Tag Archives: taxes

Another Bit on Taxes

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This is a tax increase that President Barack Obama chose not to mention in his State of the Union address while he was demanding to increase taxes on the “rich” in order to give that money to his “middle” class. Perhaps he chose to omit mention because this is a tax increase on that same “middle” class. And perhaps because it contradicts the story he’s spinning on wanting to make junior college “free.”

Recall 529 Plans, which facilitate parents’ and other family members’ (even family friends’) saving for the future college expenses of those parents’ children. Recall further that withdrawals from those 529s, when made pursuant to college expenses, are (so far) tax free. Obama’s hot tax idea is to change that, instead taxing the earnings on 529 savings when the money is withdrawn for college expenses.

This just illustrates the utter incoherence in Progressives’ taxing policies. And it’s another demonstration of the foolishness of using the tax code for social engineering—or for any other tampering with our economy.

Taxes

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Treasury Secretary Jacob Lew had a thought.

I don’t think that there’s any advantage in pretending that there aren’t big disagreements on the individual tax side. We had a national debate just two years ago about the top rate. We’re not looking at the kind of negotiation to go back to lower the top rate.

Never mind that after that debate and just a few months ago, Americans voted overwhelmingly to reject President Barack Obama’s tax policy—which he’d placed on the ballot along with every single one of his other policies (every single one of which were similarly rejected in that same election).

This Progressive, along with Obama, Knows Better and recognizes no obligation to listen to his employers.

It’s going to be a long two years with President No and his Party of Naysayers still in the way of economic reform and long term economic recovery and prosperity.

Never Met a Tax Increase

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…he didn’t like, this Progressive. President Barack Obama wants $320 billion in tax increases over the next 10 years in order to give tax credits to his version of “the middle class.”

This is rank, stinking wealth transfer. Nothing else. He doesn’t even intend to use the revenue to pay down the national debt he’s exploded over the last six years. The worst part of this is that Obama and his Democratic Party accomplices actually think this is right. The rich should “pay their fair share,” and government needs to spend the money. Never mind that “the rich” already pay 70% of the US’ income tax bill, while the bottom half(!) pay 3%-4%. Conveniently, these…Democrats…never get around to specifying what a “fair” share might be. Meanwhile, the debt keeps growing.

And

Obama also wants to close what the administration is calling the “Trust Fund Loophole,” a change that would require estates to pay capital gains taxes on securities at the time they’re inherited.

Here’s a thought. Work with me on this, it’s a hard concept for some to get: lower all income taxes to a single flat rate with no deductions, subsidies, credits, what-have-yous, and with no special treatments for this or that source of the income. Lose the death tax altogether; government should quit trying to profit from a citizen’s tragedy.

Stop using the tax code for social engineering. Have all Americans pay the flat rate, and leave in the hands of the heirs their loved one’s accumulations.

Now there’s no need for tax credits for some, which necessarily comes at the expense of others. The money inherited isn’t the government’s money, either; the government has no legitimate claim on it, and pecuniarily, it has no need of it.

Removing the tax code from the social engineering business eliminates the influence of a lot of special interests and lobbyists, too. ‘Course, that’s a problem for all politicians….

A Tax Cut

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The Wall Street Journal had a thought on one. Our gas tax should go away. Completely.

The gas tax began in 1956 as a 3¢/gal tax that was intended to fund, via the Highway Trust Fund, building…highways and bridges. Today, that tax stands at 18.4¢/gal (and 24.4¢/gal on diesel). The gas tax has roughly matched inflation over those 58 years.

However, HTF spending has not, nor has it been kept to building highways and bridges. Today, that money also gets spent on

mass transit in merely six metro areas and sundry other programs for street cars, ferries, sidewalks, bike lanes, hiking trails, urban planning and even landscaping nationwide.

None of whose riders or users pay a single red cent to the HTF.

WSJ‘s alternative?

Simply using the taxes that are supposed to pay for highways to, well, pay for highways makes the HTF 98% solvent for the next decade, no tax increase necessary.

More than that, with more than 70% of highway spending already done by the states and not the Federal government, the States can allocate their own funds (a related example: who’s paying for California’s “high speed” train boondoggle? Not just Californians), make their own decisions regarding spending priorities, without freeloading off their neighboring states’ citizens’ tax money. The Federal gas (and diesel) tax can be done away with once the HTF’s spending is refocused.

Where are the Republicans on this? The WSJ had a thought on that, too, in the same article.

Tax Reform

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…with a Republican Congress and a Democrat President.

[W]ith Barack Obama in the White House and enough Democrats in the Senate to uphold a filibuster, Republican lawmakers are quietly playing down any hope of comprehensive tax reform and instead have set their sights on just the corporate portion of the tax code.

The GOP favors a simplified tax code with a lower, but broader, tax base.

That proposal is a nonstarter with Democrats because while it would reduce taxes overall, it would draw tax revenue from more people on the lower end of the income spectrum.

Never mind that with skin in the game, “people on the lower end of the income spectrum” would take their political responsibilities more seriously, which, far from leaving them their current Democrat rubber stamps, would work to the good of the nation.

The tax cut deal Congress passed “doesn’t have the shelf life of a carton of eggs,” [Senator Ron, D-OR] Wyden lamented before the Senate adjourned.

Wyden is right to lament this, though perhaps not for the reason he thinks: temporary fiscal measures do not have any effect on businesses or the economy other than suppressing both as the businesses await the uncertain outcome of the end of temporary measures.

Congressional Republicans have come to realize that even though they will control both the House and Senate in 2015, they won’t get far on tax reform unless they do so in concert with the president.

In other words, the GOP isn’t planning on passing its own bill for Obama to reject.

Said one top GOP aide close to the Senate talks, “There is only so much that can be done without the White House involved.”

Simply giving up, though, would be a mistake, and it would play into the hands of critics who say the Republican Party has gotten too used to losing and no longer knows how to win in Congress. “Needing” the President’s cooperation and that of enough Democrats to pass a cloture vote, though, actually is good for Republicans: it would help them emphasize the differences between them and Democrats, and it (re)identify the Republican Party as the party of low taxes and the Democratic Party as the party of big spending, the party of you can’t have anything if I can’t have my big taxes, the party of No.

“Only so much that can be done” is true, and passing lesser reform is a fine fallback. However, Republicans need to force votes—even if they’re failed cloture votes in the Senate—on full, wide-ranging, complete tax reform in order to put the Democrats, individually and collectively, on the voting record: either those Democrat Senators are for reform, or they’re for the Party of No. Either Obama signs, or he vetoes as a leading member of the Party of No.

In fine: pass the broad reform bills, anyway: force the votes, and if it gets far enough, force Obama to veto. Then bring the failed bills up again the next year, and force and force the votes and the veto again—in an election year. Some Republican staffers worry that this year is it because in an election year, too many politicians will be worrying about their election campaigns. These staffers corroborate the criticism regarding not knowing how to win. Election years, especially the one coming up, is when the Republicans will have the most leverage—if they can find the courage to apply the pressure.