Tag: taxes

Californians Learn That Raising Taxes on Marijuana Fuels Black Markets for Drugs

At the beginning of 2022, tax rates for marijuana cultivated in California are set to increase, even though black market sales completely dominate the retail market in the Golden State.

Experts estimate that about three-quarters of all marijuana sales in California happen not through legal dispensaries, but through unlicensed vendors. California voters legalized the cultivation and sale of marijuana for recreational use in 2016, but extremely high taxes and oppressive regulations have caused the rollout to be a disaster.

The tax increase set to hit on New Year’s Day is a prime example. California taxes the cultivation of marijuana by weight. In the tax regulations that state lawmakers passed for cannabis in 2017, the cultivation tax rate was tied to inflation. When inflation rises, the cultivation tax will also automatically rise.

Inflation rose in 2021, and not by a small amount. The U.S. Bureau of Labor Statistics calculates that consumer prices rose nationally 6.8 percent between November 2020 and November 2021. Because of California’s law, cultivation taxes will rise 4.5 percent. For growers of fresh cannabis plants, the cultivation tax will jump from $1.35 an ounce to $1.41 an ounce. On top of the cultivation tax, the state charges a 15 percent excise tax, and the cities that allow dispensaries have their own local sales tax rates. A person attempting to legally buy marijuana in California can expect the price to balloon between 35–50 percent through tax add-ons, depending on the city.

This, obviously, will make it all the more difficult for legal vendors to compete with the black market. That the increase is happening anyway is absurd and should be seen as a warning against automatically tying any tax rate to inflation.

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States Are Hoarding $5.2 Billion in Welfare Funds Even as the Need for Aid Grows

When Congress passed welfare reform in 1996, states were given more autonomy over how they could use federal funding for aid to the poor. They could demand welfare recipients find work before receiving cash assistance. They could also use their federal “block grants” to fund employment and parenting courses or to subsidize childcare.

Twenty-five years later, however, states are using this freedom to do nothing at all with large sums of the money.

According to recently released federal data, states are sitting on $5.2 billion in unspent funds from the federal Temporary Assistance for Needy Families program, or TANF. Nearly $700 million was added to the total during the 2019 and 2020 fiscal years, with Hawaii, Tennessee and Maine hoarding the most cash per person living at or below the federal poverty line.

States have held on to more of this welfare money amid rising poverty. According to the U.S. Census Bureau, 16.1% of children under age 18 lived in poverty in 2020, up from 14.4% the year before. The poverty rate also ticked up for people aged 18 to 64, from 9.4% to 10.4%. As unused TANF dollars have accumulated, applications to the cash assistance program have waned, though it’s not for a lack of need, say experts and people who have applied to the program.

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Fauci’s Retirement Pay Largest in Federal Government History

Dr. Anthony Fauci, chief medical adviser to the president, is set to receive the largest federal retirement package in U.S. history at $350,000 per year, according to Forbes.

Fauci was the most highly compensated federal employee, according to auditors at OpenTheBooks.com.

As director of the National Institute of Allergy and Infectious Diseases (NIAID), Fauci earned $434,312 in 2020, up from $417,608 in 2019.

Fauci earned a total of $1.252 million from 2018 to 2020 in salary as a federal employee.

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Stole something? IRS says stolen property and bribes must be reported as income

Did you steal a car in 2021? How about taking a bribe? If you did, the IRS says to make sure you report it on your taxes.  

Those provisions went viral Monday following a tweet alerting taxpayers to those somewhat surprising requirements to note the value of your ill gotten gains. 

“Tax szn is around the corner,” read the tweet from @litcapital. “Remember to report your income from illegal activities and stolen property to the IRS.”

The requirements can be found at IRS.gov amid other missives to report income earned from jobs in the gig economy and what to do about taxable alimony payments. 

“If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year,” read the provision for stolen property.’

What if you’re dealing drugs or caught up in other crimes?

In that case, the IRS publication says jot your earnings on line 8z, Schedule 1 of your 1040 form, “or on schedule C … if from your self-employment activity.”

And don’t forget to report any bribes or kickbacks you took in the course of doing business.

The kickbacks also go on Schedule 1 or Schedule C, while the IRS says bribes should simply be included in your income. 

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Rand Paul Announces ‘Festivus Report’ Found $52,598,515,585 In Government Waste

Republican Kentucky Sen. Rand Paul issued Wednesday his “Festivus Report,” uncovering over $52 billion in government waste.

The report prepared by Paul, who is chairman of the Senate Governmental Affairs Committee’s Subcommittee on Emerging Threats and Spending Oversight, divided the government’s “wasteful spending” in 2021 into subcategories, which included COVID-19 expenditures, Afghanistan and other miscellaneous spending.

The COVID-19 spending detailed in Paul’s report included $4.29 billion in loans that went to people who did not qualify to receive them under the Paycheck Protection Program (PPP), $36 billion in unemployment insurance that was “paid improperly, with a significant portion attributable to fraud,” and $1.27 million in funds that that Baltimore City Public Schools received for students who weren’t even enrolled.

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COVID crooks: The most outrageous relief fund scammers busted so far

These COVID crooks are getting a jab of justice.

Nearly $100 billion of COVID relief funds has been defrauded across the United States since the pandemic began, the Secret Service announced Tuesday, adding that there are almost 1,000 separate investigations into these startling financial frauds.

Two high profile athletes have already been cuffed for the crime: US Olympic speedskater Allison Marie Baver is accused of ripping off $10 million, as well as former New York Jets wide receiver and onetime millionaire Kenbrell Thompkins, whose damages are in the hundreds of thousands.

There have also been plenty of “average Joe” perps getting busted after spending their lavish relief dough on trivial purchases, such as flashy cars or rare, five-figure Pokémon cards (both true, real examples, sadly). Gotta catch ’em all, right?

A group of deceitful dingbats in Brooklyn were even found out after posing online with some $2 million of ill-begotten relief funds.

Read on for the most ridiculous, and egregious, COVID relief scammers that have been caught — so far.

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When Your Government Ends A War But Increases The Military Budget, You’re Being Scammed

The US Senate has passed its National Defense Authorization Act (NDAA) military spending bill for the fiscal year of 2022, setting the budget at an astronomical $778 billion by a vote of 89 to 10. The bill has already been passed by the House, now requiring only the president’s signature. An amendment to cease facilitating Saudi Arabia’s atrocities in Yemen was stripped from the bill.

“The most controversial parts of the 2,100-page military spending bill were negotiated behind closed doors and passed the House mere hours after it was made public, meaning members of Congress couldn’t possibly have read the whole thing before casting their votes,” reads a Politico article on the bill’s passage by Lindsay Koshgarian, William Barber II and Liz Theoharis.

The US military had a budget of $14 billion for its scaled-down Afghanistan operations in the fiscal year of 2021, down from $17 billion in 2020. If the US military budget behaved normally, you’d expect it to come down by at least $14 billion in 2022 following the withdrawal of US troops and official end of the war in Afghanistan. Instead, this new $778 billion total budget is a five percent increase from the previous year.

“Months after US President Joe Biden’s administration pulled the last American troops out of Afghanistan as part of his promise to end the country’s ‘forever wars’, the United States Congress approved a $777.7bn defence budget, a five percent increase from last year,” Al Jazeera reports.

“For the last 20 years, we heard that the terrorist threat justified an ever-expanding budget for the Pentagon,” Win Without War executive director Stephen Miles told Al Jazeera. “As the war in Afghanistan has ended and attention has shifted towards China, we’re now hearing that that threat justifies it.”

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Portland gives $12 MILLION contract to social justice energy company headed by fraudster ex-convict

Linda Woodley, an ex-convict that has racked up millions of dollars in liens for unpaid federal and states taxes, was recently awarded an $11.5 million energy contract by the City of Portland, Oregon.

According to the The Oregonian, Woodley served time in prison for defrauding energy companies and pocketing the proceeds.

Linda Woodley is the Chief of Diversifying Energy, a community-focused nonprofit organization based in Portland, Oregon. According to their website, their mission is to facilitate equitable access to clean, sustainable energy and improve air quality to vulnerable populations, including low-income communities and people of color.

Information about Woodley’s criminal history can be found through a simple background check, so either the city of Portland knew about her past and they decided to award Woodley with contract anyways or they didn’t properly vette her. A six-figure penalty was even filed against Woodley just earlier this year, information that can also be easily found.

The City of Portland reportedly diverted the contact to Woodley after finding out that the original company it was awarded to had an 85 percent white workforce, The Oregonian reports. The contract supplies low-income families with heaters and coolers.

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