Tag Archives: taxes

Disparate Impact

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High-tax States, principally States run by Progressive-Democrat regimes, don’t like the tax reform’s cap on State and local taxes.

The governors of New York, New Jersey, and Connecticut said on Friday that they would sue the federal government to overturn the new US tax law, saying the measure unconstitutionally discriminates against Democratic-leaning states.

This is just the raw sewage of disparate impact being spread across a tax bill—never mind that the tax reform is uniformly applied across all States, across all businesses and individual taxpayers.  Never mind, too, that if some taxpayers, if some taxing jurisdictions, are impacted differently than others, it’s solely a result of the conscious individual, business, and State and local government choices.  At least when “disparate impact” is imputed to matters of race, the alleged victims have no choice in their position in the differences alleged.

Here’s an example of the foolishness and disingenuousness of the suit:

The legal action will argue that the new tax law’s cap on state and local tax deductions infringes on states’ rights and amounts to double taxation[.]

The States have no “right” to a Federal income tax deduction.  Beyond that, the cap can’t possibly represent double taxation; the only tax here is the SALT applied by those State and local jurisdictions.  Not being able to deduct a fraction of that (or any of it, come to that) from a Federal income tax bill is no tax at all.

One hopes the Federal trial judge dismisses the suit out of hand and strongly sanctions the governments and Attorneys General of New York, New Jersey, and Connecticut for bringing such a frivolous suit.  Failing that, one hopes the Supreme Court, where the suit will end regardless of the trial court outcome, itself firmly chastises the State governments and Attorneys General.

Taxing and Spending in New York

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Bookending (in more than one sense of the term) California’s move to confiscate business’ tax cuts, New York’s Progressive-Democrat governor Andrew Cuomo wants to increase the taxes levied on that State’s citizens by $1 billion.  He’s claiming, in all seriousness,

You can’t possibly get anywhere near where you want to be on education and health care unless you raise revenues.  It’s just too big a deficit, and the choice of cutting education or cutting health care I don’t think is a place anyone wants to go to this year. So you have to raise revenue.

This is a false choice.  The largest cause of the State’s deficit, after all, is its spending level, not the size of its revenue.  Thus, one choice Cuomo is carefully eliding is this: the State’s government could cut spending across the board; there is, after all, more going on in New York than just education and health coverage costs.

Alternatively (which Cuomo also avoids mentioning), the State’s government could simply reallocate existing spending into education and health care.

Still another alternative unmentioned, the State’s government could fix its runaway pension funds for its public unions by using accurate projections of investment return rates and increasing the contributions union members and the unions themselves make to the funds.  Along with this, the State’s government could fix its health coverage program, replacing its version of Obamacare with market-based solutions, and freeing the citizens to buy the health plans that suit them rather than suiting Government.  Or not buy at all.

There’s simply no need for more revenue for the State’s government, no need to take even more money out of the pockets of the State’s citizens.

Unfortunately, neither the man nor his Party cronies in the legislature are emotionally capable of conceiving of actually cutting spending, or even of reallocating existing spending.

Businesses Behind the Tree

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California wants the Federal tax reform-saved money for itself, and they want a State Constitutional amendment to make the seizure permanent.

A proposed Assembly Constitutional Amendment by Assemblymen Kevin McCarty (D) and Phil Ting (D) would create a tax surcharge on California companies making more than $1 million….

The Progressive-Democrats claim the money would go to “programs that benefit low-income and middle-class families,” but that’s just tear-jerking.  The State’s government would divert the monies to favored programs at convenience.  That’s minor, though.

The point of the proposal is to take the money from business—the surcharge is a tax of fully 50% of business’ Federal tax cut—because Government Knows Better, and business doesn’t deserve it, anyway.  Nor did they earn it.  Government did that.

Don’t tax you, don’t tax me.  Tax that business behind the tree.  That’s not quite what Russell Long (D, LA) said all those years ago, but California’s new tax proposal is close in spirit.  What the Progressive-Democrats in California’s legislature and governor’s mansion are missing, though, is another sentiment of Long’s regarding tax breaks for businesses:

I have become convinced you’re going to have to have capital if you’re going to have capitalism.

This is an understanding completely absent in the Progressive-Democratic Party.

Poverty and Concern for the Rich

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Recall the Progressive-Democratic Party-controlled legislature with their Progressive-Democrat governor who run things in California.  In response to the just-passed tax reform bill’s capping of state and local tax deductions on the Federal income tax form at $10,000, these worthies have introduced a bill that would create a State-run “charity” foundation into which California citizens could make “donations” and receive a dollar-for-dollar tax credit that they could then apply to their SALT requirements that exceed those $10,000.

Never mind that, as The Wall Street Journal‘s Editorial Board pointed out last Friday,

According to IRS data, California’s 71,000 taxpayers with million-dollar incomes deducted on average $462,500 in 2015 compared to $6,940 for individuals making between $50,000 and $100,000. Few California middle-class taxpayers will be harmed by the $10,000 deduction cap since the standard deduction has doubled to $12,000.

Kevin De León, President Pro Tempore of the California State Senate, and the Progressive-Democrat who introduced the bill, knows this full well.  These worthies are interested in protecting their rich buddies and donors.

Couple this with what the Los Angeles Times published last Sunday.  Twenty per cent of California residents are poor according to the Census Bureau’s Supplemental Poverty Measure, which considers the cost of housing, food, utilities, and clothing.  The Measure, importantly, also includes noncash government assistance in its income measure.  This 20% poverty rate is the highest rate in our nation.  It gets worse:

California recipients of state aid receive a disproportionately large share of it in no-strings-attached cash disbursements. It’s as though welfare reform passed California by, leaving a dependency trap in place.

But think about that in conjunction with the California progressive elite’s protection of their rich buds.  It’s not “as though welfare reform passed California by,” it has been by design that those elites created that dependency trap.  That’s how they get the votes—the poor have far more votes than their wealthy friends—and with those votes the elites can stay in power, exchanging favors and money with their wealthy associates.

Of course, the LAT laid most of this travesty for the poor part of the balance off on an exploding social-services community with its 883,000 full-time-equivalent state and local employees (as of 2014).  But who hires and provides the payroll and other budgets for these folks?  Yewbetcha.

Tax, Tax, Tax

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That’s the position of European Commission President Jean-Claude Juncker.  With Great Britain going out from the European Union, Juncker says the remaining nations will have to pony up yet more money “if we are to pursue European policies and fund them adequately[.]”

Currently, the EU budget is capped at 1% of the total of the EU members’ aggregated GDP.  However, it’s not enough, though, that the remaining nations will have to fill the large-ish gap created by the British departure.  Juncker wants yet more.

Yet, even that “have to fill” bit remains unjustified in any concrete terms.

Some of those new [policy] demands include building a common European defense, the fight against terrorism and protecting borders as more and more refugees and migrants seek to enter Europe. There are also calls to increase spending on research and making the bloc’s economy more competitive in the digital age.

Never mind that these are individual, sovereign nation needs.  Nor is there need for any EU-level taxes—much less increased taxes—in order for the members to coordinate those programs among themselves.  Ordinary trade agreements could achieve most of those, were EU legal requirements not in the way.  Even the fight against terrorism and protecting borders: the US and Canada handle that between us, as do Mexico and us for the most part, and we don’t tax each other for the purpose.

Unspoken among those policies, too, is the demand for money to bail out individual member nations that have differing ideologies, for instance, about the purpose of money and of government.  This at bottom is a diversity demand that’s driven by a concomitant too-great diversity of national political and social philosophies.

Juncker has pointed out that his tax demands amount to the price of a daily cup of coffee for the average taxpayer, while eliding the fact that that average taxpayer has little to no say regarding whether he’d rather have that daily cup than send his money off to Brussels.

I am of the opinion that Europe is worth more than a cup of coffee a day[.]

Europe, certainly.  The EU, not so much.  (Notice, too, Juncker’s mindset regarding national sovereignty with his careful conflation of the EU with Europe.)