United Liberty

In the wake of a very serious scandal that involved his agency singling out Tea Party groups, Treasury Secretary Jack Lew asked for and received the resignation of acting IRS Commissioner Steven Miller.

President Barack Obama announced this development during a short statement to this press this afternoon. He took no questions, but added that the recommendations made by the Treasury Department’s Inspector General will be implemented.

Quoting a congressional source earlier today, CNN noted that two Cincinnati-based staffers were largely responsible for the discrimination toward Tea Party groups. They have, according to the story, “already been disciplined,” though specifics weren’t provided.

While it’s good that there has been some accountability, much more needs to be done to prevent this from ever happening again. Moreover, President Obama’s response, to this point, had been woefully inadequate. Just Tuesday, the White House still didn’t want to own up that a mistake had been made, despite an admission and apology from the IRS.

The IRS is the problem. It’s very nature is to harass Americans into complying with the United States’ completely incoherent tax code. Couple that with the intimidating nature of this White House, and it’s a recipe for what happened to these Tea Party groups.

Written by Daniel Ikenson, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

Like too many other long-reigning fixtures on Capitol Hill, Senator Carl Levin (D-MI) doesn’t appreciate the magnitude of the challenge to the authority he presumes to hold over America’s job and wealth creators. Or maybe he does, and frustration over that fact explains why he besmirches companies like Apple, Google, Microsoft, and Hewlett-Packard.

Levin presided over a Senate hearing last week devoted to examining the “loopholes and gimmicks” used by these multinational companies to avoid paying taxes – and to branding them dirty tax scofflaws. Well here’s a news flash for the senator: incentives matter.

The byzantine U.S. tax code, which Senator Levin – over his 33-year tenure in the U.S. Senate (one-third of a century!) – no doubt had a hand or two in shaping, includes the highest corporate income tax rate among all of the world’s industrialized countries and the unusual requirement that profits earned abroad by U.S. multinationals are subject to U.S. taxation upon repatriation. No other major economy does that. Who in their right minds would not expect those incentives to encourage moving production off shore and keeping profits there?

Desparate to get his campaign back on track — especially in the face of an alleged affair, Herman Cain unveiled a new video, dubbed 9-9-9: The Movie, that criticizes the current federal tax code and stresses the need for simplification:

The video notes that it would do away with the 35% income tax while also pointing out that the 9-9-9 plan eliminates a host of other taxes, including the payroll tax. Yes, it lowers the rate, but it doesn’t get rid of the tax itself. They don’t outright say it, but that the way that is presented could lead the average voters to believe his plan does something it simply doesn’t do.

They also note the hidden taxes that are embedded into the cost of goods and services, but Cain’s campaign fails to explain how the 9% sales tax isn’t a value added tax (VAT), which has been a frequent criticism of the plan.

Anyone who follows baseball to some extent probably knows that Derek Jeter just got his 3,000th career hit.  That’s a milestone for any major league baseball player.  Fan Christian Lopez got his hands on the ball, a memento worthy of the Hall of Fame.  He gave it back to Jeter.  The Yankees, apparently in appreciation for his returning the ball to the man Lopez referred to as an “icon”, gave him prizes like luxury box seats for the rest of the season and signed memorabilia, among other thing.  Now, Uncle Sam wants a piece.

You see, these are categorized as “prizes” and are subject to taxes.  Lopez may well be on the hook for thousands of dollars.  Estimates seem to range from $5,000 to $13,000.

Lopez seems to not be bothered by the whole thing.

If it comes down to that, Lopez says he’ll pay the tax man because he’s not about to relinquish his seats. The young government major says his family and friends will help him out.

“The IRS has a job to do, so I’m not going to hold it against them, but it would be cool if they helped me out a little on this,” Lopez told the News.

You know what would be really cool?  If our tax code took a few things into account, like prizes and/or gifts.  You have a 23 year old kid who does something incredibly cool (the ball could have sold at auction for at least a quarter of a million dollars), and now he’s going to get shafted by the whole ordeal.

Of course, why should I expect sanity from government?  You’d think I’d be past that by now.

It’s easy to pick on the rich.  There really aren’t that many of them for one thing, and since they’re not considered a minority they aren’t granted the protected status that decency gives to other minority groups.  They’re still fair game, and it seems like a lot of people are taking advantage of that fact.  Now, a vote in the Senate designed to put Republicans in a corner is being a bit misrepresented by the pundits.

For example, from the Washington Post’s Greg Sargent:

So it’s come to this. Republican opposition to any kind of revenue increase as part of the deficit deal has grown so implacable that Dems will now hold a Senate vote tomorrow on the basic idea that millionaires and billionaires should help contribute to fixing our deficit.

It’s not a vote on any specific proposal to hike taxes or end tax breaks. Rather, it’s a vote that puts each Senator on record on the general question of whether the rich should sacrifice in sevice of deficit reduction.

[Bold emphasis is mine]

What’s the problem with this one?  Simple…the rich already “sacrifice in service of debt reduction”.  They pay taxes.  In fact, they pay a significant percentage of the taxes paid by Americans.  They sacrifice already, but you wouldn’t get that with comments like that, would you?

The truth is, Sargent should know better.  Later on in the same piece:

After President Barack Obama’s class warfare rant last week, Sen. Marco Rubio (R-FL) took to the lectern in the Senate and denounced the divisive rhetoric used and explained the opportunity before members of Congress should be used to reform the tax code to make America more prosperous; not punish people for success:

H/T: Dan Mitchell

In the President’s address with regard to deficit reduction earlier this week, he mentioned maintaining and increasing “investment” in certain programs, as well as “asking” our biggest income earners to “pay a little more.”

With that in mind, this video from Learn Liberty, shows that tax revenues remain a fairly constant percentage of Gross Domestic Product, regardless of rate.

To see the chart in the video up close, click here.