Income Tax

Trump’s Tax Plan Not Grounded in Reality

https://reclaimourrepublic.files.wordpress.com/2015/07/donald-trump-thumbs-up.jpg?w=640&h=480

Donald Trump, the brash, politically incorrect, self-promoting billionaire businessman turned politician has, in defiance of all political wisdom, rocketed to the top of the polls by tapping into the frustration and anger of the conservative base, which feels betrayed by GOP leadership’s absolute refusal to fight Obama’s lawless actions.

However, he has increasingly received criticism for his bumper-sticker sloganeering brand of campaigning, which has been long on chest-thumping but short on specifics. In response, Trump released recently his income tax reform plan.

From a broad-strokes perspective, there is much to like about Trump’s plan; the elimination of the marriage penalty and the AMT (Alternative Minimum Tax), the elimination of loopholes and deductions, the elimination of the death tax, a reduction in the number of tax brackets and a lowering of the rates (four brackets of 0%, 10%, 20%, and 25%), and a steep reduction in the corporate income tax rate to 15% (a great way to encourage investment in U.S. companies, which now bear the burden of the highest corporate tax rate in the world).

Trump’s plan would also require American multi-nationals to repatriate their offshore capital, encouraged by a 10% repatriation tax rate.

However, as with everything in life, the devil is in the details.

No, Tennessee Does Not Have the “Most Regressive” Tax System

[Editor’s note: This piece originally appeared on the Beacon Center of Tennessee’s blog.]

Low incomers are better off now in spite of lower minimum wage

President Obama’s statement concerning the lack of solid evidence supporting that a higher minimum wage costs jobs, has already been fact-checked and the results were everything but favorable. To the President.

Supporters of a higher federal minimum wage often overlook the importance of observing changes to the conditions of those who would be affected by such policy. They simply assume that the results should be favorable considering that everybody’s wage would go up. Like magic, everyone would suddenly become a little richer.

Aside from the obvious disincentive companies will have to factor when looking into hiring once a higher minimum wage law kicks in, supporters of an increased federal minimum wage simply ignore the fact that we, as a nation, have not been relying on the minimum wage as much as Americans did 20 years ago. Policy has already shifted in order to focus on poor families, which has made low incomers earn much more today than they did 40 years ago.

While it’s true that the federal minimum wage is actually lower now than it was in the 1960s, people who are earning minimum wage now are not poorer than those earning minimum wage back in the day, and that’s due to other policies entirely.

Americans Gave Up Rights in Order to Punish Their Neighbors

Obama’s former Chief of Staff, Rahm Emanuel, famously said government should never let a crisis go to waste. Though not a crisis in the way the financial meltdown was a crisis, the unfolding scandal of corruption, and intimidation of American citizens at the hands of a politically-driven IRS is a great opportunity to consider repealing the income tax, and abolishing the IRS, the most hated and feared of all government agencies.

The income tax was conceived in a cauldron of boiling class-warfare bile, promising the poor and middle class that the “rich” would finally pay their “fair share.” A progressive income tax being a central plank of Karl Marx’s Communist Manifesto, it was created as a tool not primarily for revenue collection, but for socialist wealth redistribution (“spreading the wealth around”, because “sometimes you’ve made enough money,” as Obama mighty say).

Yet in the drive to give government power to force their neighbors to give up their “fair share,” Americans unwittingly gave up many of their own rights, and opened the door for the great federal leviathan to enter our homes and terrorize us.

Under Article I, Section 9 of the U.S. Constitution, which reads “No capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken,“ the Founding Fathers directly forbade a direct tax, of which the income tax is a form. But in that raging spirit of class warfare, with promises that the tax would not be levied on the “average Joe,” but only those “rich fat cats.” Americans ratified the 16th Amendment and ushered in the Marxist income tax.

Credit Unions Fight Back against Big Banks

After enduring months of salvos from the banking industry, credit unions are fighting back.

The above video from the Credit Union National Association, one of the industry’s two major trade groups, launches credit unions’ campaign to enlist their 96 million members nationwide to beat back lobbying efforts by the American Bankers Association and the Independent Community Bankers of America that would strip them of their tax-exempt status.

Credit unions have been exempt from the federal income tax ever since it was created in 1916 by the 16th Amendment, on grounds that they are “organized and operated for mutual purposes and without profit.”

This reliance on community bonds and mutual interest has allowed credit unions to serve populations that historically have had difficulty accessing bank credit, whether it be immigrants and other individuals of more modest means (highlighted in CUNA’s video by the striking fact that, though 40 percent of Americans belong to a credit union, they hold only 6 percent of the country’s financial assets) or particular small business niches that banks have tended to eschew (in recent years, credit unions have had notably strong penetration among organic farms and taxi drivers, for instance.)

And for as long as credit unions have enjoyed their exemption, banks have been lamenting it as an “unfair” advantage. The charge does not stand up to scrutiny. An April 2013 report from Yang Liu and Richard Anderson of the Federal Reserve Bank of St. Louis examined whether credit unions’ tax exemption offered them a competitive advantage over banks, and found that the “evidence does not permit any sharp conclusions.”

Tax Bite Leaves Flacco Second Best Paid in NFL

Written by Matt Blumenfeld, State Policy Associate at Americans for Tax Reform. Posted with permission from Americans for Tax Reform.

As reported this week, Super Bowl MVP Joe Flacco and the Baltimore Ravens have agreed to a six-year, $120.6 million contract making the star quarterback the highest-paid player in NFL history, earning an estimated $20.1 million per year. But being the “highest paid player” and earning the most after tax pay are two very different things.

By choosing to remain a Raven, Flacco is now set to pay a combined marginal income tax rate of 51.98 percent. This overwhelming tax rate is composed of the federal, Maryland, and Baltimore County income tax rate, as well as the Medicare tax. And that’s excluding his “jock tax” liability for away games – play the Patriots at Gillette Stadium, pay Massachusetts income tax on earnings for that game - and other taxes levied against him such as Maryland’s property tax.

Given that Flacco is coming off of his best season, the franchise quarterback could have commanded a similar contract from any other team in the league while keeping a greater percentage of his contract. Four of the nine no-income-tax states have professional teams in need of the Super Bowl MVP’s caliber and skill.

State

Team

Federal Income

Tax Burden

State and County

The 100th Anniversary of the Income Tax…and the Lesson We Should Learn from that Mistake

Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

What’s the worst thing about Delaware?

No, not Joe Biden. He’s just a typical feckless politician and the butt of some good jokes.

Instead, the so-called First State is actually the Worst State because almost exactly 100 years ago, on February 3, 1913, Delaware made the personal income tax possible by ratifying the 16th Amendment.

Though, to be fair, I suppose the 35 states that already had ratified the Amendment were more despicable since they were even more anxious to enable this noxious levy.

But let’s not get bogged down in details. The purpose of this post is not to re-hash history, but to instead ask what lessons we can learn from the adoption of the income tax.

The most obvious lesson is that politicians can’t be trusted with additional powers. The first income tax had a top tax rate of just 7 percent and the entire tax code was 400 pages long. Now we have a top tax rate of 39.6 percent (even higher if you include additional levies for Medicare and Obamacare) and the tax code has become a 72,000-page monstrosity.

But the main lesson I want to discuss today is that giving politicians a new source of money inevitably leads to much higher spending.

Rocketing Towards the True Fiscal Cliff

You mad, bro?

Now that the “fiscal cliff” deal is law, we move on to the next acts in this kabuki theater we call Congress. The fiscal cliff deal locked in most of the Bush-era tax rates permanently, raised taxes on the highest earners, allowed the payroll tax to increase on all earners (a shock to many Democrats, who thought the re-coronation of the Obamessiah exempted them from more taxes). It once again kicked the can of spending excess, specifically entitlement spending, down the road. It supposedly reduces the huge annual deficits, yet will bring in only $620 billion over ten years (enough revenue in a decade to pay HALF of THIS year’s deficit). Since entitlement spending drives our growth in debt, the fiscal cliff deal did not avert a fiscal crisis; it simply delayed it and insured that it will be much worse when it hits.

The irony is that Obama’s fiscal cliff deal theoretically demands higher taxes for “fairness,” to get the rich to carry more of the burden. However, a recent Huffington Post article quotes Professor Emmanuel Saez of UC-Berkeley, who reveals that income inequality is actually higher under Obama than it was under Bush. Or, as the writer explains, “That means the rising tide has lifted fewer boats during the Obama years — and the ones it’s lifted have been mostly yachts.” In other words, his uber-rich friends hit the jackpot even as the poor and middle class he supposedly protects suffer more.

Despite hand-wringing and breathless proclamations of impending doom, Congress and Obama showed they were completely unserious about fixing the problem, voting on the “fiscal cliff” bill without having a clue what was in it. According to Congressman Ron Paul, the bill was voted on in the House just 22-hours after the text was made available, and the Senate voted on the 154-page bill just three minutes after it was presented.

Friday Not-So-Funny: Tax Policy Visualized

I don’t know from what data set this analyst pulled the points for analysis, nor can I verify that it represents anything actually going on in the world. Still, have a look:

Common birth dates reconstructed

Essentially, the analyst took the most common birth dates data, and shifted those plots leftward (backward in time) approximately nine months to find out when it was most likely (and, conversely, least likely) that people were … ahem … “reproducing.”

Given what a complicated, cumbersome, and life-force-damping wet blanket our tax code is, it should be no surprise that people get cold feet in April every year; there’s too much else to think and worry about.

Source

Real tax hikes, phony spending cuts

President Barack Obama made his pitch yesterday to jack up tax rates on high-income earners and bring a host of new fees that will reach across income groups — offering $3 in tax hikes for every $1 in spending cuts:

Drawing clear battle lines for next year’s elections, a combative President Barack Obama on Monday demanded that the richest Americans pay higher taxes to help cut soaring U.S. deficits by more than $3 trillion. He promised to veto any effort by congressional Republicans to cut Medicare benefits for the elderly without raising taxes as well.

“This is not class warfare. It’s math,” Obama declared, anticipating Republican criticism, which was quick in coming.
[…]
The president’s proposal, which he challenged Congress to approve, would predominantly hit upper-income taxpayers and would also target tax loopholes and subsidies used by many larger corporations. It would spare retirees from any changes in Social Security, and it would direct most of the cuts in Medicare spending to health care providers, not beneficiaries.

Benefit programs wouldn’t be unscathed. Obama’s plan would reduce spending for those, including Medicare and Medicaid, by $580 billion. But with Republicans calling for massive cuts in entitlement programs, Obama said he would veto any legislation that cut Medicare benefits without raising new revenue.


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