Tag Archive 'tax policy'

Happy Tax Freedom Day

ChrisB on Apr 13 2009 | Filed under: Chris' Page, Domestic Politics, Economics, taxes

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 Moveon.org 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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Tax Policy in the Obama Administration

ChrisB on Nov 05 2008 | Filed under: Around the Web

For a technical look at what’s ahead, fifteen tax profs offer their thoughts on tax policy in the new Obama Administration.

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Is Income Tax Becoming Too Progressive?

ChrisB on Oct 21 2008 | Filed under: Chris' Page, Domestic Politics, Economics, Election 2008, taxes

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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A Conservative Blueprint for Health Care?

ChrisB on Aug 14 2008 | Filed under: Blogs, Chris' Page, Health Care

Ryan Ellis, the Tax Policy Director at Americans for Tax Reform, presents 3 principles of conservative health care.

Principle 1: Conservative health care reform should neither raise taxes nor increase the size of government. You’d think this would be a no-brainer, but trust me that it isn’t.
Principle 2: Health insurance should have nothing to do with your job unless you want it to. In any event, health insurance should be 100% portable.
Principle 3: Shopping for health care should look more like currently shopping for prescription drugs, dental, vision, and cosmetic surgery, and less like going to the hospital or getting a checkup. The former is price transparent and market-responsive. The latter is bureaucratic and doesn’t work

He offers the the Health Care Freedom Coalition as a possible package and then asks for reader suggestions in the comments. Sadly the comments then fill up with sidetracking discussions about illegal immigration. If you have any ideas, feel free to chime in at the Next Right.

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Wesley Snipes has put tax protesters in the cross hairs of the IRS

Lance on Feb 21 2008 | Filed under: Lance's Page, Law

Actor Wesley Snipes was found not guilty of federal tax fraud and conspiracy charges earlier this month. Basically he blamed it on the tax advice he received. Whether one believes that he didn’t know that when one earns $38 million you are likely to owe some tax, much less request a 12 million dollar refund, the decision has gotten the IRS to take the tax protester movement seriously:

Treasury and Justice Department officials say the protester ranks are growing and now include white-collar professionals. And they are costing the government millions of dollars.

“Too many people succumb to the fallacy, the illusion, that you don’t have to pay any tax under any set of conditions,” Assistant Attorney General Nathan Hochman told Bloomberg. “That is a growing problem.”

The movement has been energized by the Snipes trial:

According to the Bloomberg report, in addition to the Snipes verdict in which he was cleared of tax conspiracy charges, the tax protester movement has been given a boost by the faltering economy and politicians’ vilification of the Internal Revenue Service.

And, no surprise here, the promotion of “kooky” avoidance plans has been aided by the Internet, where many firms sell strategies online and believers encourage others to join the anti-tax efforts.

“Any kooky tax protester can put up their theories,” said Jonathan R. Siegel, a professor at George Washington University’s law school. “It is much easier to get their message before a mass audience.”

You can read the full Bloomberg story on the coming tax enforcement activities here.

You also should check out Siegel’s collection of tax protester myths here.

And the official U.S. word on such efforts can be found at this special Web page dedicated to debunking frivolous tax arguments.


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Is Fiscal Stimulus the Answer? -updated

Lance on Jan 11 2008 | Filed under: Domestic Politics, Economics

The economy is slowing, and if we are not already in a recession (I think we probably are) the risks of one are certainly high. So should our politicians do something with fiscal policy? Alex Tabarrok says no :

Fourth, in their desperation to “do something” politicians will often do something foolish. If a spending increase or tax cut isn’t worthwhile on its own merits then it’s highly unlikely to be worthwhile once we add in the benefits of “stimulus.” Thus, it’s one thing to argue for extending unemployment benefits as a matter of welfare it’s quite another to think that an increase in unemployment benefits will so increase spending as to reduce unemployment! (The implicit view of Larry Summers.)

I admit to being dubious of legislation and federal government action being useful for short term economic swings. Here are the other quite compelling reasons why:

First, the money for any new spending or tax cuts has got to come from somewhere, right? Thus there is usually substantial crowding out of any stimulus.

Second, by the time the new spending or tax cut gets through the political process the economy has moved on and the stimulus is no longer relevant except by accident.

Third, there just isn’t that much discretionary spending to play with and even a large increase in spending, say tens of billions, is too small to make much of a difference in a 13 trillion dollar economy.

My emphasis above. I am always amused at the power people ascribe to what seems to be a large action, but in the context of the US economy and financial system is actually pretty paltry. That goes for most actions undertaken by the Federal Reserve as well. Finally, even for those amongst us, especially economists, who find those arguments less than compelling, we should all remember this:

Economists may call for “temporary,” “conditional,” and “targeted” stimulus but they won’t be the ones designing the plan. Spending increases and tax cuts are policies with long term consequences that we need to think about carefully.

My own view relates to the first reason I quoted. Spending and tax decisions should make sense in and of themselves, not because of some quixotic attempt to influence the short term course of the economy.

Update: McQ is dubious about the specific package being offered by the Democrats in Congress on far less general grounds as well.

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