Tag: Taxation

Joe Selvaggi talks with CATO Institute constitutional scholar Thomas Berry about the recently argued Moore v. U.S.A. case, which challenges the idea that income must be realized before it can be taxed.

Thomas Berry is a research fellow in the Cato Institute’s Robert A. Levy Center for Constitutional Studies and managing editor of the Cato Supreme Court Review. Before joining Cato, he was an attorney at Pacific Legal Foundation and clerked for Judge E. Grady Jolly of the U.S. Court of Appeals for the Fifth Circuit.

Joe Selvaggi talks with Pioneer Institute’s Senior Fellow in Economic Opportunity Eileen McAnneny about the features and flaws of the recently passed 2024 Massachusetts state budget now waiting for Governor Healey’s approval.

Eileen McAnneny is a Senior Fellow in Economic Opportunity at Pioneer Institute. She was formerly president of the Massachusetts Taxpayers Foundation, and has experience in government relations, public policy, advocacy, and management in both the public and private sectors. She was president and CEO of the Massachusetts Society of CPAs, Director of Public Policy at Fidelity Investments, and served as Senior Vice President of Government Affairs and Associate General Counsel at Associated Industries of Massachusetts, where she focused on healthcare and tax policy issues. McAnneny served on the state’s 2007 Tax Commission and was formerly a staff attorney for the Joint Committee on Revenue of the Massachusetts legislature. In 2018, she served as Vice Chair of the Governor’s Commission on the Future of Transportation. She is a cofounder of the Massachusetts Employers Health Coalition, serves on the Group Insurance Commission, is on the board of the Massachusetts Business Alliance for Education, and is secretary of the National Taxpayers Conference. McAnneny holds a bachelor’s degree in politic science, cum laude, from Tufts University and earned her juris doctorate in law from Suffolk University Law School.

Joe Selvaggi talks with Cato Institute’s Director of Tax Policies, Dr. Adam Michel, about the sources of the nation’s recent record levels of deficits and debt. Together, they seek to understand what would constitute a policy path toward fiscal sustainability that is also politically viable.

Guest

Stop Making Things!

 

That seems to me the message…or at least one message…of the tax/energy/economics plan introduced by Biden and supported by Joe Manchin. From the WSJ:

Evidence is emerging that the new Schumer-Manchin 15% minimum tax on corporate-book income is especially harmful to U.S. manufacturing firms. An analysis by Congress’s Joint Committee on Taxation (JCT), which is hardly a nest of supply-siders, found that 49.7% of the tax would hit U.S. manufacturers.

So… What Is the Ideal Tax Structure

 

Hey, Ricochetti.

As a life-long conservative, I have adopted a general disdain for pretty much all taxes. I cringe at the Progressives’ reflexive call for “taxing the rich” and “making the rich pay their fair share.” I experience a reasonable amount of irritation and anger at the seemingly endless list of taxes we encounter throughout modern American society.

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The American Revolution was sparked in part by unjust taxation. After all, the colonists in Boston rebelled against Britain for imposing “taxation without representation,” and summarily tossed English tea into the harbor in protest in 1773. Nowadays Americans collectively spend more than 6 billion hours each year filling out tax forms, keeping records, and learning new tax rules according […]

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A Flat Tax Is a Fair Tax

 

One of the most contentious political battles of the 2020 election cycle involves the Illinois “Fair Tax” ballot amendment. Supported politically (and financially) by Illinois’s billionaire governor, J. B. Pritzker, the amendment seeks to remove a provision in the Illinois constitution that requires all income taxes to be flat—that is, held at a constant rate regardless of the amount of income earned by any taxpayer. Currently, all income earned in Illinois is taxed at a 4.95 percent rate. The amendment requires a simple majority vote to be passed.

The amendment does not offer any specific progressive rate scale, but allows for increasing tax rates to be applied to successive tiers of a taxpayer’s income. Notably, the initial legislative plan on which the amendment is largely based—and which was proposed by the Democrat-controlled legislature—is a hybrid between a flat and progressive scheme. Most earners would be subject to progressive rate scales starting at 4.75 percent for the first $10,000 of income earned. Then. as income increases, so would the tax rate, maxing out at 7.85 percent. The legislative plan maintains a flat tax for the financial elite: Individuals reporting income above $750,000 and couples with joint incomes above $1,000,000 would pay a 7.95 percent rate from their first dollar.

This change in tax structure is held out as the fairest because it puts onto the rich the burden of shoring up Illinois’s rickety finances. The argument goes that the poorest 20 percent of the public are disproportionately exposed to high state, county, and local sales taxes, which total 10.25 percent in Chicago. This leads to a regressive system overall, where the poor pay an effective tax rate of 14.4 percent, while the top 1 percent pay only 7.4 percent. The obvious rejoinder is that, in total dollars, the rich pay far larger amounts in all taxes, much of which is used for transfer payments from which they do not benefit.

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The most recent Goodfellows conversation ends with a little debate about illegal immigration. As usual, an important subtext is left unaddressed. Yes, even many Republicans welcome lawless immigration in lieu of any impetus to reform legal immigration standards. Businesses like cheap labor.  Preview Open

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QotD: Government Policy

 

A government which robs Peter to pay Paul can always depend on the support of Paul. – George Bernard Shaw

If any statement explains how blue states work, it is this one. The number of makers is always fewer than the number of takers. So design policies to bribe the takers to vote for you.

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Today marks the 246th anniversary of the Boston Tea Party when American patriots, frustrated and angry at Britain for imposing “taxation without representation,” dumped 342 chests of tea into the harbor in protest. You’re probably somewhat familiar with this seminal event but you may not be with the story of those behind it. The “Sons Of Liberty” […]

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Richard Epstein parses President Trump’s economic criticisms of Amazon — and examines a Supreme Court case that will determine how online retailers pay taxes.

Richard Epstein examines the principles that should guide efforts to reform America’s tax system.

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I have heard Glenn Reynolds discuss the idea that you get more of what you subsidize, and less of what you tax.  Well, one thing we can almost agree on is that we have too much “social justice” I want to move beyond progressive taxation… to oppressive taxation.  Is there a good way to tax […]

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The source of much of the angst of this election season is the perceived waning work prospects of the average American. This may have reached a critical mass now, but it is the culmination of trends long in the making. The purpose of this post is to review them, and how they have created a […]

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On Abolishing the IRS

 

taxfairy“Claire,” I hear you all say, “You spend all of your time raving about Donald Trump making nutball promises to a credulous electorate. Why don’t you ever point out that Ted Cruz’s nutball schemes make no sense, either?”

(Actually, no one has ever said that to me, not even once, but I realized it this morning while I was reviewing last night’s debate transcript, so I figured this was a good opportunity to prove I’m equal-opportunity indignant. I’m against-all-nuts. It just hadn’t occurred to me that one of Cruz’s promises is Trump-level nutty: I was so busy barreling down Trump Tunnelvision Turnpike that I forgot to turn on the Cruz Control.)

Now, like every live-blooded American, I love the words “Abolish the IRS.” I love them so much that I didn’t really think deeply about them. The words themselves had me hypnotized, like a python in a snake-charmer’s gaze, giving me a tingly-all-over yes! feeling. (How could Cruz be doing so poorly in the primaries given this absolutely beautiful campaign slogan? Those are the winningest words in the English language.)

Pot Legalization Ain’t (Tax) Consequence Free

 

Like death and taxes, you can count on the state to fumble the libertarian holy grail of recreational marijuana legalization. Take Colorado, for example.

There’s a ballot proposition (Prop BB) for next week’s election that allows the state to keep revenues from excise and sales taxes on pot, rather than having to return the excess to growers and taxpayers under Colorado’s TABOR.

What We Know So Far about the GOP Presidential Tax Plans

 

Bobby JindalThe Tax Foundation analysis of Bobby Jindal’s tax plan:

  • Governor Jindal’s tax plan would substantially lower individual income taxes, eliminate the corporate income tax, and repeal a number of complex features in the current tax code.
  • Governor Jindal’s plan would cut taxes by $11.3 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $9 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.

So let’s summarize the four plans examined by the Tax Foundation model:

  • The Jeb Bush plan would lose $1.6 trillion over a decade (with economic feedback),  lead to a 10% higher GDP over the long-term, and boost income in the bottom fifth by 10%, the middle fifth by 13%,the top fifth by 10%, and the top one percent by 16%.
  • The Marco Rubio plan tax plan would lose $1.7 trillion over a decade (with economic feedback), lead to a 15% higher GDP over the long run, and boost income in the the bottom fifth by 40%, the middle fifth by 16%,the top fifth by 18%, and the top one percent by 28%.
  • The Donald Trump plan would lose $10 trillion over a decade (with economic feedback), lead to an 11% higher GDP over the long term, and boost income in the the bottom fifth by 11%, the middle fifth by 19%,the top fifth by 21%, and the top one percent by 27%.
  • The Rand Paul plan would lose $1 trillion over a decade (with economic feedback, lead to a 9% higher GDP over the long term, and boost average incomes by 16%.
  • The Jindal plan would lose $10 trillion over a decade with economic feedback, lead to a 14% higher GDP over the long run, would boost income in the the bottom fifth by 8%, the middle fifth by 15%,the top fifth by 22%, and the top one percent by 26%.

One important caveat (other than the vagaries of dynamic scoring) is that the TF model does not factor the “fiscal costs of higher interest payments, as well as the macroeconomic effects of the spending reductions needed to bring the budget into balance.” Let me also add that one other thing the TF model shows is that personal income tax cuts tend to have the biggest revenue loss and the least GDP bang for the trillion bucks.