Category Archives: Taxes

This Is F*ucked Up

https://www.theburningplatform.com/2018/08/13/this-is-fcked-up/

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The Obama Center Can Afford More Than $1 Rent, by Mark Glennon

The Obama Center is not going to a presidential library, it’s going to be Obama’s base for his continuing political operations. So why are taxpayers subsidizing it? From Mark Glennon at WirePoints via zerohedge.com:

It’s a political ‘institute,’ not a presidential library. So taxpayers shouldn’t be paying for anything…

When Barack Obama announced he would forgo a presidential library, the news was trumpeted as a win for good government. Instead, Mr. Obama would open an official center on Chicago’s South Side, funded entirely with private money. One author at Politico, who called presidential libraries a “scam,” wrote that Mr. Obama “will rip off the band-aid, removing government from what it has no business paying for.”

Now comes news that Illinois taxpayers will put up at least $174 million for roadway and transit reconfigurations needed to accommodate the Obama Center. If you don’t live in Illinois, you may be smirking – but you’ll be footing the bill, too. Eighty percent of such spending is generally reimbursed by the federal government, and Illinois officials confirmed to me that they expect to receive $139 million from Washington if they request it.

All that taxpayer money – and for what? Originally, Chicagoans imagined they’d be getting a true presidential library, akin to those they might have visited for Ronald Reagan in California or John F. Kennedy in Boston. But unlike those libraries, the Obama Center won’t be run by the National Archives and Records Administration. It won’t even house Mr. Obama’s records, artifacts and papers, which will be digitized and available online. Instead the center will be owned and operated by the Obama Foundation.

This wasn’t always the plan. In a 2014 request for proposal, the Obama Foundation said that the planned presidential library “will include an Institute that will enhance the pursuit of the President’s initiatives beyond 2017.” This institute now seems to have taken over the project. As the Chicago Tribune reported in February: “Obama said he envisions his center as a place where young people from around the world can meet each other, get training and prepare to become the next generation of leaders.” No doubt, his definition of “leaders” will be political.

To continue reading:

Could California Flame Out? by John McNellis

California definitely could flame out, and probably will. From John McNellis at wolfstreet.com:

High housing costs & taxes lead to this: “Once we decided we had to get our employees out of California, we went about our search systematically.”

The phone rang early the other day. “Well, our center’s still standing,” my partner said. “The fire’s only a couple blocks from us, the whole town of Lakeport’s been evacuated. I think we’ll be ok, but it’s out of control.”

That fire is still raging as of this writing, the town is empty, the stores are closed, our shopkeepers are suffering daily losses that, while nothing compared to the loss of life and home that California’s wildfires are claiming, will never be recovered.

Not so very long ago I thought that global warming was a tragedy of epic proportions, but that it would have at least a few winners: Southern California might become truly unbearable, but Eureka would be the next Laguna Beach. I was wrong again. Writing in the New York Times about Montana, Sara Vowell summarized it like this, “Here in the Mountain West, there are no longer four seasons, only two: winter and wildfire.”

While not that apocalyptic, California’s wildfire season has been starting earlier and ending later. In the past, the season lasted a couple months, August through early October. This year it began the first week of July and last year–the deadliest and costliest wildfire season ever–it went on forever, finally petering out in the north in November and still devastating the south as late as December. The Thomas fire in Southern California, the largest single fire ever, broke out on December 4th.

In California, we pay the highest taxes in America. No other state has a base sales tax as high as our 7.25% nor does any state match our top marginal income tax rate of 13.3% (Hawaii’s a distant second at 11%). One resigned pundit called it a “Shangri-La tax,” the price we must pay to live in the Golden State. And thanks to what passes for political brilliance in Congress, Shangri-La became way more expensive as of January 1st when the Republicans eliminated the deductibility of state income taxes at the federal level, smacking the high-tax Democratic states they already had no chance of winning. All things being equal (they never are), a rich liberal will pay another 6.5% or so in federal taxes for the privilege of living in California this year.

To continue reading: Could California Flame Out?

Leaving Illinois: How simple math chased away a village mayor and his family, by Ted Dabrowski

Take the difference in property taxes between comparably priced property in Illinois and Alabama, invest it for 20 years, and you’re talking real money. From Ted Dabrowski at wirepoints.com:

Leaving Illinois: How simple math chased away a village mayor and his family

If there was one guy you’d think wouldn’t succumb to the pressures of living in Illinois, it’s Lakewood Mayor Paul Serwatka.

He’s a reformer and a fighter. In the past year he’s succeeded where most politicians refuse to go. He lowered the Village of Lakewood’s property taxes by 10 percent and eliminated a TIF district, going against the trend of higher spending and bigger tax bills in communities across the state. And he did all that without cutting services. He was showing Illinoisans what reform-oriented leadership could look like.

But every family that’s chosen to flee Illinois in recent years hit a breaking point and Serwatka finally hit his. For him, it was the risk he wouldn’t be able to care financially for his growing family.

You can’t blame him and those families that have already left. For many, it’s become too expensiveto live in Illinois. For others, good-paying working class and manufacturing jobs have disappeared. And for yet others, they’re tired of being taken for granted and mistreated by their politicians.

At the core of the decision for many families to leave is the burden of higher property taxes. They’ve become punitive in too many parts of the state, as Wirepoints has covered in detail.

That’s true even in Lakewood, a city of nearly 5,000 people located in McHenry County. Residents in that county pay some of the state’s – and the nation’s – highest effective tax rates, measured as a percentage of household incomes.

Serwatka has four young children to think about – ages 3 to 8 – and he did the basic math that many Illinois families are doing in their kitchens or family rooms. They’re comparing what their property taxes are in Illinois to what they could be in other states – and what they could do with all the money they save.

For Serwatka, his comparison city was Decatur, Alabama.

There his family found 10 acres and a house that’s 25 percent bigger than their current Illinois home, all at roughly the same cost. The Alabama house also has access to a private lake shared by some 60 homeowners. And his home in Decatur is only 20 miles from Huntsville, which is booming in all kinds of ways.

What are his Alabama property taxes going to cost him? Just $2,200 a year. That’s a lot lower than the $15,400 he’s paying on the home in Lakewood.

If Serwatka saves that $13,000 difference every year and invests it at 6 percent annually for the next 20 years, he’ll have accumulated savings of more than $600,000 dollars.

It’s a difference Serwatka and his wife, Robin, just couldn’t ignore.

To continue reading: Leaving Illinois: How simple math chased away a village mayor and his family

Tax Cuts Work, by Daniel Lacalle

Tax cuts in our overtaxed world often result in increased government revenues. Expanding deficits are often the result of spending increases greater than the increased revenue. From Daniel Lacalle at theepochtimes.com:

It happened again. Tax receipts soared in the United States after the recent tax cuts.

Although it will take a while for the full effect of the 2017 tax reform to kick in, U.S. state and local government tax revenue climbed to $350.2 billion in the first quarter of 2018, a rise of 5.8 percent compared with the same time period in 2017. Individual income tax collections had big gains for a second-straight quarter with a 12.8 percent increase to $107.4 billion in 2018’s first quarter.

But the evidence of the positive impact on growth, jobs, and wages of lower corporate taxes has been published in many studies over time. The example of more than 200 cases in 21 countries shows that tax cuts and expenditure reductions are much more effective in boosting growth and prosperity than increasing government spending.

Multiple studies conclude that in more than 170 cases, the impact of tax cuts has been much more positive for growth.

In Denial

However, some commentators continue to deny the positive impact of tax cuts using the argument that deficits rise.

The fallacy that “deficits rise” has nothing to do with tax cuts, but with increases in government spending on top of the tax cuts.

The deficit excuse is very simple. It says taxes should not be cut because governments will spend all revenues, even if these increase, and more. But this excuse is wrong.

The mistake of pointing at deficits as proof that tax cuts don’t work is debunked by looking at the proposals of the same economists that argue against tax cuts. Economist Paul Krugman is one example. He argued against tax cuts in his New York Times article “Time to Borrow” after the Obama administration increased debt by $10 trillion. These demand-side economists defend deficit spending, yet consider tax cuts as negative … because deficits may increase. Only Keynesian economists manage to pull off such mindbending logic.

Deficits need not rise or exist at all if governments spend in line with revenue growth. And the evidence points to rising revenues from lower taxes and higher growth.

To continue reading: Tax Cuts Work

Socialism Won, by Robert Gore

If she’s elected and goes to Washington, socialist Alexandria Ocasio-Cortez will feel right at home.

Socialism: “A political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by community as a whole” (Oxford Dictionary), has been in the news lately. The most interesting aspect of the stories and commentaries is what tense the writer uses. Most use the future tense, heralding or decrying the impending arrival of socialism, or simply noting that it’s a possibility.

It’s the wrong tense. The past tense is the correct one, socialism arrived long ago. In the US, it unpacked its bags February 3, 1913, the day the Sixteenth, or Income Tax, Amendment was ratified. When the “community as a whole”—a euphemism for government—has first call on individuals’ incomes, socialism has established its vital beachhead. Everything from there on out is a mop-up operation.

For what is “the means of production, distribution, and exchange”? The minds, bodies, time, and effort of individual producers, which the income tax expropriates. Once a government steals those, there’s nothing it cannot steal, including, via regulation, the ability of producers to produce. To impose socialism on a nation, first impose it on its individuals.

The cherry on 1913’s socialist sundae was the establishment of the Federal Reserve, which began the transition of the US monetary system from the gold standard to fiat debt, the value of which is now decided by political and bureaucratic whim. It was another expropriation, stealth theft via currency depreciation and inflation.

Some are treating “avowed socialist” Alexandria Ocasio-Cortez’s primary victory over Democrat war-horse Joe Crowley as a watershed moment. Assuming she wins the general election, she’ll join 434 other socialists in the House of Representatives. That’s not a watershed political moment, it’s a watershed truth-in-advertising moment. She’ll be one of the few socialists there who admits to it.

The partisans on both sides of the barricades are a hundred years too late. The battle is over, victory to the socialists. In the US, it’s impossible to find an industry or economic activity that’s free from government ownership or regulation. Governments have their hands in agriculture, manufacturing, communications, finance, insurance, banking, transportation, technology, housing, medical care, advertising, entertainment, warfare, welfare, charity, and every other human endeavor of consequence. When children need to get a permit and pay a fee to set up a sidewalk lemonade stand, what’s left?

Judging by the reaction to Ocasio-Cortez’s victory, “socialist” is still an odious term in some quarters, mostly those precincts which still pay lip service to free markets and capitalism. Republicans long ago jettisoned freedom and made their peace with the income tax, the Federal Reserve, welfare and warfare states, and ever-expanding government; their horror is merely rhetorical. The only parts of Trump’s platform that were noncontroversial with them were his vows to increase military spending and not cut entitlements. This in a nation over $21 trillion in debt, with an estimated $200 trillion of additional unfunded liabilities.

Unlike many of us in the hinterlands, those who inhabit the swamp rarely have to answer the question: does it work? When the answer is no in Washington, it’s a justification for an expanded budget and more power. Effectiveness is the hallmark of what remains of honest American enterprise, where whatever your “it” is has to work, or you don’t get paid. Those who have only worked in dishonest enterprise— government and its satellites—are instinctively hostile to that requirement and to those who make things work.

Socialism doesn’t work; history is littered with its failures. That is why it’s embraced. Government derives its power from coercion and violence. It is no coincidence that the twentieth century, history’s most socialistic, has also been its most murderous, with governments inflicting an estimated 100 to 200 million deaths.

Socialism’s failure, death, and inevitable restrictions of liberty account for its odium among those who oppose it. The clearest lesson of history is the most ignored. Man versus the state is history’s overarching theme. Humanity flourishes when it’s free to do so (man wins) and deteriorates when it’s not (the state wins).

There is only one way to eradicate a weed without pesticide: pull it up by its roots. Well over 99 percent of arguments against government—inadequate border security, military interventions, out of control spending and debt, the national security state, loss of liberty, etc.—essentially try to kill the weed by pulling off its leaves and stems, but leave the roots intact. As long as there is unquestioning acceptance of the government’s self-granted right to forcefully relieve the productive of their honestly earned incomes, those issues amount to diversionary sideshows.

Since the dark year 1913, government has grown relentlessly larger, more powerful, and more corrupt. The tax take has gone one direction. Even with all that loot, the government has plunged into the abyss of debt and unfunded liabilities. The US has become an oligarchic empire spanning the globe. At least half its population rely on the state for some or all of their sustenance. Occasionally the socialists have lost battles, but those have amounted to mere tactical retreats. They’ve won the war.

Imagine a government that had no claim on people’s incomes and the monetary system was an honest gold standard. That such a state of affairs seems inconceivable is testament to widespread ignorance of history. This was the actual state of affairs pre-1913, when all levels of government in the US spent less than 10 percent of the GDP, as opposed to more than 40 percent now.

How much of an issue would illegal immigration be if the government paid out no benefits to either immigrants or citizens? The immigrants who arrived would be here to work, and it would be much easier to ensure that they went through the proper channels of citizenship.

Cut down government by 80 to 90 percent and the military would shrink to defense of the US’s eminently defensible borders and tending to a worst-case nuclear arsenal. You’ve got to think the costly Big Brother surveillance apparatus would shrink, too, maybe down to nothing.

There would be no unfunded liability problem, because government would be out of the pension, medical care, and redistribution businesses. A government that couldn’t inflate away its debts with more of its own or its central bank’s fiat debt would be less inclined to borrow. Creditors would be less inclined to lend, because the government would have no call on incomes.

Such a reversion might even work a “miraculous” change in the American character, a rebirth of values like the work ethic, self-reliance, individualism, community involvement, and private charity. One of socialism’s great myths, the opposite of the truth, is that only the government can help out those in need.

An appreciable part of the US’s unprecedented, privately generated bounty has always been redistributed by people acting on their own charitable impulses, not at the point of a government gun. Regular people, not just philanthropic millionaires, help their families, friends, and—through a mind-boggling variety of eleemosynary causes and organizations—total strangers.

Which gives the lie to socialists’ argument that “the masses” (they love that demeaning term) cannot handle freedom, they need to be guided and governed by an expert and virtuous elite. If the human psyche cannot handle freedom, it most certainly cannot handle unlimited power. The last 105 years of elite-initiated horrors offer conclusive proof. Wars, death camps, and genocide didn’t bubble up from they bottom, they’re ordained from the top.

If we don’t insist proudly that we have the first and only legitimate claim to what we’ve honestly earned, if we aren’t willing to fight for it, we are not and never will be free. And that’s why we need all the sideshow issues—to divert our attention from our well-deserved servitude.

You Should Be Laughing At Them!

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The state of New Jersey just signed its own death warrant, by Simon Black

If taxpayers are fleeing your jurisdiction, perhaps it’s not a good idea to raise taxes. From Simon Black at sovereignman.com:

You would think New Jersey would have learned its lesson…

Two years ago, New Jersey’s richest resident – hedge fund billionaire David Tepper – decided to move himself and his business to Miami Beach.

Tepper, who personally earned more than $6 billion from 2012-2015, was tired of paying New Jersey’s top income-tax rate of 8.97% for the 20 years he lived there, in addition to the country’s highest property taxes, the estate tax and inheritance tax.

By moving to Florida, a state with ZERO income tax, Tepper stood to save hundreds of millions of dollars each year. And, as an added bonus, he’d be living in the Sunshine State.

Anyone with some common sense would have at least acknowledged the possibility that a guy like Tepper would consider moving to save a few hundred million bucks.

But New Jersey, content on milking its ultra-wealthy for tax revenue, was caught completely by surprise.

And Tepper’s departure left an enormous hole in its budget.

Think about that: the departure of literally ONE person caused big problems for New Jersey’s budget.

And Tepper wasn’t the only one leaving…

According to the New Jersey Business and Industry Association, the State of New Jersey lost a whopping 2 million residents between 2005 and 2014, earning a combined $18 billion in net adjusted gross income, i.e. income that would have been taxed by the state.

So it’s not just the masters of the universe that are tired of paying sky-high taxes. It’s also the regular wage earner and small business owner.

60% of these folks went to Florida, with a state income tax of zero.

So the message from New Jersey’s residents (well, now former residents) is pretty clear: taxes are too high.

Now, what do you think New Jersey is doing to solve this problem?

Instead of making the state friendlier to productive people and businesses, New Jersey decided to RAISE taxes on the sad saps that remain within its borders (for now).

New Jersey tax residents making more than $5 million will now pay 10.75%, up from 8.97%

To continue reading: The state of New Jersey just signed its own death warrant