Tag Archives: taxes

“Our Federal Dollars”

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It doesn’t get any clearer than this.  Seattle Mayor Ed Murray has illustrated the addictive nature of Federal funds transfers to the States and lower government jurisdictions with that phrase.

In defending his city’s lawsuit against the Federal government over DoJ’s decision to withhold Federal monies from cities that violate Federal law by protecting illegal aliens from enforcement of immigration law, Murray said this:

The federal government cannot compel our police department to enforce federal immigration law and cannot use our federal dollars to coerce Seattle into turning our backs on our immigrant and refugee communities.

Our federal dollars.  The dollars aren’t theirs.  Those dollars are Texas citizens’ money.  Those dollars are New York citizens’ money.  Those dollars are Illinois citizens’ money.  Those dollars are Oregon citizens’ money.  Those dollars are the money of the citizens of every State and territory in the nation, including Washington.  Those dollars are money transferred from all those other citizens around the nation.

This is what such transfers lead to: the powerful addiction of a sense of entitlement to other people’s money and the loss of any sense of responsibility for a jurisdiction’s own money.

Tax Rates and Tax Credits

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One illustration of the value of the relationship between the two is provided in Laura Kusisto’s piece, Tax Overhaul Threatens Affordable-Housing Deals, in a piece in Tuesday’s Wall Street Journal.

The possibility of a tax-code overhaul is casting a shadow over the $10 billion affordable-housing industry, which receives tax credits so valuable they often determine whether or not projects get off the ground.

Members of Congress and President Donald Trump have proposed reducing the corporate tax rate to 15% to 20% from the current 35%, dimming the allure of a credit investors such as big banks and insurance companies receive to offset income taxes.

Well, of course it would.  With low taxes, there’s little value to tax credits or deductions.  There’s no mystery here.

Of course, there’s much wailing, teeth-gnashing, and bodice ripping that subsidies for builders are losing value.  The horror.

On the other hand, the availability of truly affordable housing would seem to be at risk, at least superficially.

On the third hand, though, it remains a truism that our Federal tax code has no business being used for government-directed (or any other -directed) social engineering.  These projects will work because they’re economically viable; otherwise they shouldn’t be tried at the rates they are.

In a low tax régime, too, there will be more money in the private economy, more employed labor, and commensurately less need for “affordable housing.”  And housing generally will be lower-cost, reducing the number of folks truly needing help finding housing.  That’s a number individual States can easily afford.  At least those that aren’t wasting their citizens’ resources on frivolous toys like bullet trains or engaging in virtue signaling with their sanctuary city/state foolishness.

The Trump Tax Leak

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Host Rachel Maddow said the two-page summary of Trump’s federal return for that year was first obtained by journalist David Cay Johnston, who gave MSNBC a first look at the documents.

It is unclear who leaked them. Johnston, with the website DCReport.org, said only that he found the documents “in the mail.”

If you believe that the leaked return just sort of showed up like that, maybe you’ll believe that I have some beachfront property north of Santa Fe to sell you.

The question, though, is how did they get these tax files from the IRS?  How did the IRS come to leak them—which leak is a felony?  How did Johnston and Maddow obtain these files—which looks a lot like receiving stolen goods, if the stuff wasn’t, strictly speaking, leaked?

On the lesser matter, it turns out that Presidential Candidate Donald Trump wasn’t the one blowing smoke over his taxes—it was the mendacious NLMSM.  Trump, from those 2005 tax data, paid nearly 25% of his income in income taxes.  Which is considerably more than the Left’s other billionaire hero, Warren Buffet, who paid less income tax than his secretary and who wants billionaires to pay more (but he still refuses to make donations to the Treasury…).

However, don’t expect the mendacity of the Left and its Progressives to lessen on matters related to President Donald Trump.

Tax Credits in the Obamacare Replacement Proposal

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In the main, I’m opposed to these on a couple of grounds.  One is that it’s just more welfare; we need to find a way to move folks off welfare and into the labor force and jobs rather than keeping them trapped in the welfare cage—like we did when we originally reformed the food stamps program by requiring recipients to get a job or lose the stamps.  That reform not only reduced overall unemployment, it put recipients back into jobs (and off that welfare program).  These weren’t make-work jobs, either; net prosperity for those recipient families increased.  (Then the Obama administration withdrew the work requirement, and we got record numbers of folks back on food stamps).

The (refundable) tax credits are just more of this sort of subsidy, just in the form of a tax credit rather than a direct payment, like most subsidies are.

The other is that the tax credits won’t encourage health coverage providers to lower their rates and deductible requirements.  Quite the opposite, the credits would prop up those costs by allowing the providers to put a commensurate fraction of their charges onto the taxpayer: the credits would be used by the providers to make up the difference between what the coverage purchaser pays and what the provider charges.

On the other hand, the tax credits would approach acceptability under a couple of conditions: if the credits decline year-on-year to a final value of zero over some number of years, say, two or three; or the credits are sunsetted and disappear after some number of years, say two or three.  Or a combination of the two.

With those conditions, and with the understanding that both individual and State budgets need time to adjust, a disappearing tax credit, by providing that adjustment time, could become acceptable.

Hysteria or Hypocrisy?

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You pick ’em.  The latest example of irrationality (which is a superset of both hysteria and hypocrisy) comes via V the K at GayPatriot.

Recall that the Progressive-Democratic Party that runs Philadelphia passed a massive sugar tax to be levied against soft drinks sold in the city.  Recall, too, the high school economics teaching that if you raise the price of something, demand for that something falls off.  Finally, recall that applying a tax to that something is the same as raising its price.

The [soda] tax is huge, amounting to a 45% to 100% increase in the final consumer cost of typically affected beverage products.

Last week the other shoe dropped.

Two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and are planning for layoffs.

And

One of the city’s largest distributors says it will cut 20% of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring.

“People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.

And

Sources with Teamsters Local 830 say that layoffs are “imminent” and that some workers have seen their take-home pay drop by 50 to 75% because they’re moving less product.

Restaurants are feeling the pinch, too. Josh Kim, owner of Spot Gourmet Burger, says sugary drink sales at his shop have gone down about 10 to 15%.

Naturally, the Progressive-Democrats, unable to confess to their economic illiteracy (I don’t think they’re economically illiterate, either; these are the party of Know Betters; economics is one of the things they Know Better than us petty commoners), are calling the supermarket and distributor management greedy liars.

We have no way of knowing if their sales figures and predicted job losses are anything more than fear-mongering to prevent this from happening in other cities,” said city spokesman Mike Dunn.
…
“I didn’t think it was possible for the soda industry to be any greedier,” [Philadelphia Mayor Jim] Kenney said in an emailed statement. “… They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven figure bonuses.”

Go figure.