Tag Archives: taxes

Hype that Deadline

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Even The Wall Street Journal is in on the artificial…excitement…act. Congress has just a few days to pass a bill before June 5 deadline goes the subheadline.

It’s not much of a deadline, with revenue flowing in under existing tax laws that’s more than sufficient to pay as scheduled the principal and interest on our nation’s debt, and then the scheduled payments for our soldiers and veterans, and then the scheduled payments for Social Security and Medicare along with the scheduled transfers to the States for Medicaid, and then the scheduled payments for HHS, then DoT (for good or ill), then DoEd (for good or ill), then….

You get the idea.

There are only a couple of things of note should a debt ceiling deal not be enacted by 5 June (or whatever becomes Yellen’s deadline du jour). One is that much of the Federal government would have to shut down. That amounts to a big so what.

The other is that a number of Federal government contracts with private businesses would have their payments HIAed, to the detriment of those businesses. The failure to pay on time also would strongly negatively affect our economy and to a large extent our reputation around the world.

That last is a consideration worth taking very seriously, but not at the expense of enacting a debt ceiling deal, any deal. Republicans and Conservatives in the House need to stand firm. The present deal isn’t all that, but, to coin a phrase, think of the (Progressive-Democratic Party’s) alternative.

The deal also shouldn’t be stand-alone.

Some conservatives in the House and Senate have said they would oppose the deal because it doesn’t go far enough to limit federal spending….

One way to show they’re serious about that is via the as yet undeveloped Federal budget for the next fiscal year. Beginning Thursday (assuming today’s vote is up rather than down), the House—which is to say, the Republican caucus, since they’ll get no cooperation from the Never-and-Nothing-Republican Progressive-Democratic Party caucus—needs to begin work on that next Federal budget, a budget that codifies reduced Federal spending, reduced Federal tax rates, and reformed Social Security, Medicare, and Medicaid transfer payments, and have that budget passed and ready to send to the Senate the day after that body votes on the debt ceiling bill.

And then the House—the Republican caucus—needs to get to work on the dozen separate appropriations bills that are due by this fall.

There’s no need to wait on a President’s budget proposal (what President Joe Biden (D) tossed over the House’s transom this winter is not one that can be taken seriously) or to put up with Progressive-Democrat obstructionism and knee-jerk “No.”

Press ahead.

A Tax Picture

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This is for the benefit of those who demand the Evil Rich “pay their fair share.” The rest of us—us ordinary Americans—already know the facts of the matter.

As noted at the bottom of the graph, the data are from the Congressional Joint Committee on Taxation, which is comprised of nonpartisan tax specialists. WSJ staff did the analysis.

Those Evil Rich, boy, they’re only paying 39% of the total income taxes remitted, nearly two-and-a-half times their proportion of income earned across the nation, while the working poor are paying a whopping 6%, or just under a third of their proportion of income earned.

No wonder no Progressive-Democratic Party politician, or anyone on the Left, is willing to say what “fair share” is.

Taxing the Middle Class and Poor

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Arizona’s Progressive-Democrat Governor Katie Hobbs has vetoed a bill that would have barred cities and municipalities from taxing food purchases. Hobbs’ rationalization went like this:

The bill, originally unveiled as a way to mitigate inflation, does not take effect for more than two years. What’s more, it does nothing for the more than 800,000 Arizonans who use SNAP and WIC benefits for their groceries, as these constituents are already exempt from the tax.

Hobbs’ first beef might seem like a reasonable objection, and one easily corrected. However, it’s reasonable, also, to give those cities and municipalities whose budgets currently use those food taxes time to adjust their budgets.

Hobbs’ second beef, though, is just…silly. It wholly ignores those who aren’t on food stamps, the upper reaches of Arizona’s second income quintile, the third quintile, and into the fourth—the rest of the poor, and the middle class. And those Arizonans who are Evilly Rich and have more money than the Progressive-Democrats think they should have.

Just—pay up, suckers.

Debt Limits and Spending

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The Congressional Budget Office is out with its projection for our nation’s economic future.

As for the much-discussed federal debt, the nearby chart shows how fast it has grown in the last several years. Debt held by the public—the kind we have to pay back to creditors like the Chinese and Japanese based on contracts—is now 97% of the economy, and will soon rise to 100% and keep going to 118.2% in 2033. How high can it go before creditors stop lending? No one knows, but it will be ugly if they do.

Here is that nearby chart:

This illustrates the tight relationship between spending and debt limits, and why future spending cuts must be part of negotiations related to raising today’s debt ceiling limit. It’s barely possible to see any effect from the 2011 debt limit increase that was agreed in exchange for some “freezing” of Federal spending levels, a pseudo-freeze that in the end ended rather quickly.

There need to be real reductions in Federal spending, not just a reduction in spending growth or even a pretend freeze. There’s plenty of room in welfare spending, for instance, for cutting. Furthermore, all Federal spending is discretionary, the bad habit of calling some spending mandatory notwithstanding. Finally, to put a legitimate floor under spending (which doesn’t contradict the forgoing because it’s a floor not a mandatedly ever-increasing level), there’s a Constitutional requirement to spend adequately on national defense and debt repayment.

In the end, too, tax rate cuts, leaving more money in the hands of private economy actors—us average Americans and our businesses—leads to increases in Federal revenues. This has been empirically demonstrated by every tax rate cut since President John Fitzgerald Kennedy’s reduction of the top rate from the neighborhood of 90% to the region of 70%.

Federal spending cuts coupled with Federal tax rate cuts—they’re win-win for our economy and our nation, if only the Progressive-Democratic Party politicians in Congress and the White House would get out of the way.

Lies of a Progressive-Democrat President

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President Joe Biden (D) has long claimed that his tax-raising plan and his IRS would not target anyone making less than $400,000 per year. He repeated that claim in his State of the Union speech last Tuesday.

Under my plan, nobody earning less than $400,000 a year will pay an additional penny in taxes.

Never mind. His IRS’ latest proposed rule:

The proposed SITCA [Service Industry Tip Compliance Agreement] program is designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance.

Not even that vaunted and highly successful barkeep, Alexandria Ocasio-Cortez, pulled down 400 stacks in a year when she was working saloons in New York City.

The IRS claims the program is “voluntary,” but watch what happens to the hapless waitress or waiter, or any other low-wage person for whom tips are a significant fraction of his income, who doesn’t report his tips in a manner that suits the revenooers.

Biden has lied again.

Separately, I’ll no longer include my tip on the charge card receipt that’s increasingly often offered to patrons as a “convenient” way to tip wait staff on their presentment of my bill. Instead, I’ll return to an earlier practice of leaving my tip on the table as cash. The busboy is more trustworthy than this President and his IRS. That’s an appallingly low bar for the busboy, but I do not mean the comparison as faint praise for him. Far from it. I may go a step farther, and pay the whole bill with cash.