Tag Archives: Tax

Exactly What Is Fair ?

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On Thursday the Washington Examiner posted an editorial with the title, “If top 5% paid 40% of taxes, what is their ‘fair’ share?”. That is a very reasonable question.

The current Democrat talking points are stated in the editorial:

Obama said in his postelection news conference earlier this month, “want to make sure that middle-class folks aren’t bearing the entire burden and sacrifice when it comes to some of these big challenges. They expect that folks at the top are doing their fair share as well.” House Minority Leader Nancy Pelosi, D-Calif., echoed this point in a fundraising pitch sent out on Monday: “Voters sent a clear message to Republicans in the election: we must stand up for the middle class and ensure the wealthy pay their fair share.”

What does the amount of taxes the wealthy pay have to do with standing up for the middle class?

The editorial reminds us:

As matters stand, the top 1 percent of American households paid 39 percent of income taxes in 2009, according to the most recent data compiled by the Congressional Budget Office, and the top 5 percent of taxpayers paid 64 percent.

But income taxes, taken in isolation, do not tell the whole story, because lower-income Americans do pay payroll taxes. But even taking into account all forms of taxation, the top 1 percent still paid 22 percent of federal taxes while earning just 13.4 percent of household income. The top 5 percent paid 40 percent of all federal taxes, despite earning only 26 percent of all income. No matter how you slice the numbers, it’s hard to understand why anyone would think the wealthy aren’t already shouldering a burden commensurate with their blessings.

It seems to me as if the wealthy are already paying more than their fair share. And if raising taxes on anyone is going to slow down an already struggling economy, why in the world would you want to raise taxes on anyone?

In March of this year I posted the following (rightwinggranny.com):

Fox News has a video posted showing President Obama stating in April of 2008 that, despite evidence it doesn’t increase revenue, he’d raise the capital gains tax on America’s richest Americans. Then-candidate Obama used one of his favorite words by saying it would be the “fair” thing to do! So it’s not really about revenue–it’s about redistributing wealth–taking money away from people who have earned it and giving it to people who have not earned it. How does that make our society better?

The purpose of being President (or House Minority Leader) is not to carry out your own personal vendetta upon those you resent because they are successful. It’s time to grow up and get past the idea that it is up to you as President or Congressmen to punish those who are successful.

We will all be seeing tax increases in January due to Obamacare. The question is how much additional taxation will we stand for. I personally feel taxed enough already–I think it’s time for the Tea Party to get back to their roots and begin to make noise again.

 

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Some Truth From One Of My Favorite Liberals

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Susan Estrich is one of my favorite liberals. Although I probably disagree with her on most things, there are times when she hits the nail on the head squarely. Her recent article at Creators.com was one of those times.

The article was entitled, “The Mandate To Raise Taxes on the “Rich.””

She reports:

Within days of winning the election, President Obama announced that his victory gave him a mandate to raise taxes on the “rich.”

Come again? This was a two-and-a-half-point election. It reflected a painfully divided electorate. The only mandate I saw was to unite a divided country.

Ms. Estrich explains that she voted for Obama and lists many of the reasons for her vote. She clearly states that she does not think she is paying too little in taxes in spite of the fact that she falls into the group of people President Obama describes as “rich.”

She points out:

I am all for closing loopholes. I am all for ending deductions for things I don’t even understand. But I am not for putting a low cap on deductions that would make it all but impossible for the charities I support to raise funds. I am not for putting a limit on the mortgage deduction that would mean, as a practical matter, that “middle class” (not rich) people in California would be priced out of the housing market, and the charities I support would not be able to raise what they need to survive.

That makes total sense. Ms. Estrich, would you please run for office.

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As You Hear The Debate On Raising Taxes…

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As we approach the fiscal cliff put into place by Congress and the President, we will hear a lot about the need to increase taxes to balance the budget. We will also hear that the ‘rich’ are not paying their fair share.

First of all, this is how the tax code currently works (2009 numbers) according to the National Taxpayers Union:

Who Pays Income Taxes and How Much?

Tax Year 2009 

Percentiles Ranked by AGI

AGI Threshold on Percentiles

Percentage of Federal Personal Income Tax Paid

Top 1%

$343,927

36.73

Top 5%

$154,643

58.66

Top 10%

$112,124

70.47

Top 25%

$66,193

87.30

Top 50%

$32,396

97.75

Bottom 50%

<$32,396

2.25

Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service

Secondly, watch the first minute of this video taken from the 2008 Democrat Presidential Primary debate:

Ask yourself, “What is this debate really about, and why is President Obama so determined to ‘tax the rich’ when it has been proven that doing so will not increase revenue to reduce the deficit?”

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What In The World Are We Thinking ?

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Bill Clinton’s relationship with the truth has not changed since the 1990’s. Breitbart.com posted a video of Bill Clinton on CNN yesterday explaining that the American people are easily confused by plans of lower taxes and lower spending. In the video he cited a few facts that were simply not true. See the numbers below taken from the National Taxpayers Union to see who actually pays income taxes in America.

Who Pays Income Taxes and How Much? 

                                Tax Year 2009
 
Percentiles Ranked by AGI AGI Threshold on Percentiles Percentage of Federal Personal Income Tax Paid
Top 1% $343,927 36.73
Top 5% $154,643 58.66
Top 10% $112,124 70.47
Top 25% $66,193 87.3
Top 50% $32,396 97.75
Bottom 50% <$32,396 2.25
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service

Lower taxes and smaller government allow the private sector to grow. There is nothing confusing about that, and the American people are not confused. We are reaching the point where more people are taking money out of government that are putting money in. At that point the system totally breaks down and America as we have known it disappears. This election may be our last chance to prevent that.

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An Interesting Tax Plan

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One of my favorite Congressmen is Representative John Campbell, a Republican from California.

Representative Campbell states on his website:

Many of you know that I am the only member of Congress with a Master’s Degree in Business Taxation (MBT). I received that degree from USC (Fight on!) in 1977. I am a CPA and once prepared tax returns for a living. At that time, I learned the Internal Revenue Code of 1954. We now have the Internal Revenue Code of 1986. I believe we may soon see the Internal Revenue Code of 2013.

But, what will that code look like? We ought to “reach for the stars” here. Let’s not just tinker with the tax code and change it a little bit. Let’s see if we can get 218 votes in the House, 60 votes in the Senate and the signature of whoever is president on a complete restructuring of the Code that would make it flatter and simpler.

This is the link to Representative Campbell’s tax proposal. After reading the proposal, there is a link to another site where you can take an opinion poll expressing your ideas on the proposal.

Here are some of the highlights of Representative Campbell’s proposal:

Eliminate all deductions except: charitable contributions, home mortgage interest and non-elective medical expenses.

Go to 2 tax rates: one for incomes below $100,000 (maybe 20% under this scenario) and a second for incomes above that (something like 28%).

Allow corporations to deduct dividends from their income, but make dividend income taxable as ordinary income with no preferences to individuals.

Eliminate any preferences for capital gains, except for non-depreciable assets held over 5 years.

Implement a minimum tax so that anyone with any income at all pays 2% of their gross income or a minimum of $100.

Please follow the link to read the details of the proposal and record your ideas.

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This Sounds Like A Lose Lose Situation

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CNS News is reporting today that the Congressional Budget Office (CBO) is predicting that if tax rates rise in 2013, the economy will slip back into recession. Unless Congress acts, there will be a significant tax increase on January 2013.

The article points out that Congress will not act to change the projected increase in taxes until after the election. Great. Translated loosely, that means that Congress does not want to take responsibility for any actions they might take regarding taxes. As you know, President Obama is already saying that he won’t do anything to stop the drastic defense cuts included in sequestration unless the Republicans agree to raise taxes. Does anyone honestly believe that additional tax revenue will be used to pay down the deficit? In the past, when taxes have been raised, has spending ever actually remained the same or been cut?

The article concludes:

While CBO included mandatory spending cuts from the federal budget sequester (the “fiscal cliff”) in its analysis, the vast majority of the impact to the economy will come from the tax increases – the expiration of the Bush tax cuts — due to their sheer size.

CBO estimated that the combination of spending cuts and tax increases would reduce the federal deficit by $487 billion in fiscal 2013, with the vast majority of that figure coming from tax increases.

CBO projects that if current tax policies are kept in place and do not expire in 2013 as scheduled, revenues would be $5 trillion less between 2012 and 2022.

Congress is not expected to address either the mandatory spending cuts or the expiration of the Bush tax rates until after the election.

We need to examine the way that we look at taxes, tax rates, etc. The American public has been fed a line that somehow the government has a legitimate right to the earnings of the American people. It does not. There is nothing greedy about wanting to keep money that you have worked hard to earn. There is something basically wrong about taking money from people who have worked hard to earn it and giving it to people who have chosen not to work. I am sure we have all heard stories about people who refused to take low paying jobs because they could make more money simply by being on welfare and they didn’t have to go to work all day. Because of the amount of taxes taken out of all of our paychecks, the line between making money at the bottom of the economic spectrum and collecting welfare has become very blurred.

It’s time to remember that money belongs to the people who have earned it–no one else is entitled to it–not even the government. Unless we elect an administration that understands that people are entitled to the rewards of their hard work (they did build that!), we are going to wind up in the same place as the bankrupt countries of Europe.

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The Impact Of High Taxes On Athletic Competition

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Yesterday’s Wall Street Journal posted an article about the impact of Britain’s tax policies on athletic competition in that country.

The article reports:

…After Jamaican sprinter Usain Bolt won his third gold in London last week, reporters asked him why he doesn’t compete in the U.K. more often. “As soon as the law changes I’ll be here all the time,” he said.

What aspect of British tax policy causes this sort or reaction?

The article explains:

The British government has granted an exemption to income linked to Olympic and Paralympic competition. But normally Britain takes a cut of an athlete’s worldwide endorsement earnings—that means overseas sponsors in addition to those in the U.K.—proportional to the time spent in Britain. By comparison, the U.S. only taxes nonresident athletes on endorsement fees paid by American sponsors. France does the same.

The article explains that since Mr. Bolt‘s contract with Puma is worth $9 million, any time spent competing in Britain could cost Mr. Bolt a very large sum of money. Because of these tax laws, many top athletes simply do not compete in Britain.

For example:

…Rafael Nadal excused himself from this year’s Aegon Championships, the traditional warm-up to Wimbledon, on fiscal grounds: “I am playing in the U.K. and losing money. I did a lot more for the last four years, but it is more and more difficult to play in the U.K.” Mr. Nadal competed in the Gerry Weber Open in Germany instead.

Because of the tax policies, the quality of athletic competition has suffered in Britain, the fans are less likely to attend, and there is less economic activity in the area of sports competition for the country to tax. Everybody loses.

Pay attention, American Congress!

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Some Common Sense Applied To Government

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Fox News reported yesterday that a bill has passed the House of Representative which would fire federal employees who have not paid their income taxes.

The article reports:

It passed by a vote of 263 to 114 and will be sent to the Senate.

The article further states:

Those on a plan to repay back taxes or in negotiations with the IRS would be exempt from the proposed change. IRS employees already can be terminated for non-payment of federal income taxes.

In April 2011, the bill was passed out of the House Committee on Oversight and Government Reform, of which Chaffetz is a member.

The bill would include those seeking federal contracts and grants, but exempts uniformed military personnel. In addition, federal agencies would be required to give 60 days notice before taking personnel action.

Current IRS data shows that 100,000 civilian government employees owed $1 billion in unpaid federal income taxes in 2009. Rather than raise taxes on everyone, shouldn’t we be concerned about collecting taxes already in existence from those who owe them?

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Why Does Anyone Still Listen To This Man ?

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Yesterday’s Washington Examiner posted an article about a recent statement by Senator Harry Reid.

Senator Reid stated:

“His poor father must be so embarrassed about his son,” Reid said, in reference to George Romney’s standard-setting decision to turn over 12 years of tax returns when he ran for president in the late 1960s. Saying he had “no problem with somebody being really, really wealthy,” Reid sat up in his chair a bit before stirring the pot further. A month or so ago, he said, a person who had invested with Bain Capital called his office.

“Harry, he didn’t pay any taxes for 10 years,” Reid recounted the person as saying.

“He didn’t pay taxes for 10 years! Now, do I know that that’s true? Well, I’m not certain,” said Reid. “But obviously he can’t release those tax returns. How would it look?

“You guys have said his wealth is $250 million,” Reid went on. “Not a chance in the world. It’s a lot more than that. I mean, you do pretty well if you don’t pay taxes for 10 years when you’re making millions and millions of dollars.”

There are a number of obvious problems with this statement. First of all, the article asks, “How would an investor in Bain Capital have access to Governor Romney’s tax returns?” Secondly, do you honestly believe that a public figure (as Governor Romney was after the Olympics) who earned the kind of money that Governor Romney earned would not have had his tax returns examined very carefully by the IRS.

The article also reminds us:

And in what Romney has released of his tax returns, he paid $6.2 million in taxes over two years.

This is the lowest form of sleaze so far in the campaign.

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Exactly What Does ‘Paying Down The Debt’ Mean ?

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John Hinderaker at Power Line posted an article yesterday about President Obama’s claim that he plans to pay down the debt in a balanced fashion–increasing taxes on the wealthy to increase revenue and reduce the deficit. Aside from the fact that it is historically proven that raising taxes does not increase revenue, there are some definite problems with that approach.

This is a picture of a concept called the Laffer Curve:

As the illustration states, 50% is not necessarily the ‘magic number’–that number could be anywhere. The best real life illustration of this principle is the migration of millionaires out of Maryland after the tax on millionaires was increased (see rightwinggranny.com). People who will be impacted by large tax increases on the upper middle class (no–they are not ‘the rich’) usually have the means to shelter their wealth from the tax man (check out the financial disclosure statements of some of the Kennedy’s running for office).

The article at Power Line shows a graph of what President Obama’s budget plan will actually do for the deficit. The graph is based on figures from the Office of Management and Budget (OMB):

As voters, we need to be aware of the consequences of another four years of President Obama’s economic policies.

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Why The Internet Media Is Important

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On Tuesday, Newsbusters posted a story about the mainstream media‘s recent praise for the successful government bailout of General Motors.

The article cited some of the facts given in the mainstream reports and the things that were not mentioned:

 Not mentioned was the auto bailout will lose us about $30 billion. 

General Motors (NYSE:GM) Cheers to Reports US Sales Surges 16%

General Motors (NYSE:GM) Beats Analysts Sales Forecasts

GM Sees Highest Sales Since September

Almost all of this $30 billion Taxpayer loss was in fact a gi-normous payoff of the Obama-Democrat stalwart United Autoworkers Union.

GM Races Higher on Sales Report

GM Sales Rise 16%

GM June US Sales Rose 16%

The Blaze is reporting today:

As it turns out, there’s a big reason GM experienced an increase in sales last month: “government purchases of GM vehicles rose a whopping 79% in June,” according to the National Legal and Policy Center’s Mark Modica.

The article at Newsbusters made a wonderful comparison:

That’s like you setting up a lemonade stand for your kids.  You buy them the lemons, sugar, cups and pitchers – and then buy most of the lemonade yourself.

Except you are President Obama.  Your kids are the United Autoworkers Union.  And the lemonade cost $50 billion.

At least you get to tax your neighbors for the $50 billion.

When you hear President Obama listing the saving of General Motors as one of his accomplishments, understand that you are still paying for that accomplishment, that senior citizens and others who held preferred stock in the company got the shaft, and that it really was not so much of an accomplishment.

Another reason I proudly drive my Ford Mustang!

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Leadership Matters

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There are two sources for this article–Inside Indiana Business and nwi.com. Both articles deal with what has happened in Indiana since 2005, when Governor Mitch Daniels took office. When Governor Daniels took office, the state had a deficit of $600 million.  Today, Indiana has a $1.3 billion budget surplus.

As interesting as the surplus is, it is also interesting to see how it will be used. Part of it will be refunded to the taxpayers and part of it will be used to pay for full-day kindergarten in the 2012-13 school year.

The article at nwi.com reports:

Based on the current budget surplus, Daniels said Hoosiers filing their income taxes in 2013 will be able to deduct about $70 from the taxes owed. That’s $140 off for a joint return. Individuals who owe no taxes still will receive the refund.

“At some point when budgets are balanced and reserves are full, the state should stop collecting money and leave it with the people who earned it,” Daniels said.

The article at Inside Indiana Business reports:

Compared to residents in other states, Hoosiers are enjoying relatively strong private-sector job growth, lower property taxes, an improved AAA credit rating and the fewest number of state employees per capita anywhere in the country. These developments are part of what has made Daniels popular among Indiana voters.

If the states are laboratories for the federal government, we need to take a very close look to see if what Mitch Daniels has done in Indiana can be applied to the federal government.

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The Cost Of Raising Taxes In Maryland

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Maryland Governor Martin O’Malley pushed through a millionaires tax that went into effect in 2007 and expired in 2010. Yesterday CNBC reported that during that time Maryland lost approximately $1.7 billion in lost tax revenues. The tax imposed a rate of 6.25 percent on incomes of more than $1 million a year. Approximately 31,000 residents left the state during the time the tax was in effect.

Obviously, there is no proof that the people who left the state left because of the additional tax, but if you look at population growth in various states, you find that statistically, states with the lowest tax rates are growing and states with the highest taxes are losing population (e.g. Californians are migrating to Texas). On December 19 of last year, I posted an article (rightwinggranny.com) about the migration of people from states with high taxes to states with low taxes.

The December article at rightwinggranny stated:

There are also some interesting statistics on what happened in Maryland after the state passed a millionaires’ tax in 2008–there was a 33 percent decline in tax returns from millionaire households. The article also reports that Maryland lost $1 billion of its net tax base in 2008 because of out-migration.

There is a point at which raising taxes is counterproductive. President Obama’s statement yesterday that he would keep the tax breaks for people making under $250,000 a year was interesting for a number of reasons. First, it contradicts his previous statement that it is unwise to raise taxes during a recession (technically we are no longer in a recession, but we currently have a very weak economy). Secondly, it changes the subject–instead of looking at the impact President Obama’s policies have had on the economy, this debate will stir up class envy and paint the Republicans as the party of the rich. This is getting old.

Raising taxes in a weak economy is economic suicide. The Obama Administration knows that and knows that the President will not win this debate, but as long as we are talking about raising taxes, we are not talking about the President’s record on the economy.

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Beware Of Misleading Campaign Tweets

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The economy is struggling right now, and many people are looking for a place to put their anger and frustration at being unemployed or underemployed. The Obama presidential campaign is fully prepared to direct this anger anyplace other than the man who has been in charge of the country’s economy for the past three and a half years. It has gotten so bad that even the Washington Post (not a bastion of conservatism) is fact-checking what the Obama campaign says and awarding the appropriate number of Pinocchios.

Mitt Romney is rich. He has earned his money. (The advantage of having a rich president is that he and his family spend less taxpayer money on vacations.) The Obama campaign put out the following tweet:

“FACT: In 2010 and 2011, Romney paid less than 15% in taxes on $42.5 million in income—much less than what many middle-class families pay.” (awarded Three Pinocchios by the Washington Post)

This was specifically designed to stir up envy and class warfare among voters. The problem with the tweet is that it is not true. The Washington Post awarded it three Pinocchios.

The Washington Post reports the actual facts:

Romney released his 2010 tax return and an estimate of his 2011 return earlier this year. He earned a little more than $20 million each year, a good chunk of it in capital gains and dividends, which are taxed at a preferential rate as low as 15 percent.

But that’s not the only reason why Romney’s tax rate is at that level. He also donates about 14 percent of his income to charity, which gives him a pretty big tax deduction. (As we have noted, President Obama in 2010 also gave about 14 percent of his income to charity.)

Indeed, Romney gives about as much to charity — $3 million — as he pays in taxes. Those itemized deductions are counted against income that would ordinarily be taxed at a 35-percent rate. We figure that without those donations to charity, his effective tax rate would be at least 19 percent.

Just in case you are buying into the lie that the rich don’t pay their fair share of taxes, the Washington Post also posted the following information:

Effective Tax Rates (taxes paid on tax return)

Bottom 20 percent (0-$17,000):         -5.8 percent

Second 20 Percent ($17,000-$33,500):  1.3 percent

Middle 20 percent ($33,500-59,500):  9.2 percent

Fourth 20 Percent ($59,000-$103,500): 12.9 percent

Top 20 Percent ($103,500+):  20.6 percent

 

Effective Tax Rates (also including payroll tax paid by employer)

Bottom 20 percent (0-$17,000):         1 percent

Second 20 Percent ($17,000-$33,500): 7.8 percent

Middle 20 percent ($33,500-59,500): 15.5 percent

Fourth 20 Percent ($59,000-$103,500): 18.7 percent

Top 20 Percent ($103,500+):  24.3 percent

We live in a country where almost 50% of the people do not pay taxes. Until this changes and all voters pay taxes, our tax system will probably not get fixed. Right now, the tax code is a tribute to special interests who have successfully lobbied Congress for tax breaks. The answer to the tax code is simplicity and transparency. It’s time to elect people who will make the necessary changes–not people who lie about what the tax code actually is.

 

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Exactly The Wrong Solution

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It has been proven that when you tax an activity you get less of it. When you provide a tax break for an activity, you get more of it. We have seen over the past thirty years that when taxes on businesses are lowered the economy grows. When taxes and regulations are increased, the economy shrinks. Well, not everyone got the message.

Reuters reported on Wednesday that the United Nations has suggested a global tax on developed countries to help underdeveloped countries. The taxes would include a carbon tax, currency taxes, and taxes on billionaires. What the article fails to mention is that in many countries (if not all) poverty is political–not economic. In countries that are free with freely elected governments and private property rights, there is generally prosperity. In countries with dictators (who generally live rather well) and no private property rights, there is generally massive poverty. If the UN truly wanted to fight poverty, they would encourage democracy and private property rights in countries that have neither. All they really want to do is take money from countries that have earned it and give it to dictators in countries where it will never reach those who desperately need it!

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Exactly What Do They Mean By Claiming It’s A Tax ?

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The chart below appeared in the Washington Times yesterday:

There are a few things to look at when viewing this chart. Notice the increase in dividend, capital gains and investment taxes on the ‘so-called wealthy.’ How long do you think it will be before that tax increase begins to apply to those of us with significantly lower incomes? How long will it be before that tax applies to all retired people attempting to live on those dividends?

The Washington Times reminds us:

The high court’s ruling leaves in place 21 tax increases in the health care law costing more than $675 billion over the next 10 years, according to the House Ways and Means Committee. Of those, 12 tax hikes would affect families earning less than $250,000 per year, the panel said, including a “Cadillac tax” on high-cost insurance plans, a tax on insurance providers and an excise tax on medical-device manufacturers.

“This is a clear violation of the president’s pledge to avoid tax hikes on low- and middle-income taxpayers,” said a statement from the panel, which is chaired by Rep. Dave Camp, Michigan Republican.

On the campaign trail four years ago and since taking office, Mr. Obama has been fond of saying that middle-class families will not see their taxes rise “a single dime” under his leadership.

The thing to remember here is that Obamacare is not about healthcare–it is about redistribution of wealth. The goal here is to give everything you have worked hard for to those people who have been unwilling to work for it. Please keep this in mind when voting in November.

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The Tax Changes In Obamacare

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On Friday the Weekly Standard posted an article about the impact of Obamacare on the Tax Code. The article quotes a Treasury Department that describes Obamacare as “represents the largest set of tax law changes in more than 20 years and affects millions of taxpayers.” The report further states that Obamacare’s “new taxes, fees, and penalties account for approximately $438 billion.” 

That is a conservative estimate.

The article reports:

…that $438 billion in new taxes, fees, and penalties on Americans and American businesses is just the tally through 2019 — at which point Obamacare would really have been in effect for only six years (2014-19), not the ten years that are the norm for government scoring.  On an annual basis, Obamacare’s taxes, fees, and penalties (according to that same official estimate) would increase from $48 billion in 2014 to $88 billion in 2019, rising between 9 and 26 percent per year (depending upon the year) — with no end in sight.

The article points out that the only job creation due to Obamacare is in the IRS.

I would like to remind everyone at this point that Obamacare was passed without one single Republican vote. The Republicans were given no input into the bill at all. Had the Obamacare bill included such things as tort reform and portability of insurance across state lines, we might not be anxiously awaiting the Supreme Court’s ruling on the current monstrosity.

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An Amazing Quote

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I missed this when it happened, so I am posting it now. The American, the online magazine of the American Enterprise Institute, posted the following on March 29th:

Gov. Jerry Brown defended his new campaign website’s characterization of his proposed tax increase as “a millionaires’ tax,” even though it hikes levies on people who make more than $250,000 per year.

“Anybody who makes $250,000 becomes a millionaire very quickly, if you save,” Brown told reporters in Sacramento on Wednesday.

Brown said he had not yet seen the site, although it was promoted by his Twitter feed earlier in the day. The site calls his plan “a millionaires’ tax that asks the richest Californians to pay their fair share to help fund public education and vital public services, pays down the debt we owe to schools, and does not raise income taxes on the poor or middle class.”

The proposal, which Brown wants to place on the November ballot, would hike levies on incomes of more than $250,000 for seven years, and include a quarter-cent sales tax increase for four years.

“It is a millionaires’ tax. It taxes millionaires,” Brown said, but assured reporters he would check on the campaign’s assertion. “I’ll take a look at it and make sure that it’s the most accurate it can be.”

This is an amazing quote–the only place $250,000 equals $1,000,000 is in the minds of government officials who want to take more money away from the people who earn it! Giving more money to government will not solve deficit problems–those in power will simply spend more and continue to go deeper in debt. At some point we need to realize–IT’S THE SPENDING, STUPID!!!!!!!

 

 

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About That Tax Policy Thing…

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Yesterday wthr.com, an Indiana television station, posted an article about a tax loophole that it costing Americans billions of dollars–it doesn’t involve ‘evil’ corporations or the ‘evil’ rich–it involves a simple IRS tax policy toward legal and illegal aliens who are working in America.

Please watch the video at the link above to hear the entire story. Essentially what is happening is that non-Americans who are working in America are issued an ITIN, an individual taxpayer identification number. A 9-digit ITIN number issued by the IRS provides both resident and nonresident aliens with a unique identification number that allows them to file tax returns. This number is issued to both legal and illegal aliens.

The article reports:

Each spring, at tax preparation offices all across the nation, many illegal immigrants are now eagerly filing tax returns to take advantage of a tax loophole, using their ITIN numbers to get huge refunds from the IRS.

The loophole is called the Additional Child Tax Credit. It’s a fully-refundable credit of up to $1000 per child, and it’s meant to help working families who have children living at home.  

But 13 Investigates has found many undocumented workers are claiming the tax credit for kids who live in Mexico – lots of kids in Mexico.

“We’ve seen sometimes 10 or 12 dependents, most times nieces and nephews, on these tax forms,” the whistleblower told Eyewitness News. “The more you put on there, the more you get back.”

Some of the tax refunds generated by this practice have reached $30,000. I wonder if $30,000 was paid in taxes in the first place.

The article posted a statement from the IRS regarding this matter:

Full statement to WTHR from the Internal Revenue Service

The law has been clear for over a decade that eligibility for these credits does not depend on work authorization status or the type of taxpayer identification number used. Any suggestion that the IRS shouldn’t be paying out these credits under current law to ITIN holders is simply incorrect. The IRS administers the law impartially and applies it as it is written. If the law were changed, the IRS would change its programs accordingly. The IRS disagrees with TIGTA’s recommendation on requiring additional documentation to verify child credit claims. As TIGTA acknowledges in this report, the IRS does not currently have the legal authority to verify and disallow the Child Tax Credit and the Additional Child Tax Credit during return processing simply because of the lack of documentation. The IRS has procedures in place specifically for the evaluation of questionable credit claims early in the processing stream and prior to issuance of a refund. The IRS continues to work to refine and improve our processes.

Why do I have the feeling that if I start listing my nieces or nephews on my tax return, the IRS will pay me a visit?

 

 

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The Taxman Cometh (Again)

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Investors.com posted an article about some of the ideas the government is considering in its search for increased revenue to close the budget deficit. It seems that the government is eyeing our 401(k) accounts.

The article states:

Rather than the current $50,000, Congress is considering limiting employer-employee 401(k) contributions to 20% of an employee’s salary up to a ceiling of $20,000, an idea dubbed the “20/20” plan. Even voters without 20/20 vision will quickly see it as another promise broken by a political culture whose spending has reached the level of insanity.

The Post (the New York Post) also interviewed Urban-Brookings Tax Policy Center co-director William Gale, whose idea of replacing all tax deductions on 401(k)s and IRAs with an 18% credit sent straight into everyone’s retirement account is also being considered within Congress.

This news comes as it was reported today that Social Security and Medicare will be out of money by 2033, three years earlier than last year’s estimate.

How about simply cutting the spending, ending GSA boondoggles, and making the first family pay for their own vacations?

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Hidden In The Highway Bill Passed In March

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Thomas.gov posts the text of bills that have passed Congress. They also post the votes and other details about the bills. The Highway Bill that passed the Senate was S.1813. It passed on March 19th. There were a few things in the bill that should be of concern to Americans.

This is one part of the bill I am concerned about:

SEC. 7345. REVOCATION OR DENIAL OF PASSPORT IN CASE OF CERTAIN TAX DELINQUENCIES.

    `(a) In General- If the Secretary receives certification by the Commissioner of Internal Revenue that any individual has a seriously delinquent tax debt in an amount in excess of $50,000, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport pursuant to section 4 of the Act entitled `An Act to regulate the issue and validity of passports, and for other purposes’, approved July 3, 1926 (22 U.S.C. 211a et seq.), commonly known as the `Passport Act of 1926′.
    `(b) Seriously Delinquent Tax Debt- For purposes of this section, the term `seriously delinquent tax debt’ means an outstanding debt under this title for which a notice of lien has been filed in public records pursuant to section 6323 or a notice of levy has been filed pursuant to section 6331, except that such term does not include–
    `(1) a debt that is being paid in a timely manner pursuant to an agreement under section 6159 or 7122, and
    `(2) a debt with respect to which collection is suspended because a collection due process hearing under section 6330, or relief under subsection (b), (c), or (f) of section 6015, is requested or pending.
    `(c) Adjustment for Inflation- In the case of a calendar year beginning after 2012, the dollar amount in subsection (a) shall be increased by an amount equal to–
    `(1) such dollar amount, multiplied by
    `(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting `calendar year 2011′ for `calendar year 1992′ in subparagraph (B) thereof.
    If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the next highest multiple of $1,000.’.
    (b) Clerical Amendment- The table of sections for subchapter D of chapter 75 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
    `Sec. 7345. Revocation or denial of passport in case of certain tax delinquencies.’.
    (c) Authority for Information Sharing-
    (1) IN GENERAL- Subsection (l) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
    `(23) DISCLOSURE OF RETURN INFORMATION TO DEPARTMENT OF STATE FOR PURPOSES OF PASSPORT REVOCATION UNDER SECTION 7345-
    `(A) IN GENERAL- The Secretary shall, upon receiving a certification described in section 7345, disclose to the Secretary of State return information with respect to a taxpayer who has a seriously delinquent tax debt described in such section. Such return information shall be limited to–
    `(i) the taxpayer identity information with respect to such taxpayer, and
    `(ii) the amount of such seriously delinquent tax debt.
    `(B) RESTRICTION ON DISCLOSURE- Return information disclosed under subparagraph (A) may be used by officers and employees of the Department of State for the purposes of, and to the extent necessary in, carrying out the requirements of section 4 of the Act entitled `An Act to regulate the issue and validity of passports, and for other purposes’, approved July 3, 1926 (22 U.S.C. 211a et seq.), commonly known as the `Passport Act of 1926′.’.
    (2) CONFORMING AMENDMENT- Paragraph (4) of section 6103(p) of such Code is amended by striking `or (22)’ each place it appears in subparagraph (F)(ii) and in the matter preceding subparagraph (A) and inserting `(22), or (23)’.
    (d) Revocation Authorization- The Act entitled `An Act to regulate the issue and validity of passports, and for other purposes’, approved July 3, 1926 (22 U.S.C. 211a et seq.), commonly known as the `Passport Act of 1926′, is amended by adding at the end the following:

`SEC. 4. AUTHORITY TO DENY OR REVOKE PASSPORT.

    `(a) Ineligibility-
    `(1) ISSUANCE- Except as provided under subsection (b), upon receiving a certification described in section 7345 of the Internal Revenue Code of 1986 from the Secretary of the Treasury, the Secretary of State may not issue a passport or passport card to any individual who has a seriously delinquent tax debt described in such section.
    `(2) REVOCATION- The Secretary of State shall revoke a passport or passport card previously issued to any individual described in subparagraph (A).
    `(b) Exceptions-
    `(1) EMERGENCY AND HUMANITARIAN SITUATIONS- Notwithstanding subsection (a), the Secretary of State may issue a passport or passport card, in emergency circumstances or for humanitarian reasons, to an individual described in subsection (a)(1).
    `(2) LIMITATION FOR RETURN TO UNITED STATES- Notwithstanding subsection (a)(2), the Secretary of State, before revocation, may–
    `(A) limit a previously issued passport or passport card only for return travel to the United States; or
    `(B) issue a limited passport or passport card that only permits return travel to the United States.’.
    (e) Effective Date- The amendments made by this section shall take effect on January 1, 2013.

Note that this portion of the bill does not take effect until January 1, 2013–after the November election.

In September 2010, the Los Angeles Times reported:

Privacy laws prevent release of individual tax delinquents’ names. But we do know that as of the end of 2009, 41 people inside Obama’s very own White House owe the government they’re allegedly running a total of $831,055 in back taxes. That would cover a lot of special chocolate desserts in the White House Mess.

In the House of Representatives, 421 people owe a total $6,524,892. In the Senate, 217 owe $2,774,836. In the IRS’ parent department, Treasury, 1,204 owe $7,670,814. At the Labor Department, where Secretary Hilda Solis’ husband had some back-tax problems before her confirmation, 463 owe $7,481,463. Eighty-one workers for the Federal Reserve System’s board of governors owe $1,076,733.

Over at the Justice Department, which is so busy enforcing other laws and suing Arizona, 1,971 employees still owe $14,350,152 in overdue taxes.

Does this new law apply to those people?

 

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Today Is April 15th–Unless Congress Acts, The Taxes We Paid This Year Will Seem Miniscule Next Year

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 On Friday CNS News posted a story about the coming ‘automatic’ tax increases that will begin on January 1, 2013. The tax burden of the average American family will increase by $3,800–in a single year. Congress will deny being responsible for the increase–they didn’t pass anything. So what happened–the “Bush tax cuts” are set to expire. Those “tax cuts for the rich” saved the average American family $3,800 every year they were in effect.

The article reports:

It’s a near-perfect fiscal storm — occurring just after a major national election, no less. Among the tax breaks that are expiring: the Bush tax cuts that occurred in 2001 and 2003, the payroll tax cut, and the tax cut from the 2009 stimulus.

That’s not all. The estate tax, known more accurately as the Death Tax, rises to 55 percent. The 100 percent exemption for business investment goes away. Also among the soon-to-be-missing: the patch that lawmakers passed to ensure that the Alternative Minimum Tax (AMT) doesn’t snare more and more middle-income earners (instead of the super-rich it was originally designed for).

This $494 billion increase is unprecedented in scope. To give you a better idea of how big it really is, consider that all of the tax hikes in Obamacare — a huge tax hike in and of itself — add up to $502 billion over a 10-year period. Taxmageddon will extract almost that much from Americans next year alone. Saddling a “jobless” recovery with this monster hike is spectacularly bad policy.

This disaster can be avoided in one of three ways–the present Congress can stop it by extending the Bush tax cuts, we can elect a new Congress that will stop it as soon as they are sworn in, or Congress could redo the tax code in a transparent manner that is fair to all taxpayers The first option is highly unlikely, the second option is extremely necessary, and the third option will happen right after pigs fly.

 

 

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Inventing Terms To Circumvent The Law

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On Monday, Judicial Watch reported that the Department of Homeland Security (DHS) will grant “unlawful presence waivers” to illegal aliens who can prove they have a relative that’s a U.S. citizen. What the @#$# is an “unlawful presence waiver?”

The new procedure is wrapped up in legal terms, but basically it means that illegals would not be required to return to their home countries and wait in line to enter the country legally.

There are a few things I would like to mention here. What part of illegal does the DHS not understand? The other thing I need to point out is the dirty little secret regarding making illegals legal and putting them into the work force.

In the 1960’s, money from the Social Security Taxes was raided and put in with other tax money and spent in the general fund. There has not been a separate Social Security tax ‘lockbox’ for at least forty-five years–the money was used to pay for President Johnson’s expanding social programs. Until the baby boomers began to retire, that was not a problem as there were so many boomers that the Social Security taxes they paid kept the program solvent. Well, that was then, this is now. Our population is aging and the boomers started retiring a few years ago. Because of the impact abortion has had on the growth of population (since 1973–almost thirty years ago), there are not enough workers in the workforce to pay Social Security for the boomers. If there is a sudden increase of workers paying into Social Security (such as illegals suddenly becoming legal and paying Social Security Taxes), the demise of Social Security could be kicked down the road until the President is out of office and most of the present Congress is no longer in office. That way, no unpopular steps need be taken to fix the program and federal spending in general might not have to be cut.

Illegals are illegal. It’s a rather basic concept. It may not be practical to send all illegals home, but we should begin to deport those who break our laws and we should secure our borders. The porous southern border is a security risk. Having no idea who is in the country because we have no idea who has entered the country is a recipe for disaster. Do we think for one minute that those who wish us harm who have set up terrorist camps in South and Central America are not taking advantage of our porous southern border?

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It’s Embarrassing When You Don’t Practice What You Preach

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2010-07-21 G550 NetJets CS-DKE EDDF 02

Image via Wikipedia

Yesterday Bloomberg.com posted a story about Warren Buffett. It seems that despite his recent statements to the contrary, he hates to pay taxes as much as the rest of us.

The article reports:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.

NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.

…NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed.

“NetJets doesn’t comment on pending litigation,” General Counsel Colleen Nissl said in a statement e-mailed to Bloomberg News.

I have no problem with a corporation legally cutting its tax bill, but I do find it ironic that the man who raised such a ruckus about the wealthy paying ‘their fair share’ of income taxes doesn’t necessarily think that statement applies to him.

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