Category Archive 'Taxes'
13 Nov 2017

Taxes vs. Manliness

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Severian argues that a high tax regime isn’t just about the money.

Taxes have an effect, and it isn’t an accidental side-effect, it’s an ulterior but central purpose: To weaken and distort the messages that bind civilization together, that keep it functioning.

Civilization is made up of very few of these messages: “It is wrong to kill or hurt other people”; “If someone has something you want, you need to acquire consent from them before you take it and that usually means paying for it”; “If you help me get things done I want to get done, I will give you this money.” Liberals and democrats want taxes higher, higher, higher, all the time and they don’t have a set amount in mind, nor do they want to pay for “police, fire departments and park benches”; they just want the taxes to be high, so they can attack that 3rd message that keeps civilization working and functional. Ideally, for them, the tax rate would be 100% and we’d all be fed & sheltered by living on the dole. Then, dependency on the state would also be 100%. Then they’d reach the “fun part” — they tell the rest of us what to do, and we go do it. …

Yes, taxes are required to keep civilization working.

Higher taxes bring civilization to a stop. They’re supposed to do this. They remove the ability, as well as the incentive, for children to grow into strong, complete, capable adults. They’re supposed to do that, too. Minimal taxes are a lubricant. Higher taxes are a solvent.

Remember this next time you hear someone monologue away about the evils of a tax cut.

RTWT

11 Nov 2017

Tax Cut

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03 Oct 2016

Trump Tax Brouhaha

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hillarytaxreturn
Detail from Hillary’s 2015 Tax Return: “Capital Loss Carryover: -699,540.”

Allan Sloan, at the Washington Post, inveighs against the shocking revelation(!) that the tax code actually allows business losses to be deducted from business income. The horror! The horror!

Despite what Donald Trump says, we really can learn a lot from his tax returns — even from the partial ones made public by The New York Times.

The major takeaway from the three pages of Trump’s 1995 returns that the Times made public is that Trump is right when he says the system is rigged. What he doesn’t say is that it’s rigged in his favor and in the favor of people like him — and against regular people, those of us who earn money, pay income tax on it, and financially support the country in which we live.

This is obviously balderdash. Regular people often have businesses, and carry forward and deduct business losses, too, just like Donald Trump, and just like Hillary Clinton it turns out.

Tyler Durden notes that there are no major party candidates this year who have not been deducting carried-forward capital losses.

29 Sep 2015

Trump’s Tax Plan

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TrumpTaxPlan

Donald Trump was sinking slowly in the polls and a number of pundits were predicting his candidacy was in terminal decline, but The Donald yesterday stopped whining about Fox News and actually produced a substantive policy proposal: a dramatic revision of the tax code.

Tax Prof Blog

Trump’s plan is simple, but it would certainly be a revolutionary change, eliminating scads of special interest deductions, freeing less well-off Americans entirely from federal taxation (except for Social Security), and giving US businesses a major shot-in-the-arm by making our business tax much more competitive. Trump’s plan is simple, but it is intelligent and possesses enormous potential voter appeal. In one fell swoop, Donald Trump has revived his candidacy and made himself again the man to beat.

28 Oct 2013

Big Brother on Your Dashboard

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The LA Times reports on an unlikely alliance between statist tax grabbers and some libertarians(!) to arrange for Big Brother to accompany you every mile you drive.

As America’s road planners struggle to find the cash to mend a crumbling highway system, many are beginning to see a solution in a little black box that fits neatly by the dashboard of your car.

The devices, which track every mile a motorist drives and transmit that information to bureaucrats, are at the center of a controversial attempt in Washington and state planning offices to overhaul the outdated system for funding America’s major roads.

The usually dull arena of highway planning has suddenly spawned intense debate and colorful alliances. Libertarians have joined environmental groups in lobbying to allow government to use the little boxes to keep track of the miles you drive, and possibly where you drive them — then use the information to draw up a tax bill.

The tea party is aghast. The American Civil Liberties Union is deeply concerned, too, raising a variety of privacy issues.

And while Congress can’t agree on whether to proceed, several states are not waiting. They are exploring how, over the next decade, they can move to a system in which drivers pay per mile of road they roll over. Thousands of motorists have already taken the black boxes, some of which have GPS monitoring, for a test drive.

“This really is a must for our nation. It is not a matter of something we might choose to do,” said Hasan Ikhrata, executive director of the Southern California Assn. of Governments, which is planning for the state to start tracking miles driven by every California motorist by 2025. “There is going to be a change in how we pay these taxes. The technology is there to do it.”

The push comes as the country’s Highway Trust Fund, financed with taxes Americans pay at the gas pump, is broke. Americans don’t buy as much gas as they used to. Cars get many more miles to the gallon. The federal tax itself, 18.4 cents per gallon, hasn’t gone up in 20 years. Politicians are loath to raise the tax even one penny when gas prices are high.

“The gas tax is just not sustainable,” said Lee Munnich, a transportation policy expert at the University of Minnesota. His state recently put tracking devices on 500 cars to test out a pay-by-mile system. “This works out as the most logical alternative over the long term,” he said.

Wonks call it a mileage-based user fee. It is no surprise that the idea appeals to urban liberals, as the taxes could be rigged to change driving patterns in ways that could help reduce congestion and greenhouse gases, for example. California planners are looking to the system as they devise strategies to meet the goals laid out in the state’s ambitious global warming laws. But Rep. Bill Shuster (R-Pa.), chairman of the House Transportation Committee, has said he, too, sees it as the most viable long-term alternative. The free marketeers at the Reason Foundation are also fond of having drivers pay per mile.

“This is not just a tax going into a black hole,” said Adrian Moore, vice president of policy at Reason. “People are paying more directly into what they are getting.”

The movement is also bolstered by two former U.S. Transportation secretaries, who in a 2011 report urged Congress to move in the pay-per-mile direction.

The U.S. Senate approved a $90-million pilot project last year that would have involved about 10,000 cars. But the House leadership killed the proposal, acting on concerns of rural lawmakers representing constituents whose daily lives often involve logging lots of miles to get to work or into town.

Several states and cities are nonetheless moving ahead on their own. The most eager is Oregon, which is enlisting 5,000 drivers in the country’s biggest experiment. Those drivers will soon pay the mileage fees instead of gas taxes to the state. Nevada has already completed a pilot. New York City is looking into one. Illinois is trying it on a limited basis with trucks. And the I-95 Coalition, which includes 17 state transportation departments along the Eastern Seaboard (including Maryland, Pennsylvania, Virginia and Florida), is studying how they could go about implementing the change.

The concept is not a universal hit.

In Nevada, where about 50 volunteers’ cars were equipped with the devices not long ago, drivers were uneasy about the government being able to monitor their every move.

“Concerns about Big Brother and those sorts of things were a major problem,” said Alauddin Khan, who directs strategic and performance management at the Nevada Department of Transportation. “It was not something people wanted.”

As the trial got underway, the ACLU of Nevada warned on its website: “It would be fairly easy to turn these devices into full-fledged tracking devices…. There is no need to build an enormous, unwieldy technological infrastructure that will inevitably be expanded to keep records of individuals’ everyday comings and goings.”

Read the whole thing.

04 May 2013

Mapping the Impact of Taxes

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16 Apr 2013

Where Did Your Tax Dollar Go?

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05 Jan 2013

“The Taxing Thing”

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Hurstbourne Tarrant (or Uphusband),
Monday, 7th November 1825.

We came through a village called Woodcote, and another called Binley. I never saw any inhabited places more recluse than these. Yet into these the all-searching eye of the taxing Thing reaches. Its Exciseman can tell it what is doing even in the little odd corner of Binley; for even there I saw, over the door of a place, not half so good as the place in which my fowls roost, “Licensed to deal in tea and tobacco.” Poor, half-starved wretches of Binley! The hand of taxation, the collection for the sinecures and pensions, must fix its nails even in them, who really appeared too miserable to be called by the name of people. Yet there was one whom the taxing Thing had licensed (good God! licensed!) to serve out cat-lap to these wretched creatures!

— William Cobbett, Rural Rides (1830).

03 Aug 2012

US Taxing Olympic Victories

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Ryan Lochte displays his gold medal.

The Weekly Standard reports that American athletes winning medals at the London Olympics will owe the US Government money.

Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.

There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze.

Silver medalists will owe $5,385. You win a gold? Timothy Geithner will be standing there with his hand out for $8,986. …

[M]ost other Olympians won’t pay any taxes on their medals because America is one of only a handful of countries which taxes “worldwide” prize income earned overseas.

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The Politico reports that at least on Republican wants to give American athletes a break.

[Senator Marco] Rubio (R-Fla.) introduced [on Wednesday] The Olympic Tax Elimination Act, which would exempt U.S. Olympic medal winners from paying taxes on their medals. Olympians receive honorariums in the form of cash payments of $25,000 for gold, $15,000 for silver and $10,000 for bronze, which the IRS currently taxes.

“Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness,” Rubio said in a statement. “Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.”

22 Feb 2012

The Obama Tax Plan

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James Pethokoukis observes that Americans would have limited grounds for rejoicing: (his Tweet) “We go from having the 2nd highest corp. rate to 4th. That’s it? Thank goodness for Belgium!”

The current U.S. economic recovery is arguably the worst in modern American history. Incomes are flat, housing is moribund, and the past three years have seen the longest stretch of high unemployment in this country since the Great Depression. Yet President Barack Obama—with the backing of Treasury Secretary Timothy Geithner—has the temerity to propose a corporate tax reform plan that would actually raise the tax burden on American business (and de facto on workers, too) without lowering rates to an internationally competitive level. This is a terrible, terrible plan:

..The Obama-Geithner plan would lower the statutory corporate tax rate to 28 percent from 35 percent, currently the second-highest among advanced economies. But that would still leave the combined U.S. corporate tax rate—state and federal—at 32.2 percent, far above the OECD combined average of 25 percent. The U.S. combined rate would be a bit below slow-growing Japan and France but above the U.K. and Germany. That’s not nearly good enough. Canada just lowered its corporate tax rate, for instance, to 15 percent. So instead of having the second highest corporate tax rate in the world, the United States would probably be fourth behind Japan, France, and Belgium.

23 Nov 2011

How the Political Class Thinks

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From Dan Mitchell.

22 Nov 2011

57,000 Pages of Proof That the US Tax Code Needs Reform

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GE CEO Jeff Immelt

From Alex Tabarrok:

The NYTimes reported earlier this year that through an extraordinary use of tax breaks and clever accounting:

[General Electric] reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

The Times highlighted the skill of GE’s dream team:

G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

More recently from The Weekly Standard we find what kind of effort it takes to pay no taxes on $14 billion in profits:

General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didn’t pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked.

(FYI, the length of GE’s tax return has doubled since 2006 when it (first?) filed electronically at an equivalent of 24,000 pages.)

GE’s tax bill illustrates both why our corporate tax rate is too high and too low. The nominal rate is too high which encourages a real rate which is too low.

Hat tip to Walter Olson.

23 Sep 2011

Dropping the Mask

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Charles Krauthammer explains the president’s recent tax proposal. This is politics, but it’s not only politics, this is the real Barack Obama.

A most revealing window into our president’s political core: To impose a tax that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one — not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless. …

Obama has actually gone and done it. He’s just proposed a $1.5 trillion tsunami of tax hikes featuring a “Buffett rule” that, although as yet deliberately still fuzzy, clearly includes raising capital gains taxes.

He also insists again upon raising marginal rates on “millionaire” couples making $250,000 or more. But roughly half the income of small businesses (i.e., those filing individual returns) would be hit by this tax increase. Therefore, if we are to believe Obama’s own logic that his proposed business tax credits would increase hiring, then surely this tax hike will reduce small-business hiring.

But what are jobs when fairness is at stake? Fairness trumps growth. Fairness trumps revenue. Fairness trumps economic logic.

Obama himself has said that “you don’t raise taxes in a recession.” Why then would he risk economic damage when facing reelection? Because these proposals have no chance of being enacted, many of them having been rejected by the Democratic-controlled Congress of Obama’s first two years in office.

Moreover, this is not an economic, or jobs, or debt-reduction plan in the first place. This is a campaign manifesto. This is anti-millionaire populism as premise for his reelection. And as such, it is already working.

Obama’s Democratic base is electrified. On the left, the new message is playing to rave reviews. It has rekindled the enthusiasm of his core constituency — the MoveOn, Hollywood liberal, Upper West Side precincts best described years ago by John Updike: “Like most of the neighborhood, she was a fighting liberal, fighting to have her money taken from her.”

Added Updike: “For all her exertions, it never was.” But now with Obama — it will be! Turns out, Obama really was the one they had been waiting for.

That is: the new Obama, today’s soak-the-rich, veto-threatening, self-proclaimed class warrior. Except that the new Obama is really the old Obama — the one who, upon entering office in the middle of a deep economic crisis, and determined not to allow “a serious crisis to go to waste” (to quote his then-chief of staff), exploited the (presumed) malleability of a demoralized and therefore passive citizenry to enact the largest Keynesian stimulus in recorded history, followed by the quasi-nationalization of one-sixth of the economy that is health care.

Considering the political cost — a massive electoral rebuke by an infuriated 2010 electorate — these are the works of a conviction politician, one deeply committed to his own social-democratic vision.

That politician now returns. Obama’s new populism surely is a calculation that his halfhearted feints to the center after the midterm “shellacking” were not only unconvincing but would do him no good anyway with a stagnant economy, 9 percent unemployment and a staggering $4 trillion of new debt.

But this is more than a political calculation. It is more than just a pander to his base. It is a pander to himself: Obama is a member of his base. He believes this stuff. It is an easy and comfortable political shift for him, because it’s a shift from a phony centrism back to his social-democratic core, from positioning to authenticity.

The authentic Obama is a leveler, a committed social democrat, a staunch believer in the redistributionist state, a tribune, above all, of “fairness” — understood as government-imposed and government-enforced equality.

That’s why “soak the rich” is not just a campaign slogan to rally the base. It’s a mission, a vocation. It’s why, for all its gratuitous cynicism and demagoguery, Obama’s populist Rose Garden lecture on Monday was delivered with such obvious — and unusual — conviction.

He’s returned to the authenticity of his radical April 2009 “New Foundation” address (at Georgetown University) that openly proclaimed his intent to fundamentally transform America.


In a 2001 NPR, State Senator Barack Obama complains of constitutional constraints on redistributive change.

23 Sep 2011

Stanford Football Fans Respond to Elizabeth Warren’s “Nobody Got Rich On His Own”

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Liberals are burbling in delight over Massachusetts Senate candidate Elizabeth Warren’s full-throated expression of the left’s soak-the-rich version of the social contract.

Warren said:

I hear all this, you know, ‘Well, this is class warfare, this is whatever. No. There is nobody in this country who got rich on his own — nobody.”

“You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.

“Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.”

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One of Glen Reynolds’ readers, who signs himself Fog City sent along his own rejoinder to Warren, originally posted in a discussion of her remarks in the Current Events section of a Stanford Football Fan forum:

“You built a factory out there? Good for you,” “Built a factory” is a summary for a lot of work. Put up equity, designed a business, took risk to buy land, get permits, pay property taxes and use taxes and permit fees. Then, bought a bunch of equipment and had it installed …and paid sales taxes. Hired some employees and paid them a bunch of money and paid payroll taxes on top of that. Bought a bunch of raw materials from companies that paid a bunch of salaries and a bunch of taxes. Building a factory is a huge private investment that pays the public a lot of taxes for the right to be built.

“But I want to be clear: you moved your goods to market on the roads the rest of us paid for.” Between fuel taxes, license fees, tolls and various taxes on transportation related activities, the roads budget is smaller than the total tax take.

you hired workers the rest of us paid to educate; No, you did not educate them. You babysat them for 12 years. Then I hired them, taught them how to be responsible and show up for work, taught them how to communicate in clear sentences, taught them that there are rights and wrongs and (unlike with your schools) wrongs have consequences in the workplace. Then paid for extended education for my employees so they could continue to improve themselves and better add value to what we do around here.

“You were safe in your factory because of police forces and fire forces that the rest of us paid for.” Funny, my factory has 24/7 security guards because the last time it was broken into, the police did not even bother to take a report, they just said “call your insurance company”. As for fire? The closest fire department is 10 miles away. My insurance company requires that I have a full wet sprinkler system to qualify for insurance because there is no local fire protection.

“You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.” Well, that is not exactly true. When the AFL-CIO tried to unionize my workforce, they staged three days of noisy protests outside my factory. The police forces just stood around and watched as the protesters intimidated my workers, vandalized their cars and destroyed my property.

You say “we” like the government and society are the same. They aren’t. My company and my community and you politicians are not “we”.

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Another Stanford fan signing himself neodymian60 remarked in disgust:

I’ll weigh in because she could be my next Senator and the Democrats here are scrambling to unseat Scott Brown. Somehow she seems like the perfect insufferable replacement for the insufferable Ted Kennedy.

She has the big 3. Harvard. Lawyer. Academic. Check.

She is shrill, contentious, and condescending as only the elite can be.

While any idiot knows that there can be no market without roads and consumers, she insults everyone’s intelligence by having to explain that to them. And then insults the successful by making it seem as if they have betrayed everyone with their talents. …

I just got a call from the Brown campaign and gave them $110.

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mendicant98:

You built a factory out there? Good for you,” she says. “But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

Um – the thing is – those who built the factory and employed the workers generated the revenue that allowed the ctizens to pay for the roads, police etc. It sure as hell wasn’t built by the poor.

She continues: “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”


Um – again. THEY HAVE ALREADY BEEN DOING THAT. Hey if she questions that – just go to a town that revolved around a factory that went out of business and see how that town is faring. The factory – as it employs the citizens and pays its taxes etc (not to mention all its fees etc under the various regulations/licensing requirements) IS TAKING A HUNK OF THAT AND PAY(ING) IT FORWARD FOR THE NEXT KED WHO COMES ALONG.” Course if the factory shuts down – then that kid loses that opportunity and the town loses a whole lot of revenue.

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Rocky 17 vented:

Elizabeth the Harvard and Rutgers Prof, Head of TARP, lawyer, marxist, head of consumer affairs, candidate for US senate in Mass. friend of Obama, friend of Harry Reid…

If anyone on this board doubts that she is for the social contract that successful people need share their success with those who aren`t successful and have no cause for personal celebration or reward, that she intends that wealth redistribution is necessary and good, that she is not a marxist, you must be Palcal. There is no successful individual except those who have earned it on the backs of others and therefore owe the masses. There are no successful countries except those that earned it on the backs of other countries and therefore owe those countries.

Thus the apology tour at the initial stages of the Obama administration, the rage at successful people, the class warfare rhetoric. She and Obama are two peas in a pod, share the same values and cannot be called anything but Marxist redistributionists. To me, this is the antithetical behavior and value of what made the US exceptional and why the country is headed into the deep morass with policies that slowly and quickly drain the wealth of America over the world.

Gosh, it looks like some Stanford grads must have gone into business and become conservative.

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