Tag Archives: taxes

Messaging and the Midterms

Posted on by
Reply

Here’s a bit about income taxes, via Laura Saunders in Friday’s Wall Street Journal.

For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.

And

[T]he lower 60% of households, who have income up to about $86,000, receive about 27% of income. As a group, this tier will pay no net federal income tax in 2018 vs. 2% of it last year.

And this:

…the top 1% will pay for 43% of income tax, up from 38% in 2017.

So much for tax cuts being for the benefit of the rich.

Here’s another bit about who pays and who benefits:

[I]ncome includes earnings from wages and investments plus untaxed amounts, such as from health coverage. These additions nearly double the income of people in the lowest tier and add about 20% for those in the highest tier.

Republicans are shockingly silent about this in their respective local press outlets.  If they don’t start getting these messages out to their constituents early and often, each mid-term candidate needs to fire his communications director and replace him with someone who knows how to talk to local folks.

Credit Reports and Tax Liens

Posted on by
Reply

The thee major credit reporting firms, Experian, Equifax, and TransUnion, are moving to eliminate records of tax liens from their credit data and credit reports.

The three companies, which provide vital, behind-the-scenes services in consumer credit, have been grappling with class-action lawsuits over their handling of consumers’ tax liens and judgment information.

This is a mistake.  The right answer is to defend, actively, those suits that are wrong, rather than to surrender to the extortion of lawfare, and to correct the mishandlings of the tax liens in their data and reports.

Running away from the matter altogether can only further deprecate the usefulness of these credit reporting agencies. All debt needs to be reflected in the reports so that accurate pictures of an individual’s credit risk can be developed.

Beyond that, a tax lien cuts two ways: it’s the result of a serious failure, whether of the one with the lien or of events beyond the person’s control. With the other slice, like any credit card, a record of prompt payments, keeping the lien current until it’s paid off, would reflect favorably in the minds of lenders reading the reports.

Absent the data, though, a loan’s interest charge would need to be increased to reflect the greater uncertainty, or the loan denied altogether, and either of these outcomes will harm far more consumers far more deeply than the numbers and injuries claimed by the suits.

The Anti-Competitive EU

Posted on by
Reply

Now the European Commission wants to tax “behemoth” digitally-oriented multinational companies for doing business within the EU.  The only companies that fit the EC’s definition of behemoth—large firms with annual worldwide revenue above €750 million ($922 million) and annual taxable EU revenues above €50 million ($61.5 million)—are American companies like Alphabet through its Google subsidiary, Apple, and Amazon.com.

That taxable EU revenue is key here.

The EU says these firms have exploited loopholes in tax laws and managed to lower their tax bills by shifting profits to low-tax jurisdictions within the EU such as Ireland and Luxembourg.

The effective corporate tax rate paid by digital firms amounts to just 9.5%, but traditional businesses pay about 23.3%, according to EU data.

But the measure is likely to pit low-tax European member states against countries like France and Germany, which have often complained about digital companies’ aggressive cross-border tax planning….

Heaven forfend the EU should lower, or allow its member nations to lower, those traditional business’ effective tax rates to the 9-10% range.  On the contrary, the EU is adamantly opposed to tax rate competition and to lowering member nations’ tax rates.  All members much charge substantially the same high tax rates.

And this anti-competitive, so say nothing about anti-liberty, position:

the European authorities’ push for more control over how the digital world operates.

This is the tax portion of the EU’s mercantilist push for protectionism, even as it decries what it sees as American protectionism.  The EU, though, is aiming its moves at its own members as well as the outside world.

I am Shocked, Shocked

Posted on by
Reply

Recall Amazon.com’s playing off of several cities against each other in order to maximize the tax breaks and other returns that company might get for building its second headquarters in the “winning” city.  Now we discover this in the offing:

US cities vying for Amazon.com Inc’s second headquarters risk facing an unexpected consequence to victory: other companies will demand the same hefty tax breaks conferred on the online retail giant.

How amazing is that?  Other companies want in on the goodies.

I’m not shocked at that; I’m shocked that those cities’ managers didn’t see this coming.  Their lack of anticipation speaks poorly of their ability to respond to those demands.

It also speaks poorly of the competence of those cities’ managers.

You Didn’t Earn That

Posted on by
Reply

The European Commission has criticized seven member states for “aggressive” tax practices, whereby governments try to undercut others to attract multinational companies.

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation, and Customs doesn’t like competition; he actually thinks it interferes with the “integrity of the European single market.”

[T]hese practices have “the potential to undermine the fairness and the level playing field in our internal market and they increase the burden on EU taxpayers.”

This, of course, is nonsense on a number of fronts.  The Commission has yet to justify the high taxes of those member nations that are so put upon by the others’ low(er) tax rates.  The Commission has yet to say how competition is disintegrative.  The Commission has yet to explain why the playing field cannot be leveled by those high-tax nations lowering their tax rates and thereby also lowering the burden on those EU taxpayers who are citizens of those high-tax members.  The Commission has yet to demonstrate that tax competition creates, in any way, an uneven playing field—especially since the varying national tax rates are fully within the control of those nations.

Besides, that money belongs to EU Governance, not to the people who earned it or whose enterprises earned it.  And you member nations: your sovereignty belongs to us.