Tax the Rich and Save the Poor

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August 7, 2012

Indigestion for ‘les Riches’ in a Plan for Higher Taxes

By LIZ ALDERMAN

PARIS — The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.

President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.

The lawyer’s counsel: Wait and see. For now, at least.

“We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”

A chill is wafting over France’s business class as Mr. Hollande, the country’s first Socialist president since François Mitterrand in the 1980s, presses a manifesto of patriotism to “pay extra tax to get the country back on its feet again.” The 75 percent tax proposal, which Parliament plans to take up in September, is ostensibly aimed at bolstering French finances as Europe’s long-running debt crisis intensifies.

But because there are relatively few people in France whose income would incur such a tax — perhaps no more than 30,000 in a country of 65 million — the gains might contribute but a small fraction of the 33 billion euros in new revenue the government wants to raise next year to help balance the budget.

The French finance ministry did not respond to requests for an estimate of the revenue the tax might raise. Though the amount would be low, some analysts note that a tax hit on the rich would provide political cover for painful cuts Mr. Hollande may need to make next year in social and welfare programs that are likely to be far less popular with the rank and file.

In that regard, the tax could have enormous symbolic value as a blow for egalité, coming from a new president who has proclaimed, “I don’t like the rich.”

“French people have an uncomfortable relationship with money,” Mr. Grandil said. “Here, someone who is a self-made man, creating jobs and ending up as a millionaire, is viewed with suspicion. This is big cultural difference between France and the United States.”

Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents — who are highly protective of their clients and decline to identify them by name. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them.

They also know of companies — start-ups and multinationals alike — that are delaying plans to invest in France or to move employees or new hires here.

Whether many wealthy residents will actually leave and companies will change their plans, of course, remains to be seen. Some of the criticism could be political posturing, aimed at trying to dissuade the government from going through with the planned tax increase.

But some wealthy people left after Mr. Mitterrand raised taxes in the 1980s. And more recently, the former Victoria’s Secret model Laetetia Casta, the restaurateur Alain Ducasse and the singer Johnny Hallyday caused a stir by moving to countries just across the border to escape the French treasury’s heavy hand.

There is no question Mr. Hollande is under fiscal pressure. He has pledged to reduce France’s budget deficit, currently 4.5 percent of the nation’s gross domestic product, to 3 percent by next year, to meet euro zone rules.

The matter of how best to hit that target, though, is as much a political question as a fiscal one. Mr. Hollande was elected in May on a wave of resentment against “les riches” — company executives, bankers, sports stars and celebrities whose paychecks tend to be seen as scandalous in a country where the growing divide between rich and poor touches a cultural nerve whose roots predate Robespierre.

Half the nation’s households earn less than 19,000 euros a year; only about 10 percent of households earn more than 60,000 euros annually, according to the French statistics agency, Insee.

There is currently no plan to change the tax rates for most people, which is 14 percent for the poorest and 30 percent for the next rung. For higher earners — people with incomes above 70,830 euros a year — the tax rate will soon rise to 44 percent, up from 41, in a change that was already set before Mr. Hollande’s election.

A tax accountant in Paris with many wealthy clients, Steve Horton, has calculated that a two-parent, two-child household with taxable annual income of a bit more than 2.22 million euros ($2.75 million) now has after-tax take-home pay of about 1.1 million euros ($1.35 million) under France’s current tax system.

That household would end up with 780,000 euros, or $966,000, if the Hollande tax took effect, Mr. Horton says. (The same family, with comparable income in Manhattan, would take home $1.55 million, the dollar equivalent of 1.25 million euros, after paying federal, state and city income taxes, he calculated.)

Taxes are high in France for a reason: they pay for one of Europe’s most generous social welfare systems and a large government. As Mr. Hollande has described it, the tax plan is about “justice,” and “sending out a signal, a message of social cohesion.”

That struck a chord with voters angry about the wealth divide. And it is supported by some economists, including Thomas Piketty, a professor at the Paris School of Economics, who has conducted studies indicating that high earners will not work less hard if taxed more. But some say France could send out the wrong signal.

“People have an acceptable amount of taxes they are willing to pay,” said Mr. Horton, the accountant, “and if it goes above that, they will move somewhere that’s more reasonable.”

“The thing French politicians don’t seem to understand or care about is that when you tax away two-thirds of someone’s earnings to appeal to voters, productive people who can enrich businesses and the economy won’t come — or they will just leave,” said Diane Segalen, a corporate headhunter.

She said she had been close to sealing a deal for a seasoned executive in London to join one of France’s biggest companies earlier this year, when Mr. Hollande made his 75 percent vow.

“When the guy heard that, he said, ‘I’m not coming,’ and withdrew from the process,” said Mrs. Segalen, the head of the Segalen et Associés, a consulting firm.

For Mrs. Segalen, the proposal is the latest red flag in a country that has long labored under the image of being a difficult place to do business. France has a 33 percent corporate tax rate — the euro zone’s second-highest, after Malta’s 35 percent. That contrasts with the 12.5 percent rate in Ireland, which has deliberately kept a lid on corporate taxes as a lure to businesses.

“It is a ridiculous proposal, but it’s great for us,” said Jean Dekerchove, the manager of Immobilièr Le Lion, a high-end real estate agency based in Brussels. Calls to his office have picked up in recent months, he said, as wealthy French citizens look to invest or simply move across the border amid worries about the latest tax.

“It’s a huge loss for France because people and businesses come to Belgium and bring their wealth with them,” Mr. Dekerchove said. “But we’re thrilled because they create jobs, they buy houses and spend money — and it’s our economy that profits.”

This article has been revised to reflect the following correction:
Correction: August 7, 2012

California Nightmare

So if we have the highest tax rates in the country and cannot make do, the question should be asked why.  What is it about the spending that is a problem?  What is it about the tax rates that contribute to lower revenues?  What is it about the non-taxpayers in the state that contribute to the calamity?

When those questions are answered honestly, the problem will be clear and the answers self-evident, even to Moonbeam.

California Deficit Swells to $16 Billion, Governor Says

               

By Michael B. Marois - May 12, 2012 12:49 PM PT

California’s budget deficit has swelled to $16 billion after tax collections trailed projections amid the tepid economic recovery, Governor Jerry Brown said in a comment on his Twitter post.

The shortfall has widened from the $9.2 billion Brown estimated in January, after lawmakers resisted the Democrat’s call for cost cuts, the federal government blocked other reductions and April income-tax revenue missed budget forecasts by $2 billion. On May 14, he’s set to unveil a revised spending plan and to say how he would erase the gap.

Brown, 74, set out an initial budget in January with $92.6 billion in spending for fiscal 2013, which begins in July. That plan stripped more than $4 billion from health and welfare programs while relying on higher income and sales taxes. The levy increases will go before voters in November. If rejected, schools will lose $4.8 billion midway through the year.

“We are still recovering from the worst recession since the 1930s,” Brown said in a YouTube video cited on his Twitter post. “Tax receipts are coming lower than expected and the federal government and the courts have blocked us from making billions of necessary budget reductions. The result is that we are now facing a $16 billion deficit.”

Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.

taxes

Who Pays Taxes? Apparently 1/2 of you don't, but isn't the super rich only 1%, so who are the 0ther 49% not paying taxes!

Chart of the Week: Nearly Half of All Americans Don’t PayIncome Taxes

Posted By Rob Bluey

February 19, 2012 @ 9:32 am  

This year’s Index of Dependence on Government ^[2] presented startling findings about the sharp increase of Americans who rely on the federal government for housing, food, income, student aid or other assistance. 

Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population. Meanwhile, most of that population receives generous federal benefits.

“One of the most worrying trends in the Index is the coinciding growth in the non-taxpaying public,” wrote Heritage authors Bill Beach and Patrick Tyrrell. “The percentage of people who do not pay federal income taxes, and who are not claimed as dependents by someone who does pay them, jumped from 14.8 percent in 1984 to 49.5 percent in 2009.”

That means 151.7 million Americans paid nothing in 2009. By comparison, 34.8 million tax filers paid no taxes in 1984.

The rapid growth of Americans who don’t pay income taxes is particularly alarming for the fate of the American form of government, Beach and Tyrrell warned. Coupled with higher spending on government programs, it is already proving to be a major fiscal challenge.

“This trend should concern everyone who supports America’s republican form of government,” Beach and Tyrrell wrote. “If the citizens’ representatives are elected by an increasing percentage of voters who pay no income tax, how long will it be before these representatives respond more to demands for yet more entitlements and subsidies from non-payers than to the pleas of taxpayers to exercise greater spending prudence?”

economy

Why entitlement is not a four-letter word

AUG 25, 2011 14:41 EDT

Reuters

Mark Miller

“It’s a beautiful thing, the destruction of words,” wrote George Orwell in 1984. And so it is with a mangled word that is central to the 2012 presidential race and the work of the Congressional deficit-cutting Super Committee: entitlement.

In the context of federal programs such as Social Security and Medicare, the word entitlement refers to a benefit you are granted by law. You are entitled to the benefit not because it is welfare, but because it is a program you have paid into over time. You can count on it because it is insurance that isn’t subject to the judgment of a case worker or the spending priorities of budgetmakers.

This original – and accurate – meaning has been under attack ever since the days of the Reagan Revolution. One of the first shots was fired by David Stockman, the Reagan Administration budget director who famously called Social Security closet socialism and a “coast-to-coast soup line.” Stockman’s comment preceded Ronald Reagan’s proposal to slash Social Security benefits in 1981, a political debacle that ultimately led to the compromise reforms of the bi-partisan Greenspan Commission in 1983.

But the word entitlement has been under sustained and successful assault ever since, with the result that most Americans now understand it as a four-letter pejorative term connoting welfare—handouts for people who don’t pull their own weight. It’s used that that way by all Republicans, many Democrats and nearly all Beltway media.

Do entitlements play a role in our national debt problem? Yes and no.

Social Security doesn’t contribute directly to the deficit. The Social Security Trust Fund (SSTF) runs an enormous surplus – and despite what you hear, the program is cash flow positive if you include interest on SSTF bonds and income taxes paid on benefits by high-income recipients. Social Security does face a long-term imbalance around the year 2035, when the SSTF will be exhausted, but that problem can be remedied easily by eliminating the cap on income subject to payroll taxes (See: Warren Buffett.)

Social Security adds pressure on the deficit only in the sense that the SSTF surplus is invested in a special form of Treasury note that is owed back to the fund. But that obligation is no different than any other Treasury debt.

Rapidly escalating healthcare costs are a major driver of the deficit, but Medicare reflects that inflation; it isn’t a direct cause of it. What’s more, Medicare delivers far more healthcare for the buck than private insurance; the notion that we can cut costs through privatization just doesn’t hold water.

When pollsters ask the public about Social Security and Medicare, the response is clear: keep both programs intact. These responses are consistent across party lines and age groups. For example, a survey by progressive pollster Celinda Lake for the National Committee to Protect Social Security and Medicare shows that Americans overwhelmingly reject the suggestion that Social Security contributes to the national deficit, or that benefits should be cut to reduce the debt.

But ask the public about entitlements, and the response is different. “Americans are less group-oriented and more individually oriented,” says Lake. “And entitlement sounds like something that is given to a group. When you describe this as an ‘earned benefit or a guaranteed benefit that you paid into,’ that sounds like something that is individualistic.”

One of the ironies here is that the architects of Social Security and Medicare took great pains to distinguish the programs from welfare. Instead, they were designed to be social insurance programs, which pool risk broadly. In the case of Social Security, you pay for protection while you’re working, so that you and your family will be protected when you can’t work.

The Orwellian destruction of entitlement exploits public ignorance of this excellent concept.

“In areas where people people are unfamiliar with a concept, the best way to reach them is through analogy,” says Drew Westen, a professor of psychology and psychiatry at Emory University and author of The Political Brain: The Role of Emotion in Deciding the Fate of the Nation.

“An analogy moves you from a domain you don’t know to a domain you do understand. If the analogy for Medicare is entitlement, that makes people think of a handout. If the analogy is insurance that you pay for with your taxes, not only are you mapping to a domain people consider completely legitimate and appropriate, but you are reminding them that their taxes are going for something that is useful to them.”

Social Security and Medicare aren’t just useful – they’re essential pillars holding up the rickety roof of retirement security. Now, both will be subject to the work of the Super Committee, which will be dominated by Republicans and so-called centrist Democrats who could very well send entitlement cuts to the full Congress for an up or down vote. On the campaign trail, Republicans unanimously declare their readiness to cut entitlements, and President Obama seems ready to go along.

But here’s the good news: Orwell’s Newspeak aimed to supplant the English language entirely by the year 2050. So, there’s still plenty of time to stop the destruction of entitlements before it’s too late.




Entitlement – something you are owed or due. A more exact definition may be: the fact of having a right to something. The ‘something’ may well be very vague and varies at a given time to place, and even in purpose.


Set the entitlement aside for a moment and consider the median income in the US – about $50,000. About half below, about half above. Entitlements are for everyone – the half above and the half below, although a sizeable percentage of the half above, have resources beyond entitlements, to assist their living situations (whether medical or daily costs). It is the percentage below that discussions center on and about, even when they do not reference the group specifically. One point in any argument on this issue would be to keep it vague and do not limit terms or understandings to any given group. It makes it more applicable and Mr. Miller handles this argument tact quite well.


I looked back at my Social Security statement. That statement is several months out of date, but the numbers will not change and the date is not material. I selected 20 years of taxes and ‘contributions’ to the entitlement programs for comparison. I was quite young, starting work very young, no college degree – much like a majority of young people today. My total contributions (my portion of the payment) to social security were $10,614.00. My total contribution to Medicare was $7,594.00.


Of course, the payroll taxes have increased since I started to work, but the general argument is not in question. If I ‘retired’ at 62, and I lived until I was 82 (and I would hope I can manage a few more than 82 years), I would receive in Social Security $111,120. Slightly more than I paid in by over one hundred thousand dollars. If I retired at 67 and lived 20 additional years, I would receive $157,680 in social security payments. More than $145,000 above and beyond what I paid in to social security. If I quit working at age 70, and lived until I was 82, I would receive $117,360.


Entitlement.


Am I entitled to more than $100,000 beyond what I paid into the system? When I am 67, I will fall down, break my arm, and fracture my wrist. Broken arm – very least $2500. Wrist – no idea, but say $1000. $3,500 total without doctor’s costs and medication. Moreover, suddenly we have spent half of what I contributed to Medicare. Am I entitled to suck out the resources after my contribution limits have been reached?


Why?


The answer is quite simple – because we have spent a lifetime contributing to the ‘system’ and the system made us a promise and … not quite.


Social Security was never intended as a forever and ever and ever program to make you feel better. The original program had a life expectancy of 50 years and would wither away at that time. Social Security was intended as a safety net, in case you fall. Not as a cover, your living costs and allows you to have satellite or all 400 cable stations.


Furthermore, the program was always a pyramid scheme. Take from the workers and give to those retiring. This works excellent when you have workers. We do not. Those who are contributing, like my personal example, are NOT contributing anything to the system ($10,000 covers nothing, and $7500 covers less) and certainly not enough to cover the majority who are retiring. I am not exact on numbers but we have 1 worker for every 1.8 retirees, and soon we will have 2 retirees and 1 worker. HOW is that going to work. Where is that entitlement coming from and what insane person would continue to argue we maintain the status quo because we paid into it and that is that.


Insolvency comes to mind: Greece, Ireland, Italy, Spain, and France … there are not enough workers to make the payments we have made all along. We do not have the workers and before you argue that, we should bring in more immigrant workers, remember they are paid about what I was paid, and contribute enough to cover a manhole cover on the street, NOT the Social Security payments for retirees.


Entitlement? Our country is entitled to the support and defense by its citizens. Not only in time of war, but in time of need – we must sacrifice in war and in times when maintaining the current level of support is untenable without bringing the entire economic house down upon us. The answer is not to tax the rich more – we have seen what the ‘rich’ do when they are taxed – the move their corporations to Mexico, India, Pakistan, Indonesia … everywhere else but this country. If we fail, we not only destroy those entitlements Mr. Miller is supportive of, we undermine the economic and ultimately the military strength of this country.


I am entitled to be protected from the wolf and I don’t care if you have a broken arm. I do not want to be eaten and that is of primary importance to me, and to society.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
entitled

The New York Times: Why Can't Republicans Just Accept We Won.

The New York Times in all its objectivity.  Republicans can't say yes.  They can't say yes to anything, or won't.  They are unable to say yes.

Except - why should they say yes to greater spending, higher taxes, greater government ... why not less spending, less government, and less taxes.  Why not.

Social Security payments will go out.  Soldiers will get paid.  Those are not realistic fears - but they are used by fearmongers who cater to your fear, not objective and fair analysis.

July 22, 2011

The New York Times

Editorial

The Party That Can’t Say Yes

For days, the White House has infuriated its Democratic allies in Congress by offering House Republicans more and more in exchange for a deal to raise the debt ceiling and prevent default. But it was never enough, and, on Friday evening, it became clear that it may never be enough. Speaker John Boehner again walked away from the “grand bargain” he had been negotiating with President Obama, leaving the country teetering on the brink of another economic collapse.

At the White House podium a few minutes later, the president radiated a righteous fury he rarely displays in public, finally placing the blame for this wholly unnecessary crisis squarely where it belongs: on Republicans who will do anything to upend his presidency and dismantle every social program they can find. “Can they say yes to anything?” he asked, noting the paradox of Republicans, who claim that financial responsibility and debt reduction are their biggest priorities, rejecting yet another deal that would have cut that debt by at least $3 trillion.

Mr. Obama, in fact, had already gone much too far in trying to make his deal palatable to House Republicans, offering to cut spending even further than the deficit plan proposed this week by the bipartisan “Gang of Six,” which includes some of the Senate’s most conservative members. The White House was willing to cut $1 trillion in domestic and defense spending and another $650 billion from Medicare, Medicaid and even Social Security.

Much of that savings would have come from raising the eligibility age for Medicare benefits and reducing the cost-of-living increases that elderly people depend on when receiving their health and pension benefits. It could have caused significant damage to some of the nation’s most vulnerable people.

The “bargain” would require that alongside these cuts, tax revenues would go up by $1.2 trillion, largely through a rewrite of the tax code to eliminate many deductions and loopholes. That’s substantially less in revenue than the $2 trillion in the “Gang of Six” plan. The problem is that while much of the cutting would start right away, most of the revenue increases would be put off, in part because a tax-code revision would take months, and in part to allow House Republicans to say they did not agree to any specific tax revenue increases.

Democratic lawmakers were rightly furious when they heard about these details this week, calling the plan wholly unbalanced. But, in the end, it was Mr. Boehner who torpedoed the talks. He said Friday evening that he and the president had come close to agreeing on $800 billion of the revenue increases (the equivalent of letting the upper-income Bush tax cuts expire as scheduled next year — not much of a heavy lift) but could not stomach another $400 billion the White House wanted to raise through ending tax loopholes and deductions.

So, on the eve of economic calamity, the Republicans killed an overly generous deal largely over a paltry $400 billion in deductions. Mr. Obama was willing to take considerable heat from his liberal critics over the deal, and the Republicans were not willing to do a thing to anger their Tea Party base. As the president forcefully said, there is no evidence that House Republicans are capable of making those tough decisions. If last-ditch talks beginning Saturday fail, they will have to take responsibility if the unimaginable — a government default — happens in 10 days and the checks stop going out.





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
liberals

Obama: Americans want tax increases (I know because I won)

Obama: Public is 'sold' on tax increases in a debt-ceiling deal



By Alicia M. Cohn
7/15/11 11:54 AM ET
The Hill



President Obama on Friday kept up the pressure on Republicans to agree to revenue increases in a deal to raise the debt ceiling, claiming 80 percent of the public supports Democrats' demand for tax increases.

"The American people are sold," he said. "The problem is members of Congress are dug in ideologically."

Obama said 80 percent of Americans are on his side in the debate over what to include in the debt package. Voters are paying attention to "who seems to be trying to get something done," the president said. "It's going to be in the interests of everybody who wants to serve in this town to make sure they are on the right side of that impression."

"I hope [Republicans are] not just listening to lobbyists and special interests ... I hope they're listening to the American people as well," Obama said, citing "poll after poll" showing Republican voters, as well as Democrats, believe in taking "a balanced approach" — including both increased revenues and spending cuts in a plan to cut the deficit.

Obama said he is still pushing for a large deal to raise the debt ceiling by the Aug. 2 deadline despite the hardening of positions on Capitol Hill.

"I always have hope," Obama said. "Don't you remember my campaign?"

The president said he is still waiting on his "Republican friends" to come up with a plan he can support.

"If they show me a serious plan, I'm ready to move," the president said.

The president dismissed the "Cut, Cap and Balance" bill to raise the debt ceiling that House Republicans plan to bring up for a vote next week. That plan would link a debt-limit increase to passage of a balanced-budget amendment.

"You'll probably see the House vote on a couple of things just to make political statements," Obama said.

"We don't need a constitutional amendment to do our jobs," he said, rejecting conservative calls for a balanced-budget amendment. "The constitution already tells us to do our jobs."

Obama didn't rule out the fall-back plan proposed by Senate Minority Leader Mitch McConnell (R-Ky.) that would give the president the power to raise the debt ceiling to avoid a national default.

"It is constructive to say that if Washington operates as usual and can't get anything done, let's at least avert Armageddon," he said. However, Obama said he wanted to address the deeper debt issues.

"I have not seen a credible plan ... that would allow you to get to $2.4 trillion without really hurting ordinary folks," he said.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
obama

Potpourri of Random Stuff

A sign things are getting bad - eagles, protected birds, and in California, the animal rights protection people, guard the safety of these birds vociferously.  Except from wind turbines - those eco-friendly things that save the world.  The eagles are being killed off, soon to go on the near extinct list.

In England - the IMF has told the government, CUT TAXES.  Amazing.  An outside entity telling a government to lower taxes (or raise them).  It 1) tells us how high they are in Britain (very), 2) how bad off Britain is financially.   Greece and Ireland took the plunge, Portugal followed, Austria is following up, Spain is about to fall over, and apparently ... England is on the horizon.

Libya - remember when it all started.  Obama told us 'days, not weeks' and weeks have turned into months and we are still there, for what reason I seriously do not know.  I supported Iraq and Afghanistan because there were serious issues in both.  Kadahfi had given up his nuclear and biological weapons to George W Bush after Bush told the world we would come and find you wherever you hid (if you had weapons of mass destruction), and Kadaffi called Bush up and asked him to come by and take his WMDs.  So why we are in Libya is truly beyond me.  It isn't that Kadaffi is a bad man, for all we need do is look at Robert Mugabe for a BAD man, and we are not invading Botswana or Congo or ...   And the cost is now hundreds of millions.

Why?

And health coverage - Firms to cut health plans as reform starts - 30% of companies say they’ll stop offering coverage. 

Brilliant.  More unemployed and more uninsured.

Bigger and bigger government health care. 



I am at a loss.


















loss

How much do things cost: Taxed on the taxes.

I went to the store today to buy a widget.  The price was $3.28.  I decided that was too much to pay and came home and looked on the internet.  I found the company that makes this widget and after several hours of scouring the reports and white papers on this widget, I learned that the cost to manufacture the item was .0475.

I was livid until I saw the company records.  They made a profit, quite a bit of profit as a matter of fact.  About 3000% profit.  But that is not the entire story.  If 3000% was not bad enough, the cost for packaging, boxing, transporting, and ancillary costs to the process is another $1.17.  Combined the entire cost from start through the sales is $2.7175.   That does not explain the other .56.   

There is a State fee on transportation, a green fee on development, a federal fee for waste, a state fee for waste disposal, a federal processing assessment (F.P.A.), a federal highway transportation fee, a federal and state packaging fee disposal assessment, and a national sales assessmnent fee.  Total, those fees and assessments equal 56 cents.

The item I held cost 4 cents and the fees were over 56 cents.

Then came the tax.  Los Angeles county tax and state tax.

(Even assuming the profit of $1.50 plus the .0475 cost and rounding that up to 5 cents, would give us $1.55 before tax, but no, the fees and assessments are more than the item.)


When it was done, the total charge was $3.84 for the item that cost .0475 to produce.













fees

New York: Population: Dwindling

You CANNOT tax people on taxes on top of taxed products and still believe in any delusional state of mind that they will stay around very long.  When they leave, you must necessrily raise more taxes to compensate for their having left (and reducing your revenue).

The answer - cut and slash.  Don't tax.




1 in 3 Young New Yorkers Want to Leave State

Those under 30 say it's too expensive


By John Johnson, Newser Staff
May 13, 2011 4:24 PM CDT



(Newser) – This can't bode well for New York state: A new poll shows that more than a third of residents under 30 want to move away within five years, notes DNAinfo. The big reasons: Jobs, taxes, and the cost of living. The percentage of wannabe bag-packers drops from 36% to 24% for those living specifically in New York City, notes the Gothamist blog. A hefty 77% of the 941 poll respondents of all ages consider the state expensive for an average family.

“New Yorkers are feeling the financial squeeze on the home front," writes Lee M. Miringoff of the Marist College Institute for Public Opinion. “Right now, many young people do not see their future in New York state. Unchecked, this threatens to drain the state of the next generation."

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
taxes

Who is paying? Apparently not everyone.

Super rich see federal taxes drop dramatically


By STEPHEN OHLEMACHER, Associated Press
Sun Apr 17, 4:02 pm ET



WASHINGTON – As millions of procrastinators scramble to meet Monday's tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all.

The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.

The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation's tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.

There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.

"It's the fact that we are using the tax code both to collect revenue, which is its primary purpose, and to deliver these spending benefits that we run into the situation where so many people are paying no taxes," said Roberton Williams, a senior fellow at the center, which generated the estimate of people who pay no income taxes.

The sheer volume of credits, deductions and exemptions has both Democrats and Republicans calling for tax laws to be overhauled. House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent. Republicans oppose raising taxes, but they argue that a more efficient tax code would increase economic activity, generating additional tax revenue.

President Barack Obama said last week he wants to do away with tax breaks to lower the rates and to reduce government borrowing. Obama's proposal would result in $1 trillion in tax increases over the next 12 years. Neither proposal included many details, putting off hard choices about which tax breaks to eliminate.

In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer, according to an analysis by the National Taxpayer Advocate, an independent watchdog within the IRS.

More than half of the nation's tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes.

Obama wants the wealthy to pay so "the amount of taxes you pay isn't determined by what kind of accountant you can afford."

Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called United for a Fair Economy. Their goal: Raise taxes on rich people like themselves.

Shoenberg, who now teaches a business class at Columbia University, said his income is usually "north of half a million a year." But 2009 was a bad year for investments, so his income dropped to a little over $200,000. His federal income tax bill was a little more than $2,000.

"I simply point out to people, `Do you think this is reasonable, that somebody in my circumstances should only be paying 1 percent of their income in tax?'" Schoenberg said.

Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said he has a solution for rich people who want to pay more in taxes: Write a check to the IRS. There's nothing stopping you.

"There's still time before the filing deadline for them to give Uncle Sam some more money," Hatch said.

Schoenberg said Hatch's suggestion misses the point.

"This voluntary idea clearly represents a mindset that basically pretends there's no such things as collective goods that we produce," Schoenberg said. "Are you going to let people volunteer to build the road system? Are you going to let them volunteer to pay for education?"

The law is packed with tax breaks that help narrow special interests. But many of the biggest tax breaks benefit millions of American families at just about every income level, making them difficult for politicians to touch.

The vast majority of those who escape federal income taxes have low and medium incomes, and most of them pay other taxes, including Social Security and Medicare taxes, property taxes and retail sales taxes.

The share of people paying no federal income tax has dropped slightly the past two years. It was 47 percent for 2009. The main difference for 2010 was the expiration of a tax break that exempted the first $2,400 of unemployment benefits from taxation, Williams said.

In 2009, nearly 35 million taxpayers got a tax break for paying interest on their home mortgages, and nearly 36 million taxpayers took the $1,000-per-child tax credit. About 41 million households reduced their federal income taxes by deducting state and local income and sales taxes from their taxable income.

About 36 million families cut their taxes by nearly $35 billion by deducting charitable donations, and 28 million taxpayers saved a total of $24 billion because their income from Social Security and railroad pensions was untaxed.

"As a matter of policy, there would be a lot of ways to save money and actually make these things work better," said Leonard Burman, a public affairs professor at Syracuse University. "As a matter of politics, it's really, really difficult."





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
tax

Vermont: One of those oddities

Many people, wherever they might be in this country, think of buts and fruits when they think of California - and perhaps rightly so.  We do have the oddest sorts of people here - but then our weather tends to be better than at least 47 other states, who may in fact be jealous when they make the 'nuts and fruits' comments.

Vermont however is an odd state.  Maybe not as odd as California, but close.

They have a governor who after a couple months on the job, and during a very bad snowstorm disappeared - his press person said she didn't know where he was, then said she did but would not reveal that information - it was top secret.  When pressed, repeatedly - she refused.

The people of Vermont hired the guy (2 months ago) to do a job.  He is being paid to do that job.  He has state security with him wherever he is in his secret place  (every governor has state police protection).  And yet, when questioned, his office refuses to provide details - not even whether he is in the US, in Vermont, or where.  He has disappeared.  Perhaps like another governor from further south.  And the fact he was sending emails back and forth doesn't mean he is not off hiking the Appalachian trail.



Vermont’s political observers have been all atwitter this week, wondering, “Where in the world is Gov. Peter Shumlin?”



After two months on the job, the state’s chief executive decided to take “a few” days off at an undisclosed location. In Shumlin speak, “a few” is six. He left Thursday morning and was scheduled to return Tuesday night.


News of Shumlin’s vacation was reported by WCAX-TV news director Anson Tebbetts. Shumlin spokeswoman Bianca Slota, a former WCAX reporter, at first told Tebbetts she didn’t know where Shumlin was.


Slota later told the media she did, in fact, know where Shumlin was holed up, getting a well-deserved rest after two grueling months on the job. But she wasn’t going to tell in an effort to honor his “privacy.”


She also wouldn’t divulge if he had his taxpayer-funded, around-the-clock state security detail in tow. That, too, is secret.


No word if Shumlin is in Cancun, the Dominican Republic, Rio, or New Orleans, or at his stone cottage on Cape Breton in Nova Scotia.


But top aides say he was in regular contact by phone and email with Republican Lt. Gov. Phil Scott, who was acting governor, as well as Commisioner of Public Safety Keith Flynn. In other words, he wasn’t off hiking the Appalachian Trail or something.


Slota said her boss was in cellphone range, but wouldn’t divulge if their communications would result in international charges.


Mysterious. Inquiring minds extended beyond the Vermont media. Even the New York Times wanted to know where the gov was lounging. No dice.


Shumlin’s senior spokeswoman, Susan Allen, refused to tell the Times if Shumlin was simply “out of state” or was actually “out of country.”


Why not? “Privacy reasons,” she noted.


Since when are the governor’s vacation spots considered top secret? It hasn’t been the case with prior governors — or, heck, even the president of the United States.



It’s not like we’re jealous (OK, maybe a little, if he’s on a sandy beach) or begrudge him time off (no doubt someone will object).


But it’s an odd statement from a guy who has been talking up trust and transparency.


Pressed to reveal Shumlin’s locale, Allen told “Fair Game,” “I believe Vermonters respect the governor’s right to privacy.”



He was hired by the people to do one job ... not to go off and be doing ... unknown stuff.  He is an employee of the people and as such he does not have the freedom to do whatever it is he wants to do whenever he wants to do it - snowstorm or not.

And people from within the progressive (read:  left of left) movement understand this, although they apply it selectively ....



There is this guy in Vermont - Republican Auditor Tom Salmon who is setting up an exploratory Senate campaign to possibly challenge leftist / socialist Bernie Sanders.  Just setting up the committee to think about running.  The response was quick ...


Progressive Party chairwoman Martha Abbott was first to pounce.



“Vermont taxpayers should not be forced to pay the salary of a guy who has announced that he will be spending his time doing something other than the job we are paying him to do,” said Abbott, who ran for auditor in 2006 and 2008.


Soon thereafter, Democratic Party chairwoman Judy Bevans joined her Progressive sister in calling out Salmon’s fishy behavior.


“It’s clear that Tom Salmon is only interested in serving one Vermonter — Tom Salmon. As auditor, his only accomplishment has been his ability to stay in the news while accomplishing remarkably little. From his publicity-stunt party switch to his erratic behavior in the press, and now this, Tom Salmon may think he was elected to improve his own political standing — but the people of Vermont elected him to serve for four years,” said Bevans.

So, the Governor, elected by the people to do his job, and employed by the people - refuses to tell his employers where he is, even the slightest indication of where he is ( he could be in Tanzania emailing his administration) and that is perfectly cool with these winning progressives.  However, some Republican candidate wants to set up a committee to explore a possible campaign against Bernie Saunders - THAT is not ok.  Uh huh. 

Why is it so wrong?  Where is the backbone in people from Vermont.  It is THE most taxed state in the United States and they are not upset, keep re-electing the same 'progressives' who want higher taxes.

Odd.








  
 
 
 
 
 
 
 
 
leftiosts

Tax Payers

Who exactly is it that pays the taxes and who doesn't?


With the Bush tax cuts in full swing - you know, the ones that only helped the rich..

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
taxces

Taxes

The top 5 tax states

Taking state tax and an average of local tax for a combined total of:


#1 - Tennessee -  9.44%

#2 - California - 9.08%


#3 - Arizona - 9.01%


#4 - Louisiana - 8.69%

#5 - Washington - 8.65%



So we are not the highest, but far from average.

On the other end, Oregon, Delaware, New Hampshire, and Montana all have 0% tax.
Alaska has a 1.1% tax.


Source: Tax Foundation












taxes

OBAMA and HIS Spending Habit

FACT CHECK: Obama and his imbalanced ledger



FACT CHECK: A tricky juggling act as Obama urges more spending and a freeze on spending


Calvin Woodward, Associated Press
Tuesday January 25, 2011, 10:24 pm EST



WASHINGTON (AP) -- The ledger did not appear to be adding up Tuesday night when President Barack Obama urged more spending on one hand and a spending freeze on the other.

Obama spoke ambitiously of putting money into roads, research, education, efficient cars, high-speed rail and other initiatives in his State of the Union speech. He pointed to the transportation and construction projects of the last two years and proposed "we redouble these efforts." He coupled this with a call to "freeze annual domestic spending for the next five years."

But Obama offered far more examples of where he would spend than where he would cut, and some of the areas he identified for savings are not certain to yield much if anything.

For example, he said he wants to eliminate "billions in taxpayer dollars we currently give to oil companies." Yet he made a similar proposal last year that went nowhere. He sought $36.5 billion in tax increases on oil and gas companies over the next decade, but Congress largely ignored the request, even though Democrats were then in charge of both houses of Congress.

A look at some of Obama's statements Tuesday night and how they compare with the facts:

OBAMA: Tackling the deficit "means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit."

THE FACTS: The idea that Obama's health care law saves money for the government is based on some arguable assumptions.

To be sure, the nonpartisan Congressional Budget Office has estimated the law will slightly reduce red ink over 10 years. But the office's analysis assumes that steep cuts in Medicare spending, as called for in the law, will actually take place. Others in the government have concluded it is unrealistic to expect such savings from Medicare.

In recent years, for example, Congress has repeatedly overridden a law that would save the treasury billions by cutting deeply into Medicare pay for doctors. Just last month, the government once again put off the scheduled cuts for another year, at a cost of $19 billion. That money is being taken out of the health care overhaul. Congress has shown itself sensitive to pressure from seniors and their doctors, and there's little reason to think that will change.


OBAMA: Vowed to veto any bills sent to him that include "earmarks," pet spending provisions pushed by individual lawmakers. "Both parties in Congress should know this: If a bill comes to my desk with earmarks inside, I will veto it."

[Great, but where have you been for the last couple years.  Why promise to veto now?  Why didn't you then??]



THE FACTS: House Speaker John Boehner, R-Ohio, has promised that no bill with earmarks will be sent to Obama in the first place. Republicans have taken the lead in battling earmarks while Obama signed plenty of earmark-laden spending bills when Democrats controlled both houses.

It's a turnabout for the president; in early 2009, Obama sounded like an apologist for the practice: "Done right, earmarks have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts, and that's why I've opposed their outright elimination," he said then.




OBAMA: "I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits."

[So an idea Democrats have ignored and quite honesatly ignored - he is NOW ready to consider.  Why now, if it is good enough to look at now, wasn't it worth considering it two years ago?]

THE FACTS: Republicans may be forgiven if this offer makes them feel like Charlie Brown running up to kick the football, only to have it pulled away, again.

Obama has expressed openness before to this prominent Republican proposal, but it has not come to much. It was one of several GOP ideas that were dropped or diminished in the health care law after Obama endorsed them in a televised bipartisan meeting at the height of the debate.

Republicans want federal action to limit jury awards in medical malpractice cases; what Obama appears to be offering, by supporting state efforts, falls short of that. The president has said he agrees that fear of being sued leads to unnecessary tests and procedures that drive up health care costs. So far the administration has only wanted to pay for pilot programs and studies.

Trial lawyers, major political donors to Democratic candidates, are strongly opposed to caps on jury awards. But the administration has been reluctant to support other approaches, such as the creation of specialized courts where expert judges, not juries, would decide malpractice cases.



OBAMA: Praised the "important progress" made by the bipartisan fiscal commission he created last year.

[That commission decided nothing, achieved nothing, and considering the composition - was not as equally balanced as he suggests.  It is easy to agree to milk toast - we need to cut spending.  What braniac doesn't recognize that imperative - cut spending.  His touting the bipartisanship of this committee is like celebrating the fact your child just graduated from pre-school - and suggesting to anyone and everyone that one graduation (pre-school) indicates you child is well on his/her way to graduating from Harvard.]


THE FACTS: The panel's co-chairmen last month recommended a painful mix of spending cuts and tax increases, each of them unpopular with one constituency or another, including raising the Social Security retirement age, cutting future benefit increases, raising the gasoline tax and rolling back popular tax breaks like the mortgage interest deduction. But Obama has yet to sign on to any of the ideas, even though he promised when creating the panel that it would not be "one of those Washington gimmicks."

Obama missed another chance Tuesday night to embrace the tough medicine proposed by the commission for bringing down the deficit. For example, the president said he wanted to "strengthen Social Security for future generations" -- but ruled out slashing benefits or partially privatizing the program, and made no reference to raising the retirement age. That left listeners to guess how he plans to do anything to salvage the popular retirement program whose trust funds are expected to run out of money in 2037 without changes.


OBAMA: As testament to the fruits of his administration's diplomatic efforts to control the spread of nuclear weapons, he said the Iranian government "faces tougher and tighter sanctions than ever before."

THE FACTS: That is true, and it reflects Obama's promise one year ago that Iran would face "growing consequences" if it failed to heed international demands to constrain its nuclear program. But what Obama didn't say was that U.S. diplomacy has failed to persuade Tehran to negotiate over U.N. demands that it take steps to prove it is not on the path toward a bomb. Preliminary talks with Iran earlier this month broke off after the Iranians demanded U.S. sanctions be lifted.


[And the AP story is not a right wing hatchet job.  I would NOT consider the AP right-wing, by any stretch.]




















obama admin

Obama Vacaton Time (again)

Obama may delay Hawaiian vacation over tax fight

By Ed Henry, CNN Senior White House Correspondent
December 1, 2010 5:25 a.m. EST




Washington (CNN) -- President Barack Obama is considering at least a short delay to the start of his holiday vacation in Hawaii so he can try to work out a deal with congressional Republicans on the Bush tax cuts that expire December 31, CNN has learned.

Two senior administration officials tell CNN the White House has been getting signals that the lame duck session of Congress could drag on past December 18, when the president is scheduled to depart for Hawaii.

Obama has privately said he is willing to stay in Washington until Christmas Eve if necessary to finish the contentious debate over taxes, the officials said.

While administration officials do not expect that Obama will have to stay in town until Christmas Eve, which he did last year because of health care reform, they believe there could be a delay of at least a couple of days.

The reason is that Democrats and Republicans have made little progress in the tax debate so far, and White House aides went into Tuesday's long-awaited "Slurpee Summit" believing that both parties will need a lot more negotiating time beyond this one meeting to come up with a compromise.

'Slurpee Summit' lands on RidicuList Senior Republican aides scoffed at the idea that a tax cut deal could not be worked out before December 17, suggesting that perhaps the White House talk of a vacation delay may just be a negotiating ploy to push Republicans into a quick compromise since they have vacations waiting for them as well.

"There is absolutely no need for that," a senior Republican aide said of a possible delay of an end to the lame-duck session. "Once they make a decision, it's done in a couple days. I hope it doesn't take the Democrats until Christmas to make up their minds."

At issue is whether the current tax rates should be extended just for families earning $250,000 or under per year, or should be extended to include Americans with income above $250,000 a year.

In the midterm election, Republicans hammered the message that failing to extend the Bush tax rates for wealthy Americans would hamper the already-slow economic recovery. Obama staked out the position that only the middle class tax rates should be extended because extending tax cuts will result in a huge drain on the federal treasury.

"The last thing we can afford to do right now is raise taxes on middle-class families," Obama said at an event in Kokomo, Indiana, on November 23. "If we allow these taxes to go up, the result would be that a lot of people most likely would spend less, and that means that the economy would grow less. So we ought to resolve this issue in the next couple of weeks so you've got the assurance that your taxes won't go up when that clock strikes midnight."

The president and his aides have also signaled since the election that he might be open to a compromise on a one-year or two-year extension on the tax rates for the wealthy if the tax rates for the middle class were permanently extended.

But in remarks on the Senate floor before Tuesday's summit meeting at the White House, Senate Minority Leader Mitch McConnell took a hard line in suggesting that his party will accept only extending all of the tax rates, including those for the highest-paid Americans, without caveats.

"We've heard a lot of chatter here in Washington lately about the negotiations that are expected to take place on this looming tax hike in the weeks ahead -- on how to prevent it," McConnell said. "How about we start with this: the beginning and end of any negotiations shouldn't be what's good for any political party. It should be what's good for the economy and for the American people. And if we leave the politics aside, if we look at the facts, the answer here is simple: no tax hikes on anybody -- period."

Last year, Obama and his family remained in Washington until the Senate finally passed health care reform legislation on Christmas Eve. They left for Obama's home state of Hawaii a few hours later.

The president, first lady Michelle Obama and their two daughters are again planning to go to Hawaii for a vacation that will last until the beginning of January.





 
 
 
 
 
 
 
 
 
obama

UN: Taxes to Save the Climate

What a nightmare.

More taxes including public funds - they want more and more to 'fight climate change'.  No more global warming - now it is whatever it might be outside today - cold, hot, dry, wet. 

To fight what the earth is creating?  My what an exaggerated sense of self.  Perhaps a better use would be to aid those who would be impacted, and move on.




UN panel: New taxes needed for a climate fund




By ARTHUR MAX, Associated Press Writer
Thu Aug 5, 2010




.BONN, Germany – Carbon taxes, add-ons to international air fares and a levy on cross-border money movements are among ways being considered by a panel of the world's leading economists to raise a staggering $100 billion a year to fight climate change.

British economist Nicholas Stern told international climate negotiators Thursday that government regulation and public money also will be needed to create incentives for private investment in industries that emit fewer greenhouse gases.

In short, a new industrial revolution is needed to move the world away from fossil fuels to low carbon growth, he said.

"It will be extremely exciting, dynamic and productive," said Stern, one of 18 experts in public finance on an advisory panel appointed by U.N. Secretary-General Ban Ki-moon.

A climate summit held in Copenhagen in December was determined to mobilize $100 billion a year by 2020 to help poor countries adapt to climate change and reduce emissions of carbon dioxide trapping the sun's heat. But the 120 world leaders who met in the Danish capital offered no ideas on how to raise that sum — $1 trillion every decade — prompting Ban to appoint his high-level advisory group.

The Copenhagen summit also resolved to mobilize a three-year emergency fund of $30 billion starting this year. It was unclear how much has been raised and disbursed so far.

The advisory panel, which began working in March, will present its final report to Ban in October, a month before the next decisive climate conference convenes in Cancun, Mexico.

It will analyze a range of options, Stern said, and governments must decide which to chose, how much to raise from each source, and how to distribute the money.

Potential revenue sources include auctioning the right to pollute, taxes on carbon production, an international travel tax, and a tax on international financial transactions, as well as government grants and loans. Each could produce tens of billions of dollars a year, Stern said.

"No one single source will deliver $100 billion by itself. There is no silver bullet, no hole in one," he said.

Private capital also will be crucial, and governments must adopt policies reducing the risk to investors, he said.

The panel's recommendations will weigh the practicality, reliability, and political acceptability of each method, he said.

The advisory panel is chaired by the prime ministers of Norway and Ethiopia and the president of Guyana. Its members include French Finance Minister Christine Lagarde, White House economic adviser Lawrence Summers, billionaire financier George Soros and public planners from China, India, Singapore and several international banks.

The governments of 194 countries are negotiating an agreement to succeed the 1997 Kyoto Protocol, which called on industrial nations to reduce carbon emissions by an average 5 percent below 1990 levels by 2012. Unlike Kyoto, the next deal would set emission goals for developing countries, especially rapidly growing economies like China and India, in exchange for help with financing and technology.

The negotiating session in Bonn ends Friday, and delegates will meet once more in China before the Cancun ministerial conference.

 
 
 
 
 
 
 
 
 
 
 
 
 
taxes

The Tax Tsunami

A tsunami is about to hit this country with a wallop we have never felt before.  I was thinking we should probably get a telethon going to raise funds to help us pay our new taxes. 





The Tax Tsunami On The Horizon




07/21/2010
Investors.com


Fiscal Policy: Many voters are looking forward to 2011, hoping a new Congress will put the country back on the right track. But unless something's done soon, the new year will also come with a raft of tax hikes — including a return of the death tax — that will be real killers.

Through the end of this year, the federal estate tax rate is zero — thanks to the package of broad-based tax cuts that President Bush pushed through to get the economy going earlier in the decade.

But as of midnight Dec. 31, the death tax returns — at a rate of 55% on estates of $1 million or more. The effect this will have on hospital life-support systems is already a matter of conjecture.

Resurrection of the death tax, however, isn't the only tax problem that will be ushered in Jan. 1. Many other cuts from the Bush administration are set to disappear and a new set of taxes will materialize. And it's not just the rich who will pay.

The lowest bracket for the personal income tax, for instance, moves up 50% — to 15% from 10%. The next lowest bracket — 25% — will rise to 28%, and the old 28% bracket will be 31%. At the higher end, the 33% bracket is pushed to 36% and the 35% bracket becomes 39.6%.

But the damage doesn't stop there.

The marriage penalty also makes a comeback, and the capital gains tax will jump 33% — to 20% from 15%. The tax on dividends will go all the way from 15% to 39.6% — a 164% increase.

Both the cap-gains and dividend taxes will go up further in 2013 as the health care reform adds a 3.8% Medicare levy for individuals making more than $200,000 a year and joint filers making more than $250,000. Other tax hikes include: halving the child tax credit to $500 from $1,000 and fixing the standard deduction for couples at the same level as it is for single filers.

Letting the Bush cuts expire will cost taxpayers $115 billion next year alone, according to the Congressional Budget Office, and $2.6 trillion through 2020.

But even more tax headaches lie ahead. This "second wave" of hikes, as Americans for Tax Reform puts it, are designed to pay for ObamaCare and include:

The Medicine Cabinet Tax. Americans, says ATR, "will no longer be able to use health savings account, flexible spending account, or health reimbursement pretax dollars to purchase nonprescription, over-the-counter medicines (except insulin)."

The HSA Withdrawal Tax Hike. "This provision of ObamaCare," according to ATR, "increases the additional tax on nonmedical early withdrawals from an HSA from 10% to 20%, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10%."

Brand Name Drug Tax. Makers and importers of brand-name drugs will be liable for a tax of $2.5 billion in 2011. The tax goes to $3 billion a year from 2012 to 2016, then $3.5 billion in 2017 and $4.2 billion in 2018. Beginning in 2019 it falls to $2.8 billion and stays there. And who pays the new drug tax? Patients, in the form of higher prices.

Economic Substance Doctrine. ATR reports that "The IRS is now empowered to disallow perfectly legal tax deductions and maneuvers merely because it judges that the deduction or action lacks 'economic substance.'"

A third and final (for now) wave, says ATR, consists of the alternative minimum tax's widening net, tax hikes on employers and the loss of deductions for tuition:

• The Tax Policy Center, no right-wing group, says that the failure to index the AMT will subject 28.5 million families to the tax when they file next year, up from 4 million this year.

• "Small businesses can normally expense (rather than slowly deduct, or 'depreciate') equipment purchases up to $250,000," says ATR. "This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be 'depreciated.'"

• According to ATR, there are "literally scores of tax hikes on business that will take place," plus the loss of some tax credits. The research and experimentation tax credit will be the biggest loss, "but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs."

• The deduction for tuition and fees will no longer be available and there will be limits placed on education tax credits. Teachers won't be able to deduct their classroom expenses and employer-provided educational aid will be restricted. Thousands of families will no longer be allowed to deduct student loan interest.

Then there's the tax on Americans who decline to buy health care insurance (the tax the administration initially said wasn't a tax but now argues in court that it is) plus a 3.8% Medicare tax beginning in 2013 on profits made in real estate transactions by wealthier Americans.

Not all Americans may fully realize what's in store come Jan. 1. But they should have a pretty good idea by the mid-term elections, and members of Congress might take note of our latest IBD/TIPP Poll (summarized above).

Fifty-one percent of respondents favored making the Bush cuts permanent vs. 28% who didn't. Republicans were more than 4 to 1 and Independents more than 2 to 1 in favor. Only Democrats were opposed, but only by 40%-38%.

The cuts also proved popular among all income groups — despite the Democrats' oft-heard assertion that Bush merely provided "tax breaks for the wealthy." Fact is, Bush cut taxes for everyone who paid them, and the cuts helped the nation recover from a recession and the worst stock-market crash since 1929.

Maybe, just maybe, Americans remember that — and will not forget come Nov. 2.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
taxes

NY Times: It is a TAX INCREASE after all - WH has admitted.

We were all warned that it involved tax increasaes.  We were told it would raise taxes, and taking would be necessary for the government to run this program, but Obama lied and told us otherwise - many fell for his lies and as a result 4-5 Congressman made the wrong choice.




Changing Stance, Administration Now Defends Insurance Mandate as a Tax

By ROBERT PEAR
The New York Times
July 16, 2010






WASHINGTON — When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

While Congress was working on the health care legislation, Mr. Obama refused to accept the argument that a mandate to buy insurance, enforced by financial penalties, was equivalent to a tax.

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”

When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.”

Congress anticipated a constitutional challenge to the individual mandate. Accordingly, the law includes 10 detailed findings meant to show that the mandate regulates commercial activity important to the nation’s economy. Nowhere does Congress cite its taxing power as a source of authority.

Under the Constitution, Congress can exercise its taxing power to provide for the “general welfare.” It is for Congress, not courts, to decide which taxes are “conducive to the general welfare,” the Supreme Court said 73 years ago in upholding the Social Security Act.

Dan Pfeiffer, the White House communications director, described the tax power as an alternative source of authority.

“The Commerce Clause supplies sufficient authority for the shared-responsibility requirements in the new health reform law,” Mr. Pfeiffer said. “To the extent that there is any question of additional authority — and we don’t believe there is — it would be available through the General Welfare Clause.”

The law describes the levy on the uninsured as a “penalty” rather than a tax. The Justice Department brushes aside the distinction, saying “the statutory label” does not matter. The constitutionality of a tax law depends on “its practical operation,” not the precise form of words used to describe it, the department says, citing a long line of Supreme Court cases.

Moreover, the department says the penalty is a tax because it will raise substantial revenue: $4 billion a year by 2017, according to the Congressional Budget Office.

In addition, the department notes, the penalty is imposed and collected under the Internal Revenue Code, and people must report it on their tax returns “as an addition to income tax liability.”

Because the penalty is a tax, the department says, no one can challenge it in court before paying it and seeking a refund.

Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement.

Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”

Mr. Balkin and other law professors pressed that argument in a friend-of-the-court brief filed in one of the pending cases.

Opponents contend that the “minimum coverage provision” is unconstitutional because it exceeds Congress’s power to regulate commerce.

“This is the first time that Congress has ever ordered Americans to use their own money to purchase a particular good or service,” said Senator Orrin G. Hatch, Republican of Utah.

In their lawsuit, Florida and other states say: “Congress is attempting to regulate and penalize Americans for choosing not to engage in economic activity. If Congress can do this much, there will be virtually no sphere of private decision-making beyond the reach of federal power.”

In reply, the administration and its allies say that a person who goes without insurance is simply choosing to pay for health care out of pocket at a later date. In the aggregate, they say, these decisions have a substantial effect on the interstate market for health care and health insurance.

In its legal briefs, the Obama administration points to a famous New Deal case, Wickard v. Filburn, in which the Supreme Court upheld a penalty imposed on an Ohio farmer who had grown a small amount of wheat, in excess of his production quota, purely for his own use.

The wheat grown by Roscoe Filburn “may be trivial by itself,” the court said, but when combined with the output of other small farmers, it significantly affected interstate commerce and could therefore be regulated by the government as part of a broad scheme regulating interstate commerce.







 
 
 
 
 
 
 
taxes