Tag: taxation is theft

What’s So Goofy About Eliminating Taxes?

A prominent libertarian is calling Trump’s tax proposals to eliminate taxes on tips and Social Security benefits “goofy.” What’s so goofy about eliminating these taxes and letting Americans keep more of their money?

Said Trump about tip taxation: “For those hotel workers and people that get tips, you’re going to be very happy, because when I get to office, we are going to not charge taxes on tips. You do a great job of service. You take care of people, and I think it’s going to be something that really is deserved.”

According to the Internal Revenue Service (IRS): “All cash and non-cash tips an received by an employee are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer.” Tips include:

  • Cash tips received directly from customers.
  • Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card or any other electronic payment method.
  • The value of any noncash tips, such as tickets or other items of value.
  • Tip amounts received from other employees paid out through tip pools, tip splitting, or other formal/informal tip sharing arrangement.

Said Trump about Social Security taxation: “Seniors should not pay taxes on Social Security and they won’t.”

According to the Social Security Administration (SSA):

Fifty percent of a taxpayer’s benefits may be taxable if they are:

  • Filing single, head of household or qualifying widow or widower with $25,000 to $34,000 income.
  • Married filing separately and lived apart from their spouse for all of 2020 with $25,000 to $34,000 income.
  • Married filing jointly with $32,000 to $44,000 income.

Up to 85% of a taxpayer’s benefits may be taxable if they are:

  • Filing single, head of household or qualifying widow or widower with more than $34,000 income.
  • Married filing jointly with more than $44,000 income.
  • Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.
  • Married filing separately and lived with their spouse at any time during 2021.

(Income here is “provisional income” — adjusted gross income + nontaxable interest income + half of Social Security benefits.) Congress has never adjusted the income thresholds that subject Social Security benefits to taxation. They have never even been indexed for inflation.

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The State’s Most Hated Commandment

Congressman Ron Paul’s famous desk sign said Don’t Steal.  The Government Hates Competition.

Government theft is pervasive.  Mission creep and interagency competition give us twice the government for quadruple the money.  In 2001, the first Patriot Act was affirmed by a congress of men and women who did not, and could not, read the 132 pages that altered tens of thousands of pages of regulation.  To fluff the urgency, US-manufactured anthrax spores were mailed to Senate Judiciary Committee Chairman Patrick Leahy and Senate Majority Leader Tom Daschle – both of whom had been standing in concerned opposition to the rushed, sweeping and anti-Constitutional nature of the proposed Patriot Act.

A new federal department was created overnight – the Department of Homeland Security.  This new department “efficiently reorganized” 22 existing federal agencies under a new Homeland umbrella.  In reality, most of the dissected agencies fought any loss of authority, and maintained much of their old functions and networks, even as the brand new “streamlined” department stood up.

A massive and robust state-centered ecosystem of narrative creation has since evolved. We get the message if we receive a government benefit of any kind, be it a taxpayer-subsidized school debt or education, or a piece of someone else’s productive energy in the form of welfare, retirement or subsidy checks. By virtue of our captive participation in the USDA and FDA food and drug systems – with billions of stolen funds used to ensure we purchase and consume certain products and chemicals – we understand the state narrative. If we participate in any forms of government-subsidized health care, or in any government-initiated war against people, nations, or ideologies, we have our orders.

You benefit from government, you are kept safe and warm by government, government is desperately needed to keep peace and prosperity, so stop effing asking questions.  It’s the whole Jack Nicholson speech from A Few Good Men, where there are two options – serve the state, or barring that, graciously thank it for all that it does.  The most satisfying part of that classic movie was when the truth-seeking upstart got the evil, lying government official to publicly admit what we all knew by then.

What we all know by now is that stealing what it can and coveting the rest is government theology.  Like 300 million Mr. Tooheys, we might wonder what the state thinks of the 8th and 10th commandments?  Why, it doesn’t think of them at all!

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UBI Is the Trojan Horse of Economic Ruin

In an era where the siren song of Universal Basic Income (UBI) captivates many, we must critically examine the harsh realities beneath its alluring veil. UBI, with its promise of fixed income for all, irrespective of employment status, emerges not just as an economic folly, but a direct affront to the principles of liberty.

UBI represents a grand experiment in economic alchemy, an attempt to materialize prosperity from the fumes of fiscal irresponsibility. Proponents hail it as a cure-all for poverty, a silver bullet to eradicate financial woes. However, this illusion crumbles under scrutiny, revealing a scheme fundamentally at odds with individual responsibility and freedom. The redistribution of wealth, central to UBI, fosters a culture of entitlement creating a recipe for economic disaster.

There is nothing “universal” about the government picking the pockets of the industrious to line the wallets of others. This is not empowerment; it’s robbery and subservience dressed in the garb of charity. The government, acting as a paternalistic overlord, decides who gets what, how much, and when. UBI’s one-size-fits-all approach overlooks the diverse needs and challenges of individuals.

Economically, UBI is akin to quicksand. The idea that a state can indefinitely sustain its citizens without encouraging productivity is dangerously naïve. Such a system would lead to inflationary pressures, devaluing currency, and resulting in a vicious cycle of increasing handouts and decreasing value, ultimately stalling economic growth and innovation.

The fiscal implications are stark. Funding UBI would necessitate astronomical levels of taxation and debt, burdening future generations with today’s reckless financial decisions. This approach, effectively extorting Peter to pay Paul, where Peter represents the hardworking populace, undermines the foundation of a robust economy.

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The Evil of the Residential Property Tax

According to the Case-Shiller index, home prices have increased 44 percent since February 2020. That’s just an average, of course, and some markets have seen increases in prices that are far higher. Even in middle-American housing markets, however—where home prices are supposedly more reasonable than on the coasts—prices have soared. In Cleveland, for example, the index is up 40 percent since early 2020. During the same period, the index rose 50 percent in Atlanta and 33 percent in Chicago. This sort of price inflation is not merely a product of the physical supply of housing. Demand for housing has been greatly inflated by nearly fifteen years of historic lows in interest rates, following by immense flows of newly created money during the Covid Panic. As economist Brendan Brown has noted, even as consumer price growth appeared low from 2008 to 2020, the effects of monetary inflation have long been visible in asset price inflation (e.g., home prices).

It is not at all surprising then that property taxes are rising as well. Fortunately for homeowners, though, property taxes have so far not kept up with market prices. According to an April report on property taxes from housing analytics company ATTOM,

$339.8 billion in property taxes were levied on single-family homes in 2022, up 3.6 percent from $328 billion in 2021. The increase was more than double the 1.6 percent growth in 2021, although smaller than the 5.4 percent increase the prior year.

The report also shows that the average tax on single-family homes in the U.S. increased 3 percent in 2022, to $3,901, after rising 1.8 percent the previous year.

At the individual state and local levels, some property tax hikes have soared. Michigan, for instance, has raised property taxes by levels not seen in 28 years. Some local governments are hiking property taxes by 20 percent or more.  In many areas, however, property tax increases have not even kept up with inflation. So, if home prices are rising at 40 percent or more on average, why are property tax collections not anywhere close? Much of the reason for these relatively modest increases is the fact property tax assessments are not instantaneous, but are only modified at often lengthy intervals. In other words, many homeowners may find that there is still plenty of property-tax related bad news still to come. Realtor.com reports, for example:

Property tax bills have been rising or are slated to go up as local governments capitalize on the surge in home prices over the past few years. And there is little recourse for homeowners stuck with the higher tabs.

“Most people should expect a property tax increase,” says Carl Davis, a research director at the Institute on Taxation and Economic Policy. “We’re seeing [property] assessments catch up with the market right now. That process will continue to unfold over the next few years.” Local governments are facing rising costs just like everyone else. And the wild price growth during the COVID-19 pandemic has presented municipalities with a golden opportunity to do something about it.

Kiplinger’s notes that state and local governments will be doing everything they can to translate rising home prices into more revenue:

Homeowners in areas that have experienced significant appreciation in home values should be prepared for the possibility that their local jurisdiction will raise rates to match higher assessments—even as home sales have leveled off, experts say. For local governments, inflation has driven up the cost of everything from public employees’ salaries to school supplies. In addition, in the wake of the COVID-19 pandemic, commercial property owners are struggling with a large number of vacancies, which has led to a decline in revenue from those sources.

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Supreme Court Overrules Local Governments For Seizing Homes

The U.S. Supreme Court reversed court rulings in which local governments seized two homes over unpaid tax debts and kept sale proceeds that far exceeded the tax owed.

Critics call the practice “home equity theft.”

The case came after Pacific Legal Foundation (PLF), which represented the homeowners in both cases, released a report late last year saying that 12 states and the District of Columbia allow local governments and private investors to seize dramatically more than what is owed from homeowners who fall behind on property tax payments. PLF is a national nonprofit public interest law firm that takes on governmental overreach.

The U.S. Supreme Court released unsigned orders (pdf) on June 5 summarily reversing two rulings of the Supreme Court of Nebraska.

The nation’s highest court did not explain why it was issuing the orders. No justices dissented.

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Bernie Sanders: Government Should Confiscate All Wealth Over $999 Million

No billionaires at all!

Not American ones, at least.

That’s the newly proclaimed policy of Bernie Sanders, who most definitely is not challenging the Democrats to nominate him for president in 2024, as he did in 2020. Nope, Bernie is perfectly comfortable with the policies being followed by President Biden’s handlers.

Presumably, in exchange for not rocking the boat as he did in 2020, forcing the party’s controllers to pick an already senescent Joe Biden just because he was easy to control with all these bribes that could be exposed when needed (cough! Stay tuned as Biden’s desire for re-election now appears to be a kamikaze mission), Bernie has assurances that the hard left vector will continue no matter who is leading the party as presidential nominee in 2024.

Bernie Sanders’s choice of $999 million as the permissible level of wealth and no more brings to mind Barack Obama’s words: “I mean, I do think at a certain point you’ve made enough money.”

Of course, once such a wealth confiscation is announced, billionaires will depart for friendlier shores, there will be very little left to confiscate, and entrepreneurs will be creating jobs and wealth elsewhere.

That’s what happened when France tried a wealth tax, and that’s why it was repealed. 

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Democrats join Patriotic Millionaires group to call for 90% tax on income above $100 million

Agroup of Democratic lawmakers and the Patriotic Millionaires, an organization of high-income and high net worth individuals favoring higher taxes on the wealthy, are calling on Congress to pass a 90% income tax on incomes above $100 million as fears of a recession are growing. 

Abigail Disney, a documentary filmmaker who is the granddaughter of Roy Disney, cofounder of The Walt Disney Company, joined the lawmakers to call for higher taxes on “extremely high income.”

“My grandfather paid a 90% marginal tax rate on his income, and he amassed plenty of wealth in the process,” she said at a news conference on Tuesday. “That means rates of up to 90% on incomes over $100 million.”

The Patriotic Millionaires are also advocating taxing “all income over $1 million the same regardless of how it is generated, including capital gains income and inheritance income,” according to a press release about the organization’s latest tax proposal. 

California Democratic Rep. Jimmy Gomez said his tax reform proposal, which Vermont independent Sen. Bernie Sanders is sponsoring in the Senate, would raise estate tax or “death tax” rates. The Republicans implemented a phase-out of the estate tax.

“Our bill will help narrow the wealth gap and raise much needed revenue for investment in the benefits that help working families and our constituents who aren’t in line to inherit a fortune,” he said.

Rep. Pramila Jayapal (D-Wash.), chair of the Progressive Caucus, is a cosponsor of the Gomez legislation.

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The Myth That America Prospered After WWII Despite Extremely High Taxes on the Rich

Left-wing politicians who demand higher taxes on the rich argue that the United States has, in the past, prospered when tax rates were very high, proving that high taxes do not harm the economy. And it is true: In the 1950s and early 1960s, the top federal personal income tax rate in the US was a horrendous 91 percent, after which it was lowered to 70 percent. Under Ronald Reagan, it was then successively reduced to 28 percent by 1988 (before being raised several times and then lowered again under Trump).

However, as Phil Gramm, Robert Ekelund, and John Early show in their book The Myth of American Inequality: “The top income tax in 1962 was 91 percent. After deductions and credits, only 447 tax filers out of 71 million paid any taxes at the top rate. The top 1 percent of income earners on average paid 16.1 percent of their income in federal and payroll taxes while the top 10 percent paid 14.4 percent and the bottom 50 percent paid 7.0 percent.”

Even when the top tax rate was lowered to 70 percent, not much changed. Only 3,626 out of 75 million taxpayers actually paid taxes up to 70 percent. Interestingly, the actual percentage paid by the top 1 percent of earners in the US was only 16.1 percent in 1962, when the top marginal rate was 91 percent. However, in 1988, when the top rate was only 28 percent, the percentage paid by the top 1 percent of earners had risen to 21.5 percent! As the top tax rate fell by two-thirds, the percentage of their income that the top 1 percent of tax filers paid in federal income and payroll taxes rose by a third.

This seems paradoxical, but it is logical, because it is not only the tax rate that is decisive, but the amount of income that is actually taxable. In the pre-Reagan era, there were numerous exemptions, loopholes, and tax-saving schemes that top earners could use to reduce their taxable income. Reagan abolished many of these opportunities, thereby increasing the proportion of income that was subject to taxation.

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Yes, Sales Tax is Also THEFT

A group of House Republicans is supporting legislation that would replace federal income, payroll, estate, and gift taxes with a 30 percent national sales tax. The bill also eliminates the Internal Revenue Service, giving states the responsibility to collect the sales tax and send the revenue to DC.

This deputizing of states to act as federal tax collectors violates the principles of federalism, especially since the plan forces states that have chosen not to make their residents pay sales taxes create a mechanism for collecting sales tax.

A 30 percent sales tax on all goods with no exceptions and no deductions will increase taxes imposed on millions of Americans. The sales tax legislation provides a way Americans can receive a monthly “prebate” payment to help offset the cost of the sales tax. Still, many taxpayers would be paying more under the new national sales tax system.

If the sales tax becomes law, Congress may never have to increase the rate above 30 percent. This is because it can rely on the Federal Reserve to increase the sales taxes via inflation. Consequently, this inflation tax will increase the pain inflicted by the sales tax on the American people.

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