Archive for ‘Taxes’

September 2, 2011

Tax Cuts as a Form of a Spending Program

by WIZ

 

 

 

The Republicans who loathe spending programs as a form of anti-Christian reliance in fact worship a program known as tax cuts, ironically a government program in itself:

The other way to look at these credits and deductions is that they’re essentially government spending programs in disguise. After all, if these deductions didn’t exist, then either the deficit would be smaller or everyone else could pay fewer taxes. A tax credit that subsidizes the construction of affordable housing is no different than an explicit grant to do the same thing.

In Washington, however, tax expenditures generally aren’t considered spending programs. They’re considered tax breaks. And, as a new NBER paper by Len Burman and Marvin Phaup details, this view has had enormously perverse consequences over the years. Politicians always prefer tax breaks to new spending programs. So Congress ends up enacting a disproportionate amount of social policy through tax credits and deductions, the paper said, and that, in the end, can actually lead to higher taxes and bigger government than would otherwise be the case.

Burman and Phaup found that total U.S. tax expenditures will amount to $1.2 trillion in fiscal year 2011. That’s much, much larger than non-defense ($671 billion) or defense ($744 billion) discretionary spending. In other words, there’s a huge pool of federal spending that Congress doesn’t even consider to be spending. As the authors noted, “excluding income tax expenditures causes spending to be understated by about one-third.”

(Pictured: the 10 biggest tax expenditure programs for fiscal year 2011)

September 2, 2011

Paying CEO’s and Not Paying Taxes

by WIZ

Among other things:

 

From the perspective of the board room, the fact that 25 corporations last year paid more money to their CEOs than they did in income taxes to the U.S. government is an achievement deserving applause.
 
But few people outside Wall Street are clapping at this news, which was published by the Institute of Policy Studies (IPS) in its 18th annual Executive Excess report.
 
Among the 25 companies that rewarded their leadership while dodging the U.S. Treasury were Boeing, Coca Cola, Dow Chemical, eBay, Ford, General Electric, Honeywell, Motorola, Stanley Black & Decker and Verizon. Eighteen of the 25 firms operated subsidiaries in offshore tax haven jurisdictions.
 
The average paid to the 25 leaders was $16.7 million. John Lundgren, the CEO of Stanley Black & Decker, took home $32.6 million while his company claimed a net loss and did not pay corporate income taxes.
 
The IPS report noted that executive compensation has continued to soar. In 2009, the ratio between worker salaries and CEOs was 263-to-1. By last year it was 325-to-1.
 
Of the 25 companies that paid their CEO more than they paid to the government, 20 also spent more on lobbying lawmakers than they paid in corporate taxes. Eighteen gave more to the political campaigns of their favorite candidates than they paid to the IRS in taxes.
The divide between worker and CEO pay as well as CEO pay and tax payments (if any) is mind boggling, isn’t it?
August 9, 2011

Amazon.com and Paying Taxes

by WIZ

John Judis at The New Republic has an interesting piece on Amazon’s intentional efforts to avoid taxation in several states that direly need revenue. After all, Amazon’s ability to avoid charging sale’s tax provides you and I opportunities to buy books (as well as plethora of other items) for dirt cheap.

This subject, which has been intensified lately due to Borders declaring bankruptcy, may be a good time for us all to question when to buy books online and when to buy in a store. What logic comes into play when we choose one outlet over the other? For me, if I can find a book for a penny plus ~$4 s&h on Amazon, I will go with that option over a store that may charge anywhere in the upward vicinity of $27 plus tax. If I can find a book in a store for a few dollars more than Amazon, I will go with the store. Judis elaborates on the ripple effects of the latter choice: “local realtors sustain neighborhoods and suburban malls; they fund local newspapers and theater groups. They are part of a community in a way that Amazon or Overstock—its Utah-based partner in fighting state sales taxes—will never be.” It is also worth noting that Amazon would not me Amazon without bookstores or trading houses who originally sell the books that we find online for a low price.

July 30, 2011

Quote of the Day

by WIZ

“For those who insist that the center is always the place to be, I have an important piece of information: We already have a centrist president. Indeed, Bruce Bartlett, who served as a policy analyst in the Reagan administration, argues that Mr. Obama is in practice a moderate conservative. Mr. Bartlett has a point.

The president, as we’ve seen, was willing, even eager, to strike a budget deal that strongly favored conservative priorities. His health reform was very similar to the reform Mitt Romney installed in Massachusetts. Romneycare, in turn, closely followed the outlines of a plan originally proposed by the right-wing Heritage Foundation. And returning tax rates on high-income Americans to their level during the Roaring Nineties is hardly a socialist proposal.

True, Republicans insist that Mr. Obama is a leftist seeking a government takeover of the economy, but they would, wouldn’t they? The facts, should anyone choose to report them, say otherwise.” –Paul Krugman

July 2, 2011

Quote of the Day

by WIZ

“There is a revenue stream called tax cuts,” – Rush Limbaugh.

June 24, 2011

Picturing this School Scenario

by WIZ

Imagine what a typical school district would look like with these budget cuts:

—140-plus staff members were furloughed.

—Dozens of staff members are being shuffled around the district to fill holes, which means many students will be meeting new faces.

—Nearly all special education and English Language Learner aides were furloughed, save for those required by law because of a student’s needs. ELL aides help students whose primary language is something other than English.

—The 3-year-old character education program was eliminated. The program’s creator earned national acclaim for her model of mentoring troubled students.

—Elementary guidance counselors, some secondary guidance counselors and an at-risk coordinator who helped students with issues at home were furloughed.

—The athletic teams remain intact, but the athletic budget was cut by $100,000. It is not yet clear how the department will make up for the lost revenue.

—The district’s security team was eliminated. The team helped monitor school activities and provide a buffer between students and police to reduce arrests and keep students safer. It was created two years ago.

—Students won’t have the use of library aides.

—At the elementary level, students won’t have music, physical education or art teachers. Their classroom teacher will be in charge of providing those subjects. The interim Superintendent says that elementary teachers all have certification to cover those areas.

—Students won’t have reading and math coaches around to add more individualized instruction.

—At the secondary level, the performing arts program that offered theater performances was eliminated.

—The high school pool, in dire need of repair, has been closed.

—Class sizes will increase, particularly at the secondary level. Some classes could be above 30-35 students, according to the district.

Now add to the equation that this is regarding the York City school district, a district much in need of smaller classes, classroom aides, extra curricular classes, and English language learning aides. Could these cuts, coupled with a 5% tax increase (that overrode the normal 3% max), happen in a suburban school without a national level uprising?

June 23, 2011

Quote of the Day

by WIZ

“Tax hikes are off the table,” he said. “First of all, raising taxes is going to destroy jobs….second, a tax hike cannot pass the US House of Representatives — it’s not just a bad idea, it doesn’t have the votes and it can’t happen. And third, the American people don’t want us to raise taxes. They know we have a spending problem. –Speaker of the House John Boehner.

June 16, 2011

Peering Into Our Pol’s Pockets

by WIZ

Congress has a website that allows you to look up any lawmakers’s disclosed financial reports. The Daily Beast reports on some of the hot shots. Are the actions of John Boehner crooked?

Boehner, for instance, has overseen a Republican House that has gone to bat for tax breaks, increased drilling, and less regulation of oil companies as gas prices have risen. His personal investments, estimated at $2 million or more, include such oil giants as Exxon, Chevron, BP, ConocoPhillips, and Occidental.

Another question: does Boehner really stand for free markets for the sake of businesses thriving or is he just looking out for his own dividends?

June 16, 2011

Tim Pawlenty’s Proposed Tax Cuts

by WIZ

Remember this in a year when you are at the polls:

[I]n 2013 the Pawlenty plan would give people in the top one-tenth of 1 percent on the income scale (i.e., people with incomes above $2.7 million) an average annual tax cut of $1.8 million — which is more than four times what they got last year from the Bush tax cuts.

June 14, 2011

Political Cartoon of the Day

by WIZ

I would disagree with Auth on this one. If you track the past year month by month, the economy (and job creation) under Obama has been at a slow (but expected) rate. Any Democrat or Republican can only do so much. Obama’s “government assisting the private sector” approach is not the full answer and cutting taxes is certainly not (look at the last 10 years and the 9.1% unemployment rate and tell me why tax cuts for the rich have allowed this rate to shoot up). Obama is open to both of the above. Unfortunately for the GOP as seen last night, insanity will continue if they take the White House in less than a year.

June 6, 2011

Legislating Morality in Chambersburg

by WIZ


Public Opinion columnist Matthew Major writes as if a moral and societal emergency is about to be upon Chambersburg residents. What is he writing about? Out of control yardsales. In his eyes, its worth raising taxes to enforce borough laws about yardsales.

Borough council will consider an ordinance June 13 that would limit residents to one yard sale per month, with a maximum of four per year. Each sale would be limited to three days’ duration, from 7 a.m. to 6 p.m. each day. It would require “all evidence of yard sale activity” to be stored out of sight outside of permitted hours.

It strikes us as an aggressive, but necessary, crackdown on people who effectively run underground commercial operations out of their yards every day of the week. Greencastle, Mont Alto and Washington Township have also had to rein in yard sales with similar restrictions.

Underground commercial operations. Striking use of terms there. Now some more strikingly logical and deep reasoning behind the need to enforce yardsales:

People have always needed to get rid of unwanted stuff that somehow piles up in their homes. But cultural and economic trends have conspired to emphasize the deals over the house-clearing. For example, we now have numerous TV shows glorifying the nation’s pawn shops and junk circuits.

Major finishes with some final words:

And so with the inevitable overreach on the part of yard retailers comes the correction from the authorities. If people cannot conduct yard sales without becoming a nuisance to their neighbors, someone will have to do it for them.

It’s a shame to have to legislate proper behavior and consideration for others, but Chambersburg’s proposed yard sale restrictions should become law as soon as possible.

Is this more important than dealing with local poverty, local runaway educational costs, or local unemployment (which on a Pennsylvania county level, Franklin County is dead last)? Then again, these regulations would employ a few individuals (at the cost of higher taxes, mind you).

June 4, 2011

Tax Cuts and War

by WIZ

Along with a tsunami-like downturn in the global economy have brought America to the point of over $14 trillion in debt (not Planned Parenthood or welfare checks).

June 4, 2011

Quote of the Day

by WIZ

Reflections on Sarah Palin as a 2012 candidate and POTUS:

“The objections to Mrs Palin are about personality rather than policy. The fear is that she’s too reckless, too divisive and too intemperate to be an effective president. If that’s the case, there’s no reason to think that voters will go for it.” –Erica Grieder

“Given the massive debt, I think her prescription of more, big tax cuts is like giving an alcoholic a free jagermeister supply. Given the perilous instability and transformation in the Middle East, I think accelerating the colonization of the West Bank is insanely reckless, and striking Iran potentially catastrophic. An energy policy that focuses entirely on sustaining a carbon economy is terribly short-sighted. I suspect she would gladly bring back torture into the American government. Above all, I agree with George Will that someone this unstable, this disturbed and this delusional having access to the nuclear codes terrifies me. These concerns are not all about personality, although in her case, I think we have someone outside any conventional boundaries of responsibility. They are also about preventing America accelerating its decline.” –Andrew Sullivan

 

 

 

 

 

 

 

May 31, 2011

Taxes and Entitlements Talk

by WIZ

Some interesting thoughts:

May 26, 2011

Tax Paying Paradox of the Day

by WIZ

Or even for the year / decade:

GE earned $5.1 billion in profits in America in 2010, in addition to another $9.1 billion it made overseas. But it paid nothing to the IRS. Instead, it enjoyed tax breaks totaling $3.2 billion.

Meanwhile, the scapegoat “illegal immigrants” paid more than GE:

The Institute for Taxation and Economic Policy has concluded that unauthorized immigrants paid $11.2 billion in taxes last year. This total included $1.2 billion in personal income taxes, $1.6 billion in property taxes, and $8.4 billion in sales taxes.
States that gained the most revenue from illegal immigrants paying taxes were California ($2.7 billion), Texas ($1.6 billion), Florida ($807 million), New York ($662 million), and Illinois ($499 million). They were followed by Georgia ($456 million), New Jersey ($446 million) and Arizona ($433 million).
May 14, 2011

Loathing Taxes

by WIZ

The GOP way:

 The GOP doesn’t just hate taxes. They hate taxes so much that theirstated position is they’d prefer no deficit reduction, and even a default on the debt ceiling, to even a dollar in new taxes. They hate taxes, in other words, more than they like balanced budgets, or fear a federal default. Hating taxes is the absolute, number-one core belief of the modern GOP.

A recent history lesson is helpful:

 “In the 1990s, we raised taxes, particularly on the rich. And a lot of these people were saying our tax increases were going to kill the economy. But remember what actually happened? We got rid of our deficits and the economy grew really robustly for 10 years. And what if it happened again? We might get rid of our deficits and the economy would grow really robustly for another 10 years. Maybe it’s good for the economy to actually get the deficit under control.”

March 18, 2011

A Century of “Tax Burdens” in one graph

by WIZ

The creator of the graph, Stephen von Worley, explains:

That’s a line for every year from 1913 onward, sized and colored by the tax burden: the amount of tax due relative to the long-term average at each income level. Above-average burdens appear thick and red and below-average thin and blue. We adjusted everything for inflation to ensure an apples-to-apples comparison, with the caveat that the effects of Social Security, Medicare, and other taxes are not included. The underlying data comes from The Tax Foundation, IRS, and Bureau of Labor Statistics, and is the same information we used in last year’s bracket graph, updated for 2011.

Hat tip: Andrew Sullivan

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