Category: tax policy

Categories
tax policy

Death But No Taxes

Is the Internal Revenue Service inevitable?

I’ve often discussed the IRS’s ideologically motivated harassment of taxpayers as fostered by Lois “I Took the Fifth” Lerner (e.g., here and here and here and here). But typical nonpartisan forms of IRS harassment are also deplorable.

Consider the so-​called “practice” audit, to which blogger Philip Hamburger was once subjected.

In any field, employees may presumably be sicced on a person primarily for training purposes. If you’re a new Spanish Inquisition employee, maybe you’re given somebody to flay and strangle not because he’s particularly heretical but just so you can hone the torture techniques. Seems wrong; but, you know, people have to be trained.

Same thing at IRS. Taxpayers sometimes get audited just so the new guy can fine-​tune making taxpayers sweat over each deduction.

It’s why Hamburger got audited. When an IRS supervisor admitted that there was no problem with his small charitable deduction, that the point was only to enable an (absent) agent to practice auditing, our humble taxpayer almost blew up. Fortunately, his accountant intervened to ask, simply, whether the matter was now therefore closed. Yes, it was.

Year in, year out, the IRS causes millions of us to waste time and energy and to suffer angst thanks to the agency’s sundry demands. Solution: shut it down. No law of nature ordains that our income be federally taxed, and until 1913 it mostly wasn’t.

What prevents such urgently needed reform is only politics, not physics.

This is Common Sense. I’m Paul Jacob.

Categories
crime and punishment tax policy

Overkill America

The death of Eric Garner, a 43-​year-​old Staten Islander, by police chokehold, not only sparked in me the usual combination of sadness, anger and frustration — there was an additional element: would this do it?

Would the nation’s shock, incredulity, indignation amount to anything?

Lots of questions. But one thing not being focused on in the standard reports was noted by Scott Shackford of Reason. It’s not merely a question of why the bust went so violent. Why, he asks, a bust at all? “We should be concerned that the reason why the police swarmed Garner in the first place is getting lost. He allegedly possessed ‘untaxed cigarettes.’ That is it.”

A tax matter.

The police are arresting people — and going into overkill mode in the process — on tax matters.

Couldn’t this such issues be handled by mere citation, followed by a court summons? With an arrest the last resort?

Why go all violent when violence is not really in order?

But maybe it’s not just about the taxes. Or “contraband.” Maybe this is also about “drugs.” (Yes, tobacco’s a drug.) We’ve long had a “War on Drugs” in this country. It has not gone well. As I suggested last week (as well as yesterday, on Townhall), the effects have not only been wide and deep, but inevitable.

War is like that. Expect the “unintended consequences.”

Scott Shackford suggests that New York lower the city’s high sin taxes on cigarettes.

But maybe the whole mindset of the modern state needs changing. Big things, like murder, slavery, etc., those are worth fighting about. Let’s not go to war over the little things.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Value the Vote

What happens when politicians create a special new election date in order to place a tax increase before voters … when least expected?

Did I mention that, as the Seattle Times reported, Proposition 1 “enjoyed massive support among politicians, labor unions, environmentalists, social-​equity groups and business coalitions”?

Or that the YES campaign outspent the NO side by $654,922 to a mere $7,700, a nearly 100 to 1 margin?

The answer: On Tuesday, voters in one of the most liberal counties in America said NO. A solid 55 percent rejected the ballot measure.

Proposition 1 would have hiked King County’s 9.5‑cent sales tax by 0.1 percent and imposed a $60 annual car-​tab fee. The idea was to provide more funding for mass transit and local roads, with 60 percent of that revenue going toward the area’s mass transit system.

Transit officials argued that without the additional dough they’d have to make deep service cuts.

“The voters are not rejecting Metro; they are rejecting this particular means of funding Metro,” explained County Executive Dow Constantine. “We know the people of King County love and value their transit service.”

Love? Perhaps. Ridership is reportedly at a near-​record high, about 400,000 a day.

Value? Not so much.

This very “progressive” electorate expressed, with utmost clarity, their unwillingness to pay higher taxes for transit. Further, there’s an unmistakable signal in the refusal of King County Metro officials to consider raising the price of their beloved service to become sustainable.

Isn’t it only fair to ask those riding the bus to pay the fare?

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Tax the Poor!

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.

Categories
free trade & free markets tax policy

Tax-​Free New York?

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.

Categories
tax policy too much government

NY Democrats Surrender, Sorta

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.