If it’s so great, why won’t they let us know what’s in those 300 pages of regulations??
And by the way, for all you dumber-than-dirt low-information folks out there (and that includes YOU, Tumblr Staff: This is NOT legislation passed by Congress; it’s an unconstitutional edict IMPOSED by the FCC. So now the federal government has just taken away a little more of your freedom—and you’re celebrating. Sheesh.
And to everyone else who reblogged and added a comment with a lesson in economics, that’s not the point of this post. We all know more money = inflation, but that obviously doesn’t stop the statists. The point is there is no need for taxation when the government is 16 trillion in debt and is never going to stop. It’s all just a sham. But keep clinging to the notion that if we just get back on the gold standard and control the money supply everything will magically be fixed. Economics is bunk because we live on a planet with finite resources, and we have a system predicated upon infinite growth. If all you’re trying to figure out is how we can develop new ways to maintain our hydrocarbon-dependent infrastructure and feed 7 billion people, in a few years you’ll be facing the same problems, only compounded by a higher demand for hydrocarbons and a couple billion more mouths to feed. The entire system needs to be tossed out. We fucked up.
A basic economic principle is government ought to tax what we want to discourage, and not tax what we want to encourage.
For example, if we want less carbon dioxide in the atmosphere, we should tax carbon polluters. On the other hand, if we want more students from lower-income families to be able to afford college, we shouldn’t put a tax on student loans.
Sounds pretty simple, doesn’t it? Unfortunately, congressional Republicans are intent on doing exactly the opposite.
Earlier this year the Republican-led House passed a bill pegging student-loan interest rates to the yield on the 10-year Treasury note, plus 2.5 percentage points. “I have very little tolerance for people who tell me that they graduate with $200,000 of debt or even $80,000 of debt because there’s no reason for that,” Rep. Virginia Foxx (R-NC), the co-sponsor of the GOP bill, said.
Republicans estimate this will bring in around $3.7 billion of extra revenue, which will help pay down the federal debt.
In other words, it’s a tax — and one that hits lower-income students and their families.
Robert Reich on Why Republicans Want to Tax Students. It blows my mind that so few people are discussing this. Out of all of my Facebook friends, 98% of which would fall under the low to middle income levels, I’ve seen this topic mentioned only once between posts on the weather and pleas for lives on Candy Crush.
I’ve said it before: an increase in student loan interest rates is simple taxation under a different name… and it only affects the lower and middle classes, because wealthy people don’t need to take out student loans.
Five years of bitching and editorials and rallies by Republicans and Tea Partiers over all of President Obama’s plans that would “raise taxes” - and this actual tax increase (that only includes the lower and middle classes) dwarfs them all.
Yet, either nobody seems to notice or we’re all too ignorant to care.
Between 2008 and 2011, 26 major American corporations paid no net federal income taxes despite bringing in billions in profits, according to a new report (PDF) from the nonprofit research group Citizens for Tax Justice. CTJ calculates that if the companies had paid the full 35 percent corporate tax rate, they would have put more than $78 billion into government coffers.
Here’s a look at the 10 most profitable tax evaders and the politicians their CEOs, employees, and PACs give the most money to.
Verizon Communications Profits: $19.8 billion Effective tax rate: -3.8% Top recipients, 2011-2012 President Barack Obama: $51,493 Sen. Robert Menendez (D-N.J.): $24,450 Sen. Mitch McConnell (R-Ky.): $23,700 Rep. John Boehner (R-Ohio): $22,500 Sen. Kirsten Gillibrand (D-N.Y.): $15,000
General Electric Profits: $19.6 billion Effective tax rate: -18.9% Top recipients, 2011-2012 Mitt Romney: $53,750 President Barack Obama (D): $30,493 Sen. Scott Brown (R-Mass.): $23,900 Rep. Howard Berman (D-Calif.): $21,860 Rep. Chris Murphy (D-Conn.): $19,750
Boeing Profits: $14.8 billion Effective tax rate: -5.5% Top recipients, 2011-2012 Rep. Buck McKeon (R-Calif.): $31,750 Rep. Adam Smith (D-Wash.): $25,000 Former Sen. George Allen (R-Va.): $23,500 Sen. Maria Cantwell (D-Wash.): $23,125 Rep. Ron Paul (R-Texas): $20,986
NextEra Energy: North America’s largest solar and wind power operator, based in Florida Profits: $8.8 billion Effective tax rate: -2% Top recipients, 2011-2012 George LeMieux (R-Fla.): $9,500 Mike Haridopolos (R-Fla.): $4,800 Sen. Maria Cantwell (D-Wash.): $2,000 Rep. Ron Paul (R-Texas): $2,000 Rep. Tom Rooney (R-Fla.): $2,000
American Electric Power: Electric utility based in Columbus, Ohio Profits: $8.2 billion Effective tax rate: -6.4% Top recipients, 2011-2012 Rep. John Boehner (R-Ohio): $34,750 Rep. Steve Stivers (R-Ohio): $34,050 Rep. Bob Gibbs (R-Ohio): $21,700 Sen. Joe Manchin (D-W. Va.): $19,750 Sen. Sherrod Brown (D-Ohio): $18,450
Pacific Gas & Electric: California electrical utility Profits: $6 billion Effective tax rate: -8.4% Top recipients, 2011-2012 President Barack Obama (D): $6,250 Rep. Jim Costa (D-Calif.): $5,000 Rep. Kevin McCarthy (R-Calif.): $5,500 Rep. Fred Upton (R-Mich.): $5,000 Rep. Jeff Denham (R-Calif.): $3,500
Apache: Houston-based oil and gas company Profits: $6 billion Effective tax rate: -0.3% Top recipients, 2011-2012 David Dewhurst (R-Texas): $25,000 Rep. Connie Mack (R-Fla.): $5,000 Rep. Bill Cassidy (R-La.): $2,500 Rep. Mike Conaway (R-Texas): $2,500 Rep. Gene Green (D-Texas): $2,500 Sen. Mitch McConnell (R-Ky.): $2,500 Brendan Doherty (R-R.I.): $2,500
Consolidated Edison: New York energy company Profits: $5.9 billion Effective tax rate: -1.3% Top recipients, 2011-2012 Sen. Maria Cantwell (D-Wash.): $15,050 Sen. Kirsten Gillibrand (D-N.Y.): $8,000 Rep. Edolphus Towns (D-N.Y.): $6,650 Then-Rep. David Wu (D-Ore.): $2,500 Rep. Joseph Crowley (D-N.Y.): $1,500 Sen. Harry Reid (D-Nev.): $1,500 Rep. Jose Serrano (D-N.Y.): $1,500
El Paso: Houston-based energy company that operates the country’s largest natural gas pipeline Profits: $4.6 billion Effective tax rate: -0.9% Top recipients, 2011-2012 David Dewhurst (R-Texas): $7,500 Mitt Romney (R): $5,000 Rep. John Barrow (D-Ga.): $3,000 Rep. Diane Black (R-Tenn.): $2,750 Sen. John Barrasso (R-Wyo.): $2,500 Sen. Max Baucus (D-Mont.): $2,500 Sen. Mitch McConnell (R-Ky.): $2,500 Gov. Rick Perry (R-Texas): $2,500 Rep. Fred Upton (R-Mich.): $2,500 Sen. Roger Wicker (R-Miss.): $2,500
CenterPoint Energy: Electric and gas utility company based in Houston Profits: $3.1 billion Effective tax rate: -11.3% Top recipients, 2011-2012 David Dewhurst (R-Texas): $22,050 Gov. Rick Perry (R-Texas): $13,458 Sen. Mitch McConnell (R-Ky.): $10,299 Rep. Greg Walden (R-Ore.): $7,000 Rep. Kevin Brady (R-Texas): $4,000
New poll shows that Americans don't understand economics, want to tax the rich more
Decades of progressive propaganda has had an effect. People seemingly have no idea how the economy works.
From Christian Science Monitor:
The rich aren’t taxed enough and the middle class is taxed too much. As for your taxes, you probably think they’re too high as well. Those are the results of an Associated Press-GfK poll that found that most people in the United States support President Barack Obama’s proposal to raise investment taxes on high-income families. The findings echo the populist messages of two liberal senators — Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont — being courted by the progressive wing of the Democratic Party to run for president in 2016. The results also add weight to Obama’s new push to raise taxes on the rich and use some of the revenue to lower taxes on the middle class. Obama calls his approach “middle-class economics.” It’s not flying with Republicans in Congress, who oppose higher taxes. But Bob Montgomery of Martinsville, Virginia, said people with higher incomes should pay more. "I think the more you make the more taxes you should pay," said Montgomery, who is retired after working 40 years at an auto dealership. "I can’t see where a man makes $50,000 a year pays as much taxes as somebody that makes $300,000 a year." According to the poll, 68 percent of those questioned said wealthy households pay too little in federal taxes; only 11 percent said the wealthy pay too much.
Before we get to the troublesome results of the poll, understand that there are several fundamental problems with the poll itself.
First of all, the vast majority of people consider themselves “middle class” (a term I find loathsome as it implies that we still have lords and peasants and that if you’re a peasant, you can’t possibly make it). If you’re poor, you’ll say you’re “middle class”. If you’re rich, you’ll say you’re “middle class.” No one wants to admit that they’re “poor” or “rich”, regardless of reality.
Second, of course people think that their own taxes are too high. That’s only natural. I know of very few who say “man, I wish they would just charge me more!” Sure, there are some that feel this way, but they are obviously a rarity. It’s easy to think that someone else should pay more.
Third, the so-called “middle class” is the largest “class” in the US (if the United States had “classes” — which we don’t). This, coupled with the fact that it’s only natural to think that higher taxes should be paid by other people, it only stands to reason that non principled people think that the “rich” should pay more.
Look, polls like this are not surprising and the utterly predictable results are used to pressure politicians into growing government and treating Americans differently from one another.
Nevertheless, the results are still troubling because, at best, they show a lack of principles by the general public and, at worst, they show a severe lack of understanding of the effect that taxation has on the economy.
There are so many fallacies and straw-men it’s hard to know where to start. As someone who already views taxation (especially on the federal level) as a form of theft, it pains me to defend any tax system. But arguing against the progressive tax rate and the notion that the “rich” should continue to pay more and more and more, is like shooting fish in a barrel.
In short, there are two ways to transfer wealth from the top to the bottom. Forceful redistribution through taxation and the free market. That’s it. There is no third option. The difference is that in the taxation method, nothing tangible is created. People just pay taxes to avoid prison and others receive the fruit of their labor. But through the free market, however, people with money hire others to work and things gets created. When a rich person buys a pool for $50,000, poor people get jobs and paychecks and a rich person gets a pool. However, when a rich person pays $50,000 in taxes only to have it redistributed to the poor, no jobs are created and no pool is built. The same amount of money is spent but they have wildly different results.
To make matters worse, because they know that the extra cash they make will result in a large check for Uncle Sam rather than a new pool, the rich have a built-in incentive to not make extra cash (see Laffer Curve). As you can see, high tax rates for the rich have a compounding problematic effect that goes way beyond hard numbers as it’s awfully hard to measure incentive. Rich people don’t hoard their money and swim in it like Scrooge McDuck. They invest it. They spend it. They start companies. They pay people to do things. And the amount to which they engage in such activities varies inversely to the amount they are punished in the form of taxation for doing these things. In other words, raising taxes can often lead to less revenue for redistribution.
One of the people quoted in the article says that richer people should pay more in taxes than poorer people. I have news for him: Rich people DO pay more. A LOT more. Here’s a fact: In 2011, the top 10% of earners paid 68% of all federal income taxes while the bottom 50% paid 3%. Let those numbers sink in. Oh man, darn those evil, selfish, seething, hateful rich people and their tax havens! Sheesh.
This would be true with standard, non-progressive tax rates too. If you made more, you would pay more — even if the percentages were the same. And it would at least be treating people fairly (if you consider legally robbing people under threat of violence “fair”).
Here’s another little economic principle: When you subsidize something, you get more of it. When you tax something, however, you get less of it. This is a principle that should be understood by everyone. When you raise taxes on those who create jobs (also known as “rich people”) the result will be fewer jobs. Every. Time. I always get hilarious arguments from people citing anomalous statistics that supposedly prove that this principle is false when, in fact, anyone with a modicum of common sense knows it to be true. You can’t take money away from someone and expect it to have no effect. It doesn’t occur in a vacuum. You might think it’s morally acceptable to take $300,000 from someone who has a million dollars (that’s a different argument altogether) but you cannot logically deny the fact that that millionaire will then be left with $700,000. By definition, he will have 300,000 fewer dollars to invest, start companies, create jobs or otherwise spend it as he pleases.
This affects the economy in a major way. It’s silly to pretend it doesn’t. After paying off Uncle Sam, that rich guy might not be able buy that yacht that he otherwise would have. Now, to an extreme left-wing, progressive statist, this is a good thing. After all, no one needs a yacht. But by taking money from his pocket, blue-collar yacht builders will be out of a job and the economy will suffer.
Higher tax rates on the rich will, as usual, make things worse, not better. But don’t take my word for it, take Dr. Milton Friedman’s:
IRS Provides Bitcoin and Virtual Currency Guidelines
Well, that ends all the guesswork about how to pay tax on Bitcoin and other such virtual currency transactions and gains. The IRS has issued a notice that provides an FAQ about the tax implications of transactions involving virtual currencies such as Bitcoin.
You can see all the 16 Q&As in the notice (2014-21), but the summary of it is that the IRS wants you to treat virtual currency as property as far as U.S. federal tax purposes are concerned.
General tax principles as applied to property transactions will be applicable to transactions that use virtual currency. Here’s a few specific rules as to how it will work:-
- Wages paid in virtual currency will be considered as the employee’s taxable income and must be reported by the employer on a Form W-2, and must be subject to federal income tax withholding and payroll taxes same as other payments made in property.
- Loss or gain from the sale or exchange of virtual currency will depend on whether it is a capital asset in the hands of the taxpayer.
- Virtual currency payments will be subject to the same reporting requirements as any payment made in property.
A little bit of an expanded discussion is required for the second point. If you invest into and are holding on to a Bitcoin hoard, then you need to figure out the loss or gain for purposes of capital gains.
But a taxpayer who receives virtual currency as payment for goods or services simply factors it into the gross income based on the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received.
Secondly, if you buy something using Bitcoin and there’s a difference between the fair market value and the value of the property you purchased, then you have to show the gain or loss.
A special note for Bitcoin miners – the fair market value of the Bitcoin mined must be included in the gross income.
Oh, and here’s the kicker – the notice and the rules therein must be complied with even for transactions before the issue date of March 25, 2014.
This means that if you just filed your returns and it shows underpayments or improper reporting related to virtual currency transactions in violation of the notice, then you could be subject to penalties – unless you are able to establish reasonable cause for the non-compliance.
The fast food industry is notorious for handing out lean paychecks to their burger flippers and fat ones to their CEOs. What’s less well-known is that taxpayers are actually subsidizing fast food incomes at both the bottom — and top — of the industry.
Take, for example, Yum Brands, which operates the Taco Bell, KFC and Pizza Hut chains. Wages for the corporation’s nearly 380,000 US workers are so low that many of them have to turn to taxpayer-funded anti-poverty programs just to get by. The National Employment Law Project estimates that Yum Brands’ workers draw nearly $650 million in Medicaid and other public assistance annually.
Meanwhile, at the top end of the company’s pay ladder, CEO David Novak pocketed $94 million over the years 2011 and 2012 in stock options gains, bonuses and other so-called “performance pay.” That was a nice windfall for him, but a big burden for the rest of us taxpayers.
Under the current tax code, corporations can deduct unlimited amounts of such “performance pay” from their federal income taxes. In other words, the more corporations pay their CEO, the lower their tax burden. Novak’s $94 million payout, for example, lowered YUM’s IRS bill by $33 million. Guess who makes up the difference?
Combined, these firms’ CEOs pocketed more than $183 million in fully deductible “performance pay” in 2011 and 2012, lowering their companies’ IRS bills by an estimated $64 million. To put that figure in perspective, it would be enough to cover the average cost of food stamps for 40,000 American families for a year. My new Institute for Policy Studies report calculates the cost to taxpayers of this “performance pay” loophole at all of the top six publicly held fast food chains — McDonald’s, Yum, Wendy’s, Burger King, Domino’s and Dunkin’ Brands.
After Yum, McDonald’s received the second-largest government handout for their executive pay. James Skinner, as CEO in 2011 and the first half of 2012, pocketed $31 million in exercised stock options and other fully deductible “performance pay.” Incoming CEO Donald Thompson took in $10 million in performance pay in his first six months on the job. Skinner and Thompson’s combined performance pay translates into a $14 million taxpayer subsidy for McDonald’s.
What makes all this even more galling is that these fast food giants are pocketing massive taxpayer subsidies for their CEO pay while fighting to keep their workers’ wages at rock bottom. All of the big fast food corporations are members of the National Restaurant Association, which is aggressively working to block a raise in the federal minimum wage to a level that would let millions of fast food workers make ends meet without public support.
[Photo] A Burger King worker cleans up at a Burger King restaurant in Sunnyvale, Calif. The fast food chain is operated by Yum Brands, whose CEO, David Novak, received a $94 million payout for 2011 and 2012. Of that, $33 million was subsidized by taxpayers. (AP Photo/Paul Sakuma)
Overall, people should care a lot less about who owns Canadian corporations, but about whether their workers are paid a living wage. Canadians like to get righteous about Americans owning Canadian corporations, but they’d do a lot more good getting angry at Canadian companies for mistreating and exploiting the labour of their employees in the first place.
Big news this week that Burger King, a U.S. company, is planning to buy Tim Hortons, a Canadian one. This is another in a string of “tax inversion” deals where U.S. corporations move their corporate headquarters from the U.S. to elsewhere to avoid U.S. taxation. They don’t actually change anything or move anyone outside of their accounting fairyland. Instead, they just check some different boxes on their income tax forms and “poof” — save millions in taxes.
But the loss of U.S. taxes from BK is Canada’s benefit right? Turns out, not so much. The only reason why this particular accounting trick works is because American corporations are taxed on worldwide profits, Canadian companies (and most other countries companies) are not. What that means is that American corps pay the American government taxes on all their profits no matter which country they are made in. Canadian companies only pay the Canadian government on profits made in Canada.
So the BK move to Canada would mean that BK will stop paying taxes on profits it makes in Kuwait to the U.S. government. However, since no Canadian company pays taxes on profits made in Kuwait in any event, Canadian governments would bring in no additional revenues. In BK’s case, this would save them in the neighbourhood of $12 million a year in U.S. corporate taxes. Of course, Canada sees none of that money and essentially gains nothing from this deal.
In the end, many corporations want to pay $0 in income taxes and have the rest of us pick up the tab for health care and infrastructure that we all benefit from. “Tax inversion” is just one of the many accounting tricks that makes regular people pick up the tab for corporations that abuse tax rules or lobby governments to pay less and less every year.