Category Archives: taxes

Back Door Approach To Bail Out Funding

By Daniel Downs

Not long ago, the big news was Obama’s bailout of General Motors. In 2011, US Treasury reported that GM had paid back most of the large loan. However, the Treasury also notified the public that the federal government had become a permanent shareholder. The percent stock holdings amounted to something like 30 percent. Obviously, Uncle Obama and company wanted taxpayer-funded bailout to accumulate a long-term return on the investment.

It appears Obama is getting his way with the wealth. We could call it the back door method of taxing corporate profits.

Another interesting development recently reported by General Motors was the substantial increase of GM autos being sold to China markets. GM reported an 11.7% increase in sales in April and 9.4% for the first quarter in 2012. Total first quarter unit sales was 972,369. That’s nearly one million news vehicles cruising down Chinese pavement. If the trend continues, the federal government should see an increase of about 10-15% in revenues from GM net profits.

That is how our new schools should have always been funded. It would be a win-win for local taxpayers. Funding empire through back door taxation of corporate profits may only benefit the select few, most of whom are like Obama have a million plus portfolio of wealth.

Nevertheless, Chinese consumption is still underwriting a significant portion our government’s imperial spending spree.

You Have 8 Hours to File Your Tax Return

This is a public reminder that Uncle Sam awaits the filing of your income tax return. My sympathy goes out to all who are too poor to get a tax refund or have too much income that your federal big brother wants more of your gains on your capital. The rest of us saps are still depressed or just plan sobbing.

Perspective On Progressive Tax, Buffet Rule & Obama Plan

By Daniel Downs

In an article published in the Tax Analyst, Martin A. Sullivan explains why the tax code is not genuinely progressive.

Almost everybody assumes the individual income tax is progressive — that is, that higher income categories pay higher effective tax rates than lower income categories. That is true only up to a point, as shown in Figure 2. The schedule of effective tax rates in the United States is not steadily upward sloping. Depending on the year, average tax rates begin declining somewhere in the $2 million to $5 million range. For adjusted gross income over $10 million, the average effective tax rate was 19.7 percent in 2007 and 22.6 percent in 2009. The income tax is regressive at the upper end.

There is a simple explanation for both the declining rates at the top end and the rise in top-end rates in 2009 over 2007: the 15 percent rate on capital gains and qualified dividends. As income rises, an increasingly larger share of income comes in the form of dividends and capital gains. And there were more capital gains in the boom year of 2007 than there was in the depths of the recession in 2009.

Application of the Buffett principle would eliminate the dip in tax rates at the high end. The Buffett rule is roughly equivalent to an increase in the tax rate on capital gains and dividends on millionaires.

This helps explain why secretaries of both Buffet and President Obama pay higher income tax rates while earning much less than their bosses.

Yet, Sullivan began his article stating why the Buffet Rule may not be a good idea. “[I]t is a basic tenet of tax economics that an efficient system should eliminate all taxes on capital income,” which “translates into big tax benefits for the wealthy.” In other words, it’s not a good idea to tax non-wage related investment income, capital gains or corporate profits because doing so multi-taxes wage income. (See Economist, Feb. 24, 2012)

Capitol Hill bureaucrats like Obama actually may want to raise about $5 billion more in annual revenues to help ease the imperial burden. However, it is more likely they want to create a genuine socialist economy. From the beginning of his presidency, Obama’s sought to fuflill the party’s agenda for a coherent socialist system. Evidence of his efforts is the passage of the Obamacare legislation. Another piece of evidence is his ties to the progressive policy agendas of the Communist Party.

Information about progressive Democrats ties to the Communist Party (CPUSA) is coming out since the public ire about Congressman Allan West’s statement that about 81 of the Congressional Progressive Caucus were members of the Communist Party. As journalist Cliff Kincaid recent commented, “Joelle Fishman, chair of the political action commission of the CPUSA, openly campaigned for Barack Obama” because of the progressive affiliation between the two. “Trevor Loudon,” Kincaid continued, “points out that ‘Joelle Fishman is the daughter-in-law of Soviet spy Victor Perlo. Her role within the Communist Party involves coordinating efforts to elect progressive Democrats to state and national office and seeing that the Democrats adopt Communist Party inspired policies.'” She is one of many working to achieve the same goal. The clincher is that Obama’s political mentor was Communist Party member Frank Marshall Davis.

Kincaid sums up the Obama plan that includes more progressive tax code: “The CPUSA is working through the Democratic Party as a whole, as well as the Obama Administration.” It is reasonable to assume that underlying Obama’s plan to tax wealthy is the goal of creating a socialist economy through progressive taxation. Such would be a win for the CPUSA. Maybe that is why neither the “Buffet Rule” nor any plan of Democrats proposes to eliminate the capital gain taxes.

Long live McCarthy!!!

If Taxes are the Solution, What’s the Problem?

by Cameron Smith

Alabama’s legislative leadership and Governor are under immense pressure in Montgomery to increase taxes to prevent cuts in state government funding. But is the real problem a lack of revenue?

The cuts themselves seem to be the most obvious source of consternation. So far, some Alabama agencies are engaging in spending reductions through attrition, not filling vacancies as current staff departs while others delay upgrades or capital purchases. In other words, state agencies seem to be doing what they can to prevent laying off employees. But, at some point, fewer employees tasked with administering the same government programs in the same manner may inevitably lead to reduction in state services or the elimination of state programs.

In many respects, these reductions create heartburn because the programs that may be eliminated are “good” programs. For example, Alabama’s Department of Human Resources will close an adult day-care program that enrolls about 380 people. The closure of the program will save taxpayers over two million dollars annually.

However, for the 380 people enrolled in the day-care program and their families, the elimination of the program means the removal of a substantial benefit. In a very real and meaningful sense, a good program is being terminated. But even if a thousand people are negatively impacted by the elimination of the program, how does their interest stack against the other 4.8 million Alabamians who would rather see those resources go in a different direction or remain in the pockets of taxpayers?

The immediate response that the adult day-care program and others like it should be preserved by increasing taxes makes two baseline assumptions worth challenging. First, it assumes that state government is as efficient at administering its programs and services as it could be. That is one bold assumption. Alabama has no statewide fleet management policy, antiquated payroll and time- keeping practices, and inadequate state-owned land and space management. And those are just a few issues on the internal administrative side of the equation before ever discussing efficiencies in delivering the actual services to the public.

The second assumption is that the majority of Alabamians actually want or need all of the programs and services the state currently provides. One common sentiment from those awestruck that Alabamians would want to reduce their own government is that most Alabamians are incapable of actually understanding what the “limited government” they are asking for actually requires.

But what if the people do understand? What if the people of Alabama actually intend to reduce the size and budgets of their government? Many Alabamians know that some services and programs currently provided by the government may need to be eliminated, but the tradeoff would be retaining lower taxes and prioritized government spending and services.

Maybe the pressure in Montgomery is coming directly from those with a direct financial interest in maintaining the current size and form of government. Most state employees, lobbyists, unions, and even the various agencies themselves stand to feel significant pain if government is reduced. While there are some easy cutbacks, such as eliminating unnecessary entities like the Interior Design Board, leaner government will eventually mean tougher choices.

Reducing the size of government will not, itself, lower the number of the poor and needy currently served by the state. Alabamians must be willing to open their hands and hearts to the poor and downtrodden in their midst in a reliable fashion if they want to cut programs serving those communities.

If Alabamians plan on reducing the size and budget of their government, revenue reductions provide the pressure necessary to force their legislators to prioritize. On the other hand, if they want higher taxes to pay for state programs and services, they had a funny way of showing it at the ballot box in 2010.

Cameron Smith is General Counsel and Policy Director for the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

Tax Freedom Day April 17

“Tax Freedom Day® 2012 arrives on April 17 this year, four days later than last year due to higher federal income and corporate tax collections. That means Americans will work 107 days into the year, from January 1 to April 17, to earn enough money to pay this year’s combined 29.2% federal, state, and local tax bill,” according to The Tax Foundation.

“If the federal government raised taxes enough to close the budget deficit—an additional $1.014 trillion—Tax Freedom Day would come on May 14 instead of April 17. That’s an additional 27 days of government spending paid for by borrowing. This year’s federal budget deficit remains high, though it has declined slightly over the past two years.”

“As the economic recovery continues, the growth in individual incomes and corporate profits will increase tax revenues and push Tax Freedom Day ever later in the year. The latest ever Tax Freedom Day was May 1, 2000—meaning Americans paid 33.0% of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9% of their income in taxes, meaning Tax Freedom Day came on January 22.”

The above figures are the national average. Tax Freedom Day arrives on different dates for each state. Tax Freedom Day came April 12 for Ohio taxpayers. Tennessee enjoyed the earliest day, which was on March 31st but Connecticut will still be paying Uncle Sam until the 1st of May.

Last year, IRS processed 143 million tax returns, but only 58 million (59%) paid any taxes. They paid a total of $945 billion in federal income taxes. All of the tax filing consumes an estimated 7 billion hours in order to comply with the 3.8 million word tax code. This alone demonstrates the need for serious tax reform some similar to the simplified fair tax proposal.

Below is a chart indicating the share of income taxes paid by adjusted gross income levels. As you will see, the Tax Foundation’s chart shows upper income earners already paying most of the federal income taxes. The Obamaites appear to wrong about the wealthy taxpayers not paying enough taxes.

Corporate Tax Reform

By Congressman Steve Austria

As Washington struggles to come up with a jobs plan to help turn our economy around, last week, President Obama unveiled his proposed framework for corporate tax reform. While it acknowledged that the corporate tax rate is too high, this proposal fails to provide details or address the need for a comprehensive overhaul of the current tax code. Additionally, the president recently released his FY 2013 budget request, which did not call for lowering the individual or corporate tax rates and contained more of the same increased tax policies that have failed to put us on a track of economic recovery.

Lowering the corporate tax rate to be more comparative internationally is a step in the right direction but our current tax code is outdated, overcomplicated, and in need of a reform that does not pick winners and losers in the marketplace. It’s estimated that American taxpayers spend over 7 billion hours a year trying to comply with the current filing requirements. Each year taxpayers scan through 60,000 pages and make difficult decisions to choose between calculations from tax credits or deductions. Our tax code is ridden with loopholes and unnecessary complexity that discourages saving and investing. We must simplify our tax code and cut the red tape to ensure a fair tax system for our working and middle class Americans. Congress needs to pass a tax reform package that will help create new jobs not hurt small businesses and hardworking families. Americans deserve a tax code that is simpler, fairer, and will enable U.S. businesses to compete with the rest of the world.

Small businesses owners have cited the cumbersome tax code and uncertainty about the economy as main reasons they are not expanding and creating jobs. We need to work to provide permanent tax relief for our small businesses to give them the certainty they need to reasonably plan, invest and hire. Any real effort for tax reform must ensure small business tax rates are low and provide more certainty for our small business owners and our job creators.

Why Ron Paul Is the Best Candidate for President

By Daniel Downs

Ron Paul is one politician America needs in the top spot of American government. Paul may not be the best-looking candidate but he is the most qualified. Besides, a stately appearance is too superficial a criterion by which to elect any candidate. If it were not so, Romney or Santorum would be the two best choices. Maybe that is one reason why they are promoted by mainstream media, but not by XCJ.

Oratory is an important skill required of any political leader. It is especially important our president possess it. The president is not only commander-in-chief of the military but he is also the top executive overseeing our nation’s business and the chief public and foreign relations officer. The president must speak to many different types of audiences including hundreds of Congressmen and women, thousands of White House staff, thousands of military leaders and their soldiers, thousand of foreign officials and millions of their people, as well millions of Americans. Although during some of the debates, Ron Paul seemed to conduct him as if in Congress. Yet, his campaign speeches demonstrate him to be a capable statesman.

As a competent statesman, the president must a model representative of America’s best. He must be the best at protecting and defending the rule of law as defined by the U.S. Constitution. Ron Paul is America’s finest example because he has over 20 years of proven experience.

As defender of the Supreme law of the land, the President’s function is to review every legislative act of Congress ensuring conformity to Constitutional law. This Ron Paul has been practicing since he entered politics.

As top executive of our national government, the president creates administrative law and institutional means through which congressional laws will be carried out efficiently and effectively. It’s true only executives of states, municipalities, and corporations could possess such experience. However, passing laws, making treaties, committing acts of war, and writing executive orders that in effect make laws in order to thwart the authoritative will and law-making power of the legislature and thus defy the rule of law are acts that should disqualify any candidate. Ron Paul has proven he is not among those who condone or performs such extra-legal acts, but some past presidents and most current presidential contenders have or says they would. For example, Romney’s solution to ending Obamacare would be to issue an executive order.

Excellence at articulating the American vision informed by the principles that our laws are meant to implement is another quality the president should possess. Over the course of his public service, Ron Paul has and is articulating that vision of life, liberty, happiness by means of a government limited to enumerated powers, laws limited to constitutional conformity, maximum freedom for states and individuals, and sound fiscal and monetary policies that ensure responsible prosperity for all. These define American democracy and moral capitalism and they distinguish our principled democracy from the socialist and humanist versions of Europe and many who espouse them in America. Ron Paul is an ardent proponent of America’s form of democracy.

While the media and political opponents want Americans to believe that the views of Ron Paul are ludicrous, his views actually are in-tune with historical and current realities. For example, Paul says we should close our military bases around the world because doing so would increase American prosperity by reducing our national economic burden. It would also reduce global animosity that has resulted in increasing violence against us, which in return would reduce the growing economic burden of homeland security while increasing the freedom and prosperity of Americans.

A good historical example showing the effects of big government is the Roman Empire. Like America now, Rome had strategically placed military bases throughout the world. The economic burden of maintaining a colossal effort at policing the world eventual led to it falls. In the process of decline, many other aspects of life also declined. Moral decadence added to the decline and fall of Rome. Roman elites delighted in the uniqueness of other cultures and embraced those cultures in Rome. According to journalist Amy Chua, the disunity created by multiculturalism also contributed to its eventual demise. Like aids in Africa, deadly disease depopulated native Rome, which increased Rome’s dependence on foreign militias and foreign workers. This opened the door to those who hated Imperial Rome and who eventual conquered her. Moreover, because Rome readily employed military intervention to create peace and economic stability, Rome experienced the same kind violent blowback America now faces. As with Rome and the USSR, American interests of this nature costs millions of Americans a very high price: increased poverty, public debt, and alienation. All others candidates favor maintaining the economically disastrous efforts of world policing. Keeping a strong military policing force is not the same as maintaining a strong national defense. Ron Paul knows this and wants the opportunity to help change course of America’s future.

If elected, Ron Paul will seek to right America’s wrongs with the goal of restoring America’s future.

Why Ron Paul Is the Best Candidate for President

By Daniel Downs

Ron Paul is one politician America needs in the top spot of American government. Paul may not be the best-looking candidate but he is the most qualified. Besides, a stately appearance is too superficial a criterion by which to elect any candidate. If it were not so, Romney or Santorum would be the two best choices. Maybe that is one reason why they are promoted by mainstream media, but not by XCJ.

Oratory is an important skill required of any political leader. It is especially important our president possess it. The president is not only commander-in-chief of the military but he is also the top executive overseeing our nation’s business and the chief public and foreign relations officer. The president must speak to many different types of audiences including hundreds of Congressmen and women, thousands of White House staff, thousands of military leaders and their soldiers, thousand of foreign officials and millions of their people, as well millions of Americans. Although during some of the debates, Ron Paul seemed to conduct him as if in Congress. Yet, his campaign speeches demonstrate him to be a capable statesman.

As a competent statesman, the president must a model representative of America’s best. He must be the best at protecting and defending the rule of law as defined by the U.S. Constitution. Ron Paul is America’s finest example because he has over 20 years of proven experience.

As defender of the Supreme law of the land, the President’s function is to review every legislative act of Congress ensuring conformity to Constitutional law. This Ron Paul has been practicing since he entered politics.

As top executive of our national government, the president creates administrative law and institutional means through which congressional laws will be carried out efficiently and effectively. It’s true only executives of states, municipalities, and corporations could possess such experience. However, passing laws, making treaties, committing acts of war, and writing executive orders that in effect make laws in order to thwart the authoritative will and law-making power of the legislature and thus defy the rule of law are acts that should disqualify any candidate. Ron Paul has proven he is not among those who condone or performs such extra-legal acts, but some past presidents and most current presidential contenders have or says they would. For example, Romney’s solution to ending Obamacare would be to issue an executive order.

Excellence at articulating the American vision informed by the principles that our laws are meant to implement is another quality the president should possess. Over the course of his public service, Ron Paul has and is articulating that vision of life, liberty, happiness by means of a government limited to enumerated powers, laws limited to constitutional conformity, maximum freedom for states and individuals, and sound fiscal and monetary policies that ensure responsible prosperity for all. These define American democracy and moral capitalism and they distinguish our principled democracy from the socialist and humanist versions of Europe and many who espouse them in America. Ron Paul is an ardent proponent of America’s form of democracy.

While the media and political opponents want Americans to believe that the views of Ron Paul are ludicrous, his views actually are in-tune with historical and current realities. For example, Paul says we should close our military bases around the world because doing so would increase American prosperity by reducing our national economic burden. It would also reduce global animosity that has resulted in increasing violence against us, which in return would reduce the growing economic burden of homeland security while increasing the freedom and prosperity of Americans.

A good historical example showing the effects of big government is the Roman Empire. Like America now, Rome had strategically placed military bases throughout the world. The economic burden of maintaining a colossal effort at policing the world eventual led to it falls. In the process of decline, many other aspects of life also declined. Moral decadence added to the decline and fall of Rome. Roman elites delighted in the uniqueness of other cultures and embraced those cultures in Rome. According to journalist Amy Chua, the disunity created by multiculturalism also contributed to its eventual demise. Like aids in Africa, deadly disease depopulated native Rome, which increased Rome’s dependence on foreign militias and foreign workers. This opened the door to those who hated Imperial Rome and who eventual conquered her. Moreover, because Rome readily employed military intervention to create peace and economic stability, Rome experienced the same kind violent blowback America now faces. As with Rome and the USSR, American interests of this nature costs millions of Americans a very high price: increased poverty, public debt, and alienation. All others candidates favor maintaining the economically disastrous efforts of world policing. Keeping a strong military policing force is not the same as maintaining a strong national defense. Ron Paul knows this and wants the opportunity to help change course of America’s future.

If elected, Ron Paul will seek to right America’s wrongs with the goal of restoring America’s future.

Fair Tax, Value Added Tax, Political Candidates

I just finished reading an article by finamcial expert John Mauldin. Well, Mauldin didn’t actually do much of the writing. What he published were arguments of his readership, and the argument of one client/reader took up most of the white space. Last week, he presented his argument for a national value added tax in The Cancer of Debt and Deficits.

I’m refering my readers to Mauldin’s article, Tax The Other Guy, because it offers an precise argument for the Fair Tax and because it is supported by a number of political candidates. Reading Mauldin’s two articles might help with picking the candidate who may actually attempt to fix this part of our nation’s economic problem.

Below are a list of the candidates who have state their intentions about reforming taxation; those who advocate for merely increasing taxes of “tinkering” with the tax code are not included as are those with no stated position:

President
Mitt Romney
Rick Santorum
Newt Gingrich
Ron Paul
See also a letter by Ron Paul

US Senate
Dr Micahel Pryce (R)
Rusty Bliss (R)
Eric LaMont Gregory (R)
Scott Rupert (I)
Sherrod Brown (D)

US House of Representatives
< href=https://johnandersonforcongress.com/Economic_Views.html John Anderson (R)
Edward Breen (R)
Mike Turner (R)
David Harlow (L)
David Esrati (D)
Olivia Freemam (D)
Thomas McMasters (D)
Sharen Neuhardt (D)
Mack Van Allen (D)

Why Ron Paul Is the Best Candidate for President

By Daniel Downs

Ron Paul is one politician America needs in the top spot of American government. Paul may not be the best-looking candidate but he is the most qualified. Besides, a stately appearance is too superficial a criterion by which to elect any candidate. If it were not so, Romney or Santorum would be the two best choices. Maybe that is one reason why they are promoted by mainstream media, but not by XCJ.

Oratory is an important skill required of any political leader. It is especially important our president possess it. The president is not only commander-in-chief of the military but he is also the top executive overseeing our nation’s business and the chief public and foreign relations officer. The president must speak to many different types of audiences including hundreds of Congressmen and women, thousands of White House staff, thousands of military leaders and their soldiers, thousand of foreign officials and millions of their people, as well millions of Americans. Although during some of the debates, Ron Paul seemed to conduct him as if in Congress. Yet, his campaign speeches demonstrate him to be a capable statesman.

As a competent statesman, the president must a model representative of America’s best. He must be the best at protecting and defending the rule of law as defined by the U.S. Constitution. Ron Paul is America’s finest example because he has over 20 years of proven experience.

As defender of the Supreme law of the land, the President’s function is to review every legislative act of Congress ensuring conformity to Constitutional law. This Ron Paul has been practicing since he entered politics.

As top executive of our national government, the president creates administrative law and institutional means through which congressional laws will be carried out efficiently and effectively. It’s true only executives of states, municipalities, and corporations could possess such experience. However, passing laws, making treaties, committing acts of war, and writing executive orders that in effect make laws in order to thwart the authoritative will and law-making power of the legislature and thus defy the rule of law are acts that should disqualify any candidate. Ron Paul has proven he is not among those who condone or performs such extra-legal acts, but some past presidents and most current presidential contenders have or says they would. For example, Romney’s solution to ending Obamacare would be to issue an executive order.

Excellence at articulating the American vision informed by the principles that our laws are meant to implement is another quality the president should possess. Over the course of his public service, Ron Paul has and is articulating that vision of life, liberty, happiness by means of a government limited to enumerated powers, laws limited to constitutional conformity, maximum freedom for states and individuals, and sound fiscal and monetary policies that ensure responsible prosperity for all. These define American democracy and moral capitalism and they distinguish our principled democracy from the socialist and humanist versions of Europe and many who espouse them in America. Ron Paul is an ardent proponent of America’s form of democracy.

While the media and political opponents want Americans to believe that the views of Ron Paul are ludicrous, his views actually are in-tune with historical and current realities. For example, Paul says we should close our military bases around the world because doing so would increase American prosperity by reducing our national economic burden. It would also reduce global animosity that has resulted in increasing violence against us, which in return would reduce the growing economic burden of homeland security while increasing the freedom and prosperity of Americans.

A good historical example showing the effects of big government is the Roman Empire. Like America now, Rome had strategically placed military bases throughout the world. The economic burden of maintaining a colossal effort at policing the world eventual led to it falls. In the process of decline, many other aspects of life also declined. Moral decadence added to the decline and fall of Rome. Roman elites delighted in the uniqueness of other cultures and embraced those cultures in Rome. According to Amy Chua, the disunity created by multiculturalism also contributed to its eventual demise. Like aids in Africa, deadly disease depopulated native Rome, which increased Rome’s dependence on foreign militias and foreign workers. This opened the door to those who hated Imperial Rome and who eventual conquered her. Moreover, because Rome readily employed military intervention to create peace and economic stability, Rome experienced the same kind violent blowback America now faces. As with Rome and the USSR, American interests of this nature costs millions of Americans a very high price: increased poverty, public debt, and alienation. All others candidates favor maintaining the economically disastrous efforts of world policing. Keeping a strong military policing force is not the same as maintaining a strong national defense. Ron Paul knows this and wants the opportunity to help change course of America’s future.

If elected, Ron Paul will seek to right America’s wrongs with the goal of restoring America’s future.