Archive for the 'taxes' Category

Taxing Email is Useless

Derek Thompson at the Atlantic blog writes about a NY Times piece on taxing email. He’s not advocating it, or arguing against it but looking at the supposed benefits and negatives, and how it would likely increase instant messaging.

What would be the effects of an email tax? I’m not sure it would make such a big difference. To save my daily pennies, I know I would lean more on Gchat or other instant message programs, and I’m sure everybody else would too.

Would that be taxed next? If email can be taxed, why not aim? However one of the key benefits touted by both the Times article and Thompson is that it would curtail the deluge of spam that we all recieve. You know, hey spammers send a lot of email, let’s just tax email, then we not only get less spam, but make money too! Anyone see any holes? I do. How do you keep track of emails and then send the tax bill?

Such a tax is feasible, he says, since e-mail addresses are easily identifiable by Internet service providers and they could pass on the levy in their monthly bills to users.

The problem with this? This isn’t how spam works. Spam is sent from “zombie pc’s“, meaning unknowing grandparents and non-netsavvy people are going to get a huge bill come due for the spam sent. Furthermore, the government will always be behind in technology, there’s just no way spammers and people wouldn’t be able to get around the tax through forged email headers, botnets, tor networks, ect. This will end up costing the unfortunately honest people and not the dishonest ones it’s targeted to.

Let’s also not overlook the liberal arrogance of the Times piece:

You might gulp at the $3-a-day cost for 100 e-mails, but don’t forget you pay more to gulp your daily large caramel macchiato.

For one thing, $3 a day is a lot of money in a year ($1095), for another, I have no idea what a caramel macchiato is.

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Tea Party Turnout Totals

Texas leads the way with 18 protests and 64,000 attendees.

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Sugarland Tea Party

Live at the Sugarland tea party now. Yes I’m working harder than Washington already. Good number of people here. Hundreds maybe over 1000 if you count people that left earlier. Young republican head talking now after the railroad commish I think (edit: yes, it is Elizabeth Ames Jones). Now it’s Ted Cruz speaking. Set up is pretty open in front of city hall, compared to the closed in park in downtown Houston.

Last speaker is a fair tax advocate. Overall pretty good speakers but I think that may be because this tea party is associated a little closer with the local politicians. That’s a little less likely in big cities like Houston.

Update: Now that I’m home, some more thoughts and pictures below. The thing to know about Sugarland is that it’s a suburb of Houston, but its own city. It’s very affluent with lots of upper income and well educated people. The area is pretty strict Republican helping to elect Pete Olsen to Tom Delay’s old seat.

The crowd was a little more uniform and older, and there were few if any Ron Paul types there.

Pictures below the fold.


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Houston Tea Party

I’m at the Houston tea party downtown right now. Over 1000 people easy (update: closer to 10,000). Definitely an experience. I can’t even get close enough to see the stage. Previous speaker was pretty good at firing up the crowd tossing out lots of slogans and popular pro-American sentiments. Speaker now it a bit more academic. Out of the Ron Paul mold, referring to mises and Austrian economics. Giving a historical tax lecture. Protest babes when I get home. Update: More pictures below the fold (more…)

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List of All Tea Party Protests

A pretty comprehensive list for Texas here. I roughly estimate around 64 protests planned for just Texas. You’ll note that other states are listed on the right. I’m closer to the Sugarland one and may check it out. I’m curious to see just how big it will be, especially considering there’s about 4 other Tea Party protests planned for the Greater Houston area.

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Happy Tax Freedom Day

Today is the day that we have earned enough to pay its tax burden for the year. This year’s day comes earlier than last year, though this is due to recent stimulus effects. Before you start to celebrate though, Doug Bandow warns us that the future does not look good on the tax burden front.

Runaway spending ensures that this year’s TFD will be dwarfed by future TFDs. Some day someone will have to pay off the debts being run up today. The Obama administration’s budget figures are bad enough, but they almost certainly rest upon unrealistic economic expectations. The CBO again offers a sobering analysis: “CBO’s estimates of deficits under the President’s budget exceed those anticipated by the administration by $2.3 trillion over the 2010-2019 period.”

What do do about it? Many are taking to Tea Party protests. While Jon Henke defends the protests from Paul Krugman’s libel.

Yet, in today’s New York Times column (in which he makes some reasonable points about the sad state of the Republican Party), Paul Krugman grossly misuses a term to libel a variety of people.

Last but not least: it turns out that the tea parties don’t represent a spontaneous outpouring of public sentiment. They’re AstroTurf (fake grass roots) events, manufactured by the usual suspects. In particular, a key role is being played by FreedomWorks, an organization run by Richard Armey, the former House majority leader, and supported by the usual group of right-wing billionaires. And the parties are, of course, being promoted heavily by Fox News.

What Freedomworks and various other organizations are doing is not “astroturf” any more than the anti-war protests of some years back were astroturf because ANSWER and helped organize people around those events.  Astroturfing is paid activism by an organization; it is not genuine grassroots activism that funded groups are simply helping to organize.

Update: More piling on from my home town Tea Party site.

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Why the AIG Mess is Ignorant Populism of the Worst Kind

Via Greg Mankiw comes this letter by a Mr. Desantis published in the NYTimes. The government is spinelessly trying to punish the very people who’s help it most needs. It’s almost tragic really.

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

And I think I find Andrew Cuomo’s actions the most deplorable. The head of the law and order of the state of New York, residing in an office dedicated to due process and innocent until proven guilty, used his powers and office to threaten and intimidate these people’s privacy and it’s not really a stretch to imagine, their very lives. Cuomo should resign in shame immediately for such a gross misuse of his office, but instead he will be thrust on people’s shoulders as a hero. A sign of the times, to be sure.

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Chicago Tea Party

Rick Santelli just went off on Obama’s housing proposal live on CNBC from the commodities trading floor in Chicago.

It’s now the headline on Drudge:

VIDEO: ‘The government is promoting bad behavior… do we really want to subsidize the losers’ mortgages… This is America! How many of you people want to pay for your neighbor’s mortgage? President Obama are you listening? How about we all stop paying our mortgage! It’s a moral hazard’… MORE…


Who is John Galt?

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David Cay Johnston Puts on his Bad Idea Jeans

(Edit: Mr. Johnston graciously replies in the comments section. It seems the invasion was a bit of a modest proposal that I failed to pick up on. While there are things to disagree with in the rest of the article, I think it does a good job of showing the need for a much simpler tax code.)

That’s the only explanation for this column by Pulitzer prize winning journalist David Cay Johnston in Mother Jones.In it, Johnston advocates invading countries who’s laws we don’t like. Not laws like treating women like property, stoning homosexuals, or systematic oppression of minorities. No, laws like having low taxes and vibrant banking systems.

In 1983 just 10 percent of America’s corporate profits were funneled through places that charge little or no corporate income tax; today more than 25 percent of profits go through tax havens. The Obama administration could tell the Caymans—now fifth in the world in bank deposits—to repeal its bank secrecy laws or be invaded; since the island nation’s total armed forces consists of about 300 police officers, it shouldn’t be hard for technicians and auditors, accompanied by a few Marines, to fly in and seize all the records. Bermuda, which relies on the Royal Navy for its military, could be next, and so on. Long before we get to Switzerland and Luxembourg, their governments should have gotten the message.

The rest of the article is also filled with some bad ideas, but this is the one that stands out. Many on the right have been called blood thirsty and warmongers for advocating less against actual military enemies of the US.

(H/T Radley Balko at Reason)

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Pay No Attention to the Man Behind the Curtains

Alan Reynolds at Cato asks “How’s Obama Going to Raise $4.3 Trillion?

Altogether, Mr. Obama is promising at least $4.3 trillion of increased spending and reduced tax revenue from 2009 to 2018 — roughly an extra $430 billion a year by 2012-2013.

How is he going to pay for it?

Read the whole thing for an overview of what Obama is promising in inscreased spending and loss of tax revenues and how his rational for paying for it falls far short of the goal. How will we pay for all this? It’s something I’ve wondered for a long long time and have only found hand waving about corporate loopholes and better efficiencies savings that seem absurd on their face.

That leaves 3 options as I see it. We will do one or some combination of

  1. Increase the national debt
  2. Raise taxes
  3. Cut Spending

Increasing the national debt may not be as politially feasible in the near future as it has been in the past (at least I hope), so it’s clear that can’t account for all of it. I’m not sure how much more the democrats will be able to tax the rich and corporations. I mean, they might try, but I don’t think it will give them the returns they would hope for. So that leaves raising taxes on the rest of us and cutting spending. Any whats the only part of the budge the democrats have been known to favor spending cuts for? The military.

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Is Income Tax Becoming Too Progressive?

Under McCain and Obamas tax plans 43% and 44% would pay no income tax respectively

Under McCain and Obama's tax plans 43% and 44% would pay no income tax respectively

Fewer and fewer people are paying income tax and even less will be with either candidates tax plan. I don’t think this would be such a problem if we didn’t have such high spending, growing entitlements, and if so many of these zero income tax filers weren’t getting additional handouts from the government (especially under Obama’s tax “cuts” ie. handouts).

It has been said by an unknown author “[Democracy] can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury…” and this is where we’ve been heading for awhile. I think just as a tax plan can be too regressive, it can be too progressive in that it places too high a burden on “the rich” resulting in them leaving (atlas shrugs) or seeking tax shelters, and at the same time having too much of the population with no civic tax obligation leaving them no incentive to constrain public spending (hey, it’s not their money right?)

(HT Greg Mankiw)

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Hooray for Mental Health!

If you support the Paulson bailout plan that is. The New York Times has coverage.

The Senate proposal would cost more than $100 billion and extend and expand many individual and business tax breaks, including tax credits for the production and use of renewable energy sources, like solar energy and wind power.

The bill would also extend the business tax credit for research and development, expand the child tax credit, protect millions of families from the alternative minimum tax and provide tax relief to victims of recent floods, tornadoes and severe storms.

In a delicious bit of soon to be civics geek trivia, the Senate worked around the Constitutional restrictions against voting on tax legislation not already considered by the House by attaching the bailout plan along with a tax extender bill to the Mental Health & Addiction Act (which passed the House several months ago).

You gotta love our government.

In addition to the Paulson plan details, various tax cuts and dealing with the AMT it includes a very helpful proposal, increasing government insurance on bank deposits from 100k to 250k.

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Lone accountant takes on IRS and wins

And .

The dispute arose when more than 30 mutual life insurance companies became publicly traded corporations in the late 1990s and earlier this decade, in a process known as “demutualization.”

Mutual companies are owned by their policyholders, so the companies provided stock and cash to compensate them for the loss of their ownership interests when they went public.

All told, roughly 30 million policyholders received distributions, Ulrich estimates. MetLife Inc. provided over $7 billion of stock to about 11 million policyholders when it went public in 2000, while Prudential distributed $12.5 billion in stock to another 11 million.

The IRS held that the recipients hadn’t paid anything for the shares and owed taxes on the full amount when the shares were sold. Cash distributions also were fully taxable, the IRS said.

That didn’t sound right to Ulrich, 72, an accountant for 49 years. He began researching the issue in 2001, when he received shares from two companies, Prudential and Indianapolis Life.

Ulrich concluded that policyholders had paid for their ownership rights through their premiums so the distributions should have been tax-free.

Funny, a family member gave me some shares he inherited from Met Life’s demutualization just last night to help him with. The man is a hero in my book. The IRS’s position was illogical, but they often make calling them on such matters too burdensome for most to fight. Good for him.

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