Category Archives: Taxed Again

Fair Share

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A Thomas Sowell quote is making the Internoodle rounds again. “What is your ‘fair share’ of what someone else has worked for?”

Dr. Sowell is an economist, social theorist, and philosopher. He is the Rose and Milton Friedman Senior Fellow on Public Policy at the Hoover Institution at Stanford. Dr. Friedman, a Nobel laureate, founded the Chicago school of economics; Dr. Sowell is perhaps the leading voice of that school.

Rationing Means a 'Fair Share' for All of Us“I know the intention was to slam ‘distribution of wealth/social service program’ supporters,” my friend Nola Guay said to me, “But my real question is this: ‘What’s [ExxonMobil CEO] Rex Tillerson’s fair share of the $2.72 million salary and $4.59 million bonus he gets this year’? After all, his $600 million in federal handouts padded their gargantuan bottom line.”

Nola, dear? How much of what you’ve worked for do you want to give me?

“That’s a strawman and you know it, Dick,” she said.

Maybe so, but Mr. Tillerson is a piker. !@#$%^ Comcast’s CEO Brian Roberts picked up $29.1 million in salary, bonus, and so on (down from $31.1 million in 2011) while delivering a whole lot less customer satisfaction. ExxonMobil at least puts a tiger in your tank. Heck, Walmart CEO Mike Duke’s pay jumped 14.1% to $20.7 million, mostly on a performance-based cash bonus. The average Walmart employee would have to work 785 years to earn that much.

Still, Nola, you didn’t answer the question. I really wonder how much you plan to give me out of what you worked for? I really wonder if you’ll tithe to me?

There is a belief that people who have more of something are required to give it to others who have less. Required.

“I’m looking for balanced, moral behavior on everyone’s part,” Ms. Guay said

Yeah, baby. When Rufus starts collecting Social Security this year at age 62, he’ll pull in $1,923/month or $23,076 per year because he qualifies for the maximum benefit. Ms. Guay’s 1040 showed a total income of $19,742. I guess Rufus owes Nola $1,667 this year just to keep them morally balanced. And Mr. Tillerson gets to give it to all of us. Of course, dividing his 7,310,000 pre-tax cash dollars between the 315,848,000 of us gives us each 2.3 cents.

“You’re missing the point as usual, Dick,” she said. “I’m looking for that good behavior on everyone’s part. You want to keep slashing benefits for the disadvantaged while filling the coffers of the already abusive wealthy. That’s just plain hateful and immoral.”

And that’s the smoke-and-mirrors part of Ms. Guay’s argument.

Dr. Sowell was a Marxist too, “during the decade of my 20s,” but he rejected Ms. Guay’s fair share economics (in favor of laissez faire) after he interned with the Feds in the summer of 1960. That’s when he discovered the link between the rise of mandated minimum wages for workers in the sugar industry of Puerto Rico and the rise of unemployment. Studying the patterns led Dr. Sowell to conclude that the government employees who administered the minimum wage law cared more about their own jobs than the plight of the poor.

“I don’t want to give even more money to Big Sugar, either,” she said.

Agreed.

The USDA will buy 400,000 tons of sugar in a massive bailout of domestic sugar processors. That will cost taxpayers about $80 million in the sweetest deal possible for the companies that grow cane and beets. See, they borrowed millions against this year’s sugar harvest but the harvest was soooooooooo good that prices dropped so they can’t pay back all of the loan.

Say what?

The National Debt increases at an average of $3.78 billion per day which will add up to some $1,400,000,000,000 (1.4 trillion dollars) this year so that extra $80 million is just .005% of the total increase in debt. We need to find the other 99.995% of immoral government spending, preferably from handouts to Big Sugar and Big Solar and all the other political boondoggles. After all, individual taxpayers paid $1,434,100,000 (coincidentally about 1.4 trillion dollars) in federal income tax last year. If we have to pay the spending we authorized, we’ll have to double our “contribution.”

It’s a simple calculation. Cut spending or double taxes. It’s your “fair share.”

Your choice.

“I don’t understand how these clowns keep getting elected,” Ms. Guay said. “Oh, wait. I do. They make us believe that the ‘other people’ are our enemies. They run hate filled campaigns. Then these damn fool middle class buy that load of bilge and keep voting them in.”

And all I could think of was, Why is she maligning her own Demorats?

For the record, ExxonMobil paid $31.05 billion in federal income tax last year, after the huge handout of $600 million in annual federal tax breaks, on earnings before taxes of $78.73 billion; WalMart paid just $7.98 billion on $25.74 billion in earnings before taxes.
Comcast got about the same $566 million tax reduction in 2009 and avoided paying all the Pennsylvania corporate income taxes again last year.

 

Today is Earth Day

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I suspect that has nothing to do with the fact that eBay’s President and CEO, John Donahoe, personally emailed me this morning. “Congress is considering online sales tax legislation that is wrongheaded and unfair,” he said, “and I am writing to ask for your help in telling Congress ‘No!’ to new sales taxes and burdens for small businesses.”

I’m all for no new taxes or burdens on small businesses (or their customers).

Voters seem to have a different idea.

Voters haven’t figured out that when they tell the boneheads they elect to “stick it to the rich businessman or rich businesswoman” what they are really doing is making their own cigs or Twinkies or wife-beater t-shirts cost more.

Most states levy a sales and use tax on merchandise.

Here are the arguments, pro and con.

Does the Sales Tax Break the Piggy Bank?PRO: Sales tax proponents say taxing goods bring economic growth, savings, and investment. I’ve seen no reliable data proving that. Still, the rooms and meals tax here in South Florida is about to ratchet up another thousand percent to finance Dolphin Stadium. That’s OK, though, because that tax fleeces only the tourons.

If a sales and use tax on merchandise is legit, then online sellers should charge it the same way local stores do. After all, people who use stuff owe the tax no matter where the stuff is bought.

CON: Sales taxes are regressive. (A regressive tax is defined as “a tax that takes a larger percentage from low-income people than from high-income people.”) I discussed the how much a bigger bite of your paycheck a sales tax takes here last week.

I don’t believe sales and use tax on merchandise is a fair or equitable way for a state to raise funds so no online merchant should collect it; the local stores ought not charge it either.

Mr. Donahoe thinks the solution is simple: if Congress passes online sales tax legislation, eBay says small businesses with [fewer] than 50 employees or less than $10 million in annual out-of-state sales should be exempt from the burden of collecting sales taxes nationwide. Mr. Donahoe wrote “less” there, but I corrected that, too.

eBay’s solution is the worst of all possible worlds. If the tax is due, exempting one group from collecting it is an accounting (and marketing) nightmare, not to mention probably unconstitutional.

And what happens when a $9,999,990 business sells an extra $10 this year? They didn’t collect tax all year. Do they go back to all their customers? Do they suddenly have to find the $5 or $600,000 in taxes owed from their own revenue?

“So what is the fair and equitable way for a state to raise funds?” Liz Arden asked me.

Flat income tax.

If We the Overtaxed people really really understood how much it costs us to employ 22,267,206 federal plus state and local government civilian workers, we would have thrown the always-on-vacation bums out of office decades ago.

And that, dear reader, is why there will never, ever be tax reform in these United States.

(The U.S. Census reports, in a file called “APES,” that our federal government civilian employment plus state and local government public employment payroll for March of 2011 was about $86,500,000,000.)

Did you know you can deduct the state sales tax you pay from your federal tax return?

 

We the Overtaxed People

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At 11:59 p.m. tonight, not 12 hours from now, millions of Americans including Rufus will make their annual mad dash to the post office.

Filing High
I e-filed for the first time this year. Tubbo Tax was a little confused because I didn’t owe any extra and wasn’t due a refund

Familiar icons with Follow us on Facebook and Twitter, IRS logoOddly, Tubbo sent the email announcing that the IRS had accepted my return four minutes before they sent the email announcing that they had successfully sent the IRS my return.

I shouldn’t be worried, right?

This little box came up at the end of the filing status:

How to check your refund status?
Download the MyTaxRefund app and check your status anywhere.
Available on iPhone, iPad, and Android devices.

And then! And THEN!

Filing feels good! Share your tax triumph with your friends.
(Don’t worry, nothing confidential is shared.)
[f Share] [Tweet]

What? Are they nutz?

Taxation WITH Representation
An Internoodle meme going around states incorrectly that Americans paid no taxes before the Income Tax was made permanent in 1913.

The U.S. did impose income taxes during the Civil War and again in the 1890s to pay for war expenses but didn’t make them permanent until 1913. Up until then excise taxes on alcohol and later added to gasoline, tires, telephones, tobacco, and a host of other commodities raised a lot of money to fund the government. Tariffs raised even more. Tariffs were the largest source of federal revenue (and the easiest to collect) from the 1790s until the income tax started growing.

IRS asks, Do you need more time?Tariffs were one of the major causes of the Civil War.

We’ve also had property taxes since colonial times; in fact, the only reason we could go to war against Britain is that we had well-developed tax systems in place to pay for it. By 1796, seven of the then-15 states had poll taxes. 12 taxed some or all livestock. All taxed land one way or another. Most taxed specific occupations.

We the Overtaxed People have been that way since before we threw the (taxable) tea in the harbor.

For the record, I support (a) the flat income tax and (b) elimination of all other tax methods including corporate taxes. People have the right to be taxed fairly, the right to know how much is coming out of their pockets, and the right not to be taxed two or three times on the same income.

Tariffs, excise taxes, sales and value added taxes, and even property taxes are the most regressive way to raise money from a population.

Alabama and Mississippi which have no state minimum wage charge sales tax on food (and they’re not alone). Let’s assume you live in Birmingham in the forward thinking state of Alabama and make $7.50 per hour. You don’t make enough to owe any income tax but we’ll still get you.

Americans report spending $151 on food per week on average but let’s assume you can’t afford to spend half your gross paycheck at the grocery.

If you buy $100/week in Alabama groceries, $8 of that goes to the state. That’s a tax rate of “only 2.66%.” Add in the tax on your phone and cable and apartment and gasoline and it’s easy to see how someone earning minimum wage has a higher actual tax rate than Warren Buffett.

We’re from the Government; We’re Here to Help You Get Healthy
My friend Kay Ace visited the doc a couple of times recently. She was in just before Christmas for a well-grownup, six-month checkup. And she went in last month with that crud going around.

The cost of her office visit went from $93 in December to $113 in March, 100% of which was covered by Medicare. Her Medicare Advantage copay went from $20 to $25. Oh, yeah, and her premium went up.

“Obamacare: We’ll save you money®.”

SCOTUS Upholds Obamacare: It's a tax
 

Looters

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I’ve mentioned in this space that We the Overtaxed People are on a financial path to adopting Greek as our national language.

The critters inside the Beltway have a new model now.

“Cyprus and the EU reached a new late-night bailout deal last night that will reduce the chance that Cyprus’s financial system and economy will completely implode.
“The 10 billion euro deal requires Cyprus to drastically shrink its banking sector, which has grown to eight times the size of the country’s economy, by unwinding Cyprus’ second largest bank, Laiki. In doing so, bondholders and depositors with more than 100,000 euros will take a hair cut.”

Read the rest here and come back. I’ll wait.

Broken Piggy Bank“If you think we can continue in America with the deficits we have been running, think HARD about the international precedents being set with the Cyprus fiasco. Here, I am thinking it would be your IRAs and 401Ks…” Rufus said.

He’s right.

The FDIC here covers all types of deposits received at an insured bank, including everything you have in a checking account, a NOW account, savings account, money market account, CD, or even cashier’s checks and money orders.

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

Investment or retirement accounts with a stock broker are not insured. That’s another pot of gold just waiting for the Liberal Leprechauns to loot.

When (not if) it happens here, famed liberal Bill “I’ve been overtaxed enough already” Maher may really abandon the Liberals. He’ll have to.

 

Trash to Riches

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My garbage man has to buy a new truck.

Vermont has very little municipal trash collection, even in our small municipalities. Many Vermonters contract private haulers to collect and dump our trash; others, like my daughter, load up their dogs and plastic bags for the Saturday morning outing to the transfer station.

Freelance Editorial Art by Roy Doty: http://www.roydoty.com/posters-editorial/garbage-truck.htm Tom Ripley owns my garbage route. I like Tom. He’s friendly, always on time, and comes right up on the porch to pick up the trash cans. He even (usually) latches the storm door when he puts the cans back. He owns a couple of used garbage trucks that he bought at the state auction and usually has a couple-three pickups that he runs around his route every Sunday before church. Sadly, he’s leaving the business because Vermont says he has to buy a new truck.

Gov. Peter Shumlin (D-VT) moved us “towards universal recycling [to] advance Vermont into the next generation of solid waste management and keep more waste out of our landfills” with a new law he signed this year.

The mandate requires waste haulers to collect everything from yard waste to commercial food waste, and prohibits dumping any recyclable or compostable materials in landfills.

Did you know there is a U.S. Composting Council? Its executive director says that “Enacting the law over time will ensure its success on a number of levels.”

The timeline begins in 2014 when all mandated recyclables must be removed from the solid waste stream. In 2015 yard waste goes. Two years after that, in 2017 food waste must be gone.

The prohibition mandates that every hauler have compartmented trucks. And everyone is soooooo very pleased about how the law will be phased in to give haulers enough time to build the infrastructure.

Tom has to buy a new truck.

Of course by law, Tom won’t be allowed to charge extra for handling the recycled materials.

But wait! There’s more!

“If a facility collects mandated recyclables from a commercial hauler, the facility may charge a fee for the collection of those mandated recyclables.” — Act 148

Tom has to buy a new truck.

But wait! There’s more!

Food residuals can’t go in the waste stream any more. In fact, “uncontaminated material that is derived from processing or discarding of food and that is recyclable, in a manner consistent with section 6605k of this title” (i.e. preconsumer and postconsumer food scraps) must be source separated. — Act 148

I have to pick out the wilted lettuce. Tom has to buy a new truck.

“Mr. Ripley could use his old truck and just drive the route twice,” one regulator told me. Or four times if our regulatory friend could count.

That makes perfect Green sense.

It used to be that when government usurped private property by annexing your land or legislated you out of business, it was called a taking. Times change. I guess the Far Green figures that a mandated purchase like Tom’s new truck is just another tax.

Follow the money. Somebody’s getting rich on this but it sure ain’t Tom Ripley.

For the record, Act 148 does allow new “taxes on all nonrecyclable, nonbiodegradable products or packaging.”