tax policy

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Tax the Poor!

Friday, February 21st, 2014

There is an argument for taxing the poor. Net beneficiaries of taxation can think about government in a different way than net payers. They might begin to think like children, not like adult supporters of a shared enterprise in defense of the basic institutional framework that in turn supports civilization.

If Americans still took seriously the old republican idea of “no taxation without representation,” some might scandalously invert the mantra as “no franchise without net tax payment,” thus excluding all net tax consumers (politicians, subsidized poor and subsidized business folk) from voting. But that does seem outrageous.

It’s also unworkable. At some point of complexity, calculating net winners and net losers becomes impossible.

Democrats have happily added to that complexity. One odd wrinkle? They’ve so indiscriminately increased the number of taxes in Obamacare (twenty-one!) that they have seemingly taken up the cause of taxing the poor. “Even the lowest income families (earning less than about $19,000 in 2012) will be on the hook,” writes Chris Connover in Forbes, “for nearly $7,000 in Obamacare taxes over the decade that started last year.”

Of course, the poor aren’t the only to pay more under Obamacare. Connover estimates that those in the “top 2 percent” will “end up paying $177,000 over the same decade.”

None of this suggests to me that the net effect of Obamacare will be positive. It’s basically just another hyper-intrusive, reality-distorting government program that will make services more expensive in toto, providing a huge drag on medicinal progress as well.

Impoverishing most of us, along with “the poor.”

This is Common Sense. I’m Paul Jacob.

Tax-Free New York?

Wednesday, February 19th, 2014

Where can you “start a tax-free business”?

New York State.

That’s what the Start-Up NY television campaign is telling folks — way down here in Virginia.

Recall that on Monday I bemoaned the “New York State Open for Business” TV ad campaign, which is spending $140 million to boast of numerous multi-million-dollar taxpayer subsidies to certain New York businesses, even while acknowledging a generally unfriendly overall business environment. (In fact, the Tax Foundation’s 2014 State Business Tax Climate Index ranks New York State worst in the nation, dead last.)

Now, Empire State government “has a new plan” — even newer than the “new New York” proclaimed by the previous PR effort. The newest Start-Up NY TV spot says unequivocally, “Dozens of tax-free zones all across the state. Move here, expand here or start a new business here and pay no taxes for ten years.”

Wow. No taxes. Sounds good.

But how will the state afford to deliver government services to these special tax-free businesses? Who will pay their share?

Of course, their employees will earn money and pay state income taxes. Oops. Actually, not so. The tax-freeness of this super-duper deal extends to the employees of these new or expanding operations, who can earn income free from state and local taxes.

So, the companies that have suffered long under the state’s onerous tax-and-regulation yoke, along with their heavily taxed employees, will continue to struggle — and even more so to pay for the new government-favored enterprises.

How fair!

This is Common Sense. I’m Paul Jacob.

NY Democrats Surrender, Sorta

Monday, February 17th, 2014

New York State is deeply blue. That’s the color mapmakers use to show Democratic control. That’s also the state the state’s economy is in, depressed by those same Democrats’ policies.

So, to lighten the mood, Governor Andrew Cuomo is splurging $140 million tax dollars for TV ads.

One spot features actor Robert DeNiro acknowledging that “some say we lost our edge,” but then claiming, “Well, today there’s a new New York State, one that’s working to attract businesses and create jobs . . . nurture start-ups and small businesses . . . reduce tax burdens . . .”

“The new New York works for business,” the ad concludes.

The New York Times reports “the governor and lawmakers are” funding the campaign by “draining money from ostensibly independent public authorities for purposes running counter to their missions” — something “common” in state government.

Cuomo told the Times, “By telling the stories of businesses that are already succeeding in our state, we can attract even more economic opportunity and jobs.” So what are these “successes”?

  • Taxpayers handing Fage Yogurt $1.5 million in state incentives to build a factory in Johnstown.
  • Taxpayers providing $3.4 million to help Smith Electric Vehicles build a factory.
  • Taxpayers forking over $40 million to assist BAE Systems, which was hurt by flooding back in 2011.

As much as New York politicians recognize they’ve created an environment that businesses want to move away from — the state’s taxes are the least business friendly in the union — their focus isn’t on reversing the rotten business climate. Instead, they cut insider deals.

Yes, more crony capitalism.

This is Common Sense. I’m Paul Jacob.

Nixoned Nuclear Waste

Thursday, October 3rd, 2013

The federal government, embodied in the U.S. Department of Energy, has been collecting money from ratepayers for three decades, with one set purpose: to pay for the safe disposal of nuclear waste.

And what does it have to show for it?

Nothing. Zip. Nada.

The Energy Department hasn’t done a thing to safely dispose of the spent uranium and other materials from the fission process used in American plants. The Yucca Mountain storage facility, where all this stuff was going to be buried, was nixed a few years ago, by the present Nixer-in-Chief (call him a “Nixon,” why not?) Barack Obama.

All it’s done is collect $37 billion.

You could say it has “hoarded” the money, but, this being the U.S. government, that money’s long been spent. On other, non-nuclear-waste-related items. You know, wars and prescription drugs and Star Trek sets. Vital stuff, I’m sure.

Meanwhile, the nuclear power companies haven’t been sitting still. They’ve been sitting on their own stockpiles of waste — the security for and safety of which has been paid for by a variety of successful lawsuits against the federal government . . . for not picking up the garbage.

Now, there’s a new lawsuit, seeking to enjoin the feds from collecting any more of the funds that they obviously have no intention of spending according to plan.

Breach of contract? Fraud? Government as usual?

You decide.

Meanwhile, we who demand honest government wish the new lawsuit the best of luck.

This is Common Sense. I’m Paul Jacob.

End the IRS?

Tuesday, June 4th, 2013

Every day: more revelations, more questions.

Was the IRS’s repressive targeting of Tea Party and similar groups seeking tax-exempt status “accidental”? Were only a few rogue or harried clerks responsible for the repressive targeting? Did anybody in the White House know about the repressive targeting as it happened? What does the frequency of IRS commissioners’ visits to the Obama White House tell us? What about the IRS union chief’s visit with Obama just before the repressive targeting began?

And that’s not all. How similar is the latest IRS repressive targeting of the enemies of those in power to previous IRS repressive targeting of the enemies of those in power? What about all the other forms of riding roughshod over individuals’ rights that the IRS routinely perpetrates?

And then there’s the practical question: What do we do about the mess?

Well, we could try to curtail the allegedly “unusual” abuses of government power and rights violations.

But what if the problem runs deeper?

Former presidential candidate Ron Paul argues that the problem lies “in the extraordinary power the tax system grants the IRS.” He very plausibly puts the current scandals in the context of the bureau’s central mandate: “The very purpose of the IRS is to transfer wealth from one group to another while violating our liberties in the process. Thus the only way Congress can protect our freedoms is to repeal the income tax and shutter the doors of the IRS once and for all.”

Hard? Yes. Doable? Yes — but only if such ideas catch on with more leaders than just the indefatigable Ron Paul.

This is Common Sense. I’m Paul Jacob.

Customer Service?

Friday, May 24th, 2013

It was no fun to watch Acting IRS head Steve Miller testify before the House Ways and Means Committee last week. Miller simply had no real explanation for the troubling actions at IRS.

Even his terminology induced cringes. Miller’s mea culpa was for “horrific customer service.”

Customer service? That’s a stretch.

A customer holds a position of honor in a free society. Businesses spend billions on advertising — just to gain our favor. We have the power to make a business succeed or fail according to our decisions.

We don’t have to be well connected or part of the political or social elite to share this power. The most ordinary of customers can have a powerful impact. When I was a kid, customers in my state helped build a small business, Wal-Mart, into the envy of the retail world.  In 1956, ordinary bus riders in Montgomery, Alabama, used their “buying power” to help change the world.

As customers, we make demands. We make sure we’re satisfied. Sometimes we negotiate price; when no negotiation is possible and we don’t like the deal, we walk away. We have a choice. We decide.

Does this same type of empowerment exist when dealing with folks at the IRS?

Not so much. They tell us the price. We submit or go to jail. That’s no customer.

Cowering serf might sadly serve as the more apt moniker.

As the IRS grows bigger and more intrusive each year, and as its agents shake us down for ever larger sums, we should at least be able to keep the word “customer” away from them.

This is Common Sense. I’m Paul Jacob.

The Block Stops Here

Tuesday, May 14th, 2013

We were initially told that the IRS had apologized to Tea Party and patriot groups for blocking them from non-profit tax status.

But there has been no apology.

Instead, last Friday, Lois Lerner, the head of the tax-exempt division of the Internal Revenue Service, confided to a group of tax attorneys at an American Bar Association conference in Washington. She admitted that the IRS had indeed been guilty of unfairly delaying and blocking Tea Party and conservative groups from establishing tax-exempt organizations, as these dissident groups had been complaining about for years.

Who was to blame? Only mere “low-level employees” — no senior management, heaven forfend.

Then it was disclosed that senior IRS muckety-mucks actually knew in 2011 — well before the IRS commissioner assured Congress that the agency wasn’t doing precisely what it was doing. Now, latest disclosures put the beginning of the political bias policy all the way back to 2010.

Of course, the IRS vehemently denies that politics played any role.

And what about Barack “buck-stops-here” Obama?

“I first learned about it from the same news reports that I think most people learned about this,” the president said in response to a question, adding, “I think it was on Friday.”

In denial, the president spun, “If, in fact, IRS personnel engaged in the kind of practices that had been reported on and were intentionally targeting conservative groups” and “if you’ve got the IRS operating in anything less than a neutral and non-partisan way, then . . . it is contrary to our traditions.”

Well, if these ifs weren’t so (traditionally?) evasive, we might take the prez seriously.

This is Common Sense. I’m Paul Jacob.