Category: tax policy

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Accountability Common Sense government transparency national politics & policies porkbarrel politics tax policy too much government

The Spenders’ Eternal Excuse

Gluttony

Most modern welfare states have a huge problem: their politicians promise more than government revenue covers. So they borrow and borrow until they can borrow no more.

And then they go down. Like Greece has gone down. Banks are closed there, and the people suffer.

The problem is over-spending and over-promising (the latter being merely committing to future over-spending, so let’s just call it all over-spending). But when you confront a partisan of such extravagance — whether that person be a politician or a constituency beneficiary or an ideological socialist or social democrat — the most common defense is: THEY WOULDN’T LET US TAX ENOUGH.

The “they” in such defenses could be an opposition party, or a constituency, or . . . “the evil rich.”

But anyone with something other than a lump of coal for a brain knows the real truth: responsible people don’t make such defenses. If a political difficulty gets in the way of the extra revenue needed for something promised, it’s practically the same as an economic difficulty, so the excuse falls apart.

Say again?

If you cannot get enough revenue for your favorite program, it doesn’t matter whether the people who are the source of your “needed” revenue are broke — have nothing to give — or they simply balk at giving. The point is, you don’t have the revenue. The responsible reaction would be: cut back on spending.

Responsible people budget; irresponsible people blame others for not having the wherewithal to spend and spend and spend.

This is Common Sense. I’m Paul Jacob.

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Gluttony

 

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Accountability Common Sense folly general freedom government transparency initiative, referendum, and recall tax policy

Republican-Required Referendum

Politicians in a jar

Last November, Nevada Republicans scored a “stunning” political sweep. The party’s incumbent governor rolled up a 40-point win, while the GOP gained majorities in both the Assembly and Senate — the first time Republicans have controlled all three since before the Great Depression.

At the same time, voters crushed a ballot measure to create a 2-percent gross receipts tax on businesses taking in over $1 million, by a whopping 78–22 percent. Gov. Brian Sandoval (R) and GOP legislators opposed the tax.

My tax-fighting friend Chuck Muth, president of Citizen Outreach, must be happy as a clam, living the easy life.

No?

Mere months after that vote, the solidly Republican state legislature passed — you guessed it — a gross receipts tax. And with it, for good measure, all stuffed into Senate Bill 483, the Republican majority also made permanent a whole slew of taxes passed as temporary measures back in 2009.

The total tax increase — ahem, to celebrate the Republican trouncing of Democrats — turned out to be the largest in Nevada history: $1.1 billion.

I wish this story of betrayal were shocking, not par for the course. But as we all know, the lack of surprise signals the depth of the problem.

Thankfully, Silver State citizens have what Ralph Nader calls the “ace in the hole”: statewide initiative and referendum.

Two referendum measures have been filed. One would repeal the gross receipts tax. The other, filed by Muth’s “We Decide Coalition,” places the entire billion-dollar-plus tax hike onto the ballot.

“It’s time for these elected elites to stop using Nevadans as ATM machines,” Muth recently wrote.

Yes, time for Nevadans to crank up the machinery of democracy . . . starting with 55,000 signatures on petitions for each measure.

This is Common Sense. I’m Paul Jacob.

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Politicians in a jar

 

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Accountability general freedom tax policy

The People Supreme

Tax Vote

“We’re the only state in the nation,” wails Wade Buchanan of the liberal Bell Policy Center, “where you can only raise revenues, taxes, by a vote of the people.”

Buchanan is talking about his state of Colorado and defending his side in the Kerr v. Hickenlooper case, which features 34 card-carrying members of Colorado’s political elite — sitting legislators, former legislators, former U.S. congressmen, local politicians and other assorted bigwigs — suing the voters of Colorado for having the gall to pass the state’s Taxpayer Bill of Rights (TABOR) initiative back in 1992.

Lovers of big government call TABOR a disaster; most Colorado voters like TABOR and will vote to keep it.

The crux of the case? The ridiculous notion that legislators have some cockamamie constitutional right to levy taxes and spend money without the people empowered with any veto. “When the power to tax is denied,” the suit alleges, “the legislature cannot function effectively to fulfill its obligations in a representative democracy and a Republican Form of Government.”

Immediately, however, the legal issue is whether the politically powerful Kerr plaintiffs even have standing to bring the lawsuit.

Last week, the U.S. Supreme Court vacated a 10th Circuit Court of Appeals decision that had granted standing, returning the case to the appeals court “for further consideration in light of Arizona State Legislature v. Arizona Independent Redistricting Commission.”

That’s good news.

“Most tellingly,” constitutional scholar Rob Natelson points out in a Denver Post column, in that Arizona case “the court praised direct democracy and held that it was ‘in full harmony with the Constitution’s conception of the people as the font of governmental power.’”

Font? We’re the boss.

This is Common Sense. I’m Paul Jacob.

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Tax Vote

 

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crime and punishment folly general freedom tax policy

Thieves Caught, Return Loot

Thieve's Loot

Lyndon McLellan, a convenience store owner, was robbed. The marauders took $107,000 of his honestly earned money.

We don’t need the police to find out who did it (and no, the police themselves are not the culprit, not this time). The IRS took the money, suspecting that he “structured” his bank deposits to avoid reporting requirements. McLellan’s niece, responsible for making deposits, had followed a teller’s (bad) advice to deposit the money in such a way as to avoid paperwork. The IRS noticed the “too small” deposits and looted the account despite having no indication that the funds were ill-gotten.

“It took me 13 years to save that much money,” McLellan says, “and it took fewer than 13 seconds for the government to take it away.”

This, even though the IRS had recently promised not to summarily nab account contents solely for alleged “structuring.”

At first, the government offered to settle with McLellan by returning one half the money, their standard (and outrageous) offer in such cases. But neither McLellan nor the Institute for Justice — the champions of property rights helping him with the case — accepted the government’s “deal.”

Last week, the IRS dropped the case and agreed to return their booty. But only the principal. No interest, no attorney fees (for McLellan’s first lawyer), none of the $19,000 McLellan paid an accountant to prove his innocence.

IJ will continue to litigate. We can hope that the IRS will continue to lose.

This is Common Sense. I’m Paul Jacob.

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Thieve's Loot

 

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general freedom government transparency tax policy

Latest Learned About Lois Lerner

Lois Lerner, IRS, collage, photomontage, puzzle, investigation, illustration, editorial, abuse, law, foundations, harassment,

Is it time to spell out the IRS as the Internal Revenue Scandal?

The IRS has so many scandals under its belt.

But the biggest, from a broad, threat-to-the-republic point of view, surely remains the agency’s targeting of Tea Party and conservative organizations seeking 501c(3) and 501c(4) nonprofit status. Agents ideologically tagged their applications for special obstruction in the run-up to the 2012 presidential campaign. And after.

I don’t bother Googling to get my IRS-scandal updates, I just visit the indefatigable Paul Caron’s TaxProf Blog. Day in, day out, for the past 700+ days and counting, TaxProf has aggregated all the latest reportage and analysis about this abuse of power.

Lois Lerner — former head of the IRS’s stomp-conservative-nonprofit-applicants division — has both declared herself innocent of any wrongdoing and asserted her Fifth Amendment right not to incriminate herself.

But evidence is piling up of her actual attitudes and what-she-knew-when.

TaxProf points to an email by Lerner from way back in February of 2012 in which she advocates training for IRS staffers in the fine art of “understand[ing] the potential pitfalls” of providing too much information to Congress. A 2013 email by Lerner states that she can understand “why the IRS criteria” leading to the targeting of Tea Party and other groups “might raise some questions.”

The documents are out in the wild now, thanks to Judicial Watch’s Freedom of Information Act requests. JW has been relentless in trying to hold the IRS accountable.

Which has to be one of the very toughest jobs on earth.

This is Common Sense. I’m Paul Jacob.

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Lois Lerner

 

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Common Sense national politics & policies tax policy too much government

Poor, Poor IRS

Squeezing the Taxpayer

As Tax Day approaches, you can bet the Internal Revenue Service has readied itself to help taxpayers file their returns.

No?

“It’s abysmal,” admits IRS Commissioner John Koskinen, discussing his agency’s help for Americans trying to decipher a byzantine, ever-changing tax code.

It seems only four of ten citizens ever succeed in getting through to the IRS on the phone, even after waiting multiple hours. Over days. There have been over 5 million “courtesy disconnects” — that’s IRS lingo for its phone system hanging up on you.

To boot, once you get to a real person, that employee can’t tell you much.

The problem? According to the Washington Post, the poor agency lacks the necessary funds because “Republicans on Capitol Hill have slashed the IRS budget.”

Actually, the IRS budget has gone up every year . . . in nominal dollars. When adjusted for inflation? Well, there has been some decline.

Bemoaning this supposed “era of shrinking government,” the Post assails conservatives in Congress, citing the “cuts” as “punishment for a string of missteps: an extravagant conference for employees in Anaheim, Calif., the targeting of conservative groups seeking tax exemptions, $1 million in bonuses given to agency employees who didn’t pay their federal taxes.”

Punishment seems in order.

But another story puts in perspective this crocodile cry for more money. The Daily Caller recently reported: “The Obama administration has quietly killed an IRS tax preparation program designed to help low-income and disadvantaged citizens, choosing instead to give millions of dollars to liberal groups for the same purpose.”

Look on the bright side, a review of these help-groups found their advice to have a mere 49 percent error rate.

This is Common sense. I’m Paul Jacob.

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Squeezing the Taxpayer

 

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Common Sense First Amendment rights tax policy too much government

Feinstein No Einstein

Anarchy and Chaos

Government’s job is to protect our lives and liberties. But how best to accomplish this? Should books be banned? Websites blocked?

Diane Feinstein thinks so.

Sen. Feinstein (D-California) wants to ban The Anarchist Cookbook from the Internet. The book, which came out in 1971 with lots of radical ideas, including notoriously unreliable instructions for making bombs, is now a website. Perhaps the quality of  the “cookbook” has helped us survive against the anarchist threat these last five decades.

Today, the threat is not anarchist but Islamist terrorism. So of course Sen. Feinstein also wants the Al Qaida magazine Inspire “off the Internet.”

Government censorship, anyone? Free speech, Senator?

Now, I don’t approve of the bombing and murdering of innocents for any cause. So I am not at one with deadly anarchists or deadly jihadists. Count me as among their enemies.

But, at the risk of being called a “liberal,” I don’t think we should defend ourselves against anarchists or jihadists or other terrorists just any old way. For both moral and strategic reasons, we ought not be killing innocents by drone strike, along with those simply declared guilty, without any lawful process at all.

Likewise, we ought not abridge our own cherished principles and the rule of law.

Including the First Amendment.

After all, that’s what government is supposed to be protecting in the first place.

The fact that Feinstein seems so comfortable with simply “banning” books and magazines and websites suggests an illiberal, unAmerican attitude. An attitude that threatens to do more damage to the homeland than any “cookbook” or pro-terrorist magazine or website ever will.

This is Common Sense. I’m Paul Jacob.

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Anarchy and Chaos

 

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general freedom national politics & policies tax policy

The Taker’s Gift

The Tax Trick

Say a mugger robs Ed instead of you. Has the mugger given you a present of your stuff by not taking it? Is his non-taking a “giveaway”?

No. If you possess something you have honestly earned, it is yours by right, not as a special gift from each person who abstains from relieving you of it.

Why is this not just as true when the prospective stuff-taker is a government?

Whatever case may be made for taxing you to fund a governmental goal, the state is not “giving” you whatever part of your wealth it lets you keep.

Yet this is the claim that partisans of big government repeatedly make. They apparently aim to undermine any hint of willingness to let us keep more of what belongs to us.

We see it again in the context of President Obama’s recent attacks on the plan of some Republicans to do away with estate taxes, the notorious “death taxes.” This tax relief would allegedly be a “giveaway” to those who have worked most successfully to earn something worth leaving to people they care about. It would also allegedly “deprive” non-recipients of some government handout no longer fundable because of the tax cut.

Being taxed less is always about keeping more of your own money and being able to spend it as you wish, including on heirs.

That’s a feature of tax cuts — not a bug.

This is Common Sense. I’m Paul Jacob.

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mugger300

 

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free trade & free markets general freedom Ninth Amendment rights tax policy

Taxation Rules

Overburdened Pack Mule

It turns out the United States is a tax haven.

Haven? Heavens! I live here. I don’t feel that low-tax feeling when April 15 rolls around.

But the Cato Institute’s Dan Mitchell, an expert on all things tax-policy — a dirty job, but somebody’s gotta do it — says “The U.S. Is a Tax Haven . . . and That’s a Very Good Thing.”

He is a huge fan of international tax competition. He likes it when governments at least marginally decrease the tax burden on prospective producers and investors, so as to lure production and investment from other tax jurisdictions. In his opinion, “we need some way to restrain the greed of the political class.”

Fans of big government disagree. Tax competition hinders their master plans to control and plunder the rest of us.

Mitchell knows that we mere U.S. citizens tend to lug a big tax load. But the United States is in fact “a tax haven. Not for Americans, of course, but . . . we have some good rules for foreigners.” In addition to their ability to exploit the especially robust corporate privacy rules of a state like Delaware, foreign investors can avoid taxes on interest and capital gains on their stateside investments.

Now, Mitchell says, let’s apply those “same good policies to Americans.”

Hear hear! Havens I can access are even more appealing than those I can’t.

This is Common Sense. I’m Paul Jacob.

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Overburdened Pack Mule

 

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initiative, referendum, and recall tax policy

Two-Thirds to Raise Taxes

You can’t keep a good Eyman down.

“Who says politicians don’t listen?” asked Tim Eyman in a recent email to his Washington State supporters.

“OK, you got me: we normally do. 😉  But not today.”

Pleased as punch, Eyman announced the resurrection of the two-thirds requirement for legislators to raise taxes. Three times voters have passed initiatives promoted by Mr. Eyman mandating a 2/3 legislative vote or a vote of the people before taxes can rise — in 2007, 2010 and again in 2012, the last two times by a whopping 64 percent vote.

But in 2013, the state supreme court ruled voters could not so limit their state legislature, short of a constitutional amendment. And — you guessed it — the Evergreen State lacks a statewide initiative process for voters to amend the constitution . . . without the permission of their legislators.

Eyman was blocked; the voters thwarted. Legislators could go back to raising taxes as usual.

Not so fast!

Enter State Sen. Mike Baumgartner (R-Spokane), who helped motivate a narrow GOP majority to pass a new Senate rule, 26-23, that no new tax may pass the chamber without garnering a 2/3 vote.

Democrats are livid. “Going around the voters is not only disingenuous,” bemoaned Washington State Democrats Chairman Jaxon Ravens, “it is wrong.”

Going around the voters? Really? It must have slipped his mind that “the voters” had previously voted (and been thwarted) three times.

“[H]as the Senate already nullified any attempt by Gov. Jay Inslee to create a carbon emissions charge or a capital gains tax — solely by rearranging its own internal rules?” asked John Strang at Crosscut.com.

Yes is the answer from those pesky voters.

And from their representatives who listen.

This is Common Sense. I’m Paul Jacob.