Entries Tagged as 'Taxes'

What taxpayers want

There is a good read on CNN.com by Lou Zickar entitled What taxpayers want (yes, I leveraged the title), it’s very well written and compelling; but I think it fails to be totally upfront and honest about the problem and is overtly politically spun.

You see, taxpayers also happen to be the electorate… so what they want they express by voting in each election and determining who goes to Washington (as well as their local and state seats of government) to make decisions — and since by-far-and-large voters have sent the same people back to Washington in some cases for nearly 60 years, taxpayers need look no further than the nearest mirror to see where the problem is.

If you vote for the same person election after election who has contributed to the problems, then you are getting exactly what you’ve ask for, and thus what you must want… if you want change, start at the ballot box.

But, realistically — I don’t see this happening.

America has become the home of the content, and the land of entitlement… entitlement which starts at the top and stretch to the very roots of society; and no one is willing to give up their “special” dispensations, but expect everyone else to do so.

Change is easy, and every individual is a part of it — all you have to do is send a real message to your elected officials, send them all home (for good).


What taxpayers want by Lou Sickar on CNN.com

Originally posted 2011-08-21 02:00:23.

Taxing Non-Profit

The red ink on the balance sheets of many state and local governments seems to be causing them to re-think the tax-exempt status of many non-profit organizations.

There seems to be every thing from legal/administrative challenges to organizations non-profit status to requests to non-profit organizations for tax “donations”.  Some localities are considering totally revoking non-profit exemptions, and others are simply creating hidden fees for services that are not exempt-able.

Clearly we as American’s need to re-think the non-profit tax exempt status totally.

Personally I think tax exemption for an organization should work more like “homestead exemption” — that they can be allocated a given amount of tax credit by each of their “supporters”.

Consider a system where every American is allocated a non-profit tax exemption that they can transfer to any organization (or split between organizations) that they desire; or choose not to… this gives each non-profit the ability to have a tax exemption proportional to their supporters.

What this prevents is large non-profit organizations (including faith based organization) from operating for-profit businesses or holding large tracts of real estate on which no tax is paid… but for modest non-profit organizations there would likely be minimal tax impact…

I personally believe that organizations that help society should be encouraged and supported – but organizations that simply try and evade taxes should not force the general public to support them.

Take a hard look at non-profits; ask how much of every dollar provided to them actually is delivered to the cause it is to help; ask how many employees are supported by the organization and whether their salaries are comparable those employed by for profit; and ask the same of the administrators of non-profit and who well they are compensated…

Originally posted 2010-05-27 02:00:45.

Tax Land Mines

There’s all this talk about how the Republican Party crafted a tax land mine when they put in place the Bush tax cuts with a ten year expiration — that they knew that the laws would force action by the Democratic party (you mean the Republican’s knew that after George W Bush there wouldn’t be another Republican in White House, nor would they be in control of either branch of the legislature?

Hmm… I don’t but it, but if it’s true that’s cause for major concern.

So the rational goes:

  • If the Democrats vote on the issue and they choose not to renew the tax cuts; they are seen raising taxes.
  • If the Democrats vote on the issue and they choose to renew the tax cuts for only those making less than a quarter million dollars; they are seen as raising taxes.
  • If the Democrats vote on the issue and they choose to renew the tax cuts as they are now, the Republican’s get what they want, and they are seen taking no action to address the growing deficit.

I don’t know what alternate Republican reality these analysis came from, but I certainly don’t understand why the Democrats can’t take the reigns and turn this into a political hot potato for the Republicans.

Elections are about votes; and most American’s earn far less than a quarter million dollars per year, so they aren’t effected by renewing the tax cuts for only those who earn less than that (the current strategy favored by the Obama administration)… so leverage that, show how (once again) the Republican’s want to benefit those who are wealthy, and are only providing lip service as to trying to control the deficit (it is, after all, Republican policies of the Bush administration that created the deficit we have now — remember when Bush took office there was the so called budget “surplus”).

Regardless of your political affiliation, the only real way to take control of the deficit is spend less than you take in — it’s not a revolutionary concept, and in the end it’s likely we’re going to have to both increase taxes on at least some American’s, cut waste, and likely reduce spending.

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Originally posted 2010-10-02 02:00:45.

Bye-bye, tax breaks?

By Jeanne Sahadi, senior writer CNN
October 26, 2010: 2:05 PM ET

NEW YORK (CNNMoney.com) — Who says there’s no bipartisanship? Democrats and Republicans running for Congress are finding every way possible to assure voters they will keep Americans’ taxes low forever.

But those will be hard promises to keep after the economy recovers. Tax experts almost uniformly say the next Congress should rethink the more than 200 tax breaks in the federal code that cost more than $1 trillion a year. And, yes, that includes even the really, really popular ones.

Lawmakers may be presented with the idea as early as December, when President Obama’s fiscal commission issues its report. There is a possibility the commission may recommend curtailing or eliminating some tax breaks.

Commission co-chairman Erskine Bowles has publicly expressed support for the idea. So has commission member Alice Rivlin, former White House budget director. Another member, Republican Sen. Judd Gregg, who coauthored a bipartisan plan for tax reform, supports curtailing some breaks but only to lower marginal tax rates in the context of broader reform.

The $1 trillion-plus in forgone revenue is close to the amount allocated for defense and discretionary spending in 2010, or the equivalent of nearly a third of the latest federal budget.

Cutting back on tax breaks can be a more efficient way to bring in revenue than raising income tax rates because it would subject more work and business income to taxation. If done right, it also promises to make the tax code fairer and simpler.

For years, leading tax experts and economists from the left and the right have contended that tax breaks are, in reality, a form of spending. The cost of tax breaks is mostly invisible, since there’s no formal accounting of them on Uncle Sam’s books. And once passed into law, they are rarely scrutinized.

“[Tax breaks] are styled as tax savings, but really function as replacements for explicit government spending. Some make sense, but a great many are poorly targeted and would never pass Congress if presented as an outright spending proposal,” tax expert Edward Kleinbard wrote in an article this summer called, “Sacred Cows: It’s Them or Us.”
Popular tax breaks: Dogfight ahead

A disproportionate amount of the lost revenue from tax breaks comes from just five of them.

Not surprisingly, those five are also among the most popular:

  • mortgage interest deduction;
  • tax-free income workers get from employers to pay for health insurance;
  • deduction for state and local taxes;
  • deduction for charitable contributions;
  • and myriad tax breaks for retirement savings.

Many of those breaks are only available to the roughly one-third of taxpayers who itemize deductions on their returns.

There have been a number of proposals over the years for how the biggest breaks might be modified.

Most recently, the bipartisan Committee for a Responsible Federal Budget put out a paper highlighting many possibilities that combined could raise $1.7 trillion in additional revenue over a decade.
Think you’re smart about deficits? Try this

For instance, consider the money that workers receive when their employers contribute to their health insurance costs. That subsidy is currently treated as tax-free income to the worker and is unlimited.

The subsidy could instead be converted to a credit, which is a dollar-for-dollar reduction of one’s tax bill. The credit would be phased out for higher income taxpayers and it would be refundable for low-income workers who don’t make enough income to owe any federal income tax.

“This strategy would reduce the incentive for employers to offer ‘gold-plated’ insurance plans,” the budget watchdog group wrote.

The mortgage interest deduction — currently available on up to $1.1 million of borrowing — could be gradually reduced so that it only applies to loans on up to $500,000. And the option tax filers get to deduct interest on their second homes could be eliminated.

“[Today’s] policy is regressive (providing larger tax breaks to those well off enough to purchase more expensive homes), promotes homeownership over other productive investments and costs the government roughly $100 billion a year in lost revenues,” the committee noted in its paper.

Since everyone in Congress can identify and vilify what they see as “tax breaks for special interests,” curbing tax breaks has a lot of bipartisan support. The problem, of course, is that there’s less agreement on just which tax breaks deserve the ax or at least a haircut.

And, of course, since politicians much prefer to hand out tax breaks to voters and financial backers, it may be hard for them to muster the mettle required to reverse gears.

How hard? Bowles put it plainly at the fiscal commission’s public meeting in September.

“It’s not going to be easy,” he said. “It’s not going to be fun, and in many cases, it’s also not going to be popular. It is going to require sacrifice on the part of all Americans to get there.”

Original Article on CNN.com

Originally posted 2010-11-06 02:00:55.

Tax on the super rich.

There is a good read in The Fiscal Times, an article by Bruce Bartlett that looks at the argument over Warren Buffet’s statement about raising taxes on the super rich.

It’s a one-dimensional argument; but it does bring into question the pillar of the argument has been used to support lowering the tax rate on the super rich.

One thing I will note before sending you off to read this — it’s not the tax rate so much we should be thinking of, but the effective tax rate.  When large corporations and wealthy individuals pay their taxes they often take advantage of numerous deductions that ordinary people cannot (so called loop-holes)… so their effective tax rate ends up being near zero.

I personally think that a tiered flat tax (with no deductions/exemptions), or a value added tax (assessed at each point a good or service is transferred) are the better solutions to creating a tax system that is far less expensive to implement/enforce, and much fairer overall to everyone.

If the current system is kept, not only do the tax brackets need to be changed (as well as the way they work), but the entire tax code needs to be overhauled to remove the loop-holes (and simplify it).

Buffet May Be Right, but the Top Tax Rate is Wrong by Bruce Bartlett, The Fiscal Times

Originally posted 2011-08-20 02:00:28.

The Tax Man!

It’s tax day, the deadline to file Federal (and State) Income Tax returns in the United States…

My vote is that we do away with income tax entirely; implement a “wealth” tax and a VAT.

Simplify the tax laws!

Originally posted 2009-04-15 12:00:45.

US Poverty

The Census Bureau released new numbers on the US poverty rate yesterday — 14.3% last year; the highest since 1994.

Largely due to the rising unemployment amount working age individuals in this country (even the US government admits unemployment to be in double digits — and we can all be sure that they minimize the numbers as much as they can through their creative accounting and adjustments).

13.9%, or 39.8 million people in 2008 to 14.3%, or 43.6 million people in 2009… and you can be sure that number will be even higher in 2010.

The report also showed the number of Americans without health coverage rose form 15.4% to 16.7% (or 50.7 million people); mainly because of the loss of employment and employer-provided health insurance.  And the new health care provisions were passed; the main provisions won’t take effect until 2014.

Because of the Recovery Act and many other programs providing tax relief and income support to a majority of working families — and especially those most in need — millions of Americans were kept out of poverty last year.
· President Barrack Obama

The really incredible thing is that the numbers were expected to be much worse — and in fact it’s likely that increases in Social Security payments and expansion of unemployment insurance through federal extensions helped keep the numbers in check.

Clearly those earning over $250,000 need to have their tax cuts renewed!

Originally posted 2010-09-17 02:00:40.

Voter ID Requirements

Since roughly 1750 the phrase “taxation without representation” has been used in the country as a rallying phrase for action.

In the Revolutionary War, it reflected on the British Crown taxing citizens in the colonies without providing them any voice in Parliament.

In Washington DC it became the motto of citizens pointing out that they had no representation in the House of Representatives of the Senate (and was a slogan used on Washington DC license plates — you may recall President Bill Clinton having those put on the White House limosines, and President George W Bush having them removed).

Now my questions is… if the states who have implements “tough” new voter identification requirements (even though voter fraud has never been shown to be a substantial issue) disenfranchise American citizens from their Constitutional right to vote; should they be required to pay taxes?

People who choose not to vote are one thing; but people who are denied their right to vote is entirely another…

I fear another messy election is going to be on us in 2012, much as it was in 2000 — perhaps it’s time for the United States to use international observers to insure that elections are conducted in a way that insures they comply with not only the letter of the law, but the intent of the law.

Originally posted 2011-11-06 02:00:59.

Boehner makes sense

House Minority Leader John Boehner (Republican) stated that he would support President Barack Obama’s proposal to renew the expiring Bush tax cuts only for those making less than $250,000 if it were his only option.

The Republicans in both the House and Senate were quick to add fuel to the fire and turn up the volume on the rhetoric about fiscal responsibility, watching out for the little guy, etc, etc, etc — and saying that they believe the tax cuts should be extended for all Americans.

Do people making over $250,000 really need a tax cut?

Seems to me that they’re doing OK; much better than the average American is fairing in this economic crisis (I won’t call it a recession because it certainly seems much more like a depression — so we’ll leave it a crisis).

The bottom line is we have to pay our bills — and as the Republicans are complaining about the government has been spending out of control… but what they don’t remind you is that George W Bush is responsible for the out of control spending; Barrack Obama and his administration haven’t spent anywhere near as much as George W Bush — and a large amount of what is being spent now is being spent on a war that George W Bush threw this country into (and lied to get the support for it).

I’m well aware that it’s a tenant of Socialism that we take more from those who can afford it, and give it to those who need it…

From each according to his ability, to each according to his need
· Karl Marx, 1875 Critique of the Gotha Program

But in point of fact the American income tax structure has always been based on a progressive tax (those who earn more, pay more); except what happens now is that those who earn enough can avoid taxes by taking advantage of the loop holes the complex laws afford them.

We really need to rework the tax system so that it’s more equitable across the board; and those who benefit greatly from society pay their fair share of the costs of supporting society… but until then, I think getting $700B from those who earn more than a quarter million dollars per year is a necessary step to putting this country back on the road to stability.

Originally posted 2010-09-15 02:00:52.

US Drug Policy

I certainly don’t have a solution to the drug problem in the US; but clearly the US government doesn’t either.

History teaches us many lessons, and when we ignore those lessons we often find ourselves repeating the errors of the past.

Prohibition didn’t work.

We make arbitrary decisions about which drugs are acceptable are which ones are not (we have legalized alcohol, but not drug in social use for much longer).

The Criminal Justice Policy Foundation has some interesting views on US drug policy:

The United States is at a crossroads in its drug policy. In our effort to quell the drug trade, we have greatly increased patrol and inspection on our nation’s borders. We have increased arrests for violation of drug laws and lengthened sentences. We have stripped away the rights of drug offenders and introduced drug testing in our nation’s schools and workplaces. We have poured billions of dollars into overseas anti-drug paramilitary operations that commit violent human rights abuses. And in the process of trying to eradicate illicit coca crops, we have destroyed over a million acres of land in Colombia alone.

Since 1990, more than half of the federal prisoners in America are serving time for drug offenses. The availability and purity of drugs has steadily increased over the past twenty-five years. The violence in the drug trade remains excruciatingly high and surges from year to year and city to city. Meanwhile, there remain a myriad of social issues as a result of drug abuse.

The use of drugs, and the enforcement of the anti-drug laws, effects all subpopulations in the U.S., all sectors of the economy, and many aspects of the legal system. Whether we are talking about violence, poverty, race, health, education, community development, the environment, civil liberties or terrorism, the illegal drug market is an important factor in the conversation.

We have tried to use force, prohibition and incarceration to control the drug market, but our efforts have actually led to a more efficient drug trade and a hugely profitable drug market. It is time to rethink our strategy and redefine our goals.

This section holds articles and speeches given by CJPF that address drug policy in all of its forms and effects. In this, we strive to provide a comprehensive framework for rethinking the war on drugs.

You can read the complete statement and peruse their web site at

Criminal Justice Policy Foundation

And if you’re wondering, I found their site through an article from NPR on taxing cocaine rather than (or in addition to) marijuana.

NPR

Originally posted 2010-03-28 02:00:43.