Daily Archives: 24 April 2013

“I Do Think at a Certain Point You’ve Taxed Enough Money”

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John Cochrane, University of Chicago Booth School of Business Professor of Finance (among other positions), writing in a Wall Street Journal op-ed, proposed an Alternative Maximum Tax.  He was on the right track, but he didn’t go far enough.

Here is a partial list of Federal taxes and tax-related limits on our weal which we currently pay:

  • Income tax, to tune of $1.2 trillion as recently as 2007
  • Cap on tax deferred savings: no more than $6,000 (in 2013) on Roth and Traditional IRAs, including catchup contributions if you’re a geezer; no more than $23,000 (in 2013) for 401(k)s, including catchup contributions
  • Tax on dividend income—this money is taxed twice: once at the corporate level where this profit sharing is not allowed to be deducted from corporate income and once at the individual level where the money is taxed as high as 20% in 2013
  • estate tax, as much as 40% on amounts over $5.25 million
  • payroll tax, 7.65% of every paycheck, and both employer and employee pay this—a total of 15.3%
  • Federal communications taxes
    • Federal excise tax of 3%
    • Federal Universal Service Cost Recovery tax of 15.5% of net interstate and international long distance tolls
  • Federal personal transportation taxes
    • gasoline tax, 18.4¢/gallon
    • diesel tax, 24.4¢/gallon
  • Obamacare taxes
    • 0.9% additional payroll tax for Medicare, paid by employees of a certain wage
    • 2.3% tax on top line revenue on medical equipment manufacturers
    • medical expense personal income tax deduction only after expenses reach 10% of income
    • surtax on investment income raises the top dividend income tax to 43.4% and the top capital gains tax rate to 23.8%
  • Obamacare Individual Mandate—by order of the Court, this is a tax: both the premium paid for buying the government-approved policy and the…tax…for not buying health insurance

I do think at a certain point, we’ve been taxed enough.

Instead of an alternative max tax, it’s time simply to eliminate a bunch of taxes and lower the rates on the others.  A straight flat tax, with no deductions, no credits, no nothing would be good.  No redistributionist, no social engineering, froo-froo of any sort.

Be Careful what you Wish For

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As the Wall Street Journal notes,

Video cameras played a critical role in helping authorities track suspects in this week’s Boston bombings.  Now calls for increased camera surveillance in the US are putting a spotlight on the technology and the debate about its use.

New York Mayor Michael Bloomberg bragged about that city’s surveillance system.  It can

alert police to abnormalities it detects on the street, such as an abandoned package that is left on a corner.

Charles Ramsey, Philadelphia Police Commissioner, said on Fox News Sunday:

It gives you that historical record.

But such a ubiquitous government-run surveillance system also can alert government to abnormalities of which it disapproves—like individual citizens taking part in “right-wing extremist” peaceful rallies and meetings.  And there’s that government record on us private citizens thing, again.

In the present case, though, the matter of the Boston Marathon bombing, whose cameras were they?  The government’s cameras were involved in the data collection and subsequent hunt, certainly.  However, so were thousands of privately owned still and video cameras—all those smart phone cameras in the hands of Marathon fans and other ordinary citizens just out taking care of their own business in the area.

It was private citizens’ imagery and private citizens’ eye witness reports (one injured witness: “he looked right at me” and the boat owner’s sighting and 911 call) that generated the imagery, descriptions, and location data that so thoroughly supported the hunt, the tracking, and the capture.

Does government, today, really need such a widespread surveillance system?  No doubt the government’s surveillance cameras were highly useful, too, in this incident.  A tool for keeping track of the citizenry that’s in government hands, though, is subject to misuse, even if the tracking is for the best of reasons, as our government might assure us.  A tool for tracking one’s neighbors—or strangers—in private hands is subject to misuse, also, certainly.

Think, though, about which misuse is capable of the greater damage.

Think, also, about the extant government abuse of its surveillance capability.  Already, for instance, the present administration (and both national political parties) are scraping social media for personally identifying data for government (and party) purposes.  The IRS already is asserting its authority to read, without a court’s order, private email as part of its investigations (while denying it actually does so).  Do we need government actively tracking us private citizens?

Hmm….