FairTax

401(k) Plans Teeter on the Fiscal Cliff

Among the many tax “loopholes” on the chopping block in the fiscal cliff negotiations are the 401(k) contribution limits.  Liberals like to refer to tax deductions, deferrals, and exemptions as “spending through the tax code,” or “tax expenditures.”  Of course, there are certain tax subsidies and credits that might best be described as spending (e.g., subsidized coverage on the Obamacare exchanges).

But conservatives and libertarians recognize that private property rights are at the foundation of individual liberty, and that any just government must be dedicated to protecting the individual’s right to the fruits of his labor.  Treating a legitimate tax deduction as government spending presumes that the government has a right to those fruits by default - that we are privileged to retain any such fruits, and the government spends its funds in permitting it.  This confiscatory mindset is foreign to our founding and inconsistent with our nature.

The proposed changes to 401(k) contribution limits are a good example of the threats to economic liberty we face as the revenue hawks continue to scour the tax code for backhanded tax increases.

What is a 401(k) Plan?

The traditional 401(k) plan is a method of tax deferral.  You contribute with pre-tax dollars, the account grows tax-free, and you pay ordinary income tax on the distributions when you retire.  If your employer offers a Roth option, you can contribute with after-tax dollars, and both the gains and distributions will be tax-free.  In 2012, employees can elect to contribute up to $17,000, and the total employer/employee combined contribution limit is $50,000.

What’s Being Proposed?

Who I Support For President?

Vote No One 2012Election Day is November 6 and I need to decide who I’m going to support for president.

There’s the incumbent, Barack Obama. Should I give him four more years? However, the problem is, I don’t approve of the four years he has already served. His signature law is Obamacare which is a tax increase on the middle class and the government takeover of our healthcare system. Nor do I approve of his administration continuing to enact budgets that increase the national debt by $1 trillion every year he has been office. I also do not approve of his administration’s foreign policy which is an incoherent continuation of the Bush foreign policy.

I do not approve of this administration’s social policy which appears to support a nanny state to combat everything from obesity to bullying, nor am I impressed with his very recent, election change of heart on gay marriage. I am also opposed to the continued funding of Planned Parenthood, the crack down on medical marijuana in states where it is legal, and the nationalization/federalization of just about everything. I definitely will not support Barack Obama’s reelection.

GA Senate: Karen Handel sees outsider status as key to victory

Karen Handel

Karen Handel is hoping that her record as a political outsider willing to shake up the status quo will help propel her to victory in the competitive Republican primary for Georgia’s open U.S. Senate seat.

The race is interesting because it’s a potential battleground for control of the Senate. Handel is one of eight candidates currently running in the Republican primary. The field also includes three sitting U.S. Congressman, Paul Broun, Phil Gingrey, and Jack Kingston. Whoever wins the primary will likely face Michelle Nunn, a Democrat and daughter of former Sen. Sam Nunn (D-GA), in November.

Handel served as Fulton County Commission chair from 2003 to 2007. In 2006, she ran successfully for Georgia Secretary of State, a position she held from 2007 until 2009, when she resigned for to run for governor. Though she made it to the runoff, Handel lost to former Rep. Nathan Deal (R-GA) by 2,519 votes.

That may cause some to ask how Handel can claim to be an anti-establishment outsider, after all, she’s served in elected office, statewide office, at that. The answer is pretty simple. Handel made national headlines in January 2012 when Susan G. Komen for the Cure, where she served as vice president, cut off funding to Planned Parenthood.

Reason Chats with Rep. Thomas Massie, a Liberty-Minded Republican

Thomas Massie

Nick Gillespie of Reason TV recently sat down with Rep. Thomas Massie (R-KY), who is one of the new libertarian-minded Republicans in the Congress, to discuss a number of issues, ranging from his support of the Keystone XL and his opposition to expansive government surveillance and the so-called “fiscal cliff” deal that was passed earlier this year.

On Keystone XL, which was recently approved by the House, Massie explained that he voted to support the project because he “thought that the government was trying to hold up the project.

“I sit on the committee that marked up the bill, and so I got a chance to hear the amendments that the Democrats offered,” explained Massie. “They had some good points, but most of their amendments were designed to kill the bill. I wish they had offered amendments that were actually constructive.”

Gillespie asked about passing more laws to protect Americans from onerous and overreaching proposals like CISPA and other forms of government surveillance. Massie said that Congress doesn’t really need to pass new protections because the Constitution already protects the rights of Americans.

“A lot of what I see Congress grapple with here is the introduction of new technology into society and trying to resolve that with existing laws. I don’t necessarily think we need new laws, we need to respect the Constitution,” Massie told Gillespie. “So just because we have a new type of technology like the Internet or drones, for instance, doesn’t mean that all of our constitutional rights have to go away. As Congressmen we have be sure that they’re preserved even with the advent of new technology.”

Poll: Most Americans Want A Flat Tax But Don’t Know It

On Thursday, Fox News conducted a poll showing that the vast majority of Americans think everybody should pay some taxes:

A large majority of likely voters believes all Americans should pay some federal income tax — even if it is as little as one percent of what they make.

Seventy-nine percent say everyone should pay something, according to a Fox News poll released Thursday.  That includes 85 percent of Republicans, 83 percent of independents and 71 percent of Democrats.

According to the IRS, last year approximately 41 percent of tax filers did not pay federal income tax.  The Tax Policy Center estimates that will increase to 46 percent this year.

Republicans and independents are pretty similar on this point; Democrats are 14 points behind, but most of them believe it too. I think they agree for totally different reasons: Republicans want the poor to pony up something for the government services they keep consuming; Democrats still think the rich don’t pay their fair share. It’s all semantics, really; if we’re going to have taxes, everyone should pay them. Fair is fair.

Outrage Over Taxation

If you’re upset over the Supreme Court ruling on ObamaCare, maybe you should be. The Court’s ruling that it’s a tax has left many people frustrated with the system in general. This frustrated, annoyed, outraged feeling where you just want to find a legislator to beat senseless is exactly how you should feel. (You shouldn’t beat legislators senseless, but this is how you should feel about taxation.)

We’re now being taxed for inaction. It’s a tax for doing nothing. Whether we’re sick or well, whether we want insurance or not, we have to spend that money.

While the thought of being taxed for inaction is certainly outrageous, why aren’t we this outraged at taxes based on action? When we earn money, it’s taxed. When we spend money, it’s taxed. When we inherit money, it’s taxed.

Many people will tell you that taxation based on an action is preferable because you can choose how much you pay in taxes. Though that’s true, at least to an extent, conservatives have supported the FairTax approach to consumption taxes that they don’t bother thinking that maybe the tax is too high; all they see is the method of taxation.

We’ve adopted this mentality that government has some right to a percentage of what we earn, what we spend, and what we are given. Of course, the government needs money to operate, and that has to be done through taxation of some sort. I understand that the government needs to be funded. That’s not the point here; the issue is our overall complacency toward taxation.

The ruling from the Supreme Court on the health care issue has reminded us what we’re supposed to feel like on the issue of taxation. Remember this feeling; hold onto that level of rage; and let this example from the health care issue be a constant reminder of the way government influences our decisions.

Cain’s 9-9-9 plan has very real problems

Soundbytes are always a way to gain support, and we’re frequently heard Herman Cain mention his 9-9-9 tax plan during debates and news reports from the stump. But is it a serious tax proposal or a gimmick that we can add to the growing list of problems with the Cain? Kevin Williamson, managing editor the conservative National Review and author of The Politically Incorrect Guide to Socialism, explains why it’s a cheap rhetorical tool, not a serious policy proposal:

[L]et’s take a look at 9-9-9 on its own merits. Mr. Cain says the proposal would be revenue-neutral. I have my doubts. The federal government took in about $2.2 trillion last year. Based on personal-income and business-income figures from the IRS, and consumer-spending figures from the Gallup survey, my English-major math suggests that a 9 percent tax on all of the above produces about $1.7 trillion in revenue, meaning that 2010’s $1.7 trillion deficit would have been more like a $2.2 trillion deficit — from calamity to catastrophe. If Mr. Cain’s team is building in some growth assumptions into the fiscal forecasts, they must be sunny indeed.

BREAKING: Tax Hike Mike is not running for president

Tax Hike Mike Huckabee announced on his Fox News show this evening that he will not seek the Republican nomination for president. The announcement ended days of speculation and mixed messages from those close to the former Arkansas governor, including staffers and advisors from his 2008 bid.

Huckabee, who has been criticized by fiscal conservatives for his big spending, big government and tax hiking policies during his time in Arkansas, had been among the top-tier in polling among Republican candidates; neck-and-neck with Mitt Romney.

Who benefits the most? Since much of Huckabee’s support comes from social conservatives, look for Rick Santorum to up the rhetoric in the coming days; though others will as well. Tax Hike Mike’s populist approach and support for the FairTax will also boast other soundbite candidates, such as Herman Cain.

Personally, it’s one less cult of personality we’ll have to deal with during the campaign; though others seem poised to take his place. Huckabee not running means there is one less statist is in the mix. I’m OK with that.

Mike Huckabee is a big government Republican

While visiting with Judge Andrew Napolitano on Freedom Watch this past weekend, Mike Huckabee, a potential GOP candidate for president in 2012, took issue with libertarians and free marketers over his record, saying, “If a libertarian thinks he’s a better Republican and calls people like me a RINO or a liberal, I have a real problem with that.”

Here is the segment:

While many are fans of Huckabee because of his support of the “Fair Tax,” there is little question that he is a fiscal liberal. During his tenure as Governor of Arkansas, Huckabee gave residents of the state a net tax hike of over $505 million to finance his big government agenda. His record on taxes is worse than Bill Clinton.

PA-12: Democrats demagogue the FairTax

Democrats are using the FairTax, a popular tax proposal put forward by Americians for Fair Taxation and promoted by Republican talk show host Neal Boortz, in attack ads against Tim Burns:

In the May 18 special election in Pennsylvania to replace the late Rep. John Murtha (D), the DCCC is running a television ad attacking the Republican nominee, Tim Burns, for supporting the fair tax, using the issue to accuse him of supporting higher taxes on groceries, gas and medicine.

The ad refers to an interview Burns gave last year in which he said he “would love to ultimately see the fair tax implemented.” He went on to suggest that pursuing the fair tax “straight out of the gate” would be impractical because it would require overhauling the entire tax code.

A Burns campaign spokesman, Kent Gates, said the DCCC ad “is a complete distortion at best.” Burns issued a statement to The Hill saying he supports “making our tax code flatter and fairer.”

Here is the ad in question:


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