Archive for the ‘Taxes’ Category

Nothing But Down-side to Top-Two Primaries

There was a strong push in the last Arizona election cycle to disenfranchise political parties by turning the Arizona Primary election into a “round one general election” in which there would be a single ballot with all candidates listed on it without regard to party affiliation, but only the top two vote-getters from the Primary would be on the General Election ballot.  Some very good political thinkers were involved at least in conceptualizing this ballot proposition.  The proposition failed by a two to one margin

military voting

The main thing the proposition was designed to do was to give independents (voters not affiliated with any party) a greater say in the primary.  There are certain good things about today’s party system; it allows people with common political views to identify their positions on issues (platform) and to select candidates who will run for office in the general election.  The founding fathers were not fond of political parties; but parties in their times were specific special interest factions such as merchants, or lawyers, or veterans, or bankers, or planters.  The political parties spoken of by Washington and his contemporaries were what we would now call lobbyists or political action committees (PACs).

Today’s parties are made up of voters with diverse professions, economic stations, races, educational levels, and lifestyle, and serve primarily as a vetting process for candidate selection. party) more say in Primary elections.  To me that alone doesn’t make any sense because primary elections are elections in which political parties nominate their candidates.  Independents are independents because they don’t support party politics.  Arizona already does something that I think is very bad in that they allow independents to vote in one primary of any party they wish. To me nobody except party members should have a say in who the party nominates..  I’m glad it did because I think it was a very bad idea.

Even minor parties have played a significant role in shaping our politics.  By presenting their views to the public they have caused the two major parties to adjust to attract those voters.  Two examples are the Socialist Party who originated the idea of vast social programs and redistribution of wealth, and the Libertarian Party who has pushed for a more stringent compliance with the constitution and lest government involvement in the lives of citizens.  Both of these minor parties have never reached the number of supporters needed to enact their policies, but the Democrats have adapted many of the aims of the Socialist Party, and the Republicans have adjusted to the right in response to the ideas of the Libertarian Party.

One problem with a top two primary is that it does not give the voter more choices but limits them to only two in the general election.  A second problem is that in a district in which one party dominates, no other party has a chance to make it on the ballot, both general candidates could be from the same party.  It would virtually illuminate all minor party candidates from ever getting on a general ballot.

Many independents say there is no difference between the two parties; however, even the most cursory review of their stand on issues reveals that as false. The main causes of independent discontent with the two major parties can be categorized as: 1) They are all professional politicians who are mostly concerned with feathering their own nest and being reelected, and 2) They can’t work together to get anything done.

I think Item one is partly true; I do believe that many people in congress have a genuine desire to do what’s right, but their view may differ from that of many of their voters.  They have elevated themselves to a special class that is paid much more than the average voter, has amazing perks and benefits, and gives them special exceptions to things the rest of us live with every day.  When congress was first given an annual salary in 1855 it was $3000; comparing the consumer price index of 1855 to 2012, that equates to under $12,000 per year in today’s dollar.  Then, being in Congress was a part time job, they spent a couple of months a year mostly approving a budget.

This brings us to item two.  As the founders intended, the federal government dealt with relatively few departments and programs, they didn’t enact many new laws every year, they took care of business and got back their farm, store, law officer, parsonage, etc.  For the last 80 years congress has gotten along too well, they have passed way to many laws, creating way too much government, and spending way too much public revenue.  Any congress that refuses to raise expenditures or increase taxes is a good congress.  Democrats want to keep using the public revenue to buy votes, and Republics want to reverse that process.  In a nutshell that is the difference between the two parties.  I will vote for the senator or representative who refuses to go along with government programs, trillion dollar deficits, and forever increasing taxes.  A “do-nothing” congress is better than a “do-something” congress unless the something being done is cutting spending, cutting government, and cutting taxes.

So since the main accusation is that Democrats and Republicans are the same, you better look again.  And if you want to save the country you better hope the “do-nothings” outnumber the “do-everythings”.

10 Things Conservatives Got Right About Obama

More Taxes1. Tax Increases ~ It came as quite a shock and surprise when President Obama raised payroll taxes on 77% of taxpayers. Many Democrats exploded on Twitter that they had been “duped.” But the Democrat Party is just warming up — it’s seeking another $1 trillion by the end of the year.

2. Debt & Deficit Spending ~ After the election, the deficit, debts and spending will only go up. The just-inked fiscal cliff deal meant that there would be $41 in new spending for every $1 in cuts. In effect, that means taxes and unemployment will continue to go up. Elections have consequences, and so does bad economic policy.

3. Out-of-Control Spending ~ Another thing conservatives were pointing out before the election is that Barack Obama has no interest in cutting spending. American taxpayers were warned about this, even as the president harped about his supposed “balanced approach.” The president recently said flat-out that “we don’t have a spending problem.”

4. Unemployment and Jobs ~ All hail to the chief — we have a 7.8% unemployment rate. But that declining number is due to people dropping out of the labor force — futility and despair helping the Obama unemployment rate. By the way, the stimulus bill’s projections had the unemployment rate at 5.0% right now. And about those new jobs that were created? As of December, 73% of them were financed by government with taxpayer money.

5. Green Jobs & Environmental Policy ~ The president promised to commit $15 billion a year to create 5 million green energy jobs over a decade. Obama was unable to get cap-and-trade through first time around, but the clock is still ticking on this promise to create a bunch of green jobs through central planning. But a word of warning: America is pursuing the same failed green jobs strategy that killed current EU basketcase Spain. But let’s not learn from mistakes — that would be so un-Obamalike.

6. Social Issues & Campaign Distractions ~ Conservatives warned during the campaign that Obama was hiding his poor record with distractions like social issues. Turns out they were right. Social issues were campaign bait to engage sensitive youth voters and women. The president overwhelmingly favors men in cabinet appointments and women in his administration tend to make less than men.

7. Slashing the Military ~ The right-wing was abuzz with alarm when the president whispered on hot mic to former Russian President Dmitry Medvedev that he would have more “flexibility” in his second term. It looks like they were right about what that meant. The president’s nomination of Chuck Hagel for Defense Secretary signals that he is going through with his cut of military spending by almost a third by 2019 — from 4.3% to 3%.

8. Civil Rights ~ The libertarian wing of the Republican Party tried to alert voters that President Obama continued or even made worse some of the Bush war and terrorism policies. After critics on both right and left blasted the president for signing the NDAA, the president did not learn a single thing: he renewed the legislation after his election.

9. Gun Rights ~ Although the president had not initiated legislation to enact or decree sweeping gun laws during his first term, there were suggestions after such massacres as the Gabby Giffords tragedy and the Aurora theater massacre. Conservatives aware of the president’s radical positions against gun ownership in Illinois, however, knew that the president would seize on any crisis to bring back calls for tighter gun control laws. After all, this is the administration that gave us the deadly Fast & Furious scandal.

10. Blame Game Continues ~ The President would continue to blame others for the predictably disastrous results of his policies. This self-evidently become the case as “Blame Bush” turned into “Blame Boehner.” Maybe we should feel sorry for President Obama. After all, he did inherit another failed administration.
Yes, liberals. Conservatives told you

10 Things Conservatives Got Right About Obama
Yes, liberals. Conservatives told you so.

13 Tax Increases in 2013

Tax increaseThe deal that Congress and President Obama struck that finally—but only partially—avoided the fiscal cliff resulted in seven tax increases.
Those hikes combined with six tax increases from Obamacare that also began on New Year’s Day.
13 Tax Increases That Started January 1, 2013
Tax increases the fiscal cliff deal allowed:
1. Payroll tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hits all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” will lose “an annual income boost of $1,000.”
2. Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).
3. Phase out of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
5. Tax rates on investment: increase in the rate on dividends and capital gains from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).
6. Death tax: increase in the rate (on estates larger than $5 million) from 35 percent to 40 percent.
7. Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases by businesses.
Obamacare tax increases that took effect:
8. Another investment tax increase: 3.8 percent surtax on investment income for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).
9. Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax for incomes over $250,000 ($200,000 for single filers).
10. Medical device tax: 2.3 percent excise tax paid by medical device manufacturers and importers on all their sales.
11. Reducing the income tax deduction for individuals’ medical expenses.
12. Elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy.
13. Limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.
Each of these 13 tax increases will slow the economy, meaning that businesses will create fewer jobs. Fewer jobs will make it even more difficult to land a job than it already is for the more than 12 million Americans looking for work.
President Obama demanded these higher taxes. Obama’s tax increases, in Obamacare and through the fiscal cliff deal, will not curb deficits and debt, because growing spending is driving America’s budget crisis. Congress needs to immediately turn its attention to the actual cause of our deficit and debt problem: too much spending. The proper way to address this problem is through reforms to entitlement programs.
President Obama promised the American people a “balanced approach” of tax increases and spending cuts to reduce deficits and debt. He has achieved the tax increase portion of that approach. Now Congress needs to force him to follow through on the spending cuts portion.

Workers making $30,000 will take a bigger hit on their pay than those earning $500,000 under new fiscal deal

by Harley Peterson

Middle-class workers will take a bigger hit to their income proportionately than those earning between $200,000 and $500,000 under the new fiscal cliff deal, according to the nonpartisan Tax Policy Center.
Earners in the latter group will pay an average 1.3 percent more – or an additional $2,711 – in taxes this year, while workers making between $30,000 and $200,000 will see their paychecks shrink by as much as 1.7 percent – or up to $1,784 – the D.C.-based think tank reported.
Overall, nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal.
Tax GraphNearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal
‘The economy needs a stimulus, but under the agreement, taxes will go up in 2013 relative to 2012 – not only on high-income households, as widely discussed, but also on every working man and woman in the country, via the end of the payroll tax cut,’ said William G. Gale, co-director of the Tax Policy Center.
‘For most households, the payroll tax takes a far bigger bite than the income tax does, and the payroll tax cut therefore – as [the Congressional Budget Office] and others have shown – was a more effective stimulus than income tax cuts were, because the payroll tax cuts hit lower in the income distribution and hence were more likely to be spent,’ he added.

When the deal was passed by Congress late Tuesday, President Obama said it prevented ‘a middle class take hike that could have sent the economy back into recession’ and have a ‘severe impact’ on American families.

‘Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up,’ he said.
To the contrary, the Tax Policy Center says roughly 70 percent of Americans will see their income taxes rise as a result of the deal. They won’t rise as much as they would have if no deal had been reached and the fiscal cliff was triggered, but they will go up nonetheless.
Federal Tax rateWhile the lower brackets will take a bigger hit to their paychecks than those in the $200,000 to $500,000 bucket, their overall federal tax rate will remain smaller
The average increase in tax bills for all earners will be about $1,257.
While the lower brackets will take a bigger hit to their paychecks than those in the $200,000 to $500,000 bucket, their overall federal tax rate will remain smaller. And the biggest hit of all will still be felt by the nation’s top income earners.
Obama made a tax hike on the nation’s wealthiest central to his campaign for re-election.
Workers making more than $1 million will pay an average 7.8 percent more – or an additional $170,341 – under the new law.
The federal tax rate will be roughly 39 percent for that group, compared to 26 percent for those earning between $200,000 and $500,000 and 14 percent for those making between $40,000 and $50,000.
Ave Dollar change
Tax rate changeWorkers making more than $1 million will pay an average 7.8 percent more – or an additional $170,341 – under the new law

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Deal or No Deal: A Tax Hike for Every Working American

by Daniel HalperForward2

Payroll Tax HikeDeal or no deal, taxes are increasing for every single working American. And it appears no “fiscal cliff” proposal or provision being offered by the White House, Democrats, or Republicans will alter this fact.

The tax every working American will be hit with? The payroll tax increase.

“That means that the paychecks for more than 160 million Americans will be 2 percent smaller starting in January, as the payroll tax will jump from 4.2 percent to 6.2 percent. And a huge number of those hit will be middle class or working poor (Two-thirds of those in the bottom 20 percent would be affected by a payroll tax hike.),” describes the Washington Post.

The deal the Senate passed in late hours last night does not address the payroll tax hike. And no House member who has objected to the “fiscal cliff” bill has done so on the grounds of the payroll tax increase (instead, the objections are all based on how little the Senate bill cuts the bloated budget). The White House supports the already-passed Senate bill”So whether this particular deal passes or not, it’s basically a given that the payroll tax holiday is going away, which means a $115 billion fiscal contraction this year directly from the pocketbooks of ordinary Americans,” reports the Post. “To put that in perspective, the sequester cuts that are so dreaded would cut about $110 billion this year — more or less the same amount. While the fiscal cliff deal will save middle-class families an extra $2,000 in tax pain by extending the Bush tax cuts, anyone who earns $50,000 a year will still be hit with a $1,000 higher payroll tax burden.”

Over a month ago, the boss urged Congress to consider the payroll tax.

“The payroll tax, remember that?” the boss said on TV. “That was cut to 12% from 10% two years ago. It’s been 10% the last two years. And I gather the Republicans have no problem — I don’t know if Grover Norquist has a problem — with letting working class and middle class Americans have a 2% tax increase, and, that is not currently the Republican position that the payroll tax cut should be extended. And the administration is quietly happy to let that go, because God forbid they should actually cut entitlements from wealthy seniors or for others who benefit from corporate capitalism and big government.”

Regardless of Fiscal Cliff: Five More Obamacare Taxes Hitting on January 1

There are five major Obamacare taxes taking effect on January 1, 2013 — saddling the economy with a $268 billion tax increase:
The Obamacare Medical Device Tax – a $20 billion tax increase: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to prosthetics more expensive.
The Obamacare “Special Needs Kids Tax” – a $13 billion tax increase: The 30-35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2,500 (currently the accounts are unlimited under federal law, though employers are allowed to set a cap).
There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.
The Obamacare Surtax on Investment Income – a $123 billion tax increase: This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income:

Capital Gains
2013+ (current law)
The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.
The Obamacare “Haircut” for Medical Itemized Deductions – a $15.2 billion tax increase: Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans. This tax provision will most harm near retirees and those with modest incomes but high medical bills.
The Obamacare Medicare Payroll Tax Hike — an $86.8 billion tax increase: The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:

First $200,000
($250,000 Married)
All Remaining Wages
Current Law
2.9% self-employed
2.9% self-employed
Obamacare Tax Hike
2.9% self-employed
3.8% self-employed

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Half Your Paycheck To The Government In 2013

The president is convinced Americans need to pay more in taxes. Here’s what he said yesterday.
“I think everybody out there understood that was an important debate and the majority of voters agreed with me. By the way, more voters agreed with me on this issue than voted for me! So we’ve got a clear majority of the American people who recognize if we’re gonna be serious about deficit reduction we gotta do it in a balanced way.”
But let me tell you, come January 1, you’re probably not going to be happy with the amount of taxes you’re paying. That’s because it’s not just Federal taxes that you pay.
A middle class taxpayer pays 25% percent of their income in Federal Income Tax. Sounds, ok?
Then there is the Federal Social Security and Medicare payroll tax of 13.3%. You pick up 5.65% while you’re employer pays 7.65%. Add them up and that’s 38.3% of middle class family incomes going to Uncle Sam. But we aren’t done, not by a long shot.
According to the Tax Foundation, the average state’s income tax rate on the middle class is 4.82%. Of course, some states have it and some don’t, but we’re taking an average here.
Now the total: 43.12% of middle class income to taxes.
Oh, and I almost forgot, unless congress makes a move, Federal Income taxes go to 28% for middle income folks next year as the Bush tax cuts expire.
Neither party has said they want that to happen, but in Washington, well, you never know.
Also the payroll tax for those folks will go to 15.3% from 13.3%percent.
Did I mention state, property, corporate, and excise taxes? No?
All told, next year, total taxes will go to almost 50% for the middle class; the very group that the president says he wants to protect. That means 50 cents out of every dollar earned has to go to the government. Half of everything will go to an entity that didn’t earn that money, and shouldn’t be entitled to all that dough.
Unbelievable. You think most Americans agree that’s fair?
I don’t think so.

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California has approved Proposition 30, a measure to increase state taxes for a time amid a fiscal crisis, the Associated Press reports.

The measure, championed by Gov. Jerry Brown, raises $6 billion in taxes to spare state schools from budget cuts in this fiscal year. It increases the sales tax by a quarter of a percentage point, while boosting the income tax by one to three percentage points for individuals with annual income of more than $250,000 or couples with more than $500,000.

741 Tax Returns Filed From Single Florida Address, The Obama IRS Sent Back Over $1 Million In Refunds

More than 700 tax returns were filed in 2010 from a single residential address in Belle Glade, Fla. The IRS reportedly issued over a million dollars in refunds to the Belle Glade address that year.
Either one particular home in South Florida is really, really crowded, or there’s something shady going on.

In 2010, 741 tax returns were filed to the federal government from a single address in Belle Glade, Fla., the South Florida Sun-Sentinel reports. In response, the Internal Revenue Service issued over $1 million in combined tax refunds to that address, which is, y’know, embarrassing.

Most or all of those returns were probably filed by identity thieves, and the Belle Glade case isn’t even the worst of it, according to a report issued last month by the Treasury Inspector General for Tax Administration. That report notes that in addition to the Belle Glade home, there was an address in Tampa that sent in 518 tax returns and got back almost $1.8 million in refunds, and an address in Lansing, Mich., sent in 2,137 tax returns and got more than $3.3 million back. The returns from these addresses all bore the hallmarks of identity theft, according to TIGTA.

Tax-refund scams don’t seem to be going away any time soon. Identity theft and fraud are reportedly rampant in some parts of the country, especially Florida, which is home to three of the five U.S. addresses that filed the greatest number of tax returns in 2010, according to the TIGTA report.

Scams of this kind are growing more common, and they’re making it harder for law-abiding taxpayers to get refunds that are rightfully theirs. Identity thieves reportedly have a number of ways to soak the IRS, from borrowing the names and information of dead people to hijacking the Social Security numbers of Puerto Rican citizens, who don’t pay federal income tax. The TIGTA report estimates the IRS will send out $21 billion in refunds to criminals over the next five years.

That’s a forecast the IRS itself has, not surprisingly, taken issue with, and the agency claims it’s cracking down on identity thieves and fraudulent returns. The IRS has reportedly put controls in place to spot stolen identities and returns that use the Social Security numbers of dead people. Last week, CNNMoney reported the agency has already picked out almost twice as many suspicious returns this year as it had by this time last year.

Still, fooling the IRS doesn’t seem like an impossible task, considering one guy reportedly did it from a jail cell with a typewriter, according to a recent story in The Kansas City Star.

Why Confiscatory Tax Laws Don’t Work: Leftists Bemoan $ 21 Trillion In Untaxable Offshore Accounts

Conservative Refocus Notes:

I read this article with one eyebrow raised in ire.

The issue of the wealthy protecting their wealth is not one of greediness, but rather it’s one of alarmed and pro-active security. These offshore accounts are nothing if not the extreme methodology of protecting one’s assets from the statist robber-barons who couch their own state sanctioned greed under the auspices of the common good.

Were the taxes to be applied not confiscatory, then the wealthy would have no need of such devices. It is not a question of morality, at least not for the asset owner…

The more one considers the matter, the clearer it becomes that redistribution is in effect far less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State~Bertrand de Jouvenel

BBC News

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

The figure is equivalent to the size of the US and Japanese economies combined.

The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, and commissioned by the Tax Justice Network.

He said $21tn is a conservative figure and the true scale could be $32tn.

A trillion is 1,000 billion.

Mr Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.

His study deals only with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.

The report comes amid growing public and political concern about tax avoidance and evasion. Some authorities, including in Germany, have even paid for information on alleged tax evaders stolen from banks.

The group that commissioned the report, Tax Justice Network, campaigns against tax havens.

Mr Henry said that the super-rich move money around the globe through an “industrious bevy of professional enablers in private banking, legal, accounting and investment industries.

“The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries.

“From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems,” he said.

‘Huge black hole’

The report highlights the impact on the balance sheets of 139 developing countries of money held in tax havens that is put beyond the reach of local tax authorities.

Mr Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3tn to $9.3tn of “unrecorded offshore wealth” by 2010.

Private wealth held offshore represents “a huge black hole in the world economy,” Mr Henry said.