Category: tax policy

Categories
ideological culture tax policy

The Audacity of Sleep

During Wednesday’s big speech, just as President Obama laid into Rep. Ryan’s Medicare reform proposal, Vice President Joe Biden skirmished with the Sandman. Zzzzz.

Obama wasn’t boring, though. He had a theme.

As he saw it, the Republicans’ “pessimistic” vision is of an “America [that] can’t afford to keep the promise we’ve made for our seniors” or “invest in education or clean energy” or fix “our roads” or afford to do all the cool things done by South Korea, Brazil, and China.

He didn’t explain how it might have come to pass that our government became disabled. He barely mentioned previous budgets’ waste — on goofy projects, overpayments, duplicated efforts, and undeclared, never-​ending wars. Or how government regulation and subsidy might be the reason many people cannot afford medical insurance.

Or that if the government doesn’t invest in something, it doesn’t mean that private investors aren’t investing.

But he did mention his opposition to “more than $1 trillion in new tax breaks for the wealthy.”

And then came the corker: “In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. The top 1 percent saw their income rise by an average of more than a quarter of a million dollars each.  And that’s who needs to pay less taxes?”

Wow. America’s wealthiest merely “saw their incomes rise”? They didn’t actually do something for their gains?

Maybe Obama was napping while others were working.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets tax policy

How Not To Be in Pictures

Everybody wants to be in pictures, it’s said. Michiganders, who’ve been funding moviemaking with their taxes for years, should try digital cameras and YouTube. The state’s governor, Rick Snyder, has proposed a new budget slicing and dicing the state’s generous (read: foolhardy) film subsidy and tax credit system.

This is called a “blow to Hollywood.” One nifty headline dramatizes the new situation: “Michigan to Hollywood — Get Off My Lawn,” with photo of Clint Eastwood on the porch of his Gran Torino house, wielding a shotgun. 

Over the top. 

Tax credits and tax subsidies given only to moviemakers are wrong on several grounds, as I’ve argued before (see “Knot Cannibalism” and “Cinema Without Subsidy”). Of course, the red tape and high taxes associated with setting up any business are wrong, too. You may say that the state’s gotta raise funds, but it most definitely shouldn’t kill the geese that lay the eggs, golden or Technicolor. 

Taxes should apply equally, all around. Low taxes evenly spread will entice businesses — including moviemakers — into an area, if other locales remain over-​taxed and confusing.

Some will cry “jobs!” but the word isn’t magic. Real jobs can be measured. Michigan’s subsidies created mainly temporary part-​time jobs for Michiganders. According to a commissioned study, “Michigan spent $378,240.74 per job in 2008; $586,779.18 per job in 2009.” 

No film incentive, it turns out, “has generated as much revenues as it has taken from the treasury.”

Cut. Print.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

A Chill Hits Illinois

That big bump in the night? It was the sound of a massive new tax increase dropping on the backs of Illinois citizens and businesses.

Not long after midnight, Wednesday morning, mere hours before the newly elected legislature was to be sworn into office, the state’s lame-​duck legislature voted to increase the personal income tax by a whopping 67 percent and the business income tax by nearly 50 percent.

That’s lame, all right.

Governor Pat Quinn, who had campaigned in favor of a smaller increase, will sign the bigger tax hike. “Our fiscal house was burning,” he said in its defense.

Is the fire now out? 

Well, there sure is a lot of smoke, and where there’s smoke, there’s … a lot of people making a quick exit.

Remember, people can vote with their feet. “Leaving Illinois,” a study by the Illinois Policy Institute, points out that between 1991 and 2009 Illinois lost one resident every ten minutes.

That’s $16.9 billion in lost state and local tax revenue.

So Wisconsin Governor Scott Walker was quick to offer a safer haven. “In these challenging economic times while Illinois is raising taxes, we are lowering them.”

As William Brodsky, chief executive of CBOE Holdings Inc, argues, “Merely throwing tax dollars at a broken system, without overhauling the expense side of the ledger, compounds the problem…” Bemoaning Illinois’ lost tax advantage in attracting business, Brodsky remarked, “They don’t come here for the weather.”

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Philly Bloggers Beware

Do you live in Philadelphia? Do you blog? Have you earned a penny or more from your blog page? Then don’t click away!

Stick around a minute even if you blog in some other town, because today’s installment is about the lengths to which tax mongers might go to mulct or muzzle you.

The Philadelphia government has begun sending letters demanding dough to bloggers who report even trivial revenue from their blogs. The city wants $300 for “business privilege” licenses. Marilyn Bess is one recipient. Her blog MsPhilly Organic earned about $50 over the last few years.

Sean Barry also got the city’s letter. His own blog, Circle of Fits, has been deluged with some $11 in revenue over the last couple of years. He, too, had dutifully reported the blog-​generated boodle on his tax returns.

What did these electron-​stained opinion-​purveyors do to deserve this special attention? Nothing but fail to read every last jot of the city’s tax code — and every last secret inter-​department city government memo about when to go after local bloggers — before setting fingers to keys.

Philadelphia’s pursuit of imaginary scofflaws may amount to just an obtuse lunge for hitherto unextracted funds. But the new protocol is also a weapon that could be selectively deployed, now or later, to harass bloggers who publish inconvenient words. Wouldn’t be the first time in our history that the power to tax has been turned to such ends.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies tax policy too much government

Social Security Beyond Retirement Age

Social Security turned 75 last week, and yet I saw few demands to retire the program.

Instead, pundits like Paul Krugman took the occasion to praise the septuagenarian boondoggle. 

Krugman started boldly, saying that the program “brought dignity and decency to the lives of older Americans.” Huh? Social Security has indeed brought a steady income to retired Americans, many of whom would have had to rely on their children’s help to live out their last years. But Krugman doesn’t say that. Instead he implies that, before Social Security, old folks led indecent and base lives. 

But think about this: Saving for yourself and living on a limited means is indecent? It lacks dignity?

Krugman also talks about the economics of the program, defending, for instance, its dual accounting method in a bizarre way. But mostly he steps carefully around Social Security’s biggest failings, which include the intergenerational swindle, providing bigger rewards-​over-​contributions to earlier retirees than to current recipients, and, by its nature, will take more from, and give less to, future retirees.

Most shockingly, though, he says this: “Social Security has been running surpluses for the last quarter-​century, banking those surpluses in a special account, the so-​called trust fund.”

Krugman does all but state that the special account has money in it.

It doesn’t. The “trust fund” consists of IOUs from Congress. That’s it.

I guess Social Security is a program too important to Krugman to tell the truth about.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets tax policy too much government

Cinema Without Subsidy

Yesterday I insisted that states stop subsidizing filmmaking. Implied, I hope, was the notion that states needn’t provide tax credits to lure movie shoots to their state, either.

No sooner did I wrap up that argument (with the premature proclamation “end of story”) than I read a fine article on Show Me Daily about how “States Can Entice Businesses and Industries Without Credits.” The article begins talking about making films in Wisconsin, where the tax credits were just cut by two thirds. And yet the state has nabbed some major film efforts.

According to Show Me, “Wisconsin sets a great example.…” Every state has something going for it, unique locations, geography, architecture, people, climate, what-​have-​you. “Firms will locate” where they do for relevant reasons; “they don’t need to be bribed with generous incentive packages.”

But, but, but, but! some will sputter. Film companies are special firms. They start up, inhabit a location for a while, and then vamoose. State regulations and business taxation often makes it very difficult to shoot in a particular place. Filmmakers need special help around encumbering bureaucratic obstacles.

I’m sympathetic. For example, the business-​and-​occupation taxes that increasing numbers of states are instituting are horrendously burdensome: They take from gross revenues, of all things! 

But the proper way around such counter-​productive laws is outright repeal, setting up better state revenue programs … ones that are not so generally destructive of industry, including the film industry.

This is Common Sense. I’m Paul Jacob.