The Democrats insist rich don't pay their fair share of taxes. Every bitter Democrat is certain of that.
So in 2011 the Obama Administration beefed up the rate of audits on the rich from 8% of returns over $1 million to 12% of returns over $1 million. Those who earned less than $200,000 faced only a 1 in 100 chance of a skin and person audit.
The IRS stated the high percentage of audits were done only to demonstrate the tax laws were applied fairly against the rich. Whew.
So now we know for sure - The IRS audited the millionaires, and made sure they paid their fair share of taxes.
Obama proved it. In 2011, the millionaires paid their fair share.
~~~~~~~~
Its a certainty the Obama Administration will play the class envy card to crank up taxes on the rich. But anybody who can accounting will know that won't be enough.
So the tax increase on the rich will have to serve as a smokescreen for the increase on taxes on everybody else. 2012 will be the year of the economy crippling tax increases if we do not find a way to stop Obama and his thugs.
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Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Friday, January 6, 2012
Thursday, April 21, 2011
Taxes, Growth and Government Revenue
Most conservatives believe that less meddling by government is good for society. This belief includes taxation. Its even asserted that lower taxes increase government revenue.
I ran into the precisely opposite view by a professor named Robert Ricketts in an article titled, Do Tax Cuts Increase Revenue? The article stated,
"It is a widely held belief in the U.S. that cutting tax rates actually increases government tax revenues.... Regardless of the effect of changes in tax rates on the economy, it is important to recognize that the idea that tax cuts increase government revenues while tax increases decrease them is a myth."
The article cites this graph. Click on it to see it full sized. The graph states it is comparing outlays and revenue as a percentage of Gross Domestic Product.
As Ricketts' graph shows, revenue decline as a percentage of GDP is the result to expect if the tax cut stimulates economic growth. Tax revenue still increases, despite (and because of) the fact that the tax bite is a smaller portion of growing GDP.
Ricketts claims his graph shows increasing taxes increases economic activity and government income. I don't know if Ricketts is confused or if he is trying to hide the fact that cutting taxes will help the economy grow and government income increase.
The key is that the tax cuts stimulates GDP growth. This makes government demands on the economy appear to shrink, even as the government coffers gain income.
~~~~~~~~
In each of the last three cuts in marginal tax rates, revenues received by the U.S. Treasury have increased. Coolidge cut tax rates in the 1920s, Kennedy cut marginal tax rates in the 1960s, and Reagan cut them in the 1980s.
Under Coolidge, marginal tax rates were cut from the top rate of 73% to 24%. The economy rewarded this policy by expanding 59% from 1921 to 1929. Revenues received by the federal treasury increased from $719 million in 1921 to more than $1.1 billion 1929. That's a 61% increase (there was zero inflation in this period). Growth averaged more than six percent annually. We are currently growing at 2.5%.
Under Kennedy, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 1961 to 1965. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.
Under Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 1997, Office of Management and Budget. Revenues increased from roughly $500 billion in 1980 to $1.1 trillion in 1990.
Mackinac Center
~~~~~~~~
The policy implication for Obama's tax increases bode badly for government revenue. Given the S&P rating reduction for US Government debt, we cannot raise the debt ceiling without grave results. And given that increasing taxes will reduce government income, the only thing left is to reduce government expenditure.
I ran into the precisely opposite view by a professor named Robert Ricketts in an article titled, Do Tax Cuts Increase Revenue? The article stated,
"It is a widely held belief in the U.S. that cutting tax rates actually increases government tax revenues.... Regardless of the effect of changes in tax rates on the economy, it is important to recognize that the idea that tax cuts increase government revenues while tax increases decrease them is a myth."
The article cites this graph. Click on it to see it full sized. The graph states it is comparing outlays and revenue as a percentage of Gross Domestic Product.
As Ricketts' graph shows, revenue decline as a percentage of GDP is the result to expect if the tax cut stimulates economic growth. Tax revenue still increases, despite (and because of) the fact that the tax bite is a smaller portion of growing GDP.
Ricketts claims his graph shows increasing taxes increases economic activity and government income. I don't know if Ricketts is confused or if he is trying to hide the fact that cutting taxes will help the economy grow and government income increase.
The key is that the tax cuts stimulates GDP growth. This makes government demands on the economy appear to shrink, even as the government coffers gain income.
~~~~~~~~
In each of the last three cuts in marginal tax rates, revenues received by the U.S. Treasury have increased. Coolidge cut tax rates in the 1920s, Kennedy cut marginal tax rates in the 1960s, and Reagan cut them in the 1980s.
Under Coolidge, marginal tax rates were cut from the top rate of 73% to 24%. The economy rewarded this policy by expanding 59% from 1921 to 1929. Revenues received by the federal treasury increased from $719 million in 1921 to more than $1.1 billion 1929. That's a 61% increase (there was zero inflation in this period). Growth averaged more than six percent annually. We are currently growing at 2.5%.
Under Kennedy, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 1961 to 1965. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.
Under Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 1997, Office of Management and Budget. Revenues increased from roughly $500 billion in 1980 to $1.1 trillion in 1990.
Mackinac Center
~~~~~~~~
The policy implication for Obama's tax increases bode badly for government revenue. Given the S&P rating reduction for US Government debt, we cannot raise the debt ceiling without grave results. And given that increasing taxes will reduce government income, the only thing left is to reduce government expenditure.
Wednesday, September 1, 2010
The Myth of Income Inequality
The statistic keeps popping up that the top 20% of wage earners earn 9, 10 or 11 times as much as the bottom 20% of wage earners.* Politicians tell us this is immoral.
For this to be inequality, we have to pretend is that if someone finds himself in the bottom 20% of wage earners, he's stuck there --- there is nothing he can do to get increased income. This assumption is bogus.
The easiest thing you can do to increase your income is get older. The bottom 20% of earners is overwhelmingly inhabited by young people. A special example of a young person who gets a lower annual wage is the college student who works only in the Summer.
Generally, the young wage earner is most likely the newest person on the job. That makes him or her least experienced and least productive. As people gain experience, they also gain income, unless they decide to stay with perpetually low income jobs by frequent quitting.
As a worker ages, he or she gains experience and stability. Both of these qualities makes the worker more desirable and productive. The employer will pay more to retain the better worker.
Compare age versus income, 2008 **
There is no such thing as an income tax on the rich. There is only a tax on better workers, better producers. (The drop in average income after age 65 is presumably the effect of retirement from the work force)
In order to justify "progressive" income taxes, the politician must pretend to be interested in social justice or similar lies. In fact, politicians are greedy to take more of the peoples' money.
More taxes means less sales, less sales means fewer jobs, fewer jobs means no recovery anytime soon.
~~~~~~~~
* The precise multiplier is dependent on whether the statistician compared pre-tax wages or post tax wages. You see, politicians love to find new excuses to raise taxes so they can take more of the peoples' money for themselves.
** table based on ftp://ftp.bls.gov/pub/special.requests/ce/standard/2008/age.txt
For this to be inequality, we have to pretend is that if someone finds himself in the bottom 20% of wage earners, he's stuck there --- there is nothing he can do to get increased income. This assumption is bogus.
The easiest thing you can do to increase your income is get older. The bottom 20% of earners is overwhelmingly inhabited by young people. A special example of a young person who gets a lower annual wage is the college student who works only in the Summer.
Generally, the young wage earner is most likely the newest person on the job. That makes him or her least experienced and least productive. As people gain experience, they also gain income, unless they decide to stay with perpetually low income jobs by frequent quitting.
As a worker ages, he or she gains experience and stability. Both of these qualities makes the worker more desirable and productive. The employer will pay more to retain the better worker.
Compare age versus income, 2008 **There is no such thing as an income tax on the rich. There is only a tax on better workers, better producers. (The drop in average income after age 65 is presumably the effect of retirement from the work force)
In order to justify "progressive" income taxes, the politician must pretend to be interested in social justice or similar lies. In fact, politicians are greedy to take more of the peoples' money.
More taxes means less sales, less sales means fewer jobs, fewer jobs means no recovery anytime soon.
~~~~~~~~
* The precise multiplier is dependent on whether the statistician compared pre-tax wages or post tax wages. You see, politicians love to find new excuses to raise taxes so they can take more of the peoples' money for themselves.
** table based on ftp://ftp.bls.gov/pub/special.requests/ce/standard/2008/age.txt
Thursday, August 19, 2010
Happy National Cost of Government Day
By Brett Davis, Evergreen Freedom Foundation
It's not a holiday or anniversary that one would find on a calendar, but today is national Cost of Government Day — the day the average American finally stops working to pay for all the expenses of government at all levels, including regulatory burdens. ... Besting last year’s dubious honor, this year’s Cost of Government Day falls later than any year since it was first tracked in 1977.
What this means in practical terms is that it takes 231 days out of the year for the average worker to meet all the costs imposed by government. Given that “stimulus” funding is still ongoing and the passage of health care “reform” earlier this year, is it any wonder the cost of government consumes a staggering 63.41 percent of national income?
~~~~~~~~
Government is the problem
by Bob Qat
The AP story on the current economy proved they are a captive press organ of the "Democratic" Party. Their story on the economy leads off with "Layoffs are back, and that's bad news for the fragile economic recovery."
It is not the layoffs causing the problem. The layoffs are the result of governmnet hyper spending. Lighten the burden of government and businesses will be able to hire more people.
Grover Norquist, Americans for Tax Reform president, put the depressing figures in context: "Two years ago Americans worked until July 16 to pay for the cost of government: all federal, state and local government spending and regulatory costs. That government was too expensive and wasteful. Two years later, we work until August 19 for the same bloated government. We have lost an additional full month of our income to pay the cost of government in just the last two years."
~~~~~~~~
Government debt
inspired by Eric Roseman
The old adage "Don't fight the Federal Reserve" is one with which investors mostly can't go wrong. However, with the Fed now buying up Treasuries, perhaps a better warning would be, "Do as they say, not as they do."
Today's Treasury looks a lot like the German Weimar Republic of the early 1920s when ballooning debt turned into hyperinflation. Recall images of folks carrying their cash in wheelbarrows. They couldn't fit enough of that inflated paper in their wallets when a loaf of bread ran 3 Billion marks.
Sovereign credit risks are real, and dangerous. But more risk equals more reward, right? Not in US bonds --- not now. Yet investors snap them up at record rates.
Are investors crazy? Probably not. It just this government has got them scared.
It's not a holiday or anniversary that one would find on a calendar, but today is national Cost of Government Day — the day the average American finally stops working to pay for all the expenses of government at all levels, including regulatory burdens. ... Besting last year’s dubious honor, this year’s Cost of Government Day falls later than any year since it was first tracked in 1977.
What this means in practical terms is that it takes 231 days out of the year for the average worker to meet all the costs imposed by government. Given that “stimulus” funding is still ongoing and the passage of health care “reform” earlier this year, is it any wonder the cost of government consumes a staggering 63.41 percent of national income?
~~~~~~~~
Government is the problem
by Bob Qat
The AP story on the current economy proved they are a captive press organ of the "Democratic" Party. Their story on the economy leads off with "Layoffs are back, and that's bad news for the fragile economic recovery."
It is not the layoffs causing the problem. The layoffs are the result of governmnet hyper spending. Lighten the burden of government and businesses will be able to hire more people.
Grover Norquist, Americans for Tax Reform president, put the depressing figures in context: "Two years ago Americans worked until July 16 to pay for the cost of government: all federal, state and local government spending and regulatory costs. That government was too expensive and wasteful. Two years later, we work until August 19 for the same bloated government. We have lost an additional full month of our income to pay the cost of government in just the last two years."
~~~~~~~~
Government debt
inspired by Eric Roseman
The old adage "Don't fight the Federal Reserve" is one with which investors mostly can't go wrong. However, with the Fed now buying up Treasuries, perhaps a better warning would be, "Do as they say, not as they do."
Today's Treasury looks a lot like the German Weimar Republic of the early 1920s when ballooning debt turned into hyperinflation. Recall images of folks carrying their cash in wheelbarrows. They couldn't fit enough of that inflated paper in their wallets when a loaf of bread ran 3 Billion marks.
Sovereign credit risks are real, and dangerous. But more risk equals more reward, right? Not in US bonds --- not now. Yet investors snap them up at record rates.
Are investors crazy? Probably not. It just this government has got them scared.
Thursday, August 5, 2010
The Free Market & Taxes
High tax rates are a part of the Left's desire to control the American economy. This essay explores why that is a bad idea and why we must elect politicians who will seek to control us less. Its our freedom.
The Obama Administration has seized control over much of the American economy. Health care is to be centrally administered, even though the administration admits costs will probably increase. Some companies will be considered too big to fail, thus they will always face the prospect of government taking away their independence. We the People will always face the prospect of bearing heavy financial burdens in order to bail out some failed business or a failed homeowner because the politicians wish to influence the economy.
The Left insists on government control of the natural economy despite history showing clearly how utterly government fails at that. Governments screw up. The free economy creates more wealth for everybody. Government only consume, so governments can only allocate poverty. Humans will always seek to escape misery. The pity for America is the present rush into it.
But what if American Leftists may genuinely think the free economy needs to be tamed under government control? Let me suggest a rhetorical question for those Leftists, to give them some insight into a good understanding of the economic importance of the free market.
Which is better for the environment -- A wild lion left to freely roam the savanna, or for the lion to be locked up in a zoo? Why?
The answer is Humans cannot fit a lion into a zoo without doing some harm to the environment, and great harm to the lion. Human understanding is inferior to the natural world.
So it is with natural economics. An economist will tell you we understand a great deal about how economy works. But its certain we are no nearer to controlling the economy than we are to controlling the weather. Nevertheless, some Leftist economists smugly insist they know how to control economy. Their hubris is a clue they don't have the answers.
~~~~~~~~
More fun
The U.S. is in recession. Still.
Consumer spending and economic activity is down due to uncertainty about government policy. This uncertainty perpetuates the recession and perpetuates high unemployment.
The Bush tax cuts will expire Dec. 31, 2010. The "Democratic" Party controlled Congress will use the only tool they like: Higher taxes. Income taxes will increase:
No matter your income tax bracket:
The Democrats in control of Congress ought to abandon their desire to control the economy and let the poor beast recover. They will blather on about fairness and planning, but expect them to screw up. Its the Democrats --- its what they do.
The Obama Administration has seized control over much of the American economy. Health care is to be centrally administered, even though the administration admits costs will probably increase. Some companies will be considered too big to fail, thus they will always face the prospect of government taking away their independence. We the People will always face the prospect of bearing heavy financial burdens in order to bail out some failed business or a failed homeowner because the politicians wish to influence the economy.The Left insists on government control of the natural economy despite history showing clearly how utterly government fails at that. Governments screw up. The free economy creates more wealth for everybody. Government only consume, so governments can only allocate poverty. Humans will always seek to escape misery. The pity for America is the present rush into it.
But what if American Leftists may genuinely think the free economy needs to be tamed under government control? Let me suggest a rhetorical question for those Leftists, to give them some insight into a good understanding of the economic importance of the free market.
Which is better for the environment -- A wild lion left to freely roam the savanna, or for the lion to be locked up in a zoo? Why?
The answer is Humans cannot fit a lion into a zoo without doing some harm to the environment, and great harm to the lion. Human understanding is inferior to the natural world.
So it is with natural economics. An economist will tell you we understand a great deal about how economy works. But its certain we are no nearer to controlling the economy than we are to controlling the weather. Nevertheless, some Leftist economists smugly insist they know how to control economy. Their hubris is a clue they don't have the answers.
~~~~~~~~
More fun
The U.S. is in recession. Still.
Consumer spending and economic activity is down due to uncertainty about government policy. This uncertainty perpetuates the recession and perpetuates high unemployment.
The Bush tax cuts will expire Dec. 31, 2010. The "Democratic" Party controlled Congress will use the only tool they like: Higher taxes. Income taxes will increase:
35% bracket which will increase to 39.6%
33% bracket which will increase to 36%
28% bracket which will increase to 31%
25% bracket which will increase to 28%
10% and 15% will all pay 15%
No matter your income tax bracket:
If your taxes will increase, the economy will decline.
Capital gains tax will increase from 15% to 20%
Dividends tax will increase from 15% to 39.6%
The Democrats in control of Congress ought to abandon their desire to control the economy and let the poor beast recover. They will blather on about fairness and planning, but expect them to screw up. Its the Democrats --- its what they do.
Tuesday, June 8, 2010
Taxing to Prosperity! Yay!
On CNBC today, a "Democratic" Party cheerleader explained Mr Obama's tax increases would lead to prosperity. After all, she reasoned, the proposed tax increases would be no greater than the tax increases during the Clinton administration. In a marvelous flourish of speciousness, she indicated the tax increases caused the Clinton era economy to improve.
Wrong, wrong and wrong.
Tax increases lead to the government taking more of your money. The only way that could lead to prosperity is if the government spends your money on you in a better way than you can.
Mr Clinton inherited a prosperous economy from the previous Bush administration, so any comparison between 1992 and now needs to bear that in mind. That economy itself was a legacy of Mr Reagan's energetic transformation of the government into a lighter burden for the people. What is interesting was the newsdroids insisted in 1992 the economy was in a horrible slump. The networks didn't come clean until after the election. The economy had been fine all along. Seems the networks needed to lie a little for their "Democratic" Party buddies. But I digress....
The tax increases of the Clinton era lead to two events. The first was an immediate decrease in economic output. The second result was a Republican majority in both houses of Congress. When Republicans got control of Congress (where the laws are made) they refused to further damage the economy and reversed some of the Demo Congress' stupid spending and tax increases. The result was an improving economy and a more closely balanced budget.
Mr Bush's "New Tone" insistence amounted to Republicans acting like a lightweight version of Democrats. In consequence, deficits mushroomed and government got poised to be more intrusive. Now Mr Obama has the nation far more in hoc than during any previous administration. Mr Obama spends credit at a rate five times that of any previous administration ever. With that much credit in use, we don't have the room for tax increases. Instead, federal spending must be cut back, way back, to Clinton era levels.
Wrong, wrong and wrong.
Tax increases lead to the government taking more of your money. The only way that could lead to prosperity is if the government spends your money on you in a better way than you can.
Mr Clinton inherited a prosperous economy from the previous Bush administration, so any comparison between 1992 and now needs to bear that in mind. That economy itself was a legacy of Mr Reagan's energetic transformation of the government into a lighter burden for the people. What is interesting was the newsdroids insisted in 1992 the economy was in a horrible slump. The networks didn't come clean until after the election. The economy had been fine all along. Seems the networks needed to lie a little for their "Democratic" Party buddies. But I digress....
The tax increases of the Clinton era lead to two events. The first was an immediate decrease in economic output. The second result was a Republican majority in both houses of Congress. When Republicans got control of Congress (where the laws are made) they refused to further damage the economy and reversed some of the Demo Congress' stupid spending and tax increases. The result was an improving economy and a more closely balanced budget.
Mr Bush's "New Tone" insistence amounted to Republicans acting like a lightweight version of Democrats. In consequence, deficits mushroomed and government got poised to be more intrusive. Now Mr Obama has the nation far more in hoc than during any previous administration. Mr Obama spends credit at a rate five times that of any previous administration ever. With that much credit in use, we don't have the room for tax increases. Instead, federal spending must be cut back, way back, to Clinton era levels.
Friday, January 2, 2009
Estate tax fairness
Politicians want to bring back the estate tax. Estate tax is the tax that the heir pays when his or her parents die.
Not very many people die in a year, so the estate tax is sold to us as "fairness." Politicians say it is not fair the living should benefit from the dead -- only the government should benefit.
What concerns me about the estate tax is the family farm. If your family worked 640 acres (a small farm) and the land and machinery was valued at $1.5 million, when your parents die, you will have to find about $700,000 to pay the estate tax. Do you have that kind of money lying around?
So you have to sell the farm. Only are only two types of buyer who will benefit. Therefore only they will want to buy the farm: the Big Corporate Land Developer, so the farmland is turned into subdivisions, or; the Mega-Farm Corporation. These are the only types of buyer who will benefit.
I have nothing against big corporations just because they are big corporations. Some are good corporate citizens. But the politicians' policy benefits these mega corporations at the expense of the family. Ask yourself the question, What personal gain is in it for the politicians?
Back in the 1990's, the Republicans dismantled the estate tax. The Democrats screamed this benefited the rich. Bull. The Democrats only want to benefit their big corporate buddies. Now the Democrats control the government, the estate tax is sure to make a come back.
Not very many people die in a year, so the estate tax is sold to us as "fairness." Politicians say it is not fair the living should benefit from the dead -- only the government should benefit.
What concerns me about the estate tax is the family farm. If your family worked 640 acres (a small farm) and the land and machinery was valued at $1.5 million, when your parents die, you will have to find about $700,000 to pay the estate tax. Do you have that kind of money lying around?
So you have to sell the farm. Only are only two types of buyer who will benefit. Therefore only they will want to buy the farm: the Big Corporate Land Developer, so the farmland is turned into subdivisions, or; the Mega-Farm Corporation. These are the only types of buyer who will benefit.
I have nothing against big corporations just because they are big corporations. Some are good corporate citizens. But the politicians' policy benefits these mega corporations at the expense of the family. Ask yourself the question, What personal gain is in it for the politicians?
Back in the 1990's, the Republicans dismantled the estate tax. The Democrats screamed this benefited the rich. Bull. The Democrats only want to benefit their big corporate buddies. Now the Democrats control the government, the estate tax is sure to make a come back.
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