Tag: Taxation

We’re #3!

Well, friends, I think we can finally give our government some credit. After decades of effort, we are finally one of the top nations in the world in something. In fact, we’re the third best. Only France and Portugal are better. With a huge bipartisan effort and some fantastic leadership from President Obama, the United States is now third in tax shittiness:

If American businesses have begun looking for opportunities to relocate their corporate offices overseas, it’s not necessarily from a lack of patriotism. The Tax Foundation calculated the tax competitiveness of the 34 countries within the Organisation for Economic Co-operation and Development (OECD), nations at least nominally committed to free-market economics, as part of their annual ranking system. The US comes in 32nd out of 34, just above France and Portugal, but below such economic powerhouses as Mexico — and Greece

The United States places 32nd out of the 34 OECD countries on the ITCI. There are three main drivers behind the U.S.’s low score. First, it has the highest corporate income tax rate in the OECD at 39.1 percent. Second, it is one of the only countries in the OECD that does not have a territorial tax system, which would exempt foreign profits earned by domestic corporations from domestic taxation. Finally, the United States loses points for having a relatively high, progressive individual income tax (combined top rate of 46.3 percent) that taxes both dividends and capital gains, albeit at a reduced rate.

This isn’t just a matter of taxes being high; many of the countries ranked below us have much higher overall tax rates and much larger governments. To get our #3 ranking, we had to put together a corporate tax system with both a high rate and ridiculous complications. We had to resist the global trend to not double-tax foreign earnings. We had to make our income tax ridiculously complicated and unfair. We had to create a tax system that is openly hostile to the idea of people working, investing and exporting goods.

So, congratulations to the Congress and President Obama! Between this and our rapid decline in the Economic Freedom Index, you’re making this country worse than the European socialist states!

The Taxman Taketh

This is pretty fucking outrageous:

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check.

The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.

That law was passed when the Democrats controlled Congress. Raise your hand if you’re surprised.

It’s difficult to count the number of things wrong here: supposed overpayments of parents being extracted from their children; debts older than good scotch suddenly being valid again; the lack of any real evidence that an actual overpayment happened; plus, who wants to bet that they are primarily targeting middle class and poor people who lack the resources to fight it? Grice is taking them to court, but most people can’t afford that and it’s debatable whether the cost of fighting it would be more than the debt. And for a lot of people, tax refunds — correction, the return money they loaned the government interest-free — is a critical part of their budget.

In discussing student loans, I described our federal government as the world’s biggest predatory lender. Well, now they’ve become the world’s biggest predatory collection agency. Almost everything they are doing here would be illegal if a private agency tried to do it. But the gang of thugs who run our empire won’t be bound by rules. Rules are for plebs, not for the state.

The Tax Man Cometh Again

Remember, as you read through these stories, the cardinal rule of government: everything you have is theirs. If you have such a thing as “take-home pay” it’s only because of their generosity in allowing you to take it home. Sort of the way a highwayman might let you keep enough bread to feed your family while stealing everything else.

First, Chicago. The city of Chicago has figured out what every economist knows: when you tax something, you get less of it. This is why, for example, paying for healthcare reform with cigarette taxes never works. People smoke less in response and revenues fall below expectations. Taxes and fees on cars and gasoline are driving some people to ride bicycles. This is a good thing, right? Less fossil fuel use, more people getting exercise. The only losers are people like me who wear out their brake pads trying not to run over these hippie fruitcakes when they cut across a road all of a sudden with NO consideration for anyone else and NO concept of how much momentum a car has and there’s a Goddamn bike lane right there and we paid taxes to build that thing so why don’t you use it, you self-important piece of …

Sorry, lost my train of thought there.

Anyway, Chicago is floating the idea of taxing bikes.

A city councilwoman’s recent proposal to institute a $25 annual cycling tax set off a lively debate that eventually sputtered out after the city responded with a collective “Say what?” A number of gruff voices spoke in favor, feeding off motorists’ antagonism toward what they deride as stop sign-running freeloaders. Bike-friendly bloggers retorted that maybe pedestrians ought to be charged a shoe tax to use the sidewalks.

Chicago is by no means the only place across the U.S. tempted to see bicyclists as a possible new source of revenue, only to run into questions of fairness and enforceability. That is testing the vision of city leaders who are transforming urban expanses with bike lanes and other amenities in a quest for relevance, vitality and livability – with never enough funds.

Two or three states consider legislation each year for some type of cycling registration and tax – complete with decals or mini-license plates, National Conference of State Legislatures policy specialist Douglas Shinkle said. This year, it was Georgia, Oregon, Washington and Vermont. The Oregon legislation, which failed, would even have applied to children.

Don’t mention the shoe tax, guys. They’ll take it seriously.

Second story: you remember how our budget deficit problems result from not being able to raise taxes? Well, welcome to 2014 when a slew of new taxes will be heading your way.

The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.

There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.

Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.

Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.

Those with high out-of-pocket medical expenses also will get smaller income-tax deductions. Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

Then there’s the new Medicare tax.

Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax. They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.

Oh, and this morning, I found out about this little gem:

The new year is time for change, even in the service industry. Starting January 1, the IRS will classify automatic gratuities as service charges that are taxable as regular wages and subject to payroll tax withholding. That might sound like a bunch of arcane tax law mumbo jumbo, but what it means is that restaurants have to treat those tips like regular wages.

Typically, the IRS left it up to the waiter or tipped employees to declare that money. But with this new change the waiter won’t see those “tips” until payday—instead of the end of the shift. And restaurants will have to withhold federal income, Social Security and Medicare taxes on that money, too.

What it means for the diner is that those automatic 18% gratuity charges on tables of 6 or more may well be a thing of the past. The addition has been added onto large parties to ensure that servers are paid for catering to a large group.

That doesn’t mean you should use this an excuse to start stiffing people. Remember, the minimum wage laws here in the states for tipped workers is still at a shocking $2.13 an hour. And, as evidenced by this video, a few extra bucks means a lot to the service workers of America.

What surprises me — actually it doesn’t surprise me — is how much this stuff is going to hit the middle and working classes. Cycling taxes, insurance taxes, tip taxes — these will hit hardest on young people, the working poor and the middle class. This is a running theme in Obama’s America: the plebs get screwed; the elites pat themselves on the back for caring so much. Even when the elites do bad things, they are never punished for their misdeeds, not to the extent the rest of us would be for smoking a joint or chewing a pop-tart into the shape of a gun. It’s enough to make you think the system is broken beyond repair.

Enjoy your new taxes.

The Somalia Canard

In Josephine County, Oregon, a woman was recently raped by her ex-boyfriend while she was on the phone to 911, begging for help which never came. I’ll forgo the usual “this is why we have the second amendment” point to concentrate on something a little different.

The Sherriff’s office is blaming the lack of response on recent budget cuts and the refusal of the citizenry to support a tax hike. But as Radley Balko points out, the city has had plenty of resources to go after legal medical marijuana growers or small-time illegal pot smokers. When it comes to the things that bring in asset forfeitures and pad arrest stats, they have all the resources they need.

This problem, however, is being enabled by the likeliest of political suspects:

The partisan political reactions to this story are typically awful. Wonkette’s Rebecca Schoenkopf mockingly calls Josephine County a “libertarian paradise,” and chides the dumb rubes for rejecting property tax increases that would (allegedly) fund police officers to respond to 911 calls. (More likely: It would fund more drug raids.) The post then takes the obligatory shots at people who favor local government over national government. You can find similar reactions at ThinkProgress and The Stranger.

Here’s the thing. Maybe part of the reason Josephine County is facing budget woes is because more than half the land in the county is owned by the federal government. The federal government doesn’t pay property taxes. And property taxes are primarily how local government is funded. Perhaps, just perhaps, the county’s residents reject the idea that their federal tax dollars are going toward buying up local land that is sapping the county’s tax base, and they resent the notion that if they then want basic services — like police protection — they are then asked to make up the difference through higher property taxes. And perhaps — just perhaps — they also resent the federal government because while county residents can’t get the local cops to respond to a woman being raped, the federal government is imposing its will on the state by funding task forces to raid medical marijuana facilities in a state where voters have expressed a clear will to legalize the drug for medicinal purposes.

But that would require an analysis of this story that involves some nuance, extra reading, and empathy. Better to just make Ayn Rand jokes and mock the dumb, low-income bumpkins for mistrusting the government.

This is simply another variation on the Somalia Canard. Idiotic liberals have a tendency to respond to libertarian-conservative arguments with some variation of, “Well why don’t you go live in Somalia?! That’s a libertarian paradise!” I regard the Somalia Canard as the libertarian version of Godwin’s Law. When someone brings up Somalia, you know they have run out of arguments and are just going for the ad hominem.

But, OK, assholes. I’ll do this thing. Here’s why we don’t all move to Somalia: because Libertarianism is not anarchism. And conservatism is a long way from anarchism.

The vast majority of libertarians and conservative have no problems with funding things like law enforcement and fire-fighting. Most of us don’t have a problem with making sure our water is clean and our meat is healthy. And many of us even think public schools are OK!

But these are not the only things that government does. They are not even a majority of what the government does.

A lot of what the government does is either unnecessary (if we’re lucky) or damaging (if we’re not). It pays out hundreds of billions in transfer payments every year. It pays employees generous salaries and extravagant benefits for which we are now on the hook to the tune of hundreds of billions of dollars. It uses asset forfeiture to seize people’s property without trial because they might be dealing drugs. It uses eminent domain to force people to sell their property to rich developers. It fights unnecessary wars. It fights a stupid and devastating War on Drugs. It shovels tens of billions into corporate welfare and tax exemptions to favored businesses. It seizes well-cared-for children because their parents have a little pot.

I have no problem giving government money to do the things that government needs to do. But no one should be willing to just throw money into the equivalent of a wishing well in the hope that, somehow somewhere, it might be spent wisely.

How about, instead of laughing at the low-income people of Josephine County for not wanting yet more money extracted from them, you look into what kind of stupid shit Josephine County was spending money on instead of funding the police? If you can’t find any waste, then I might be prepared to listen to you chuckling at the brutal rape of a defenseless woman.

Update: I shoulde not that what is going on in Oregon is a pattern we have seen at all levels of government in response to budget cuts: getting rid of essential services first in order to increase pressure on the public for tax hikes. One place where this did not happen was Wisconsin, where Walker’s reforms allowed the state to retain thousands of teachers they would otherwise have had to fire. But anytime shrinking governments choose to cut the meat instead of the fat, can you count on the entire Liberal Ecosphere to blame conservatives.

What is missing from these NYT articles?

The NYT has a couple of articles one dealing with the pain the tax hikes have caused and another with how the lower income people where hit the hardest. And conveniently the NYT forgets to mention the “WHO” and “WHY” of it all in either piece. I am sure if they thought they could get away with it they would blame Boosh, but by now this tired and false excuse doesn’t even work with the cultists anymore. That first NYT article I link begins with the following:

WASHINGTON — Only the most affluent American households will pay higher income taxes this year under the terms of a deal that passed Congress on Tuesday, but most households will face higher payroll taxes because the deal does not extend a two-year-old tax break.

The legislation, which was forged in the Senate and overcame resistance in the House late Tuesday will grant most Americans an instant reversal of the income tax increases that took effect with the arrival of the new year. Only about 0.7 percent of households will be subject to an income tax increase this year, according to the Tax Policy Center, a nonpartisan research group in Washington. The increases will apply almost exclusively to households making at least half a million dollars, the center estimated in an analysis published Tuesday.

But lawmakers’ decision not to reverse a scheduled increase in the payroll tax that finances Social Security, while widely expected, still means that about 77 percent of households will pay a larger share of income to the federal government this year, according to the center’s analysis.

The tax this year will increase by two percentage points, to 6.2 percent from 4.2 percent, on all earned income up to $113,700.

Indeed, for most lower- and middle-income households, the payroll tax increase will most likely equal or exceed the value of the income tax savings. A household earning $50,000 in 2013, roughly the national median, will avoid paying about $1,000 more in income taxes — but pay about $1,000 more in payroll taxes.

Note what’s missing? Who wanted this stuff and why, that is. I don’t feel like rehashing the whole thing here, because the same lame people will end up bringing out the same lame excuses, and we will again go around and around with people that think Marx understood economics. But the short of it is that they did this because Team Blue under Obama has been running trillion dollar plus a year deficits which have increased our debt by over $5 trillion in 4 years. Remember when the Boosh deficits where evil at fractions of these numbers? Heh.

Anyway, in a nutshell, faced with out of control debt that was going to skyrocket at an even higher pace because of some horribly fiscally irresponsible wealth redistribution schemes of like the most horrible piece of legislation ever passed in the US and the concocted deal to force themselves to do something about this unsustainable and destructive trend of spending more than they could take in, with all that spending being mostly vote buying social engineering schemes despite the lies to the contrary, they had to do something to balance the sheets. So the tax and spenders pretended they would do cuts, did none, and jacked up taxes on everyone. This was all Team Blue, led by the king of wealth redistribution, Obama. But the NYT conveniently forgets to point that out.

But it doesn’t stop with them conveniently not pointing out that Obama and the donkeys where behind this pain. Oh no. They fluff up that first piece by pretending that Team Blue and Obama actually did everyone a favor!

The Obama administration did win a five-year extension of tax breaks for lower-income families, including the child tax credit and earned-income tax credit. Those credits eliminate income tax liability for many lower-income families. In many cases, the government actually makes a direct payment to the family to help offset the burden of payroll taxation — up to $1,000 a child under the child credit and up to $5,900 total under the earned income credit.

That second article sure begs to differ. And ain’t it funny how those evil Boosh tax cuts that they repeatedly tried to blame their insane deficit spending gaps of the last 5 years on suddenly have become Obama’s great tax breaks, huh? Obama helped you serfs out. And since we don’t mention he is also behind the stuff that jacked up the other taxes and your healthcare payments, we hope you think this guy has really done you a solid and that the fault government is taking even more of your money is someone else’s. Hopefully you will even believe it was the other guys that are fighting the war on women and everything good. Let me also mention that Obama wants more taxes, and that everyone will have to be hit to cover the massive spending vs. government income gap. Team Blue is not going to give any kinds of cuts either.

At least I can take consolations that Team Blue and Obama’s greatest fans are the ones getting hammered the hardest by these assholes they stuck us with for another 4 years. Those young people that voted in higher numbers for Team Blue are stressing, and can’t seem to understand the reason they are stressing is the nonsense they believe in and the people they vote to do it to them, just like minority voters which also voted in record numbeue are losing their wealth at an accelerated pace, while Team Blue is pretending the wealth redistribution schemes they used to buy these people should make their lot better. Good luck with that. Life has a way of making sure stupid people get the lesson from the school of hard knocks. Unfortunately these people tend to double down on their stupid instead of realizing they are being had. Thriving on your envy and greed of what others have is always easier than doing the right thing, I guess, and letting go, even when you are getting screwed royally, is harder than it looks.

Fiscal Cliff I: The Search for More Money

As Thrill noted, the so-called fiscal cliff was semi-averted last night. I didn’t pay too close attention to the debate since the basics of the deal had been hashed out days before. All we had last night was political theater. It’s true that 2/3 of the Republican House voted against it. But they allowed it to come to a vote and most voted after they were sure it would pass as an ass-covering maneuver. I’m reminded — and not in a good way — of the TARP vote where the Republicans and Democrats agreed to let vulnerable House members vote against it once they’d secured passage.

To be honest, I’m OK with the deal, since the alternative was letting all the tax cuts expire. I would have preferred it be paired with entitlement reform but the Republicans apparently scuttled that, to judge by the GOP Senate leadership’s statements over the last few days. It will mean about $60 billion per year in revenue — a few drops in the bucket that only looks large in comparison to the trivial budget maneuvers we’ve gotten until now.

What no one is mentioning, of course, is that there is a much larger tax increase going into effect: the expiration of the payroll tax holiday, which is expected to add about $100 billion to federal revenue. That means every working person is going to see a 2% slice taken out of their next paycheck. I’ve long been in favor of this, feeling that the longer the holiday went on, the more difficult it would be too get rid of and the worse it would make the situation with Social Security/Medicare. I also thought it was wrong-headed from the beginning. From the employer side, it would have made hiring cheaper and eased unemployment. From the employee side, all it did was (maybe) goose consumption. And it did even more to narrow the wedge of people actually paying taxes in this country. The cut was temporary and it’s gone now. But it will be fun to watch the shocked reactions of people who think taxes are just going up on “the rich”.

The big thing — and the reason my reaction is kind of “meh” — is that two more important cliffs were put off. One is the sequester, which seems to have bipartisan opposition. Republicans don’t want military spending cut, despite spending currently being in excess of Vietnam War levels (although the number of soldiers is only slightly above post-Cold-War levels). And Democrats don’t want anything cut.

Obama has indicated that future spending cuts will have to be matched by tax increases, but I think he’s overplaying his hand here. The Republicans were forced to give in on taxes because the alternative was tax hikes for everyone. Obama is going to have to give in on spending cuts because the alternative is a 8-10% cut in everything else.

He’s also going to have to give in because of the third cliff: the debt ceiling. This could be the most interesting fight as Obama might try to fight this on legal/constitutional grounds. I’m not looking forward to this as it was almost an economic castastrophe last time. Hopefully, our leadership won’t be quite as stupid (yes, I know ….).

In the end, I think the most important thing to be pulled out of this unholy mess is the chained-CPI formulation of Social Security that was temporarily on the table and should be again. This seemingly small change would slow the growth of the program and save us trillions down the road. If we can get that, it will have a more lasting impact than the tax hikes, debt ceiling or sequester.

This isn’t over yet. We’ve got another two months of theater to go.

Why doesn’t Obama know?

When the WH economists know that Bush Tax cuts are not responsible for deficits? Here is the pertinent section:

Turn to Pages 411-413 of his 2012 Economic Report of the President, published by the Council of Economic Advisers. They show that “the math,” as Obama is wont to say, in fact does add up for tax cuts.

After President Bush in late May 2003 signed the largest tax cut since President Reagan — including dropping the top marginal rate to 35% from 39.6% — government receipts from individual income taxes rose from $793.7 billion to a peak of $1.16 trillion in 2007, when the mortgage crisis began, a 47% jump.

Stronger economic growth expanded the tax base and brought in so much revenue that Bush more than halved the deficit over that period. The budget gap plunged to $160.7 billion from $377.6 billion, according to the president’s report.

Below is the graph from this report. It leaves no room for doubt that the Bush Tax cuts not only increased government revenue, but that the annual deficits where going down because of that.


Bush Tax Cuts Narrowed Deficits

The question begs to be asked why the class warriors, like the commenters here that have been arguing otherwise on another post, despite many people providing this evidence, pretend otherwise? Note that the deficits do not jump again until the mortgage crisis starts, and then it is also important to point out that spending, which originates from the US House of Representatives, was controlled by the democrats whom owned the house.

Anyone that argues that tax cuts reduce government revenue is not arguing out of good faith. In every instance where the feds cut taxes, Kennedy, Reagan, and GWB, government ended up collecting more money. That happened because the greedy capitalists, from the stinking rich to the guy with a cool small business idea, put their money to work – they wanted to make more – and the economy took off like a bat out of hell.

So ask yourself this: why would these class warriors be so hell bent on forcing the issue of hiking taxes, during an anemic economy that despite all their efforts remains so and promises to only get worse of all cases, knowing these details? What’s the logic behind this? When every economist worth their salt says tax cuts produce more revenue and grow the economy, wouldn’t you expect the people in charge, especially if they really want to fix the economy, want to do more of that? And when stimulus after stimulus fails, wouldn’t the Keynesians be forced to rethink their nonsense? More importantly, why do democrats want to keep things as chaotic as they have made them when they know what we need right now the most is stability?

The current policy the left wants clearly will bring more pain, and yet, that’s what they are hell bent on giving us more off. Ask yourself why. Is it just ideological? Or is there more?

Sunday Six Pack

NPR recently had group of economists discuss policies that they think are great for the country but that politicians consider radioactive. The group of economists was actually quite diverse, ranging from George Mason libertarian (and frequently linked Cafe Hayek blogger) Russ Roberts to Cornell liberal Robert Frank. What six policies could that group possibly agree on? And why wouldn’t politicians embrace policies that enjoy such a broad consensus?

One: Eliminate the mortgage tax deduction, which lets homeowners deduct the interest they pay on their mortgages. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive houses?

One thing they don’t talk about: the mortgage interest deduction is a lot smaller than most people think it is. People see they can deduct $10,000 off their taxable income and think that’s pretty big. But mortgage interest is deducted only if you throw out the standard deduction, which is $12000 for a married couple. For most people, if their home costs less than about $250,000, they are gaining little, if anything. The host says the deduction saves him $5000. Assuming he’s calculating that correctly (i.e,. what it gives him above the standard deduction), that means he’s paying off a half million dollar mortgage.

The home mortgage interest deduction has its destructive aspects, too, distorting the real estate market. As noted above, it mostly subsidizes the purchase of large and expensive homes, driving up that end of the market. But even worse is that by creating the perception that the government is paying up a third of your mortgage, in induces people to buy more home than they can afford. Ironically, this drives up the cost of housing for the poor and middle class.

I don’t think the market can take the shock of an immediate cessation. But phasing it out would be a great idea. Even better, as we’ll see later, would be to scrap the entire tax system.

Two: End the tax deduction companies get for providing health-care to employees. Neither employees nor employers pay taxes on workplace health insurance benefits. That encourages fancier insurance coverage, driving up usage and, therefore, health costs overall. Eliminating the deduction will drive up costs for people with workplace healthcare, but makes the health-care market fairer.

Have the tax deduction for all health insurance or have it for none. Encouraging people to get insurance through their employer has been one of the biggest drivers of healthcare cost over the last few decades, pushing consumers further and further away from the actual costs. The Wyden-Bennett bill, one of the things I hope becomes part of the “replace” part of “repeal and replace”, would have done this.

Three: Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that’s good. Don’t tax companies in an effort to tax rich people.

Four: Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you’re taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.

The Fair Tax is one of the more coherent plans on this subject. I’ve detailed before why I oppose it. A VAT would work much better but only if it mostly replaced the existing system. A lot of libertarians oppose the VAT because they see it as a gateway to big government. My opinion is that we already have big government and, given our commitments to seniors, it’s not going to get small anytime soon. The question is how to pay for it without crippling the economy and a VAT has the minimum of deadweight loss.

I lived in Texas, which does not have an income tax, for four and a half years. It was awesome. You weren’t taxed until you spent money. I would love to see the entire nation enjoy that freedom and empowerment.

Note also something important in the broadcast: the most ardent advocate of eliminating the corporate tax? The two liberals on the panel. They know how destructive corporate taxes are to our economy.

Five: Tax carbon emissions. Yes, that means higher gasoline prices. It’s a kind of consumption tax, and can be structured to make sure it doesn’t disproportionately harm lower-income Americans. More, it’s taxing something that’s bad, which gives people an incentive to stop polluting.

This is the one that will cause the most disagreement on the blog. I don’t want to open another global warming debate. I would support a carbon tax but if and only if it came with steps three and four of eliminating our current tax system. It is infinitely preferable to the cesspool that would be cap and trade.

Six: Legalize marijuana. Stop spending so much trying to put pot users and dealers in jail — it costs a lot of money to catch them, prosecute them, and then put them up in jail. Criminalizing drugs also drives drug prices up, making gang leaders rich.

We’ve talked about this before. No need to rehash.

Here’s where the NPR segment falls on its face: they imagine a politician putting forward the above platform and being rejected by the public. There’s some validity to that. If you cornered politicians, they would probably agree that most of these ideas are sensible but fear the public backlash. However, I think that if you polled the American people on that platform, they wouldn’t be too opposed either. Oh, they might have reservations about one or two policies but they would probably accept it over the current system.

No, I don’t think the problem is necessarily one of marketing. I think the problem — a problem that NPR glosses over — is that our politicians and political class are simply too invested in the current mess. Part of it is special interests that would rather have a tax system tailored to them or a booming prison industry or a booming housing market. Part of it is simple inertia in favor of policies we have pursued for decades. Part of it is spinelessness — the unwillingness to propose policies that, as NPR noted, can be easily demagogued.

But the largest problem is that our politicians like the system we have. The system we have — especially the tax system — keeps titans of industry, atlases of production and prometheii of invention groveling to them. The system we have keeps special interests on bended knee, constantly asking for and getting favors from politicians. Remember how, earlier this year, Apple had to start ramping up their political contributions and lobbying under threat of regulation and lawsuit? Politicians love that.

The system outlined above isn’t actually libertarian. It sounds like it, because I’ve cast in libertarian terms. But steps 1-4 would be accomplished by replacing our tax system with a VAT — versions of which have propped up some of the most socialist countries in the world. That and step 5 just detail how taxes are collected, not how much are collected. It would create a tax system that was essentially “Dial a Revenue” — capable of supporting either an expansive welfare state or a limited federalist state. Opposing those changes and supporting the current system is not an issue of big government versus little government. It is an issue of just how much of our lives and our industry Washington can control.

Even step 6 isn’t a necessarily libertarian issue; it’s more a matter of common sense. I’ve heard support for marijuana legalization from all parts of the political spectrum. My mother has never voted Democrat. My best friend from college has never voted Republican. Both think marijuana should be legal.

So, no, it’s not that the above platform would necessarily be Republican or Democrat. Or conservative or liberal. Or libertarian, for that matter. The problem with it is not that it would produce smaller or bigger government but that it would produce less invasive government, less powerful government. It would disperse the groveling lackeys and toadies are politicians have grown used to. It would produce a government less besieged by special interests and lobbyists. It would produce a government that spends a lot less time looking over shoulder and poking through our underwear drawer.

And that’s the reason it can’t happen. Our establishment enjoys the genuflection too much.

The Ex-Pat Act

It seems that every week brings some stupid/repulsive piece of legislation out of the Democratic “leadership”. A few weeks ago, it was the repellent People’s Rights Amendment. Then last week, it was the Trayvon Amendment. And now, it’s the Ex-Patriot Act:

Facebook co-founder Eduardo Saverin has gone ahead and given up his U.S. citizenship before the social network’s IPO, thereby saving an estimated $67 million in taxes, and personally pissing off our nation’s leaders. In direct response to what they call Saverin’s “scheme,” New York Senator Chuck Schumer and Senator Bob Casey of Pennsylvania are unveiling their “Ex-PATRIOT” Act — “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy.” The plan will aim to impose taxes on expatriates anyway, as well as bar those like Saverin from returning.

There are lot of people who think this is reasonable. I’ve heard some people mention an “exit tax” that would grab part of the wealth of departing rich people. I’m sure they have their reasons for supporting it. And I have my reason for opposing it. In particular:

We are not the Soviet Union.

Being an American is a choice; a privilege. We extend this privilege to people who are born here and go through the arduous process of immigrating. But is is voluntary. We do not put up walls to keep people in this country like the Soviets did. We do not confiscate people’s wealth as they leave, as the Germans did. We do not force people to flee across shark-infested waters, like the Cubans do. If you want to leave this country, its freedoms, its opportunities … well, go ahead. Being a free country means people are free to leave.

I realize this infuriates men like Schumer and Casey (my Senator!) who think that all the money in this country belongs to them and we just keep what they allow us. But their efforts would be better focused on making this country more appealing to entrepreneurs.

As for Saverin, I hope he enjoys Singapore. And I hope that he stays away from drugs if he values his backside. I think, in the end, he’s going to find out that other countries aren’t all they are cracked up to be.

Futile Gesture

Feeding the beast, the ever ravenous appetite of government spending waste has been the largest impediment to fiscal solvency. The mantra of this administration, couched in deceptive terms like ,”Paying their fair share”, has always been income equality. But raising taxes only leads to more spending, which leads to even more calls for raising taxes, all the while the junkie gets more smack, and the drug problem goes unanswered.

Some liberal do gooder (at least he thinks he is doing good) has decided to do his part in reducing the deficit:

That’s the one thing liberals are the most proud of, their compassion and their good will towards others. Of course, if your dead, no one can pat you on the back and sing your praises.

Factoring in that the government spends $49K every second , this grand gesture will front drug money for about 27 seconds, now that is a quick fix.

But there is the addition one million bucks he is leaving the government, I’m sure his kids are just thrilled about this selfless act, what did they do to piss him off?

Currently the federal estate tax (for the rest of us not patriotic enough to give everything to the government) is 35% over the allowed exemption, but as of 2013 it goes up to 55% with an additional 5% surtax for estates over a certain amount. If the rest of us can hold out for just 2 more years, Uncle Sam gets a bigger slice of the pie, and no doubt that money will be put to good use.

If only more rich liberals had this type of patriotism.