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: taxpayer

Tax Foundation Counts All Income Except Underground

This article first appeared online at TheNewAmerican.com on Monday, February 23, 2015:

Tax Foundation

Tax Foundation

Not one single word of the 10-page report “Sources of Personal Income” released by the Tax Foundation mentioned the “black market” — that vast swirling uncounted (and largely uncountable) part of the U.S. economy that some estimate in the trillions. Accordingly, that throws off the foundation’s attempt to draw any more than tentative conclusions about how much the average taxpayer earns.

According to the Foundation, Americans reported a total of $9.2 trillion in income in 2012, the latest year for which numbers are available, with $6.3 trillion of it coming from “wages, salaries, tips” and “other” compensation. They get those numbers mostly from the infamous

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Latest CBO Report shows Deficits Approaching $1 Trillion

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, February 4, 2015: 

English:

When the Congressional Budget Office issued its Budget and Economic Outlook 2015 to 2025 in January, few could be bothered to do a serious review of it as it seemed to contradict the present meme of the Goldilocks economy: job growth accelerating, interest rates low, consumer confidence improving, deficits shrinking, and so forth. Even those taking the time to look at it, scoffed at its conclusions. Said the CBO:

The federal budget deficit, which has fallen sharply during the past few years, is projected to hold steady relative to the size of the economy through 2018.

Beyond that point, however, the gap between spending and revenues is expected to grow, further increasing federal debt … which is already historically high.

The CBO explained why:

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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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Crude Oil Prices: The Politics, Implications, and Backlash

This article first appeared online at TheNewAmerican.com on Tuesday, January 6, 2015:

With the price of crude dropping significantly below $50 a barrel, prognosticators have come out of the woodwork predicting drops to $40, $30, $20 a barrel, and even lower before it rebounds.

Jon Ogg, writing at 247Wall St.com, noted that the precipitous drop in crude oil prices “has serious implications for consumers and companies alike,” and not all of them are unblemished blessings. On the surface the winners are

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IRS Chief Threatens Furloughs, Possible Shutdown

is article first appeared online at TheNewAmerican.com on Monday, December 22, 2014: 

English: United States Internal Revenue Servic...

United States Internal Revenue Service Criminal Investigation Division Badge

One unheralded part of the widely criticized CRomnibus bill came to light last week when IRS Commissioner John Koskinen complained about the $346 million cut in his agency’s funding and the possible impact it would have on its services. The agency requested $12.4 billion, but the spending bill gave them just $10.9 billion, a reduction of $346 million from last year and $900 million below 2010 levels. In an e-mail to his employees on Wednesday, Koskinen warned them that “Our hiring — already limited at a ratio of one [new] hire for every five people who leave — will be frozen…. We will stop overtime except in critical situations.” He noted further that, adjusted for inflation, the IRS budget is about where it was back in 1998.

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Latest Poll: Vast Majority Oppose Gas Tax Increase

This article first appeared online at TheNewAmerican.com on Wednesday, December 17, 2014:

A new poll from Benson Strategy Group confirms not only that most Americans don’t want an increase in their gasoline taxes but that they’re afraid Congress will enact one anyway. Coming on the heels of Republicans joining with Democrats to pass a pork-laden CRomnibus bill earlier this week, the poll’s results show that two out of every three Americans don’t want to pay more at the pump. 

Those polled are likely also concerned that the recent precipitous drop in the price of gas will be seized by the Congress as an opportunity to raise the tax with minimal initial pain to drivers. 

An early attempt by a safe-district liberal Democrat from Oregon, Earl Blumenauer, a year ago to raise gas taxes by 15 cents a gallon failed to gain any traction, with just one co-sponsorship coming from a House member who knew he would be retiring this year. 

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Judge Approves Detroit’s “Grand Bargain” to End Bankruptcy

 

English: City seal of Detroit, Michigan.

City seal of Detroit, Michigan.

This article first appeared at TheNewAmerican.com on Monday, November 10, 2014:

 

 

The party began immediately after bankruptcy Judge Steven Rhodes approved the plan to get Detroit out of bankruptcy last Friday. Rod Meloni, a local journalist who has been following Detroit’s woes from the beginning, was there:

There was nothing short of a party atmosphere around the federal courthouse….

Attorneys hugged, shook hands, slapped backs, promised to get together soon and said goodbye.

The only thing missing was the signing of yearbooks!

This was evidence of the rule that no matter who takes a haircut in a bankruptcy, the attorneys always get paid first, one hundred cents on the dollar. As of October 2013, those fees had mounted to

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Fracking Boom and the Development of America’s Energy Resources

This article will appear as the cover story in the next issue of The New American print magazine:

Travis Wright’s first impressions of Williston, North Dakota, in January 2012 remain vivid. It was bitter cold and the Walmart parking lot was filled to overflowing with campers and RVs whose owners were using them as de facto homes while working in the oil fields. Once inside Walmart, Travis discovered pallets of goods blocking the aisles as the understaffed nighttime crew of stockers simply couldn’t keep up with demand. He quickly learned to do his shopping in the middle of the night when the lines were only 30 minutes long. He learned later that this Walmart in Williston was the highest-grossing one in North America. The local economy was booming to such an extent that even paying $17 an hour for entry-level jobs, store officials couldn’t find enough employees to work for that amount.

Travis — at 6′6″ and 280 pounds, his friends called him Big ‘Un — was also astonished to learn

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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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$25 Billion Wasted last year, says Senator Coburn

This article first appeared at The McAlvany Intelligence Advisor on Friday, October 24, 2014: 

Official portrait of United States Senator (R-OK).

Senator Tom Coburn (R-OK).

Entering his final year as Senator from Oklahoma, Dr. Tom Coburn just issued his “Wastebook” for 2014, listing 100 examples of government waste totaling more than $25 billion. They range from the ridiculous to the sublime, from the silly to the fraudulent. The fact that $25 billion is less than 7/10 of 1% of the total budget does little to mute the message or soften the impact of the ghastly, egregious projects at which the federal government is throwing heaps and gobs of taxpayer monies.

Faced with deadlines, journalists at the Washington Post, MSN.com, and GOPUSA.com were forced to pick and choose from this rancid buffet. The Post selected

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Sen. Coburn’s Final 2014 Wastebook Is Funny, Sad, and Outrageous

This article first appeared at TheNewAmerican.com on Thursday, October 23, 2014:

Oklahoma Republican Senator Tom Coburn’s final edition of his “Wastebook” lists 100 ways that the federal government is wasting taxpayer dollars on wacky, useless, and exasperating projects. Coburn first served in the House of Representatives for three terms and then two more terms as Senator. Battling prostate cancer and keeping his pledge not to run for a third term, Coburn is retiring at the end of this year. He has rightfully earned the sobriquet from big spending Democrats as “Dr. No.”

Journalists across the political spectrum enjoyed selecting their own “favorite” projects to explore, decry, and ridicule. Josh Hicks at the Washington Post picked his favorite nine, including

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Stock Market Gains Failing to Bail Out Pension Plans

This article first appeared at The McAlvany Intelligence Advisor on Friday, September 26, 2014: 

Pension managers’ hopes that investment returns – i.e., pixie dust – would bail them out from their bad assumptions, and keep their plans solvent and fully funded so that they would be able to keep every promise made, have finally crashed on the rocks of reality. Just three months ago, the Center for Retirement Research at Boston College released a study showing that the shortfall between promises and assets to pay them for 25 of the largest public defined-benefit pension plans in the country amounted to more than

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Despite Stock Market Gains, Public Pension Plans Fall Further Behind

This article first appeared at TheNewAmerican.com on Thursday, September 25, 2014:

 

In its latest report on public pension plans, Moody’s announced on Thursday that, despite recent historic gains in the stock market, those plans’ liabilities are increasing even more quickly. Reporting on the 25 largest public defined benefit pension plans in the country, Moody’s Global Credit Research estimates that those plans are now $2 trillion short of where they need to be to pay out all the benefits promised to their beneficiaries. This has occurred despite record gains in the stock market, which,

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Welfare State Costs Taxpayers More Than $2 Trillion a Year

This article first appeared at TheNewAmerican.com on Wednesday, August 6, 2014:

 

Following the release of the latest budgetary statement from the U.S. Treasury, Ali Meyer dove into the statistical morass of charts and graphs to determine just how much the welfare state is paying out in benefits. Meyer, writing at CNS News, concluded that beneficiaries received over $2 trillion from the American taxpayer last year, or almost

 

Tea Party Protest, Washington D.C. September 1...

Taxpayers protesting

60 percent of all federal government spending. This included “means-tested” benefits — which require incomes to be below a certain level to quality for them — as well as “non-means tested” benefits such as Medicare, Social Security, unemployment insurance, workers’ compensation and the like.

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New York Times Calls Out City’s Pension System

This article was first published at TheNewAmerican.com on Monday, Augusts 4, 2014:

NYC Mayor Bill de Blasio

NYC Mayor Bill de Blasio

In a nearly 4,000-word lead article on Sunday, the New York Times clearly articulated exactly what is wrong with the city’s five separate pension plans: too-optimistic investment assumptions, excessive fees, overly generous pension benefits, and political interference. Mere tweaking on the margins will only delay the inevitable Detroit experience: drastic benefit cuts for retirees and higher taxes on taxpayers.

In 2000, the city’s contributions to its five pension plans (general city workers, police, firefighters, teachers, and other school personnel) consumed just two percent of the city’s budget, and the plans were considered to be adequately funded. For instance, the plan insuring the city’s general workers was actually overfunded by 36 percent. Today those pension plans soak up more than

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Detroit Taxpayers Being Set Up by New “Free” Rail Line

This article was first published at the McAlvany Intelligence Advisor on Monday, July 28, 2014: 

Woodward Avenue in Detroit, Michigan

Woodward Avenue in Detroit, Michigan

Construction begins next week on Detroit’s version of a taxpayer “sting” operation: the new M-1 Rail line, also called the Woodward Avenue Streetcar. It’s been in the works for years, but no one could ever figure out how to make it pay, and besides, Detroit is broke. When it was suggested that private money fund most of the $137 million project in the form of gifts and grants rather than as “investments,” it began to get purchase. It’s already $12 million over budget but

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Santa Clara’s Field of Dreams

This article was first published at The McAlvany Intelligence Advisor on Monday, July 21, 2014:

Cover of "Field of Dreams (Widescreen Two...

Ray Kinsella, meet the Mayor of Santa Clara, California, home of the brand new Levi’s Stadium where the San Francisco 49ers are scheduled to play their home games starting this fall. And where, it is predicted, their fans will come to watch.

Whether enough of them will is an open question.

Already nearly a third of the 49ers’ season ticket holders have

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Taxpayers On the Hook for New 49ers Stadium in Santa Clara

This article first appeared at TheNewAmerican.com on Monday, July 21, 2014:

A custom San Francisco 49ers GMC Yukon XL at t...

A custom San Francisco 49ers GMC Yukon XL at team headquarters in Santa Clara, California.

Last Thursday every politician, every bigwig, every banker, every individual with any interest whatsoever in the new Levi’s Stadium in Santa Clara, California, showed up for the invitation-only celebration of its grand opening. The beer was flowing, the confetti was flying, and self-congratulatory exuberance was on every lip.

Present were Santa Clara Mayor Jamie Matthews, San Francisco 49ers CEO Jed York, John York (Jed’s father and co-chairman of the team), 49ers president Paraag Marathe, NFL Commissioner Roger Goodell, 49ers coach Jim Harbaugh, and some of his star players including Patrick Willis and Joe Staley. In the background were executives from Levi Strauss, who paid big bucks to name the stadium.

The only people not in the audience were the ordinary taxpayers, who could find themselves on the short end of one of the most massive financial disasters in modern history.

In a toast to the fans who are expected to fill the 70,000-seat extravagance starting with preseason games in early August, Jed York said, “You deserve to have the best stadium in the world. And now you have it!” 49ers president Marathe added, “You can feel the difference [here] and you know the fans are going to feel the difference.”

At one point in the ceremony, noted Mike Rosenberg, a writer for the San Jose Mercury News who attended the affair,

Hundreds of workers wearing white “I built Levi’s Stadium” shirts and hard hats marched down two red-carpeted giant staircases. Thousands of white, red and gold pieces of confetti burst into the air at the end of the event, as dozens of cheerleaders waved their pom-poms and guests rushed to take selfies in front of a giant screen on stage.

The deal has been in the works for years, with initial plans to demolish Candlestick Park and replace it with an updated version in its parking lot. Financial squabbles and traffic glitches finally deep-sixed those plans, and in 2006 the team’s new owners announced they were moving 40 miles south to the tiny burg of Santa Clara, home of the 49ers’ administration offices.

Negotiations with the city council began in earnest the next year, with promises that no new taxes would be needed and that the huge stadium would bring in additional revenues without liability. Free money, in other words.

On June 8, 2010 Measure J was passed, with 15,000 voters in favor and 10,000 against. Those voting for it were persuaded by the language in the ballot which said, in part:

No use of City General or Enterprise funds for construction; no new taxes for residents for stadium; private party pays all construction cost overruns; no City/Agency obligation for stadium operation/maintenance.

Within a year that ballot language had already been breached: Twelve percent of the cost of the $1.3 billion stadium was provided by the city, with another $330 million to be borrowed by the city’s Stadium Authority. Goldman Sachs headed up a consortium of banks that provided some $850 million in construction financing (with Goldman taking its usual 10-percent fee) while Levi Strauss ponied up another $200 million to be paid out over the next 10 years. The NFL itself loaned the Stadium Authority $200 million to help out, expecting to be paid back out of gate revenues, seat leases, trinket and beer sales, and so on.

The assumptions underlying the project are mind-boggling: First, it is assumed that the 49ers will continue to have a winning team for as far as the eye can see into the future, drawing fans from not only San Francisco but also other cities within a 100-mile radius of the stadium. That expectation, however, is already flawed, as more than 30 percent of those loyal fans in San Francisco holding season tickets have given them up, as the 40-mile drive each way and the potential traffic jams on game day were just too daunting.

Second, the interest rate on the financing is short-term, and most of the loans will have to be refinanced no later than 2015. Even a small uptick in short-term interest rates could put debt service requirements out of reach of the authority.

Third, the cost of subsidies negotiated to bring the 49ers to Santa Clara haven’t been measured but include the NFL’s requirement that all revenue from its events “be exempt from sales, amusement or entertainment taxes or other surcharge obligations.”

Judith Long, who teaches urban planning at Harvard, concluded that even these costs are usually underestimated when proposed to the taxpayers:

Governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land and infrastructure, and the ongoing costs of operations, capital improvements, municipal services and foregone property taxes.

Adjusting for these omissions increases the average public subsidy by $50 million.

That would bring the taxpayers’ cost for the “free” Levi’s Stadium to more than $200 million, not counting any obligation incurred by the Stadium Authority. Another part of the risk is that Santa Clara itself is such a small town, with such a small tax base. Even adding in the county, its population is just 10 percent of the 17 million populating metro San Francisco. No matter how one does the math, the town is making a massive bet on everything turning out just right. As writers Darrell Preston and Aaron Kuriloff of Bloomberg expressed it, “The city is taking what may be the largest per-capita risk for any municipal sports facility [in the country].” The budget for the city itself is just barely $140 million a year.

Roger Noll, a retired professor of economics at Stanford University, looked at the numbers and came to the same conclusion:

The thing that makes this such a dog is that Santa Clara first of all is a small town. There’s some amount of financial hit the city could probably pay [if things don’t pan out as projected], but the probability that it’s going to exceed that is certainly not zero.

That is how a retired college professor says that Santa Clara is taking a huge risk. Within the next three to five years, after “normalization” about attendance, winning games, traffic congestion, interest rates, and maintenance expenses, the taxpayers will know.

Now that the stadium is finished, all the people behind the massive project are counting on those fans to come. Just because they built it doesn’t mean they will.

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