[A]s globalization increases demand for a more competitive tax system, the United States must consider shifting from a system that primarily relies on income taxation to one that relies primarily on consumption taxation. Most other major economies around the world depend more heavily on consumption taxation than does the United States. And all indications are reliance on consumption taxes is increasing. [Martin Sullivan]
Tag: Taxes
Omaha Mayor Proposes Crappy Idea to Fund Sewer Improvements
Omaha Mayor Jim Suttle was at the U.S. Conference of Mayors this week to brainstorm solutions to various problems with his fellow hizzoners. Omaha, for one, needs to make improvements to its sewer system to the tune of $1.7 billion. So it makes perfect sense for Suttle to suggest a simple way to get to the source of this problem:
Among the items on his brainstorming list: a proposal for a 10-cent federal tax on every roll of toilet paper you buy. Based on the four-pack price for Charmin double rolls Tuesday at a midtown Hy-Vee, such a tax would add more than 10 percent to the per-roll price, pushing it over a buck.
But just because Scuttle is throwing this out there doesn’t mean he’s on board with it; he’s just come up with solutions:
The idea came from a failed 2009 House measure by an Oregon congressman to help cities and the environment. “I heard about it and said, ‘Well, this is simple. Let’s put it on the table,’” said Suttle. “It doesn’t mean I endorse it.
Suttle unrolls toilet paper tax [OWH via TaxProf]
Rich People in the U.S. Seem to Be Pulling Their Tax Weight Relative to Other Industrialized Countries
The United States relied more on tax revenue from wealthy individuals and families than other industrialized countries during the middle of the last decade, the Tax Foundation said Monday. Citing data released in 2008 from the Organization for Economic Cooperation and Development, the nonpartisan group said that the ratio of what higher-income households paid in taxes compared to their share of market income was bigger here than in certain other countries. The richest 10 percent of American households paid a 45 percent share of the nation’s taxes in the mid-2000s, the OECD found, while having a 33.5 percent share of market income. That 1.35 ratio was higher than countries including Australia (1.29), Canada (1.22), France (1.1) and Poland (0.84). [The Hill]
Pipedream Legislation Would Tax Billionaires at 49%
Congresswoman Jan Schakowsky (D-IL) has introduced the cleverly-named “Fairness in Taxation Act” that would tax millionaires and billionaires at rates that will cause John Boehner to hack up both his lungs.
Despite the futility of the FiTA, these are some tax rates that Tom Bloch can get behind!
The bill would create the following new tax brackets for millionaires and billionaires:
• $1-10 million: 45%
• $10-20 million: 46%
• $20-100 million: 47%
• $100 million to $1 billion: 48%
• $1 billion and over: 49%
And Schakowsky obviously has a thing for the Steve Cohens and John Paulsons of the world:
The current top tax bracket begins at $373,000 in income and fails to distinguish between the “well off” and billionaires, such as the top 20 hedge fund managers whose average income last year was over $1 billion, Schakowsky pointed out.
Congresswoman Introduces Bill to Tax Millionaires and Billionaires [AT]
Memo to Congress: Cutting Funding for NPR Should Be NBD
The NPR funding debate is a litmus test of how serious Congress in general and Republicans in particular are about spending cuts. If Congress can’t even cut NPR it is a sign that deficits are here to stay and . . .dare I say it . . .tax hikes will be necessary. Or perhaps you don’t care that your children will be paying big chunks of their diminished incomes to the Chinese. [Martin Sullivan/Tax.com]
Heir to H&R Block Fortune Is Ready to Pay Higher Taxes
Tom Bloch is so ready in fact that he wants his to go up first.
“Congress will have no choice, in my opinion, but to raise taxes sooner rather than later.
“I also believe that the rich are significantly under-taxed compared to the middle class. That’s why I suggest that raising taxes on the very wealthiest taxpayers must be the first step toward restoring equity in our income tax system and ensuring the financial security of our children’s future.”
US taxes are too low, should be raised: H&R Block heir [PhillyDeals]
IRS Eases Up on the Tax Liens for the Little People; Celebrities Not So Lucky
Commissioner Doug Shulman said in a statement today that the agency would make it easier for taxpayers to seek withdrawal of liens when they pay a tax debt or make arrangements to pay in installments for debts of less than $25,000. The agency also raised the dollar thresholds before liens are typically filed. “We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” Shulman said in the statement. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.” [Bloomberg]
Lawrence O’Donnell Wants to Know if This Congressman Is Sleeping in His Office as a ‘Tax Criminal’
You can just see the perverse enjoyment on Larry’s face as he badgers Utah’s Jason Chaffetz.
I especially enjoyed:
• “Have you sought an advisory opinion from the IRS yada yada yada”
• “Will you seek to do it? TOMORROW!”
• “DOES YOUR WIFE HAVE ANY INCOME?”
• “As far you know, the rest of them are criminals too.”
[via TaxProf]
Be Prepared for a New Flood of GOP ‘IRS Agents Will Be Invading Your Homes’ Rhetoric
President Barack Obama proposed increasing the budget for the Internal Revenue Service by 9.4 percent to hire more than 5,000 new employees, most of whom would pursue tax cheats. The president’s fiscal 2012 budget released today sets funding for the tax-collection agency at $13.3 billion, an increase of $1.1 billion from 2010, the last time a full appropriation was made for the IRS. Almost half of the increase, or $460 million, would support the agency’s tax-enforcement programs. Under the plan, the IRS would focus on fighting tax evasion through the use of offshore accounts and cheating by corporate and high-wealth taxpayers. It also would seek out fraudulent tax preparers. [Bloomberg]
It’s Being Suggested That Higher Taxes on Alcohol Will Reduce Crime
It’s ironic that I read this this blog post today (rather than on Friday) since A) approximately a third of the country is in a some stage of a hangover B) I’m listening to “Rehab” by Amy Winehouse as I write this and C) there was a murder at a fraternity in Youngstown, Ohio over the weekend (I realize it’s a stretch to assume that anyone would have been drinking at a frat party) but this is pie-in-the-sky postulating that just begs to be mocked.
Janet Novack’s post at Forbes discusses a recent article written by two professors who are crime fighters in the economic persuasion:
Would raising the tax on beer reduce the number of young folks who get caught up in crime and the high budget and social costs of locking up so many people?
In a provocative article, The Economist’s Guide To Crime Busting, in the new issue of The Wilson Quarterly, Duke University’s Philip J. Cook and the University of Chicago’s Jens Ludwig suggest that it would. (The article is here, but isn’t free.) The profs argue that crime policy (from an economist’s point of view) should focus “both on making criminal opportunities less tempting and the law-abiding life more rewarding” and offer three strategies which they say have been shown to do just that: raising the mandatory age through which kids must attend school; creating business improvement districts with private security guards (a tactic Los Angeles has used with great success); and yes, raising taxes on alcohol.
Our favorite passage being the “making criminal opportunities less tempting and the law-abiding life more rewarding” because this what someone walking into the liquor store is thinking, “Jeepers, the cost of binge drinking on the weekend has gone up significantly and no longer fits my monthly budget. I guess I’ll stay sober and won’t break the law today.”
It continues:
The average state excise tax on beer, they note, is now only about 10 cents per 12 ounce bottle. Raising it to 55 cents they write, would persuade some teenagers “not to pick up that second six-pack on Thursday night” and would produce such extra benefits such as “fewer auto accidents and more money for state treasuries.” Data from Cook’s 2007 book, Paying The Tab, suggests a 55 cent per bottle levy would reduce beer consumption perhaps 10% and crime maybe 6%, they note.
Never mind how the neo-con scamps over at American for Tax Reform would react; this assumes that the demand for alcohol is elastic. You could easily argue that most people with the necessary means will pick their potent potable of choice regardless of price and even if they did decided to tighten the booze budget, they’d just go for a cheaper alternative, they wouldn’t actually buy or drink less.
I’m no economist but this kind of reasoning simply defies logic. People will drink regardless of the cost and they will continue to act like idiots and commit crimes when doing so. If you want to discuss that from a tax/fiscal policy standpoint raising taxes on booze (or taxing other sins) is a good idea then a discussion can be had. But let’s not get all crazy and start claiming that our country will become a bunch of law-abiding teetotalers the second a sixer of suds goes up $6.
Super Bowl Question:Would Higher Beer Tax Reduce Crime? [Forbes]
Can We Get a Show of Hands From People Who Plan to Declare Their Super Bowl Gambling Winnings?
You may have heard about or even watched a sporting event known as the Super Bowl that was played last night. This particular mother of all bowls saw the Green Bay Packers defeat the Pittsburgh Steelers 31-25, paying a tidy sum for anyone that picked them last spring. Which brings me to my next point: while the Super Bowl is a grand occasion that involves athletes at the top of their game, expensive ads and shitty, over-hyped halftime shows, it’s also means an epic amount of wagering. Everything from the coin flip to last year’s odds on Reggies Bush’s total yardage versus Kim Kardashian’s measurements are popular ways to earn yourself some free money (or, if you’re on the losing side, a broken tibia).
And believe it or not, most gamblers appear to be a honest lot with over $27 billion declared gambling winnings in 2008 (the most recent data available). However, because avoiding taxes is as American as, well, the Super Bowl you can bet that a lot of the winnings don’t ever see a 1040. The exact amount of unreported winnings is, like that the secret ingredient in that dip you were inhaling last night, a mystery. Kay Bell reports:
As for how many taxpayers didn’t completely ‘fess up on 2008 returns about their gambling income, the IRS won’t even venture a guess. Or as an IRS spokesman once told me, “We can’t tell you what we don’t know.”
But guesstimating that a whole heck of a lot of gambling income never gets taxed is a very safe bet.
But don’t worry if you missed some sweet, tax-free action on last night’s game. March Madness isn’t far off.
Ohio County Auditor Discovers an Ongoing 30-Year Tax Mistake
After a massive flood in the Ohio county of Butler March 25, 1913, the Miami County Conservatory was formed to preserve the quality of Great Miami River water. This mission, hammered out in 1914, allowed for a tax against Butler County residents but apparently when this tax was raised in 1976, it didn’t actually go in front of Butler County votes like it was supposed to.
Which means $4 million in taxes has been collected since then ($252,793.74 in 2009) and somehow no one noticed until now.
Via the Oxford Press (OH):
Following an internal review and opinion from the Ohio Department of Tax Equalization, Butler County Auditor Roger Reynolds is removing the tax from the 2010 bill.
“I am proud of my office for this discovery, and for instituting our plan for stronger internal controls on behalf of the citizens of Butler County,” Reynolds said in a press release. “Our role as government leaders must be to protect taxpayers’ money, and to safeguard against waste and error.”
The tax is allowable according to Ohio law. A 1914 statute states taxes for a conservancy district can be collected up to 10 mills, but anything greater must have voter approval.
The funny part is that according to Miami Conservatory District PR, the county is only obligated to pay $207,982 a year to the conservatory. So they really over-collected.
This county auditor is the same who caught another tax boo-boo in early 2010 in which a $1.46 assessment was wrongly collected from every parcel of land in the county for a grand total of $2.3 million.
And you guys wonder why tax protesters do what they do.