Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Income Tax

House Votes to Repeal Federal Estate Tax

This article first appeared online at TheNewAmerican.com on Friday, April 17, 2015: 

English: Official photograph of John Thune, U....

U.S. Senator John Thune from South Dakota

On Thursday the House voted, 240-179, to repeal the federal estate tax, setting the stage for a confrontation with the Senate and a veto threat by the president. Identical bills were presented in both houses of Congress, by Representative Kevin Brady (R-Texas) and Senator John Thune (R-S.D.). Brady’s bill passed with the support of all but three Republicans and the defection of seven Democrats. Thune’s bill is expected to die in the Senate.

Said Brady: 

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Tax-credit Private-school Scholarship Funding Explodes in Oklahoma

This article first appeared online at TheNewAmerican.com on Tuesday, March 24, 2015:

Many Oklahoma taxpayers are paying less in state income taxes, thanks to contributions made to scholarship granting organizations (SGOs) last year.

It’s a new wrinkle, and many of those opening envelopes from the Oklahoma Tax Commission are in for a pleasant surprise. A single taxpayer contributing $2,000 to an SGO last year will save $1,000 in state income taxes. A couple contributing $4,000 will save $2,000. These are credits, not deductions, based on one-half the contribution. Translation: Every dollar of credit saves one dollar in state taxes.

For those able to give more — think successful small business owners, lawyers, accountants, physicians, software engineers, farmers, ranchers, and other business owners operating as regular C corporations — that letter in the mail this month could generate even greater excitement.

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Even Fewer IRS Audits This Year

This article first appeared online at TheNewAmerican.com on Wednesday, February 25, 2015:

Franklin D. Roosevelt

Obama is not the first president to use the IRS to bludgeon his opposition.

A year ago John Koskinen, head of the Internal Revenue Service (IRS), was heard complaining that his agency was suffering from budget cuts that forced him to reduce his staff, which caused fewer audits in any year since 2005. Last year Koskinen complained:

I have not figured out either philosophically or psychologically why nobody [in Congress] seems to care whether we collect the revenue [we are owed] or not.

Coupled with increased responsibilities to enforce the mandates under ObamaCare and increasingly bad publicity, Koskinen continues to have to make do with less. A year ago he had $11.2 billion to spend. This year he has just $10.8 billion. And requests for more money from Congress continue to fall on deaf ears. In a phone interview with USA Today on Monday, Koskinen admitted that he runs an agency that is “not the world’s most beloved.” It’s also continuing to decline in credibility. In a speech to the New York State Bar Association on Tuesday he said: 

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Milton Friedman, the W-2 Withholding form, and the Underground Economy

This article first appeared at The McAlvany Intelligence Advisor on Monday, February 23, 2015:

English: Portrait of Milton Friedman

Milton Friedman

With Americans about to file their income tax returns, most of them will look at their W-2 withholding forms to get the numbers without any background on how paying the government first came to be accepted as normal.

At age 16 this writer worked as a helper on a Canada Dry delivery truck. It was a plum job if one could get it. A “helper” load was 160 cases (the heavy glass-bottle kind), and it paid $20 for the day. There was great incentive to dump those cases as fast as possible (without breaking them!) and get back to the warehouse and put in the time sheet.

The first week generated $100, and this writer had never seen a $100 bill before. Imagine his surprise when his pay envelope had “change” in it. The slip showed Gross $100.00. Net: $92.43. The government got into this writer’s pay envelope before he did!

He’s never forgotten that moment, and was surprised, so many years later, to learn how much a hand one of his favorite economists, Milton Friedman, had in creating the entire withholding system in the US back in 1943.

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Obama Goes on Offense, Wants to Spend Even More

This first appeared at The McAlvany Intelligence Advisor on Monday, February 2, 2015:

English: Obama speaks at American University.

Taking a page not only out of the Super Bowl on Sunday, but also out of the statistical study proving that offense is more effective in winning than defense, Obama is offering a grievously offensive and logically indefensible budget for 2016 today (Monday, 2/2/15). His proposal is morally offensive in that he proposes to take money earned by some and give it to others. It is logically flawed in that it will increase deficits each year for the next ten years, adding yet another $6 trillion to the $18 trillion already extant (up from the $10 trillion when he took office in 2008). It will limit job growth, stifle innovation, keep tax lawyers and accountants busy into eternity, and do nothing for his favorite target: the beleaguered middle class.

None of that matters. It’s all for show and to keep the Republicans on the defensive by couching his proposal in terms that only progressives could love:

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This is the Largest Wealth Transfer in History

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, January 21, 2015: 

English: Murray Rothbard in the 90's

Libertarian economist Murray Rothbard

Coinciding with the announcement from the IRS that January 20 is the start of the 2015 tax season came the report from two wealth management consultancies, Wealth-X and National Financial Partners, that the largest transfer of wealth in world history is about to take place. With Obama’s help and the acquiescence of the Congress, the IRS is hoping to partake in the windfall.

According to the Family Wealth Transfer Report, an estimated $16 trillion of wealth belonging to 211,275 ultra-high net worth (UHNW) individuals worldwide will pass to their heirs over the next 30 years. $6 trillion of that wealth is

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Largest Wealth Transfer in History is Coming

This article first appeared online at TheNewAmerican.com on Tuesday, January 20, 2015: 

According to a study just published by Wealth-X and National Financial Partners, $16 trillion of wealth belonging to 211,275 “ultra-high net worth” individuals will be passed on to the next generation over the next 30 years. $6 trillion of that wealth is located in the United States, and financial “consultancies” such as Wealth-X and NFP are gearing up to help them manage the transfer.

Two-thirds of that wealth was created by entrepreneurs starting businesses, and these entrepreneurs are now faced with questions on the future of their money:

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New Illinois Governor Facing Torrent of Red Ink

This article first appeared online at TheNewAmerican.com on Monday, January 12, 2015:

 

Previous Illinois administrations and politicians have been kicking the can down the road for decades. Now, the state has run out of road. Bruce Rauner, Illinois’ new Republican governor, was inaugurated on Monday and is facing a daunting task: a $4 billion backlog of unpaid bills and a budget showing deficits approaching $21 billion in three years unless something is done.

During his campaign that successfully ousted what Huffington Post noted as the “nation’s least popular governor,” Pat Quinn, Rauner made the usual political promises of streamlining government and improving education and the state’s business climate, all without increasing taxes. In fact, he promised

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Mercedes-Benz Latest to Leave New Jersey Owing to High Taxes

This article first appeared online at TheNewAmerican.com on Thursday, January 8, 2015:

Mercedes-Benz HighPerformanceEngines

The rumors swirling around the Mercedes-Benz headquarters in Montvale, New Jersey were confirmed by the company’s U.S. president, Stephen Cannon, on Tuesday: It would move its U.S. headquarters from Montvale to Atlanta, starting in July. The move would affect about 1,000 employees, about half of whom would likely be offered the opportunity to move with the company.

The decision to move was based on the high-cost and high-tax environment in New Jersey compared to Georgia, although one had to read between the lines of the company’s official statement to ferret that out:

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51 OECD Countries Sign Tax Evasion Treaty

This article first appeared at TheNewAmerican.com on Monday, November 3, 2014: 

Last Wednesday’s agreement among 51 countries belonging to the Organization for Economic Co-operation and Development (OECD) in Berlin to share tax information across borders in a continuing effort to crack down on tax evasion was announced with great excitement but precious little logic.

German Finance Minister Wolfgang Schaeuble told the group at a meeting entitled the “Global Forum on Transparency and Exchange of Information for Tax Purposes” that the agreement is “a joint contribution to more transparency and fairness in our globalized 21st century.” Britain’s Finance Minister George Osborne added, “Tax evasion is not just illegal, it is immoral. You are robbing from your fellow citizens and you should be treated like a common thief.” Said Osborne, the new treaty “strikes a blow on behalf of hard-working taxpayers.”

A careful look reveals that the new treaty in fact is designed to benefit tax collectors, not taxpayers.

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Tax Avoiders Performing a Public Service

This article first appeared at The McAlvany Intelligence Advisor on Monday, November 3, 2014: 

English: Judge Learned Hand, circa 1910. Franç...

Judge Learned Hand, circa 1910.

In his letter to the Washington Post on Saturday, libertarian economist Donald Boudreaux unwittingly exposed the logical fallacy behind the OECD’s (Organization for Economic Co-operation and Development) new “tax evasion” treaty: they really think they can help the little taxpayer by increasing the collection of taxes on the evaders. Wrote Boudreaux:

Consider the U.S.: in 31 of the 67 post-war years from 1946 to 2013, Uncle Sam’s budget deficit rose … when his tax receipts increased.

This fact means that Uncle Sam almost as often as not responds to each dollar of additional tax revenue by increasing his spending by more than a dollar – thus imposing a heavier tax burden on future taxpayers.

In other words, tax avoiders (not evaders) are performing a public service by doing what they can to reduce government revenues which constrain government spending.

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Governor Corbett’s Last Chance: Signing a Pro-gun Bill into Law

This article first appeared at TheNewAmerican.com on Thursday, October 30, 2104:

English: Tom Corbett at the McCain rally at th...

Tom Corbett at the McCain rally at the Greater Pittsburgh International Airport

On Tuesday, one week before the election which will determine whether Pennsylvania’s Republican Governor Tom Corbett (shown) gains a second term, he signed into law a state-wide “preemption” law that ensures that all gun laws across the state’s 2,639 counties and municipalities cannot be more restrictive than the state allows. In its announcement of Corbett’s signing of the bill, the National Rifle Association (NRA) urged its members to “thank Governor Corbett for being a steadfast advocate of your Second Amendment rights and for signing [the bill] into law.”

The NRA might better have asked its members to show their appreciation by voting for him next Tuesday: He’ll need every vote he can get.

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New York Governor Andrew Cuomo gets a “B” from Cato

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, October 29, 2014:

In a remarkable display of pure unadulterated pragmatism, New York State Governor Andrew Cuomo signed into law in 2014 an unheralded tax reform bill that has won approval from two conservative think tanks: the Cato Institute and the Tax Foundation. In Cato’s “Fiscal Policy Report Card on America’s Governors” released earlier this month, the authors were positively ecstatic about him:

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National Debt to be $27 Trillion in 10 Years, Says the CBO

This article was first published at TheNewAmerican.com on Thursday, October 16, 2014: 

English:

There was something for everyone in the release last week by the Congressional Budget Office of its August update and outlook. The federal government’s revenues are expected to top $3 trillion this year for the first time in history, thanks to individual income taxes rising by six percent, payroll taxes by eight percent, and corporate income taxes by 15 percent. Those infatuated with big government are celebrating the event as a reflection of an improving economy resuscitated by government spending and stimulus programs. Small government advocates, on the other hand,

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Foreign Affairs: Give Away Free Money!

This article first appeared at the McAlvany Intelligence Advisor on Friday, August 29, 2014:

Foreign Affairs

Foreign Affairs

What happens when a college professor meets up with a graduate student from Oxford University, intending to solve the world’s economic problems? What happens when they consider that the previous attempts to revive the economy have failed and their recommendation is to do more of the same?

The title of their resultant article in Foreign Affairs – the premier publication of the Council on Foreign Relations – explains it all:

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House Slashes IRS Enforcement Budget Almost 25 Percent

This article first appeared at TheNewAmerican.com on Wednesday, July 16, 2014:

English: Anti-United States Internal Revenue S...

Earlier this week the House of Representatives took up the Financial Services and General Government Appropriations Act to fund the government for the next 12 months. In the process it took advantage of the opportunity to savage the IRS by cutting its funding severely, specifically its enforcement budget dedicated to “assisting” taxpayers to stay in compliance with its 74,000-page tax code.

Thanks to Lois Lerner (former director of the Exempt Organizations Unit of the IRS and potential future inhabitant of a federal penitentiary for her role in ordering the illegal scrutinizing and delaying of conservative groups’ applications for tax-exempt status and then covering up those orders by conveniently losing potentially incriminating e-mails), members of the House had a field day piling on amendments to the bill. Along the way they relieved themselves of some of the frustrations they have felt as the IRS has rebuffed and stalled them during various House committee investigations into those matters.

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Tax Cuts of Kansas Already Improving the State’s Economy

This article was first published at TheNewAmerican.com on Monday, July 14, 2014:

Kansas City Skyline 1

Kansas City, Missouri’s Skyline

When Kansas Governor Sam Brownback signed into law the first of several reductions in his state’s income taxes back in May 2012, he wrote:

Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy. It will pave the way to the creation of tens of thousands of new jobs, bring tens of thousands of people to Kansas, and help make our state the best place in America to start and grow a small business.

By cutting the top tax bracket by 25 percent and eliminating taxes on small businesses altogether, he expected great things to happen:

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Texas 7, California Nothing

This article was first published at TheNewAmerican.com on Wednesday, July 9, 2014:

Moving Day.

Moving to Texas from California

One would think the good doctor is running for Congress from Texas, but he’s not. He’s running to boot a hard-left Democrat who’s been representing the 24th District in California for 15 years by touting all the good things Texas has been doing compared to California. In a letter to the Wall Street Journal, Dr. Brad Allen, a pediatric heart surgeon from Paso Robles, wrote:

As a Californian, I am pained to say that three of the nation’s five fastest-growing cities – and seven of the top 15 – are in Texas.

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Texas Beats California: No Income Tax, Booming Economy, Friendly Folks

This article was first published at TheNewAmerican.com on Tuesday, July 8, 2014:

texas our texas

Texas, Our Texas!

Following Toyota’s announcement April 28 that it would be consolidating its three American business headquarters and moving them from California to a new $300-million campus in Plano, Texas, the debate over why has heated up once again. Toyota follows Occidental Petroleum (which is leaving Los Angeles for Houston, after being there for a hundred years), Raytheon (which is moving its El Segundo headquarters to McKinney, Texas), and Legal Zoom (the largest legal-issues website in the world, which has already moved from Los Angeles to Austin). In the past 18 months more than 50 companies have made the same decision to move from California to Texas.

Some say it’s because of the lower cost of living in Texas. The cost of living in Plano is about a third lower than in the Los Angeles-Long Beach area where Toyota is currently located. As calculated by the Dallas-based conservative think tank National Center for Policy Analysis, “People of all incomes will save in Texas,” according to Pamela Villarreal, a senior fellow at the institute. Some will save a little; others will save a lot by moving to Texas to keep their jobs with Toyota. As Villarreal explained, the calculation takes into account property taxes “which are pretty high in Texas” — about twice what they are in California for equivalently priced homes. Once real estate taxes are factored in, a single woman in Texas making $75,000 a year will have about $14,000 more in discretionary income than she would if she lived in California, but married workers making $150,000 a year who move from California to Texas would not see as dramatic a jump in discretionary income.

The Manhattan Institute says it makes sense for California companies to make the move to Texas, owing to California’s high taxes, oppressive regulations, expensive electricity, union influence, and the high cost of labor. According to the U.S. Energy Information Administration (EIA), the cost per kilowatt-hour for commercial establishments in California is 13.11 cents while it’s only 8.2 cents in Texas — a saving of almost 40 percent. For industrial users, the savings are even greater: 10.72 cents per KWH in California versus just 5.86 cents in Texas. That cuts a heavy user’s energy bill in Texas nearly in half. Advantage: Texas

The advantage enjoyed by Texas is reflected in the states’ comparative economic growth rates: nearly four percent last year in Texas versus half that in California. In job growth, Texas regained the jobs it lost during the Great Recession by May of 2011 while California just made it back to even by May of this year — a three-year difference in favor of Texas. Since May 2011, Texas has added more than a million new jobs, while California has added barely 25,000 new jobs since this past May. Advantage: Texas

According to the blog 24/7 Wall Street, Texas ranks eighth among the country’s most quickly growing states with GDP growth jumping by $1.5 trillion in 2013. Its population continues to grow as well, with unemployment below the national average. California is well off the pace. Advantage: Texas

Bradley Allen, a pediatric heart surgeon in Paso Robles, just announced his candidacy for Congress in California’s 24th district, and in the process noted the difference between California and Texas in an opinion article at the Wall Street Journal: “Texas has no state income tax, while California’s 13.3% marginal rate is the highest in the country. Electricity rates are about 50%-88% higher compared to Texas due to the Golden State’s renewable-energy mandate, and its gas is 70-80 cents per gallon more expensive because of taxes.” Advantage: Texas

Allen’s opponent is incumbent Lois Capps, who sports a dismal Freedom Index rating of just 21 out of 100 on constitutional issues. Out of California’s 53 congressional districts, 18 of them have FI ratings of 20 or lower, while just one has an FI rating of 80 or higher. In Texas, by contrast, just three representatives have a rating of 20 or less out of the state’s 36 districts, with one, Rep. Steve Stockman, holding an FI rating of 95. Advantage: Texas

One of the best measures of the difference between the two states is just how much a Californian would have to pay to move his family to Texas. In November 2012, a Californian living in San Francisco would pay $1,693 to rent a 20-foot U-Haul truck and drive it San Antonio. On the other hand, a Texan in San Antonio moving to San Francisco would pay just $893 for the same truck. (Since then the numbers have become even more favorable: A Californian moving his family on August 1 from San Francisco to San Antonio would have to pay $1,890 for the same truck while a Texan moving the other way would pay only $737.) Advantage: Texas

However, David Horsey, writing for the Baltimore Sun, noted that Californians moving to Texas will leave an awful lot behind:

California has Silicon Valley and Hollywood. Texas has oil and gas.

California has Barbara Boxer and Nancy Pelosi. Texas has Ted Cruz and Louie Gohmert.

In California, billionaires get taxed more to pay for programs for the poor. In Texas, billionaires get to keep their money, and the poor go without health care.

[California Governor Jerry] Brown got voters to approve a tax hike to balance the budget and fund education. [Texas Governor Rick] Perry balanced the budget by slashing spending on education.

In lots of places in California, it’s tough to live on a middle class family budget. In lots of places in Texas, it’s hard to live outside a church-going, football-loving, white, heterosexual lifestyle.

Absence of snarky, politically correct, bitter liberals. Advantage: Texas.

 

Medtronic Announces Largest “Tax Inversion” deal in move to save taxes

Ten-dollar bill obverse/reverse

The announcement earlier this week that Medtronic is buying up Covidien in a $43 billion “tax inversion” deal confirms that momentum is building for more and more companies to use this strategy as a way to avoid high US corporate tax rates. Medtronic, a huge medical device maker headquartered in Minneapolis, will buy Covidien, a smaller company in the same business. Although Covidien is run out of Mansfield, Massachusetts, it has been incorporated for tax purposes in Ireland since 2009.

Once the deal is complete, a new company will emerge with a much lower income tax liability because

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.