Tag: taxes

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deficits and debt tax policy

Deadbeat California

Gavin Newsom, California

The injustices pile up so thick and fast that one can’t really keep track. Some state governments are especially prolific in producing them. Governments like the Deadbeat State, formerly known as the Golden State.

Now businesses in California must pay the price for the state government’s profligacy during the pandemic, when it borrowed $20 billion from the federales to help pay unemployment benefits. California is refusing to repay.

In the budget proposal for 2023-2024, $750 million had originally been set aside to begin repaying this debt. But Governor Gavin Newsom killed the provision. So, in accordance with federal regulations, businesses must take up the slack. Starting in 2023, the unemployment tax rate that businesses will pay, which had been 0.6 percent, is being increased by 0.3 percent until the loan is repaid.

“California is just not really an employer-friendly state,” says Marc Joffe of the Cato Institute. “This one thing will not be a difference between a business remaining open or closing, but it’s just another burden on top of the many burdens the state puts on employers.”

A major contributor to the size of this debt is the state’s failure to act to prevent massive fraud in filings for unemployment benefits. LexisNexis estimates that fraudulent payments amount to more than $32 billion.

California taxpayers must pay for this unsalutary neglect one way or another. But what Newsom has done ends up penalizing businesses in particular. 

Yet another reason to avoid doing business in the state.

This is Common Sense. I’m Paul Jacob.

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government transparency insider corruption national politics & policies

The Regime Shows Its Fangs

IRS, corruption, power

“No one thinks it’s a coincidence,” says Rep. Jim Jordan, chairman of the Select Subcommittee on the Weaponization of the Federal Government. “Everyone thinks this was done for intimidation reasons.”

The “this” was a visit by the Internal Revenue Service to the home of journalist Matt Taibbi while he was testifying to Congress about his Twitter revelation research.

Normally, the Regime’s collection wing, the IRS, does not just ‘stop on by’ unannounced.

The timing, Rep. Jordan suggested, is suspicious.

And the condemnations are coming in from more than just the “right.” A journalism professor at DePauw University joined the tide of free speech advocates to note that the “this” indeed “runs contrary to every principle” of the American press freedom as instituted in the First Amendment. 

The IRS has not so far clarified the visit, and Jordan is threatening to subpoena all documents related to the event.

Journalist Sharyl Attkisson — who “has long contended the Justice Department during the Obama administration illegally surveilled her while she was at CBS News,” explains Fox News — not unreasonably contends that the “IRS would have to know how their visit to Taibbi’s house would be construed, which suggests that’s exactly as they wanted it.”

The chilling effect is by design.

But why would The Regime be so blatant?

So clear in intent and corrupt in method?

Does The Regime feel impregnable?

Maybe the old lore of deviltry and contracts with the Principalities and Powers is true: evil feels compelled to signal what it is doing, at least nominally. Leaving it up to good people to see the signs.

Which we now cannot unsee.

This is Common Sense. I’m Paul Jacob.

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media and media people national politics & policies tax policy

Decreases & Increases & Krugman

Paul Krugman, taxes, Social Security

Social Security was never designed for sustainability. The “Ponzi” element was there at the beginning: early recipients received HUGE benefits over their contributions, but as the population matured, that ratio of what working taxpayers put in compared to what they received in benefits decreased. 

Further, because there never was a “lock box” much less any investment of funds — it was always a transfer scheme — as the system matured it hit the point of financial default. Back in the 80s this was fixed by raising the taxes on working people.

And then the kicker: with the rate of reproduction in the U.S. falling like Sisyphus’s rolling stone, the ratio of taxpayers to subsidized retirees went in the wrong direction. The folks assigned to keep track of the system’s finances predict that a major insolvency moment occurs about a decade from now, a few years ahead of earlier predictions.

So what does Nobel-winning economist Paul Krugman, of The New York Times opinion page, advise?

While we fret about the devastation that benefit cuts and tax hikes would cause, Reason’s Eric Boehm notes that Krugman doesn’t think the cuts are necessary. “First, Krugman says the CBO’s projections about future costs in Social Security and Medicare might be wrong. Second, he speculates that they might be wrong because life expectancy won’t continue to increase. Finally, if those first two things turn out to be at least partially true, then it’s possible that cost growth will be limited to only about 3 percent of gross domestic product (GDP) over the next three decades and we’ll just raise taxes to cover that.”

Hope over reason! And the progressive’s blithe acceptance of always-increasing tax burdens.

Serious people should confront facts . . . and avoid Krugman.

This is Common Sense. I’m Paul Jacob.

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crime and punishment general freedom tax policy

Voting for Audits

IRS, tax audit, taxes

Eighty-seven thousand new IRS agents!

What could possibly go wrong?

In a bill passed and signed last August, “$80 billion worth of new funding over the next decade” was shoveled at the Internal Revenue Service “so it could” — as a recent Reason article summarizes — “hire 87,000 new workers, purportedly to better target millionaire and billionaire scofflaws.”

The assurance that the new investment in personnel would not be directed towards “those making under $400,000 annually” was, as Reason’s Liz Wolfe makes clear, “not provided within the text of the actual bill.”

Ah — political promise over actual law and all bureaucratic experience. The IRS, you see, prefers to focus its audits on the lowest income earners, who were audited more often than millionaires.

Why? Well, the key is one feature of the tax code: the earned income credit. Which, it just so happens, is easy to get wrong. And upon which lower-income workers have come to rely.

The other reason is even more basic: “given a dearth of experienced auditors not likely to be fixed soon, the agency would rely on the easiest and least time-consuming types of audits.” Which are conducted through the mail. Easy. Cheap. And annoying.

Even with more IRS auditors with more experience, this path of least resistance — these earned income credit audits — will likely get the most use.

The reasons behind the reasons? Why were Democrats so eager to increase the ranks of tax collectors? Sure, Democrats love taxes. But like most tax hikers, they promote the idea that others will pay all those taxes; they promise to stick it to the rich . . . while ever-so consistently missing the mark and whacking the poor and middle classes.

This is Common Sense. I’m Paul Jacob.

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initiative, referendum, and recall too much government

SF Scheme Scuttled

San Francisco, taxes, income, GBI

The proposed tax was very popular. In San Francisco. It polled at nearly 75 percent in favor. 

But it possessed a fatal flaw. 

And worse.

The fatal flaw? The numbers didn’t add up.

Organizers spent nearly half a million bucks developing and promoting and getting the petition signatures to place Proposition K on this November’s ballot.

The notion? Tax Amazon sales within city limits to fund a guaranteed income scheme in the Golden City.

But then they learned — after it qualified for the ballot — that it was an incoherent tax-and-spend mess. Its chief pusher, John Elberling, admitted, reports The San Francisco Standard, that “he made mistakes in calculating how Amazon earns its revenue in the city.” And, The Standard continues, “the City Controller’s office found that the tax measure would actually harm hundreds of small businesses in San Francisco and cut revenue to the city’s general fund by about $10 million a year.”

So Elberling ate crow, admitting to error (and also, apparently, to misleading petition signers), and a judge removed Prop K from the ballot.

Whew. Disaster averted.

Alas, Elberling promises to “perfect” his scheme, and advance it again.

Which is ominous, for the core idea itself — adding on more taxes to fund a trendy-but-disastrous “guaranteed income” — is not the way out of California’s progressive-induced nightmare. It’s just a vastly bigger version of what’s gone on before.

If Californians don’t develop more common sense about the limitations of salvation-by-government, they are doomed to repeat such folly.

That goes double for San Franciscans.

Who this time have a reprieve, thankfully.

This is Common Sense. I’m Paul Jacob.

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tax policy too much government

For a Thousand Years

government, monster, politics

Time for a gas-tax holiday. 

When the people lie prostrate, when the people groan under heavy burdens, when the people just can’t take it anymore — and when an election is coming up — that is the time for politicians to relieve everyone’s burden.

A bit.

Treasury Secretary Janet Yellen favors considering a temporary gas-tax holiday to emulate some of the states. Reviving the Keystone oil pipeline — no, not something to consider, she says. But she’s okay with a brief gas-tax break.

Let’s do better.

I propose a millennium-long gas-tax holiday, government-barriers-to-drilling holiday, regulation-of-all-industries holiday. Under my plan, government gets all the way out of the way of all markets so we can all be as prosperous as possible, whether or not a big economic crisis is underway.

But would there be any such crises — long-term and intractable economy-wide crises, I mean — if my plan were enacted?

When government does everything possible to injure the economy and prevent recovery, it takes a long time for markets to bounce back from shocks. If ever.

Un-fetter the markets, though, and economic actors would be able more rapidly to adjust to major jolts. If gas imported from overseas plummets, producers could then quickly adapt by expanding production. They cannot readily do so now because government imposes so many barriers.

The politicians’ preference for modest, namby-pamby reprieves are not only substantially weak, they send the wrong signals. They get doled out as if government were doing us a special favor . . . by not beating us up so badly for a very little while.

We need freedom. On an ongoing basis.

This is Common Sense. I’m Paul Jacob.

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