Category: tax policy

Categories
tax policy too much government

Many Thanks to Grover

Since the Super Committee failed to come up with the promised $1.2 trillion in pretend deficit reduction over the next decade, many in the nation’s capital blame Americans for Tax Reform President Grover Norquist.

Our taxes — and even the taxes of people with the nerve to be wealthy — are not being increased. This, you must understand, is all Grover’s doing, the fault of the Taxpayer Protection Pledge he “pushed” on more than 275 members of Congress.

His pledge articulates a simple, straightforward idea: Taxes are too high and politicians should stop increasing them. Incumbent politicians appear fearful of breaking this pledge. If they go back on their word, they risk being defeated come the next election.

Last Sunday, 60 Minutes’ correspondent Steve Kroft blurted out to Norquist, “You’ve got them by the short hairs!”

Norquist responded, “The voters do, yeah.”

Are we really supposed to be sad about the system of accountability known as elections?

Former Wyoming Senator Alan Simpson whined that Norquist “may well be the most powerful man in America today.”

“The tax issue is the most powerful issue in American politics going back to the Tea Party,” Norquist explained.

If you think the federal government is too small and does too little, a pledge not to raise taxes makes scant sense. But if you think, like Norquist, that government is a whole lot bigger than it should be, pledging not to make it bigger still is a no-brainer.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall tax policy

Time Waits for the Tax-Fighter

More than two decades ago, I got involved in my very first initiative campaign.

In 1990, tax-​fighter Jim Tobin, then the head of Taxpayers United of Illinois, filed the Tax Accountability Amendment. I organized the petition drive, which gathered more than half-​a-​million voter signatures to earn a place on the ballot. Polling showed more than 70 percent support for the issue, but a lawsuit by the Chicago Bar Association struck our initiative from the ballot.

The amendment would have mandated a three-​fifths vote of both legislative chambers to increase taxes. By requiring public notice and hearings before a tax hike could be enacted, the amendment also promoted transparency in the legislative process — long before the “transparency” buzzword became cool.

Illinois’s very limited initiative process has allowed for only one issue to appear on the state ballot — a successful 1980 measure, cutting back the number of state legislators and electing them in single member districts.

But even without a vote, Tobin wrested a pledge from both candidates for governor to abide by the provisions of the amendment, which the victorious governor stuck to for several years.

Tobin’s group has grown, finding considerable success battling big taxing politicians. It hasn’t forgotten about transparency, either. The group has launched a national campaign to provide the public with information on lavish and unsustainable pensions being collected by public employees.

Tonight, I’ll be with Jim Tobin at a big event in Chicago celebrating the 35th anniversary of his now national anti-​tax organization, Taxpayers United of America.

Congratulations, Jim! Thanks for letting me be a part of it.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets tax policy

An Embarrassment of Riches

Have you heard the terrible, awful news?

Over roughly the last three decades, specifically from 1979 to 2007, Americans across all segments of the economy — from the poorest to the richest — have seen their incomes rise.

It just doesn’t get any worse, eh?

If you haven’t committed hara-​kiri, here are the cold, hard facts from the Congressional Budget Office report:

  • The poorest fifth of the population, on average, saw their inflation-​adjusted incomes increase 18 percent.
  • The 60 percent of Americans in the middle earned nearly 40 percent more, after taxes.
  • Those of us from the 80th percentile to the 99th had income gains of 65 percent.
  • Incomes for the top one percent of earners were up a whopping 275 percent.

One might think that universally higher incomes are a good thing, but that depends on how you look at it.

“If you think of America’s total income as one giant pie,” an ABC World News Tonight report explained, “the richest one percent have seen the size of their piece double over the last 30 years. And everyone else has seen their piece get smaller.”

Well, I’m really hoping that we won’t start thinking of all our incomes as “one giant pie.”

What about this 99 percent versus 1 percent warfare?

That’s media slant. Most Americans don’t begrudge someone good fortune, and affirmatively admire those who grow wealthy in return for smarts and hard work.

But they do oppose bailouts.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Fair Share Laid Bare

President Barack Obama says “it’s only right that we ask everyone to pay their fair share in taxes.”

Rich folks must be wondering when their refund checks will start arriving in their mailboxes.

The current income tax is progressive, requiring those making more to pay a higher rate. Thus, those earning a million dollars pay, on average, 29 percent of their income to Uncle Sam, while those taking home $50,000 to $75,000 a year pay an average of 15 percent. This progressivity can be seen in wide angle, too: Figuring credits and exemptions, 47 percent of Americans pay no federal income tax at all. Meanwhile, the top ten percent in income pay 73 percent of all income taxes collected.

And Obama’s idea of taxing “the rich” would only make it more unfair.

But, wait, what about billionaire Warren Buffett? Doesn’t he pay a lower percentage of his income in taxes than does his secretary?

Most of Buffett’s income comes off his investments, not in salary. That’s capital gains, taxed at 15 percent. Obama decries it, but doesn’t propose any specific increase in capital gains taxes. Why? He doesn’t want the stock market to crater. As he put it two years ago, “The last thing you want to do is raise taxes in the middle of a recession.”

So, when President Obama says the rich should pay their fare share, what does he mean? Simple: “If you’re not rich, vote for me.”

This is Common Sense. I’m Paul Jacob.

Categories
ideological culture tax policy

A Social Contract You Can’t Refuse

Massachusetts U.S. Senate candidate Elizabeth Warren really worked up “progressives” with a rant about “fair taxation.”

“There is nobody in this country who got rich on his own — nobody.”

As A. Barton Hinkle points out, no one suggests otherwise. But the real meat of her argument is worth studying … for a peculiar pathology in logic:

You built a factory out there? … You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-​forces and fire-​forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.

Upon this rests her case for ramped-​up progressive tax rates.

Apparently, according to Ms. Warren, successful businessfolk are takers only. But all along the way, businesses pay for the services they hire. Indeed, they pay for roads, too. Truckers, for instance, pay special weight-​rate taxes and licenses for carrying heavy loads across roadways. 

Her “argument” no more justifies government taxing truckers or factories more than a similar argument, mutatis mutandis, would allow the kid who mows your lawn to reach into your wallet when you aren’t looking.

The social contract doesn’t originate the way Warren specifies. Her logic establishes only that she’s not thinking clearly about obligations and lacks an appreciation for making a business succeed.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Excise Excitement Exorcizes E‑Biz

Retail sales taxation became vogue among the states of the union during the Great Depression. When other revenue sources dried up, many states decided to nab potential taxpayers at each transaction.

We’re in a depression again, and numerous legislatures are looking to expand their retail sales tax base by targeting out-​of-​state Internet purchases.

California has made the biggest stink about this, and its fight with Amazon​.com has been in the headlines for some time. Though the issue has been put “on hold” for a year, the Assembly’s rapacity has produced at least one effect. It has driven many online businesses out of the state, and severely curtailed the online sales of many California brick-​and-​mortar concerns.

Take Shopobot, a new online business. One of this San Francisco company’s biggest revenue streams was Amazon. And Amazon dropped it like a hot rock.

So what did Shopobot do? It fled California for the cooler Seattle, Washington.

Why skip Oregon — which lacks a retail sales tax? My guess is that Oregon’s political environment struck the Shopobot folks as nearly as crazy as California’s, so heading further north made more sense, to sit beside Amazon itself, and across Lake Union from Adobe’s compound, er, “campus.”

The online sales tax question is widely perceived as a problem. The only solution, I guess, is to let Congress do its constitutional duty and “regulate interstate commerce.”

Amazon sure wants that.

But why am I not optimistic about a good solution?

This is Common Sense. I’m Paul Jacob.