November 26, 2010
“The average American has regular contact with the federal government at three points – the IRS, the post office and the TSA. Start with that fact if you are formulating a unified field theory to explain the public’s current political mood.”
— George Will
June 17, 2010
In order to pay for increased services, states and municipalities often propose higher taxes — particularly on the wealthier among us. They argue that the wealthy are more able to afford it and are less harmed by the increases. But what happens when the wealthy get tired of their taxes going up? The answer, according to IRS data, is they leave.
An analysis noted in this story from Forbes shows that the wealthier are apparently attracted to areas with lower tax burdens, which often happen to be in the South. Go figure. Here is an interactive map showing the migration patterns.
In sum, the unintended consequence of “soaking the rich” is that you may eventually run out of rich people to soak.
April 10, 2010
IRS Commissioner Douglas Shulman claimed at a National Press Club luncheon that the so-called individual mandate in the new health-care “reform” law will not be punitive. Although the bill requires the IRS to tell individual tax filers to pay a fine if their level of health insurance does not meet certain minimum government standards, Shulman apparently asserted that it will be up to the individual to pay the fine or not.
[picapp align=”left” wrap=”true” link=”term=douglas+shulman&iid=4820973″ src=”9/2/2/d/IRS_Commissioner_Shulman_0512.jpg?adImageId=12339961&imageId=4820973″ width=”234″ height=”170″ /]
Since when have fines been voluntary? And, if this really is voluntary, what individual would actually pay the amount? It really doesn’t seem to add up.
Still, Shulman claims that the IRS will neither forcibly take the money nor pursue criminal charges. Government imposing a fine without actually technically imposing it? What’s wrong with this picture?
February 27, 2010
After reading a recent AP analysis of CPAC that purported to point out factual errors in political rhetoric, I noticed one interesting problem that represents a common misconception about what some call tax “credits.” The specific example given in the analysis was the $400/$800 “Making Work Pay” tax “credit” given to individuals and joint filers as part of last year’s stimulus package.
Ron Fournier, the writer, referenced that “credit” as an attempt to debunk former Massachusetts Governor Mitt Romney’s claim at the convention that the Democrats were the party of no tax cuts. Fournier equates what he calls these “tax benefits” with what Romney was referring to when he mentioned “tax cuts.”
As I’ve written about before, the Making Work Pay tax “credit” is not really a tax cut. It gives $400 to individual filers or $800 to joint filers without accounting for the fact that many of them do not end up paying federal income taxes anyway. In fact, in many cases this “credit” actually amounts to free money (money they never had nor paid in taxes) to these filers. It can’t be a tax “cut” if there is no tax to cut.
Thanks to our “progressive” income-tax system, such so-called “credits” have become the norm. They equate to what President Obama called “spread the wealth around” during the 2008 campaign. With these types of handouts, is it any wonder why our federal debt is now more than $12 trillion?