Category — Income Tax

I have a sinking feeling that NYC Mayor Bloomberg and President-elect Obama will be sharing similar tax plans this year:

To illustrate the problem, the mayor said a 7.5 percent increase in income taxes for a family of four earning $50,000 to $70,000 annually would mean they would pay an extra $116 a year.

That “does put in perspective what might have to change,” Bloomberg said.

Bloomberg defines the “rich” as a family of 4 making $70K a year in the world’s most expensive city.  You have got to be kidding me.  But that’s not all by a long shot.  Mayor Mike wants to eliminate property tax rebates, hike property taxes, fire 1,000 cops, raise sundry fees, and hire more meter maids to, as liberals would quaintly put it, raise more revenue.

I’m so glad the Republican Party supported the liberal Bloomberg.  He not only embarrassed the party by turning independent, but he continues to damage the Republican brand with liberal policies.  It would have been better to have a Democrat in office to push these liberal policies and let them own them.

That’s right.  If Republicans are going to rise from the ashes, they have to let liberals own their policies.  This will be especially important for Congressional Republicans.  If they follow the moderate “reach across the aisle” meme and provide a fig leaf for the failed Democratic policies soon to be pushed by Pelosi, Reid, and Obama, they’ll be slitting their own throats.

There’s nothing in Obama’s priorities that Republicans should support.  Are Republicans going to “compromise” on higher taxes?  Is muzzling talk radio via the Fairness Doctrine a good idea after the media just kicked the “moderate” McCain in the teeth?  How about adding 10s of millions to Democratic coffers by supporting card check for the unions?  Will the GOP add 20 million new Hispanic voters after they just broke 2 to 1 for Obama even though John McCain has been front and center on all their issues?

There’s nothing to do now but let the Democrats kill themselves.  They’ll overreach.  They’ll kill an already bad economy with higher taxes.  Be disciplined, take some media flack, get out of their way, and get ready to run against them when even a blind monkey could tell their policies have failed.

MA never changes.  Kerry wins easily although I defy anyone to tell me what he’s done for the state.And Question 1 to end the income tax goes down.  I thought it was funny the left spent money campaigning against it.  Who actually thought Beacon Hill would approve it anyway?

In the event, “That One” becomes president and especially if the House and Senate are veto proof, the country will see:

• Strict new gun laws enacted even though he promised he would not.
• The phrase ‘In God We Trust’ removed from all currency.
• He will back away from his pledge to Israel and leave them to the wolves of Islam.
• Hillary Clinton or Chuck Shumer named to the Supreme Court.
• Tax rates will return to their highest levels in 30 years as fewer persons pay income taxes. The capital gains tax will be at least double current levels.
• Retired Army General Wesley Clark named as Secretary of Defense. This General was fired for “integrity” issues.
• Open borders to all comers, especially those from the Middle East and South America.
• He’ll grant amnesty to all illegals now in the U.S regardless of status or even gang Members (MS-13).
• An abrupt termination to the Iraq war, the results will be tragic and the consequences to our military will be devastating.
• A massive drop in enlistments and reenlistments far worse than what occurred during Clinton’s terms.

There is nothing above that he has disavowed. On the gun issue, he has waffled so that he leaves himself free to do what he wishes.

..Against taxes in Massachusetts? 

Massachusetts - The issue is whether to erase the state’s income tax in two phases.  The 5.3% tax would be sliced in half  next year and disappear entirely in the following year.  Advocates or repeal are hoping for support from voters worried about tough economic times and angered by bloated government spending.  Six years ago a similar proposal attracted 45% of the vote…

I’m pleased, but cynical.  The progressive cancer runs too broad and deep in Massachusetts.  Their ways are many, and their determination to sustain, if not expand, the state, ferocious.  Once in the door, they spread through the administrative bureaucracies, the unions, the quid pro quo “private” services,  the education hive, the health systems, the environmental enforcers and into every elective and appointed tier from Washington to township.    Nothing short of a total collapse will rid the state of their control.  Good luck.

Now that the Chosen One has flitted about the Holy Land, managed to upset most of the inhabitants, and is heading to Germany to instruct them on proper social principles, the question which needs answering is, “Will Obama detour to Bulgaria to instruct his Socialist comrades on the error of their taxing ways?”

Obama considers himself the “Leader of the‘Free World” pre-ordination. Therefore, by divine right he must travel to straying socialist countries and correct their governmental missteps.

Thankfully, one member of the MSM dutifully enumerated Bulgaria’s miscues for us to fathom.

They listed the delinquencies, the rationale for those reshuffles, the results of repositioning and the dangers to Socialism accruing from those alterations.

I expect Obama to thoroughly chide the malefactors and wag the Holy Digit under their collectivist nose. Will he force the issue by fiat of “More Taxes or More Tanks!”
Here are the insufferable changes.

[snip]
“The situation was getting desperate in Bulgaria. We were losing our population and our best workers. They were leaving for Western Europe to find jobs and the No.1 form of foreign capital came from remittances.” All that began to change when the corporate tax was cut to 10% in 2007 and the personal income tax to 10% in January of this year. “We told the politicians that it was symbolically important for Bulgaria to have the lowest flat tax. We were surrounded by flat tax countries, we wanted to be the nation most friendly to capital and business.”

[snip]
“These countries understand that the flat tax is the key to their prosperity — even the former communists.” Only stultified political tactics — certainly not clear thinking — explains why somebody like Barack Obama could be running on a platform of making America’s tax rates among the highest in the world when other nations are proving the competitive advantages of flatter tax systems.

Difficult to figure out isn’t it.

I am an ardent supporter of the 2^nd Amendment.

The SCOTUS ruling upholding the lower courts in Heller produced satisfaction, tempered by the narrowness of the decision. All justices did agree the 2^nd Amendment is an individual right. How four voted against is not comprehensible. Nonetheless, they did and that is worrisome, when the Bill of Rights is subject to a whim.

Obama’s position on the 2^nd Amendment has one more side than a polygon. He finally settled on pro right to own a weapon according to the Bill of Rights, but states and localities can legislate all manner of rules as to where, how and who is elite enough to carry.

At first consideration, this is a typical liberal absurdity. Why have a Bill of rights?

The scales fell from my eyes and the beauty of this logic became apparent. I realized the cramped channel of my logic. I thought only inside the box.

Why restrict Obama’s reasoning to the 2^nd Amendment. Well-crafted legislation in the states and localities can produce highly desirous results in many other amendments, to wit:

1^st Amendment
Any journalist convicted of publishing, printing, broadcasting liberal tripe or causing the aforementioned shall be prohibited from being in possession of writing implements, computers microphones telephones, paper or transmitters and banned from all media contact as a prohibited person.

4^th Amendment
This now applies only to American citizens in the selected states and local areas; all others may be seized and searched. Illegal immigrants may be indentured before deported.

5^th and 6^th Amendments
Depends on who and what they did. The more heinous the crime and undesirable the miscreant gives sanction to more basic diversion.

8^th Amendment
The state and locality will determine bail and punishment, to be dependent on the person held. See 5^th and 6^th

13^th Amendment
No slavery unless the state or locality votes such laws for a specific reason.
Section 2 is void if any state or locality so chooses.

14^th Amendment
This new process makes this amendment null.

15^th Amendment
Voter registration in states and localities so choosing may ban liberals from voting under new mental incompetence laws. This avoids race, color and servitude unless changed under the amended 13^th Amendment
Section 2 is void if any state or locality so chooses.

16^th Amendment
Most states will vote to end income tax. Why send any money to support the remnants of the Constitution.

19^th Amendment
Hey, some places might have changed the 13^th, why not change this one.

24^th Amendment
States and localities may bring back poll and any other voting tax as needed. One never knows when the entities need a new revenue source. They will know whom to tax.
Section 2 is void if any state or locality so chooses.

26^th Amendment
Definitely, this is changed. If anyone isn’t smart enough to drink wisely or own a handgun, he or she isn’t smart enough to vote.
Section 2 is void if any state or locality so chooses.

27^th Amendment
Most localities if not states will write new law on this. Why pay any of these clowns in congress, they don’t do anything.

We have Obama to thank for this enlightenment; it takes a liberal, socialist lawyer to see part of an answer. They never see the unintended consequences.

Barack Obama is pulling a page out of the Bill Clinton playbook—dangle a tax cut to get elected:

…Obama outlined his own reform plan that includes a tax cut for 150 million middle-income Americans, a homeowners tax benefit for those stuck in the subprime mortgage crisis, an end to income taxes for seniors making less than $50,000 a year and a tax code reduced in complexity.

Of course, once the election was over, Bill Clinton’s middle class tax cut turned into the largest retroactive tax increase in our history.  A quick look at Obama’s web site tells you the same has to happen here.  For example, along with the tax cut, he promises: 

• A national healthcare plan
• More drugs and coverage for seniors
• Funding for Zero to Five education
• A $4,000 tax credit for college kids
• More teacher pay
• And on and on it goes…. 

But the reality nobody wants to face is that we can’t do everything.  You can run around yelling “Believe in change!” all you want, but as John Adams pointed out “facts are stubborn things.”  Just ask Massachusetts residents about Deval Patrick’s property tax relief if you want to know what happens when a snake oil salesman tries to sell you “change”. 

Quite simply, the stubborn fact is that Obama can’t deliver on all his promises and the tax cut will be jettisoned faster than you can say Trinity Church.

Most Harvard liberals wouldn’t blink before agreeing to raise property or personal income taxes 2.5%. It’s for the children. It’s for the cops and firefighters. It’s for the environment. But the Charles River bastion of liberalism isn’t thrilled with a proposal that would tax its endowment 2.5%:

“You’d be taxing success here,” Kevin Casey, Harvard’s associate vice president for government, community and public affairs complained in a quote that will soon be framed and hung in my office. “Over time, this would put us at a real competitive disadvantage, which would drastically hurt the Commonwealth.”

Where has Mr. Casey been? Our “progressive” tax system has been punishing the successful for decades. The more you earn, the more you pay. The only difference between Harvard and us is the university didn’t earn its investment foundation. It was given to them.

You’d think Harvard liberals would want to pay their fair share. It’s for the children, don’t you know.

I don’t think we can afford to do “better.”

Pollina Says VT ‘Can Do Better’

Progressive Launches Campaign For Governor In Essex

[snip]
Progressive Party candidate Anthony Pollina, 56, of Middlesex launched his campaign for governor of Vermont Thursday evening in a high school cafeteria in Essex Junction.
[snip]
This is Pollina’s fourth attempt at statewide office. In 1984 he ran for Congress as a Democrat and lost badly. He gravitated to Vermont’s fledging Progresssive Party soon afterward, worked for U.S. Rep. Bernie Sanders in the 1990s and re-emerged as a statewide candidate in 2000. Pollina came in a distant third for governor that year and lieutenant governor in 2002.
[snip]
In his announcement speech to supporters, Pollina sharply criticized Douglas[…]for Douglas’ plan to reduce the top marginal state income tax rate.
Pollina offered a general outline of the themes upon which he’ll rely in the campaign, including support for farmers, small-business owners and seniors. He proposes $80 million in additional state borrowing to fix roads and bridges, wants to boost renewable energy development, and help Vermonters use less heating fuel.

Vermont is a magical place. The rest of the country is in foreclosure, jobs are disappearing, the USD is shrinking faster than Alice eating the cookie and here comes Pollina looking to borrow $80 million.
For what is this sum to be borrowed? To fix the roads and bridges for which previously collected taxes were to repair of course. If there is any spare change left over from this debt overload, Pollina will plant the hillsides with pinwheels to create a superfluity of energy for the CFL abusing flatlanders.
Heating Vermont homes, according to Pollina, is a serious obstruction to life in La-La land. The solution is global warming, which is as close to free as one gets. Since the freebie isn’t taxed at least three times, it’s injurious.
Next time, coverage of the universal health care, plastic bag free living and huge taxes on any item finding official disapproval will suffer discussion.

Not everyone pays all these taxes in every state; some states tax unprepared food, others like New Hampshire tax the scenic view you have from your property. To insult you further all tax, at some level, your view of the coffin lid. Politicians will look you in the eye and tell you most of these aren’t taxes, they’re fees for allowing you to exist.
This list is by no means definitive. Many more state and local “fees” are in place, limited only by the imagination of the “Elected Elite.”
I’m using $1000.00 as monthly earnings for ease of math and understanding. Also, I’m using Vermont as the basis for other taxes, which may or may not have the same rates OR even be collected where you reside. All is computed as single, no exemptions, 0 dependents

Federal Income Tax: @ 15% of gross adjusted = $150.00 X 12 = $1800.00

State Income Tax: decoupled from the Federal when Bush’s tax cuts took place. $434.00

Federal Medicare Tax: @ $1.36% of gross =$13.60 X 12 = $163.20

Social Security Tax (FICA): 15.7% of gross = $157.00 X 12 = $1884.00

The fact that the employer is paying your other half means he isn’t giving that to you in wages. You still pay it.

State Unemployment Tax (SUTA): Average $1.00 to $3.00 per month $1.75 X 12 = $21.00

Workers Compensation Tax: $25.00 X 12 = $300.00

Property Tax: My town = $1.43 per $100.00 evaluation $200,000 =$2860

Renters as well as homeowners pay this. Seriously, do you think the landlord pays your share?
Phone Fees and taxes land Line:

Federal Subscriber line charge $6.40 X 12 = $76.80

Federal Universal Service fee $0.65 X 12 = $7.80

Vermont Universal Service fund $0.24 X 12 = $2.88

Vermont State tax $1.13 X 12 = $13.56

Federal Excise tax $0.59 X 12 = $7.08

Phone Fees and taxes Cell phone:

Federal Universal Service fee $2.01 X 12 = $24.12

Vermont State tax $13.18 X 12 = $38.16

Vermont Universal Service fund $0.67 X 12 = $8.04

Regulatory Program Fee $0.96 X 12 = $11.52

Utility Taxes: $100/month electric bill 4.5% =$4.50 X 12 = $54.00

Vermont residences do not pay sales tax on energy used, they do pay an Energy Efficiency Charge, between 4.5 and 5%, funds the statewide Energy Efficiency Utility
Gasoline Tax: $0.42 cents/gal Federal and State(some states add their tax as a percentage of the per gal charge) Thought this ruling is of interest. The state will have no untaxed gasoline in cars.

At 20 MPG, 100 miles =$2.10 X 15,000 miles/year = $315.00
Vehicle License Registration Tax: for pleasure /year $60.00

Rooms and Meals Tax: Eat out once a week

$30.00 dinner for two = $2.70 = $140.40

9% on everything from coffee to the motel room. Add up all those lattes and bagels for more tax, tip optional
Here’s the annual total of those taxes I can actually figure. You need to add the sales, use and other taxes as you believe you pay them:

TOTAL: $8161.56

Your income: $12,000.00

Percentage of income paid in taxes/year: 68% of Gross

With all this the Congress wants to let the “cuts” expire and raise taxes on “only the wealthy.” Aren’t you glad to be only poor.
Extras:
Sales Tax: Charged on everything except unprepared food and first $110 of clothing, State rate is 6% with some towns adding 1% to that.
Service Charge Tax: Same rates at Sales tax. Placed on services like medical, dental, construction etc. 6% with some towns adding 1% to that.
Use tax: Buy a item out of state for $100.00, pay the sales tax there, bring it into Vermont and pay 6% use tax here.
Marriage License Tax: to make legal what you are doing now, $15.00.
Excise Taxes: Federal taxes on things like tires for the car $3.00/tire added on to the cost, don’t forget the sales tax.
The following taxes you pay when you use any middleman for work, selling or buying, shipping:
Building Permit Tax; A variable fee based on the cost of the project, gets you a piece of paper with writing on it allowing you to alter your own property.
Federal Unemployment Tax (FUTA
Road UsageTax
Accounts Receivable Tax
CDL license Tax
Inventory Tax
Fuel Permit Tax
Gross Receipts Tax
Food License Tax
Corporate Income Tax:
Luxury Taxes
Real Estate Tax
Personal Property Tax
Cigarette Tax
Dog License Tax
Hunting License Tax
Fishing License Tax
Liquor Tax
Watercraft Registration Tax
Recreational Vehicle Tax
Inheritance Tax
Well Permit Tax

 And we wonder why U.S. companies would ever want to move offshore.

Iceland and Taiwan to Slash Corporate Tax Rates

Iceland is known as the Nordic Tiger because of rapid economic growth. Much of the nation’s prosperity is the result of free-market policies, including a 36 percent flat tax on labor income, a 10 percent flat tax on capital income, and a corporate tax rate of just 18 percent (down from 50 percent at the end of the 1980s). But Iceland is not resting on its laurels. The government has just announced a reduction in the corporate tax rate:

The corporate income tax will be cut from 18 per cent to 15 per cent, effective for the 2008 income year and come into force in the 2009 assessment year.

Meanwhile, even though the 25 percent corporate tax rate in Taiwan is already substantially lower than the 39 percent-plus rate in the United States, Taiwanese politicians apparently recognize that globalization and tax competition are powerful arguments for even lower rates. Tax-news.com is reporting that the government therefore plans to slash the corporate rate to 17.5 percent - and also make unspecified reductions to personal income tax rates:

It emerged this week that the Taiwanese cabinet has approved plans to reduce corporate and personal income tax rates, although the proposed changes must still secure parliamentary approval. The cuts would see the business tax rate reduced to 17.5% (from 25%), and the personal income tax rate slashed, according to reports. [snip]

When will American politicians hop on the tax-cutting bandwagon?

Why promote an independent citizenry when you can be as fascist as possible. Besides, Pelosi and Reid said it can’t work.

After we cart away all the stroked out Vermont legislators, it is possible to elect persons who care about the taxpayer more than the clamoring “gimmee” parasites on the public dole. Yes, this includes everyone looking for a subsidy, be it business or personal aggrandizement.

South Carolina to Consider Flat Tax

An article in the Greenville News Sunday by SC Gov. Mark Sanford urges state adoption of a voluntary flat tax.

Excerpt:

Our proposal would simply allow an individual the choice to either pay taxes at the current 7 percent, or forgo exemptions and pay 3.4 percent. The choice would be the taxpayers’, and it allows you to avoid the endless debates that stall tax reform. [snip]

A 3.4 percent flat tax would mean that people in the top income bracket — in our case those making more than $12,850 per year — could see their income tax rate cut by half.

Hiking the cigarette tax $0.30/pack to $0.37 covers the cost. The preeminent part is the no new tax income for the state. Make it an opt in and no return to the prior system.

Big Oil-one better hope they keep paying taxes and employing people. The lefties griping about Exxon can’t cover these taxes collectively.

 

Exxon’s 2007 Tax Bill: $30 Billion

Corporate profits receive a lot of media attention, but what receives considerably less attention are the corporate taxes paid on corporate profits. Do a Google search for “Exxon profits” and you’ll get about 8,000 hits. Now try “Exxon taxes” and you’ll get a little more than 300 hits. That’s a ratio of about 33 to 1.

I’m pretty sure that Exxon’s tax payment in 2007 of $30 billion (that’s $30,000,000,000) is a record, exceeding the $28 billion it paid last year.

By the way, Exxon pays taxes at a rate of 41% on its taxable income!

[Update: The $40.6 billion and $39.5 billion figures are after-tax profits. For 2006, Exxon’s EBT (earnings before tax) was $67.4 billion, it paid $27.9 billion in taxes (41.4% tax rate), and its NIAT (net income after tax), or profit, was $39.5 billion.]

Over the last three years, Exxon Mobil has paid an average of $27 billion annually in taxes. That’s $27,000,000,000 per year, a number so large it’s hard to comprehend. Here’s one way to put Exxon’s taxes into perspective.

According to IRS data for 2004, the most recent year available:

Total number of tax returns: 130 million

Number of Tax Returns for the Bottom 50%: 65 million

Adjusted Gross Income for the Bottom 50%: $922 billion

Total Income Tax Paid by the Bottom 50%: $27.4 billion

Conclusion: In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people! Further, the tax rate for the bottom 50% is only 3% of adjusted gross income ($27.4 billion / $922 billion), and the tax rate for Exxon was 41% in 2006 ($67.4 billion in taxable income, $27.9 billion in taxes).

I wonder if the excesses of the United Way and the Red Cross executives has any currency here?

Chronicle: Nonprofits Pay Zero Tax on Billions of Unrelated Business Income

The Chronicle of Philanthropy reviewed the Form 990s for 91 nonprofit organizations — including Columbia, Emory, Harvard, Indiana, Johns Hopkins, MIT, Minnesota, Penn, Stanford, UC-Berkeley, USC, and Yale — and found that the organizations reported $412.9 million of income from unrelated business activities, but 46 (51%) reported zero tax liabilities:

[snip]… But the finding may verify longstanding concerns of the IRS that current rules on unrelated-business income tax, known as UBIT, may allow “excess flexibility” for charities…[snip]

[snip]…some lawmakers worried that existing rules are not working to put charities and companies on a level playing field.

Yup, they’re worried about it, doing anything will put a big dent in campaign donations.

Keep moving people, nothing you need to know here!

The real title for this post should be: “How to turn a recession into a depression.” For all of you who think life is a zero sum game, there won’t even be pencils for you to sell.
Explain to me and the readers how removing this amount of capital from the markets plus increasing government spending improves the current economic conditions?
I’ll wait, but not for long, don’t have that much time.

David Leonhardt profiles Senator Clinton’s economic views. A notable paragraph:

Her first priority, she said, would be changing the tax code. She has proposed tax credits for college tuition, retirement savings, health care and alternative energy use, most of which would go to lower- and middle-income families. She would also raise the top marginal rate to 39.6 percent, its level for much of her husband’s administration. Increasing high-end tax rates would bring in $52 billion a year, her campaign says, and help pay for some of her other proposals.

A few observations:

1. The $52 billion estimate seems high to me. The CBO reports that each percentage-point increase in the top two income tax rates–singles making over about $150K, married taxpayers over about $180K–increases tax revenue by only $6.5 billion in 2009. Multiply that by 4.6 (the proposed rate increase), and you get $29 billion, not $52 billion. And even that $6.5 billion is an overestimate, because it includes the top two rates, not just the top rate. I would guess that the Clinton campaign included other tax increases in the $52 billion figure, such as increases in the tax rates for dividends and capital gains.
2. Even taking the $52 billion estimate at face value, it shows how little revenue would come from increasing taxes on the rich. This is only about 1/3 of one percent of GDP. (Emphasis added)
3. The passage from Leonhardt makes clear that Senator Clinton wants to spend the extra revenue on other proposals, instead of using it to reduce the long-term fiscal gap.
4. The passage says that this revenue will “help pay” for her other proposals, instead of fully paying for them. The entire package seems to involve either an expanded deficit or other taxes increases (or spending cuts) to be named later.

Update: An informed reader directs me to the source for the $52 billion figure (see page 13), which makes clear that the proposal is to increase the top two rates, not just the top rate. According to this document, Cinton also proposes to raise additional revenue through the less obvious tax hikes known as PEP/Pease, which make the effective marginal tax rate higher than the statutory rate.
My informed reader says that the Clinton campaign has not taken a position on dividends and capital gains tax rates. Some journalist out there ought to ask the candidate about it, especially in light of the stock market’s recent performance.

Evaluate this in light of world market actions. Just for giggles, OK.