Tag Archives: taxes

Wealth Redistribution

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Now it’s threatening to spread to our education institutions.

Lawmakers have a new solution for the high cost of college: make the wealthiest universities pay for it.

Of course.  Because competition among colleges to bring down costs, or reducing Federal funding for them under [pick an excuse] programs to reduce the non-student population money available to drive up costs just can’t be done.  Too many special interests would be perturbed by such a thing.

Elite US schools have grown richer since the 2008 financial crisis by investing their endowment money in everything from California vineyards to Chinese startups.  State and federal policy makers now want to tax those profits….

Gotta punish that success.  How dare these institutions accrue moneys without a government’s faretheewell?

…or force the wealthiest schools to spend down their endowments—to defray soaring student bills and refill depleted higher-education budgets.

Which governments could do easily by not sending so much taxpayer dollars to these schools.  But…special interests.

Interestingly, Republicans are in on this move.

Congressman Tom Reed (R, NY)…floated a plan late last year that would require endowments bigger than $1 billion to pay out a quarter of their earnings in grants to working-class families or face steep penalties or even the loss of their tax-exempt status.

It isn’t Government’s place to tell these schools—or any other institution—how to spend its money.  It is Government’s place to not send taxpayer dollars to these schools—or to any other institution.

No wonder Conservatives are so angrified.

Anti-Competitive G-20

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And, yes, that includes an anti-competitive Democratic Party administration representing the US in this group of twenty.

G-20 finance officials called on the Organization for Economic Cooperation and Development to report by July countries and jurisdictions that haven’t signed up to new international standards on tax transparency and information sharing.

“Defensive measures will be considered by G-20 members against non-cooperative jurisdictions,” the officials said in their statement after two days of meetings in Washington.

Wrong answer, guys.  Your threats just expose your own dishonesty.

If you really want to rein in the so-called tax havens, out-compete them in a free market: lower your own tax rates to competitive levels, and simplify your tax rules to eliminate your cynically Byzantine structures which serve only to benefit (or, just as bad, to appear to benefit) cronies and other government-favored groups.

The best defense is a good offense, but that offense must be directed at the right target.

“There is one thing which has not gone very global and that is taxation, which is still very much a local affair associated with national sovereignty,” IMF Managing Director Christine Lagarde said.

Why must taxation be standardized globalized?  What part of national sovereignty is unclear to you, Madam?

And further cynicism:

Revenue lost to tax havens is a sore point for the G-20….

It isn’t lost to you, guys; it isn’t yours to begin with, so it cannot be “lost” to you.  Again, compete: lower tax rates, and reduce the incentives to hide in “tax havens.”

And just to be clear (although, surely I’m preaching to the choir here:

haven 2. A place of refuge or rest; a sanctuary.

Thus, tax haven is a place of refuge from abuse by tax.

Tax the Rich for the Benefit of the Rest of Us?

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The Left—Democratic Party Presidential candidates Hillary Clinton and Senator Bernie Sanders (I, VT), for instance—want the rich to pay their fair share in taxes.

What is their fair share, you ask?

(…), Clinton and Sanders answer.

Here’s what the rich are paying today, according to our very own IRS, via AEIdeas:IncomeTaxShares

Notice that.  The hated 1% already are paying nearly 40% of the income taxes being paid—that includes Warren “I’m Not Paying Enough, but Don’t Ask Me to Donate to Treasury” Buffet—even though they earned less than 20% of the total income.  Meanwhile, the poor, downtrodden, and abused bottom 50% aren’t even paying 3% of the total.

Hmm….

Leadership Regarding Tax Avoidance

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Large multinationals operating in the European Union will have to publish details of profits and tax bills generated in countries considered to be “tax havens,” the bloc’s executive arm said on Tuesday as it toughened up proposals for fighting tax avoidance following the “Panama Papers” leak.

And

“By adopting this proposal, Europe is demonstrating its leadership in the fight against tax avoidance,” said Valdis Dombrovskis [European Commissioner for the Euro and Social Dialogue](!).

Never let a crisis go to waste, eh, guys?  Never pass up an excuse to increase Government intrusion and control.

Here’s a thought.  Work with me on this, it’s an unfamiliar concept for you Big Government aficionados.  How about showing leadership on tax avoidance by reducing the incentive to avoid paying taxes?  Lower your tax rates.

You haven’t demonstrated a need for all that money, anyway, and certainly you haven’t demonstrated a greater need for that money than the folks who’ve actually earned it: private citizens and their private enterprises.  All of you should be “tax havens.”

Taxes

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A couple of items, via the Tax Foundation:

Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of almost $5.0 trillion, or 31% of the nation’s income.

Think about how much our economy would burgeon if we only paid, say, 20% of GDP on these taxes.  Think about how much more revenue Federal, State, and local governments would collect, despite (or because of) that lower rate, from the hugely increased economic activity and the taxes thereon.

And this graph:NecessitiesAndTaxes

Not only are we spending more in taxes than we spend on the necessities of food, clothing, and housing, we’re spending roughly the same amounts on State and local taxes as we do on food.

It’s not only the Federal government that’s overcharging us.