By Christopher Jacobs • The Federalist
Unless you’re a procrastinator, tax filing season officially ended Monday. That milestone means a likely reprise of the political battles from earlier this year about tax refunds and the effects of the Republican Tax Cuts and Jobs Act.
Early in the filing season, Democrats argued that smaller refunds for filers demonstrated the legislation’s ineffectiveness. (As of March 29, the Internal Revenue Service has processed $6 billion less in refunds than during last year’s filing season.) Republicans counter that, under the new law, most individuals will have smaller tax liabilities overall, meaning that individuals receiving smaller refunds this spring benefited from fatter paychecks throughout 2018.
By and large, Republicans have the better argument. Even the liberal Tax Policy Center concedes that most households will benefit from the tax legislation. Under their estimates, more than four in five tax filing units (80.4 percent) received a net tax cut, with fewer than one in twenty (4.8 percent) paying a net tax increase. (About 15 percent of households won’t see a major change, one way or the other.) As a result, most families with smaller refunds received larger net pay during the year, due to smaller tax withholding in their paychecks every month.
But the political back-and-forth misses the bigger point: Continue reading
By Glenn Kessler • Washington Post
“The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.”
— Sen. Kamala D. Harris (D-Calif.), in a tweet, Feb. 11, 2019
Harris, who is running for president in 2020, attacked President Trump’s tax law after the Internal Revenue Service reported that preliminary data shows that the average tax refund check is down 8 percent ($170) this year compared with last year.
Boy, talk about a non sequitur that turns out to be nonsensical and misleading. Let’s take a look.
The average tax refund is down, at least according to very preliminary data for returns processed through Feb. 1. (That’s essentially one week of filing data.) But the size of a refund tells you nothing about a person’s tax bill. Continue reading
By John Stossel • Reason
Today is the Super Bowl.
I look forward to playing poker and watching. It’s easy to do both because in a three-hour-plus NFL game there are just 11 minutes of actual football action.
So we’ll have plenty of time to watch Atlanta politicians take credit for the stadium that will host the game. Atlanta’s former mayor calls it “simply the best facility in the world.”
But politicians aren’t likely to talk about what I explain in my latest video—how taxpayers were forced to donate more than $700 million to the owner of Atlanta’s football team, billionaire Arthur Blank, to get him to build the stadium. Continue reading
by Haris Alic • Washington Free Beacon
Democratic Rep. Nancy Pelosi (Calif.) has yet to take the speaker’s gavel of the U.S. House of Representatives, but Democrats are already laboring to make it easier to dismantle the achievements of the Trump presidency.
The incoming chairman of the House Rules Committee, Rep. Jim McGovern (D., Mass.), confirmed to colleagues on Wednesday that he would not honor the three-fifths supermajority requirement to raise income taxes, as reported by the Washington Post.
McGovern’s decision overturns a rule implemented under outgoing Speaker Paul Ryan (R., Wis.) that mandated a three-fifths majority approve any proposed hike to the income tax.
The change comes after a standoff between Pelosi and her moderate allies in the Democratic conference, such as incoming Ways and Means Committee chairman Richard Neal (Mass.), and younger, more progressive members like Rep.-elect Alexandria Ocasio-Cortez (N.Y.). Continue reading
Taxes: A new “study” in Britain suggests that by raising taxes sharply on Facebook, Amazon and Apple, the government could pay for a universal basic income (UBI) for all Britons. It’s an absurd idea, which is why it can’t be counted out.
The so-called FANG companies — the above-mentioned three, plus Google and Netflix — have been vilified now for years in Europe and in the U.S. as “monopolies” and, worse, “predators.” When such strident rhetoric is used by politicians, you know they’re going in for the kill. There’s money to be made in taking down big, successful companies.
In the case of Britain, the left-wing paper The Guardian reports, the Royal Society of Arts (that’s right, Arts) recommends that “Britain could raise new taxes on Amazon, Facebook and Apple to give every citizen under the age of 55 as much as £10,000 ($14,000) in a form of universal basic income … helping to counter the growing risk of job losses from automation and artificial intelligence.”
America’s FANG tech companies look like easy victims. Inevitably, since they have little in the way of a domestic British constituency, they will come into the cross hairs of Britain’s tax-happy, left-wing politicians. Continue reading
It's a good start, but it can't be the end of the GOP's economic efforts.
By US News•
The Republicans have kicked off the New Year with an earnest effort to sell the American public on the benefits of the tax bill just passed. It’s better than nothing, but if they hadn’t put the cart before the horse in the first place, they might not be in as much of a mess.
To be sure, achieving the first major overhaul of the U.S. tax code in 30 years without the single vote of a single Democrat is a considerable accomplishment. And, unlike the Affordable Care Act – with all the regulations and other nonsense Barack Obama piled on the economy in his first two years – the Tax Cut and Jobs Act of 2017 will be a boost to the economy rather than a drag. Still and all, telling the voters they should be for it because it puts more money in their pockets (or, more accurately, leaves it there in about nine out of 10 cases) doesn’t really constitute a Reaganesque vision for a more prosperous America in which each citizen has a vested share.
Hopefully things will turn towards the better, and soon, meaning the Republicans will retain control of Congress through 2020 and be able to pass additional tax cuts, continue to lessen the size of government, remove unnecessary and counter-productive controls on productive economic activity, and set the stage for another long boom like the Reagan tax cuts kicked off back in the early 80s. But time and the narrative are not yet on the GOP’s side.
Like it or not, even with relatively low rates of inflation for much of the last decade, the purchasing power of the dollar has declined. Families are felling pinched, which is part of the reason many of Continue reading
By Ali Meyer • Washington Free Beacon
One in five small businesses, or 22 percent, pay at least $10,000 on the administration of federal taxes each year, according to the National Small Business Association’s 2017 taxation survey. This does not include the money that a business owes the IRS in taxes.
Five percent of small businesses pay more than $40,000 a year on the administration of federal taxes, seven percent pay between $20,001 and $40,000, and ten percent pay between $10,001 to $20,000. The majority of businesses, 67 percent, pay more than $1,000.
Small businesses and their staff also spend significant amounts of time dealing with taxes, whether it be by filing reports, working with accountants, or calculating payroll. Twenty percent of businesses spend more than 120 hours annually. Continue reading
Ali Meyer • Washington Free Beacon
This year, taxpayers will spend 113 days working to pay for the nation’s tax burden, according to a report from the Tax Foundation.
Tax Freedom Day is April 23, 113 days into the year, and falls 5 days after taxes are collected on April 18. Tax Freedom Day would fall roughly two weeks later on May 7 if federal borrowing or future taxes were included.
“Tax Freedom Day takes all federal, state, and local taxes—individual as well as payroll, sales and excise, corporate and property taxes—and divides them by the nation’s income,” the report says.
Americans will spend upward of $5.1 trillion on taxes, which includes $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, according to the report. Continue reading
by Crystal Wright • Morning Consult
Just when you thought the disastrous Obamacare literally couldn’t get any sicker or more costly to Americans, think again. However, this time it isn’t the law’s namesake President Obama and his Democrat cronies harming our country’s health care system while ballooning the federal budget, it’s Republicans.
Sen. Ben Sasse (R-Neb.) and Rep. Mark Walker (R-N.C.) introduced a bill — the Taxpayers Before Insurers Act which requires funds paid in by private insurance companies collected under the auspices of the “reinsurance program” mandated under the Affordable Care Act to go the U.S Treasury instead of being used to reduce consumer medical costs. And many Republicans in Congress say it’s a great idea. Continue reading
The IRS is abusing its authority once again by employing the help of a private law firm in its case against Microsoft.
By Peter Roff • USNews
If there is one federal agency that has clearly run amok during the Obama administration, it’s the United States Internal Revenue Service. From the harassment of tea party groups applying for nonprofit status to the defiance of congressional subpoenas, it’s an agency badly in need of a thorough housecleaning.
IRS Commissioner John Koskinen is already under threat of impeachment by the U.S. House of Representatives. That might be a good start, but removing him won’t fix the problems any more than the ouster of his predecessor did. The problems run too deep. Congress needs to act, not just by stepping up oversight of the tax collectors but by jerking their chain and narrowing their authority.
From top to bottom the agency is engaged in a wholesale abuse of its authority – and is defying attempts to investigate what it has been doing. Groups on the right are still reportedly having their applications for tax-exempt status slow-walked through the process. Confidential data is still leaking out and the auditing process is out of control. Continue reading
by Kenneth Bloomquist
Standing before an audience of college students, President Obama remarked that “As Americans, we can and should be proud of the progress that our country has made over these past six years. This progress has been hard, but it has been steady and it has been real. And it’s the result of the American people’s drive and their determination and their resilience, and it’s also the result of sound decisions made by my administration.” These remarks sound more defensive than confident. The President asserted that Americans should feel proud of the modest economic gains his administration frequently cites, but given that over half of Americans still consider the economy to be meandering through a recession it seems they have overwhelmingly rejected his outlook and chosen to remain humble instead.
Perhaps they’re being overly pessimistic? In the President’s defense, the metrics commonly used to measure the duration of recessions do indeed place the end of the Great Recession in 2009. Since then, GDP has risen slowly, but steadily, at an adjusted rate of just over 2% per year. The unemployment rate has fallen from its 2009 high of just under 10% to just under 6%, and new jobs are being created at a pace which is improving with time. And yet despite the graphs and charts, Americans refuse to be optimistic no matter how often they are told to be. The economy as described in press conferences doesn’t seem to be same one which most Americans live and work in, where family and friends remain unemployed or underpaid, where they have been passed over for raises, and where there just isn’t enough income leftover to save. Americans may not all have advanced economics degrees, but they are intuitively aware when times are good and when times are bad, and they remain skeptical even when bombarded by a steady stream of rose-tinted statistics. Continue reading
And secret friend of the one percent.
by Jay Cost • The Weekly Standard
In last week’s State of the Union address, President Barack Obama came across as the ultimate class warrior. His domestic agenda consists of more spending on roads and infrastructure, new entitlement programs for community college and preschool, and tax preferences targeted to low- and middle-income earners. All of this he would pay for with new inheritance taxes on the wealthy, a hike in the capital gains tax, and a special levy on the biggest financial institutions.
But don’t be fooled. Obama may seem like the newest member of Occupy Wall Street—chanting “We are the 99 percent!”—but his record shows him to be a corporate liberal, and a closer look at last week’s proposals confirms it. Continue reading
Obama goes where the money is to pay for ‘free’ education programs – your savings account.
by Glenn Harlan Reynolds • USAToday
Bank robber Willie Sutton is said to have explained his career this way: “That’s where the money is.” Whether Sutton ever really said that, it’s an aphorism that, according to Bloomberg’s Megan McArdle, explains President Obama’s plans to go after middle class assets like 529 college savings plans and home appreciation.
Though millions of Americans have been putting money into “tax free” 529 plans to save for their children’s increasingly expensive college educations, President Obama would change the law so that withdrawals from the plans to fund college would be taxed as ordinary income. So while you used to be able to get a nice tax benefit by saving for college, now you’ll be shelling out to Uncle Sam every time you withdraw to pay for Junior’s dorm fees.
This doesn’t hurt the very rich — who just pay for college out of pocket — or the poor, who get financial aid, but it’s pretty rough on the middle– and upper–middle class. In a double-whammy, those withdrawals will show up as income on parents’ income tax forms, which are used to calculate financial aid, making them look richer, and hence reducing grants. Continue reading
by Stephen Moore • The Washington Post
It was 40 years ago this month that two of President Gerald Ford’s top White House advisers, Dick Cheney and Don Rumsfeld, gathered for a steak dinner at the Two Continents restaurant in Washington with Wall Street Journal editorial writer Jude Wanniski and Arthur Laffer, former chief economist at the Office of Management and Budget. The United States was in the grip of a gut-wrenching recession, and Laffer lectured to his dinner companions that the federal government’s 70 percent marginal tax rates were an economic toll booth slowing growth to a crawl.
To punctuate his point, he grabbed a pen and a cloth cocktail napkin and drew a chart showing that when tax rates get too high, they penalize work and investment and can actually lead to revenue losses for the government. Four years later, that napkin became immortalized as “the Laffer Curve” in an article Wanniski wrote for the Public Interest magazine. (Wanniski would later grouse only half-jokingly that he should have called it the Wanniski Curve.) Continue reading
Despite his memory lapses, the ethical problems related to his work on Obamacare are plain.
by John Fund • National Review Online
An old Soviet joke had men carrying briefcases marching alongside tanks and soldiers in a Kremlin parade. “Why are those men in a military parade?” a boy innocently asks his father. He replies, “Those are the economists. They are the most dangerous of all.”
MIT economist Jonathan Gruber’s factually impoverished testimony on Obamacare didn’t get nearly the attention it should have, as congressional Democrats cleverly decided to release a report on CIA torture abuses on the same day. Continue reading