Tag: taxes

Contributor Post Created with Sketch. Yes, GOP, Tax Rates Matter. But They Aren’t All That Matters — Or Even What Matters Most

 

Jeb Bush is giving a big lunchtime speech at the Detroit Economic Club today. CNN reports that he’ll be pitching “reform conservatism,” a subject I’ve written a lot about. We’ll see what his version is. Now as it happens, The Wall Street Journal this morning has a piece from reporter Bob Davis on reform conservatism, focusing particularly on tax policy (though there is far more to it than that): “’Reformicons’ Put New Twist on Tax Debate — Young Conservatives Push GOP Presidential Candidates to Back Targeted Breaks, Not Just Broad-Based Tax-Rate Cuts.” Here is a quote from my AEI colleage Michael Strain: “For the past 10 years, our biggest issue was whether the top tax rate was 35% or 39.5%. I don’t care anymore.”

In short, conservative reformers place less emphasis on cutting the top marginal income tax rate as a top policy priority. Coincidentally, my new The Week column concerns that very subject. At least on the personal income tax side, my preference is for tax relief for parents – a human capital gains tax cut for the worker creators. But it’s a long stretch of the legs — a Kessel Run-length distance, in fact – between saying that (a) right now cut the top marginal personal income tax rate is not of maximum policy importance and (b) tax rates simply don’t matter. More from the WSJ piece:

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We’re well on our way to a conservative civil war on taxes. On one side, we’ve got my heroes at the Wall Street Journal editorial page and most recently Amity Schlaes. On the other, we’ve got my heroes Ramesh Ponnuru, Marco Rubio, and Mike Lee. Cut it out, guys!   More

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I have just spent time completing the Green survey sent to federal employees. Here is what I have learned, based on my commuting patterns (3 office/2 telework, 20 mi one way, solo driving) Survey Complete More

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I went to my tax preparer today. These folks have their finger on the pulse of the government in a very different way from my everyday experience. Here are some highlights: Our refund went down this year because we are prospering more and planning better. I commented that I looked forward to the day when […]

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Promoted from the Ricochet Member Feed by Editors Created with Sketch. Loopholes and Inequality

 

shutterstock_222504601“And let’s close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth…” President Barack Obama, State of the Union Address, January 20, 2015

That statement just about sums up Barack Obama’s entire political philosophy. Wealthy capitalists hire accountants and lawyers lobby the government to create ways for them to legally cheat the government out of tax proceeds — proceeds rightly given to other citizens — which is, of course, unfair in that it creates inequality. The conceit simple: money (capitalism) is rigged; even the government is cheated, and by association, so are you.

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Along with a laundry list of other tax increases, President Obama will reportedly recommend ending the tax code provision called “stepped up basis” Most of us would rather have a root canal than think about the tax code, but this is an extremely harmful change for the parts of the economy that work with real […]

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Contributor Post Created with Sketch. It’s the Spending, Stupid

 

Republican policymakers and strategists, most notably the “Reformicons,” have recently released numerous proposals for restructuring taxes. Many of the specifics may be sound and sensible. But the proposals are all a terrible mistake. My message to reformers is this: it’s the spending, stupid.

We live in an age of deficits. Any tax proposal will need to be revenue-neutral (and under static assumptions, because trust in economists is low). That means it will also be zero-sum: You can’t give one person a break without raising taxes for someone else. Good luck with that.

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We use a Health-Care sharing ministry instead of “traditional” insurance since as a minister I am an independent contractor according to the IRS (Form 1099 employee). This morning I received an e-mail from our provider with this attached: More

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Contributor Post Created with Sketch. Eric Garner and the Dog Who Didn’t Bark

 

shutterstock_121088260Amid the contention over the Eric Garner case — whether the force used against him was justified, how much his criminal and medical histories should bear on the events, etc. — two points have emerged with what should be crystal clarity: that the cigarette taxes that make selling “loosies” so profitable are absurd, and that the crime Garner was being arrested for at the time of his death is almost wholly a creation of these taxes.

To give a sense of just how crazy cigarette taxes are in New York City, consider that each pack of 20 is subject to $4.35 in state taxes, plus an additional $1.50 in city taxes: in all, a little over $0.29 per cigarette. Given that cigarettes are legally available within a day’s drive for less than the cost of the taxes, it’s little wonder that an estimated 57% of the cigarettes sold in the state are smuggled in (the highest rate in the nation; Lord knows how much higher the figure is for NYC itself). It’s even less of a surprise that street vendors like Garner and this fellow can make a living selling individual cigarettes for $0.70 each or $1 for two.

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Contributor Post Created with Sketch. The Making of a FiCon

 

My teenage daughter, who is very keen on astrophysics and space exploration, came to me in a huff. She had watched a video that claimed a manned Mars mission was now only a matter of money, not engineering. “According to the video, if everyone in the country paid something like only half a penny, NASA would have the money they need for the mission!”

I don’t know enough about the science to evaluate the truth of the engineering claim without further research. But we had a fruitful discussion of whether money is truly the only obstacle in government bureaucracies, who pays taxes, how much they pay, where the spending goes, and what the disincentive effects are of taxes on the labor supply.

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Contributor Post Created with Sketch. Burger King Shrugged

 

Progressives are outraged. “But that’s so unlike them, Jon.” I know, but this time they mean it.

Burger King, a fast food establishment I last visited during the Clinton administration, has determined that their tax bite is a bit lower if they incorporate in Canada rather than the U.S. Or something like that. I’ll let the experts explain:

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Contributor Post Created with Sketch. Memo to Leader McCarthy: Talk About Pocketbook Issues, Not Freedom

 

From a good friend:

Listening to Uncommon Knowledge with Kevin McCarthy at the gym. The new House Majority Leader is making a big mistake. Why do conservatives keep using LIBERTY! in every interview? It adds zero-content and non-conservatives think it’s weird.

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How much time does government take from you each week, month, or year? How much time is wasted by paperwork and by unnecessary processes (undue regulations)?  More

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Contributor Post Created with Sketch. The First Paycheck of the Summer, or, a Conservative is Born

 

shutterstock_183463727An email from Nico Robinson, age 19, who, today, opening the first paycheck from his summer job, suddenly discovered withholding taxes:

As I open the letter, I see the first line reading Direct Deposit Voucher, immediately skim to the bottom, expecting my full paycheck, and I notice something amiss. Rather than the figure I was expecting, I only see merely a much smaller figure, mocking me. I still have yet to grasp the concept of what withholdings are and why the feds can take my money — money that I don’t even owe them yet!

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Contributor Post Created with Sketch. About ‘The Republican Case Against Republican Economics’

 

New York Times’ columnist Thomas Edsall uses my recent The Week column, “What Conservatives Don’t Understand About the Modern U.S. Economy,” as a prompt for analysis on how Republican “reformers” are, in his view, “questioning … free-market orthodoxy.”

The subject of my critique was a recent manifesto put forward by top conservative groups after a big meeting in Washington. To me, their agenda reflected little recognition of the major challenges facing today’s economy. As I wrote:

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Contributor Post Created with Sketch. Member Post

 

Business owners and those who hope to become one (wantrepreneurs) are a dying breed. First some wonky background: Technically, the U.S. economy is in “recovery”. However, most economists agree growth is anemic and vulnerable. 2014’s first quarter GDP was a mortifying 0.1%, surprising most everyone. Forbes called the growth “glacial”. Now we are informed that […]

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Contributor Post Created with Sketch. Piketty’s Focus is in the Wrong Place

 

It says something about how much attention the French economist Thomas Piketty’s new book, Capital in the Twenty-First Century, is getting — and something about how deeply flawed Piketty’s thinking is — that I have, for the second straight week, dedicated my column at Defining Ideas to rebutting the arguments made in the book. As I’ve noted before, one of Piketty’s greatest errors is focusing on inequality to the exclusion of economic growth. We should welcome any increase in wealth to the rich or the poor that does not leave other people worse off, whether that change increases or narrows the gaps in wealth between rich and poor—any such Pareto improvement meets the gold standard of economic welfare.

As I write in this week’s column:

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Alternate-Side Parking is a semi-regular, once or twice a week, podcast. Each episode lasts approximately as long as it takes for me to find a new alternate-side parking space in my neighborhood in Brooklyn, New York, plus however long I feel like sitting in the driver’s seat. In today’s episode, I talk about how unhappy […]

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I completely overlooked the significance of April 15th when I signed up on 10 Cents’ list. But, having walked right into it, there’s nothing for it but to confess to my Tax Day story. For every one of us, there was a First Time: the year you first had dealings with the IRS. For some, […]

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Contributor Post Created with Sketch. Do Liberals Really Think An 80% Tax Rate Wouldn’t Hurt the U.S. Economy? — James Pethokoukis

 

Federal income taxes went up last year, a financial reality becoming ever clearer to many higher-earning Americans as tax day looms. But how much higher can Washington clip wealthier Americans before rising tax rates really weigh on US economic growth?

041414taxesQuite a bit, some would argue. Despite those tax hikes, the American economy actually grew faster in 2013 than in 2012. Real GDP — measured fourth quarter over fourth quarter — accelerated to 2.6% from 2.0%. Another point: while the current top tax rate of 39.6% is the highest since the 1990s, the economy has done just fine with top rates double that level. Real GDP grew by 3.6% annually in the 1950s even with a 91% top rate. Going forward, progressive economist and inequality researcher Thomas Piketty recommends a top rate of 80% in his new book Capital in the Twenty-First Century, a work much praised on the left. Clearly, then, tax rates could go a lot higher both to reduce income inequality and raise more dough for government spending programs, right?

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