tax policy,

Richard Spencer’s white supremacist group loses its tax-exempt status

  • White supremacist organizer Richard Spencer has collided with something that might smart a little more than a punch to the face: The revocation of his organization’s tax-exempt status by the IRS.
  • The Los Angeles Times reported Monday evening that Spencer’s National Policy Institute, the quasi-academic think tank behind a notorious Washington, D.C., conference in November, has lost its tax-exempt status after the paper inquired whether Spencer had filed proper paperwork to fundraise in Virginia. Read more (3/13/17 11:18 PM)
Liberalism is objectively more profitable for America than conservatism. Minnesota is liberal, and they’ve been raising taxes for years and building a better state a la liberalism-in-action, and Minnesota is doing great with budget surpluses, job growth, expanded social programs and happy people. Kansas, meanwhile, was the self-proclaimed conservative wet dream of tax cuts and conservative economic policy, and instantly their budget and university system went bankrupt, they halted all transportation projects, and are continuing to slide downward in the state rankings of quality of life. Brownback almost lost his reelection, and who knows maybe Kansas’ next governor will be a Democrat to clean up the mess. Louisiana is another state that was deemed a trial run for conservative tax cuts and economic policies under Bobby Jindal and it quickly went bankrupt, too, and lost all hope for growth…so much that Jindal’s successor was a Democrat in a very very republican state.
—  Levi Olson

Remember. The Republicans’ plan to repeal and replace Obamacare is not really a health care plan. It is a tax plan which provides $275 billion in tax breaks to the very wealthy while throwing 24 million people off of health care. Paul Ryan said it himself this morning. He said: “We are repealing Obamacare and replacing it with good Republican tax policy.” Tax policy! Not health care policy. At a time of massive income and wealth inequality the last thing we need is more breaks for millionaires and to be put on the backs of the rest of America.

Look at how they’re bidding up real estate prices. They’re obviously willing to pay a very high premium to live in New York City. That suggests that New York has some leeway to tax the very wealthy. If you could figure out exactly how much they’d be willing to pay without leaving, it could be an incredible bonanza for New York City. And if they’re willing to pay so much for those empty apartments, maybe they should also do something to help make everyone else better off.
—  Daniel N. Shaviro, professor of taxation New York University School of Law, ‘Plan to Tax the Rich Could Aim Higher
YOU NEED TO KNOW THIS.

Yesterday, I blogged this.

It is true, it doesn’t address the problem directly.

I’ll try to clear it up.

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Our three married, male players all work at the same Californian company:

  • Aaron Wells: Management. Wage of $300,000 yearly. $800,000 bonus last year for completion of Project A.
  • Bob Medio: Associate. Wage of $85,000 yearly. $30,000 bonus last year for completion of Project A.
  • Carl Poor: Senior Custodial. Wage of $45,000 yearly. No bonus.

===

TAX BRACKETS:

Based on the California Tax Brackets 2012 and Federal Tax Brackets 2012 only, here’s how things end up:

  • A pays 9.3% + $2,059 of his wage in state tax and 33% of his wage in federal tax pre-deductions. A is left with $171k of his original $300k, which is 57%.
  • B pays 9.3% + $2,059 of his wage in state tax and 25% of his wage in federal tax pre-deductions. B is left with $54k of his original $85k, which is 64%.
  • C pays 4% + $533 of his wage in state tax and 15% of his wage in federal tax pre-deductions. C is left with $36k of his original $45k, which is 80%.

So far so good, right? The poor keep a higher percentage of their wages. 

Oh, wait. We forgot about the bonuses.

The IRS taxes bonuses at a flat rate of 25%. Those in upper management are much more likely to receive bonuses that are hundreds of percent of their salary. A gets to keep $600k of his $800k bonus. B gets to keep $23k of his $30k bonus. C gets to keep working.

Net wage after taxes, bonuses, and taxes and bonuses? $771k for A, $77k for B, $36k for C. I’d like to remind everyone that A’s wage is only 7 times as much as C’s wage, but he’s taking home 20 times that much after taxes and bonuses.

===

But you know what? Maybe A deserves it. He’s a genius who’s done a lot of good for his society. Even C admits it. In fact, C respects A so much that he’s completely fine with A being able to retire at 35 while he has to work until 65.

But wait, there’s more.

Let’s figure out a quick Minimal Cost of Living (CLm).

$1,000 rent/mo, $200 food/mo, $500 car/mo, $200 utility/mo, $100 depreciation/mo. Plus $5k a year to account for everything else – marriage expenses, having to replace your car once every 2 decades, credit card debt (PROTIP: Avoidable credit card debt by chipping off your stocks a little every month).

$29k a year to stay alive in California. This is a very, very conservative estimate. It’s probably closer to $36k a year.

Which would mean, by the way, that C saves $0 a year. Based on our conservative model, C saves $7k a year.

Let’s say A isn’t a lavish guy. Drives a new car, but it’s a Prius. Lives in a house, but it’s not huge. Buys organic, but doesn’t eat out every day. Does take a vacation to Hawaii during the holidays. Does buy Starbucks every morning. Does have a membership at a tennis club, and prefers to have the latest iPhone. A’s cost of living is $100k a year. Based on wage alone, A saves $71k a year. This year, A saved $671k. It would take C 96 years to save as much as A saved this year. Remember, though, that A’s wage is only 7 times as much as C’s.

And who said anything about saving that money? A’s going to invest it by buying a house, starting a side-business, buying some stocks, hiring expensive tutors and buying expensive colleges for his kids.

By the way, when A does this, his wages are taxed less and he gets to keep more of his $771k.

But that’s not the point. Once A’s investments secure him several rental properties and several properties in promising areas that he can resale, once his investment portfolio is otherwise robust, wages become close to meaningless with respect to wealth in terms of investments and assets for the rich.

“Yeah my paychecks add up to $300k a year, but that doesn’t mean I’m rich. I only get to keep like $150k of that. Also, my stock portfolio lost 4% last quarter. I lost $20k from that alone. My investment properties are going up 2% a month though, so I should be worth $500k more by the end of the year.” – A

C is trying to invest, too. He’s trying to buy his first house before he retires.

===

This discussion doesn’t include concepts like benefits, dividends, options, bonds, offshores, and other things that exist only in the lexicon of the rich.

  • The kicker: Our A is not even upper class rich. He’s upper middle class rich. If you want to get a sense of how a rich person might fit in to this example, add some zeros to the ends of A’s numbers. Except for tax. There is a tax ceiling.
  • The conclusion: The discussion on taxes on wages is, at best, a good ideological start on something that makes little difference. At worst, the political focus on taxation itself is a diversion planted by the wealthiest upper-class to keep public minds off of the real issue at hand: the ownership of the means of production.

Even if the upper class paid 100% of their wages in tax yearly. Even if the upper class paid 1000% of their wages in tax yearly, they would still remain the wealthiest people by far. Their money doesn’t come from wealth. It comes from ownership.

Without capital, there can be no ownership. Without saving, there can be no capital. With $7 post-tax post-CLm saving, good luck building up a meaningful amount of capital to work with.

And being a Senior Custodial staff, good luck knowing what to do with that capital, if you should ever build it up. God knows no one ever taught you.

The government’s total price rule forbids the airlines from calling attention to the tax component of the price of a ticket by listing the price the airline charges and then the tax component with equal prominence. The rule mandates that any listing of the tax portion of a ticket’s price “not be displayed prominently and be presented in significantly smaller type than the listing of the total price.” The government is trying to prevent people from clearly seeing the burdens of government.
nytimes.com
Stop Coddling The Super-Rich

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

Its quite stunning that Trump’s budget plans, Trumpcare, tax policies disproportionately fall on his supporters. Its quite a thing …

“In rural Appalachia, people are so poor that there is a federal program dedicated to lifting them out of poverty. Through the Appalachian Regional Commission, the government pitches in on projects that these rural communities badly need but can’t quite afford — everything from fixing roads, to building computer labs, to training workers, to opening health clinics.

   These efforts have become so widely admired that in recent years Congress launched, with bipartisan backing, sister agencies to help other rural regions stuck in generational cycles of poverty. Together the programs spend about $175 million each year bringing jobs and opportunities to places that long have felt left behind.

   President Trump, who won rousing victories in these same parts of rural America, would eliminate that funding.”

Also See: President Trump won big in these places. Now he wants to eliminate 3 agencies dedicated to helping them - Washington Post

Remember. The Republicans’ plan to repeal and replace Obamacare is not really a health care plan. It is a tax plan which provides $275 billion in tax breaks to the very wealthy while throwing 24 million people off of health care. Paul Ryan said it himself this morning. He said: “We are repealing Obamacare and replacing it with good Republican tax policy.” Tax policy! Not health care policy. At a time of massive income and wealth inequality the last thing we need is more breaks for millionaires and to be put on the backs of the rest of America.
—  U.S. Senator Bernie Sanders
theguardian.com
Women bearing 86% of austerity burden, Commons figures reveal
Labour urges Conservatives to look at disproportionate impact of tax and spending policies on women
By Heather Stewart

Labour has urged the Conservatives to carry out a gender audit of its tax and spending policies, as the shadow equalities minister, Sarah Champion, published analysis showing that 86% of the burden of austerity since 2010 has fallen on women.

Champion said research carried out by the House of Commons library revealed that women were paying a “disproportionate” price for balancing the government’s books.

“Yesterday, the prime minister and chancellor talked up the significance of International Women’s Day yet their warm words have amounted to nothing,” she said on Thursday.