Taxes

The Republican Plan to Cripple the IRS

Internal Revenue Service

Imagine a world where there were not enough IRS agents to threaten your livelihood by pouring over years of receipts and tax filings. With the Republican takeover of the Senate, the Republican-controlled Congress is looking to severely de-fund the IRS in the wake of the ongoing scandal that revealed the organization targeted conservative organizations and held up nonprofit status approval.

POLITICO would have you believe that’s a bad thing:

Confused taxpayers, jammed help lines and tax cheaters running rampant — the IRS for months has warned that drastic budget cuts will disable an already troubled agency.

Republicans aren’t buying it.

Instead, they’re biding their time until they seize control of both chambers next year, giving them majorities to financially gut the most hated government agencies and new leverage to get agencies to do what they want.

A top priority? Crippling IRS regulatory actions, from Obamacare’s individual mandate to the looming draft rule that will limit political activities of groups like Crossroads GPS. The Environmental Protection Agency and the Department of Health and Human Services are among the others in the cross hairs.

Republicans are already chipping away at the agency’s budget. Tucked into something called a “cromnibus” (a terrible word only politics-obsessed D.C. folks could devise) is a $350 million budget cut to the IRS, and Democrats aren’t really doing anything to push back.

The POLITICO account continues:

Rat head in the Coke bottle: Getting Republicans out of the tax-raising business

Grover Norquist

Americans for Tax Reform’s President, Grover Norquist, tells it like this:

The Republican Party is a brand. Like Coca-Cola. Consumers know what Coke tastes like. It tastes the same from every bottle and out of every soda fountain. There’s no guessing what Coke tastes like from one drink to the next.

Since ATR’s inception in 1985 at the behest of Ronald Reagan, it’s been trying to brand the Republican Party as the party of lower taxes — the party opposed to tax increases. That attempt has been largely successful.

ATR’s “Taxpayer Protection” pledge puts candidates and elected officials on record opposing tax increases. And it holds them accountable when they stray.

So, when a Republican attempts to raise taxes, that damages the brand. It’s like a rat head in a Coke bottle. Someone drinking a Coke wouldn’t discover a rat head in the bottle and say to themselves, “Hmmm, perhaps I’ll finish this bottle later.” No. They would seriously consider whether or not they would drink another Coke ever again. They might tweet about it, show their friends, and discourage others from drinking Coke. That’s a branding problem.

Let’s consider a few surprising gubernatorial pick-ups from last Tuesday and see what those Republicans did that helped them cross the finish line.

In Illinois, Maryland, and Massachusetts, the Republican candidates for governor largely ran against their opponents’ records on taxes.

Successful Republican challenger Bruce Rauner in Illinois outlined his tax plan online:

The Quinn-Madigan 67% income tax hike.

You won’t believe what Big Government is spending your money on — actually, you probably will. And it’ll enrage you.

Wastebook 2014

Government spending is out of control.

Outgoing Oklahoma Republican Senator Tom Coburn, M.D., has been a fierce critic of wasteful government spending since he rode the “Contract With America” Republican wave into Congress in 1994.

Coburn’s 2014 annual report — his magnum opus, as he returns to Oklahoma to battle cancer — details $25 billion in absolutely ridiculous and unbelievable (but really, you likely won’t be surprised) spending programs coming out of Washington. Much of Coburn’s ire is directed at the National Institutes of Health (NIH), which has come under fire for (1) not having an Eblola cure and (2) blaming budget cuts on the lack of a cure.

In the introduction, Senator Coburn tells us what he’s learned during his time in Washington and asks readers to consider our national priorities:

What I have learned from these experiences is Washington will never change itself. But even if the politicians won’t stop stupid spending, taxpayers always have the last word.

As you read through the entries presented in this report, ask yourself: Is each of these a true national priority or could the money have been better spent on a more urgent need or not spent at all in order to reduce the burden of debt being left to be paid off by our children and grandchildren?

WHO’s unelected global bureaucrats want to unfairly tax the poor

Cigarette Taxes

Black-and-white images of soldiers abroad brandishing “victory cigars” in the fight against a cruel and oppressive enemy lit up television screens in homes across the nation, and “Smoke! Smoke! Smoke! (That Cigarette)” by Merle Travis was a national hit on the air waves. Cigarettes were an icon of glamor with a hint of rugged sophistication, and America was very much the land of the free and home of the brave during World War II.

President Franklin D. Roosevelt ensured that tobacco was a protected crop during this time, as tobacco companies sent millions of free cigarettes overseas in GI’s C-rations. Tobacco use was so prevalent by the end of the Second World War, that cigarette sales hit an all-time high.

Seven years after the end of World War II, in 1952, Reader’s Digest published “Cancer by the Carton,” the first series of articles that brought the dangers of smoking, which had previously been ignored, to the public’s attention. Twelve years later, in 1964, the U.S. Surgeon General’s office published an extensive report that linked tobacco use with lung cancer and other diseases. Since then, the Surgeon General has released 32 reports on smoking, including its January 14, 2014 report, “The Health Consequences of Smoking—50 Years of Progress.”

The OECD’s Scheme to Raise Tax Burdens on Workers, Consumers, and Investors

People pay every single penny of tax that politicians impose on corporations.

The investors that own companies obviously pay (more than one time!) when governments tax profits.

The workers employed by companies obviously pay, both directly and indirectly, because of corporate income tax.

And consumers also bear a burden thanks to business taxes that lead to higher prices and reduced output.

Keep these points in mind as we discuss BEPS (“base erosion and profit shifting”), which is a plan to increase business tax burdens being advanced by the Organization for Economic Cooperation and Development (OECD), a left-leaning international bureaucracy based in Paris.

Working on behalf of the high-tax nations that fund its activities, the OECD wants to rig the rules of international taxation so that companies can’t engage in legal tax planning.

The Wall Street Journal’s editorial page is not impressed by this campaign for higher taxes on employers.

Inversion Controversy Is about Whether Company Profits Should Flow to Shareholders or Government

Since I’ve been in Washington for nearly three decades, I’m used to foolish demagoguery.

But the left’s reaction to corporate inversions takes political rhetoric to a new level of dishonesty.

Every study that looks at business taxation reaches the same conclusion, which is that America’s tax system is punitive and anti-competitive.

Simply stated, the combination of a very high tax rate on corporate income along with a very punitive system of worldwide taxation makes it very difficult for an American-domiciled firm to compete overseas.

Yet some politicians say companies are being “unpatriotic” for trying to protect themselves and even suggest that the tax burden on firms should be further increased!

In this CNBC interview, I say that’s akin to “blaming the victim.”

Burger King looking to become a Canadian corporation because of the United States’ insane corporate tax code

U.S. fast food giant Burger King is looking to buy Tim Horton’s in Canada, and move its corporate headquarters to Canada. It’s a tax move called corporate inversion that’s been taken by companies that aren’t in the public eye like Burger King, and it’s been a bone of contention between Democrat and Republican lawmakers.

Democrats think that the solution to the problem lies in making it more difficult for American corporations to buy smaller companies abroad, to justify moving out of the U.S. Keeping businesses in America with competitive tax rates is the solution Republicans support. As for this particular case, Burger King is looking to save around 20 percent in taxes.

Canada’s corporate tax rate is 15 percent, according to the Organization for Economic Cooperation and Development. The U.S. rate is 35 percent, the highest among OECD nations, although most businesses pay significantly lower effective rates.

The Washington Examiner pointed out one obvious problem. In addition to not being competitive, there is no such thing as a standard effective tax rate for businesses in the U.S. As we head into the mid-term elections, tax reform should be an issue of concern, especially corporate taxes.

America needs to be encouraging businesses to move here with low tax rates. President John F. Kennedy understood that, when he decreased taxes - it is always better to collect smaller amounts from more people and businesses than it is to continually increase tax burdens on few. As Burger King is showing, the few can choose to just move away.

Thanks, Obamacare!: Individual health insurance premiums skyrocketed in California, and young people were the hardest hit

Aetna CEO Mark Bertolini acknowledged this week that Obamacare plans are “really not an affordable product for a lot of people.” He wasn’t kidding. The Los Angeles Times reports that individual health insurance premiums have skyrocketed in California, in some cases doubled, over last year’s rates:

For 2014, consumers purchasing individual policies paid between 22% and 88% more for health insurance than they did last year, depending on age, gender, type of policy and where they lived, [California Insurance Commissioner Dave] Jones said Tuesday.
[…]
For 2014, consumers purchasing individual policies paid between 22% and 88% more for health insurance than they did last year, depending on age, gender, type of policy and where they lived, Jones said Tuesday.

“The rate increase from 2013 to 2014, on average, was significantly higher than rate increases in the past,” Jones said in a news conference in Sacramento.

The hardest-hit were young people, he said. In one region of Los Angeles County, people age 25 paid 52% more for a silver plan than they had for a similar plan the year before, while someone age 55 paid 38% more, according to a report that Jones released Tuesday.

Funny or Die Accidentally Proves Why Big Federal Government Programs Suck While Making the Case for a Minimum Wage Hike

Kristen Bell Mary Poppins

A recent Funny or Die video accidentally proves what conservatives and libertarians have been saying about what the government does with paychecks.

The video, featuring Kristen Bell playing Mary Poppins, has a line which says it’s tough to live above the poverty line when the government takes out federal and state income tax, plus Social Security and Medicare. But instead of complaining about how much gets removed from paychecks, the video suggests raising the minimum wage is the only way to go.

This is ridiculous logic. Employees get 6.2% of their paychecks taken out for Social Security. This is money which never gets returned because it goes to pay for others who are already on Social Security. There’s also 1.45% taken out for Medicare. These are things Americans can’t opt out of and keep their own money.

To put it in real numbers. If someone works 40 hours a week at $7.25 the base pay should be $290. Instead, about $22 is taken out of the paycheck. That amounts to $1,144 per year which could have stayed in.

Then there’s federal income taxes. Singles making between $9,075 and $36,900 have 15% of their paycheck taken away per year. That $2,262 per year.

Today in Liberty: Federal court strikes down D.C.’s handgun carry ban, deal reached on V.A. reform as August recess looms

“We have a system that increasingly taxes work and subsidizes nonwork.” — Milton Friedman


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