That’s not your money

Posted on November 23, 2012 by Michael

It’s often a conservative rallying cry to say “I want my money back!” or something along those lines when talking about taxes. They believe that what the government takes throughout the year and especially April 15 belongs to them at all times, not merely while it sits in their pockets.

This is a false belief.

What the government takes in taxes belongs to the government, bar any bookkeeping errors. To claim otherwise is tantamount to claiming that the government has stolen money. I’m sure there are plenty of ignorant people out there willing to say as much, but I think that vast majority of citizens are intelligent enough to recognize that Uncle Sam isn’t robbing them, even if they do disagree with certain tax and spending policies.

The truth is, the moment money leaves a person’s bank account to head off to government coffers is the moment that money ceases to belong to that person. It is at the point that it belongs to the government. Fortunately, the government is of, by, for, along, about, concerning, since and perhaps a few other prepositions related to the people. That means that even though the money no longer belongs to any particular individual, it does belong to all citizens. What we collectively decide to do with it – which may include giving it to individual people – is up to us and those we elect to represent us. It isn’t up to John Smith or Suzie Q how the government allocates his or her specific portion of taxes – it’s up to all of us because it belongs to all of us.

So the fact is, the government can’t give you your money back. Once it taxes you, all it can do is give you some of the money that belongs to all of us (which may, as it so happens, match what you put into the system). That’s why we don’t jail politicians and IRS agents every time a new tax policy is put in place. Uncle Sam is not stealing from you.

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Where were Mitt’s taxes born?

Posted on July 16, 2012 by Michael

Everyone seems to want Mitt Romney to release his tax returns from his days at Bain. This makes sense since Romney has staked a good portion of his candidacy on his record as a businessman. He doesn’t get to say he was good at something and that that something is relevant while simultaneously claiming that the details of that something don’t matter. He should just release everything.

Of course, I hope he doesn’t.

I have no desire to see Mitt Romney win anything and this is a great issue to hurt him. It’s his birth certificate. The only difference is that the stuff his opponents are saying about him is true.

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Quick! Lower taxes!

Posted on July 12, 2012 by Michael

We must!

In 1992, the 400th richest person in America made $24 million.

In 2007, the 400th richest person in America made $138 million (or $87 million, inflation-adjusted).

As the United States has clearly demonstrated, lower taxes for the wealthy result in nothing but jobs.

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Is it a tax or a fine? You can’t have it both ways, Republicans.

Posted on July 1, 2012 by Michael

The Republican outrage to the Affordable Care Act prior to the Supreme Court ruling was primarily premised in the idea that it was a fine. That is, Republicans argued that by being fined for not having healthcare, they were being coerced into something. And, of course, that is inherently anti-liberty. That was the issue. Now, however, the Court has called the act a tax. Naturally, Republicans are pounding that phrase into the ground. It makes sense since President Obama hasn’t raised taxes, despite that being all we’ve heard for nearly four years. (In fact, he has lowered them.) They finally have the ammunition they want. (Except that the tax increases primarily go towards insurance companies, the wealthy, and certain other groups. The middle class isn’t terribly affected, and even for those that are, they only face a 1% increase.)

But this raises a serious problem. If this is a tax, then it cannot also be a fine. And if it isn’t a fine, it is not an attack on anyone’s liberty. (Unless someone is ready to argue that all taxes are anti-liberty, I suppose.) The Republicans need to make a choice here: They can call this a tax; They can call it a fine; They cannot call it both. Of course, I know they will not make that choice. They will continue using both lines of rhetoric – because honesty is hard, amirite? – but logically speaking, their hands are tied one way or the other.

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Well done, Maryland

Posted on March 17, 2012 by Michael

At least a few states can get things done:

The state Senate voted Thursday to significantly raise taxes on Marylanders earning half a million dollars or more — prompting complaints that liberals were bent on launching class warfare in the state.

The Senate’s vote to adopt what is being dubbed a “millionaire’s tax” came after some liberal-leaning senators said they would refuse to support a smaller, across-the-board increase in income taxes unless the wealthy took a special hit. The chamber was considering a plan to raise taxes on most Maryland taxpayers by up to a quarter of a percentage point — a proposal that eventually passed by a vote of 26-20.

The plan to tax top earners — those earning more than $500,000 a year — at a higher rate would only affect 15,000 households, who would pay at least $2,752 more for joint filers.

I’m not sure how an extra $2700 or so dollars is “significant” when we’re dealing with a half million or higher. I’m sure the wealthy will get along just fine with or without this tax. And I bet they won’t change their spending or investing habits one bit either.

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Oh, corporate America

Posted on March 26, 2011 by Michael

You’re so silly:

A piece in today’s New York Times by David Kocieniewski outlines how G.E. skirted paying any taxes on $5.1 billion in profits in 2010–in addition to claiming a $3.2 billion tax credit.

Bank of America also is paying nothing.

U 2 CORPORATE AMERICA

Y?

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When raising taxes works

Posted on January 27, 2011 by Michael

There are a few times when I think raising taxes is a good thing. If the unemployment rate is down? You might want to raise them. If it’s on an industry that is making more than it could ever need (i.e., the oil industry)? You might want to raise them. If the tax rate is extremely low already and you need funds, a la Illinois? Raise them. That doesn’t mean we always want high taxes. We don’t. But this no-taxes-ever mentality needs to stop. It’s just plain bad economics/greed.

Recently the mayor of Omaha raised taxes and some fees. He was heavily criticized, and in fact, he was almost recalled. But it’s a good thing that city has Jim Suttle.

[Recall] Organizers accused Suttle of supporting excessive taxes, breaking his promises and pushing for changes that threaten the city’s economic future.

But the tax increases helped the city generate a $3.3 million surplus by the end of 2010 and restore its AAA bond rating, meaning it can borrow money on more favorable terms.

It seems to me that the primary motivation for low taxes in all scenarios, aside from the usual greed and dismissal of poor people, is that people think the sooner they get money, the better off they will be. But that is not always the case. In fact, when it comes to investing in infrastructure, something the U.S. has largely been ignoring for the past couple of decades, it is absolutely the long term view that wins. In Omaha’s case, the investment was in gaining a better bond rating. (That isn’t to dismiss the short term win here as well; the massive increase in revenue has helped with the city’s current fiscal crisis.)

So are there times when it is best to raise taxes? Absolutely. In Omaha’s case, it has very low unemployment (4.7%; 4.4% for Nebraska). That doesn’t mean it would always be good to raise taxes. If the city had no shortfall, then why do it? But in tough times, people have to learn to sacrifice. I know that’s an unpopular notion in the 21st century, but it’s the only way a healthy economy can be sustained sometimes.

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