Free Republic

It is no secret that business and jobs are flowing to Texas from California but that is not the only state that is benefiting with new jobs as a response to higher taxes in once was called the Golden State.

The economics of our federal income tax has been under assault by some of our best economists and tax men. The general conclusion seems to be that this tax acts as a drag on the economy, slowing economic growth, producing chronic commodity inflation, discouraging savings and enterprise, and putting America at some disadvantage in world trade with those nations, especially the miracle economies, who have moderate, simpler tax systems--systems that encourage and promote capitalism. Any Income Tax is intrinsically wrong – that is, the very concept of a tax on income is wrong. A tax that is arbitrary, like our...

A new NBER study of 14 European nations finds that football players tend to locate in countries that have comparatively low income tax rates. This response to tax rates is especially pronounced for the most able and well-paid athletes, and is actually negative for the least able and lowest paid among the professionals. Often, national tax breaks designed to lure top-notch foreign players displace the domestic players in a league. In Taxation and International Migration of Superstars: Evidence from the European Football Market (NBER Working Paper No. 16545), authors Henrik Kleven, Camille Landais, and Emmanuel Saez construct two models of...

In a response to my piece entitled, “Taxeaters”, a reader who favored progressive income taxation posed this question back to me: why shouldn’t the top 50% of income earners pay 96% of the taxes? My answer: for the same reason that they shouldn’t have to pick up 96% of the state’s collective bar tab. All knowledge builds upon what you know. That evening, I pondered his question some more and was inspired while enjoying a pub meal that Michelle Obama would ban if she could. And here is the problem with progressive income tax theory played out a fictional place...

Gov. Dannel P. Malloy intends to propose one of the largest tax increases in state history Wednesday, seeking $1.5 billion in new annual revenue from income tax hikes on the wealthy and middle classes, and new sales taxes on clothing and other long-exempt products and services. In a plan outlined Monday to The Mirror by his senior staff, Malloy also would extend the corporate tax surcharge for another two years and restrict tax credits for the motion picture industry, while modestly increasing incentives for research and development. The sales tax rate would change for the first time in 20 years,...

During the course of his pre-Super Bowl interview with Bill O’Reilly, President Obama said “I didn’t raise taxes once”. I guess he forgot. This year a new additional $2.7 billion a year tax was imposed on drug companies under Obamacare. Doesn’t affect me, you say? Of course it does. Drug companies, unlike the federal government, can’t print money, so this tax is being paid by you in the form of higher drug prices. Personally, I’ve already noticed the increase.

With a censure vote looming this afternoon, Rep. Charlie Rangel clashed with Speaker Nancy Pelosi (Calif.) in a closed-door meeting this morning, as the New York Democrat and his supporters demanded the right to seek a lesser punishment for a series of ethics violations. Reps. Zoe Lofgren (D-Calif.) and Jo Bonner (R-Ala.) came to the floor shortly after 4 p.m. Thursday afternoon to offer the censure resolution against Rangel, who was found guilty of 11 ethics violations related to his personal finances. Lofgren and Bonner are taking one hour of floor time for the resolution, half of which will be...

I predict that in the lame duck session, Congress will extend all of the Bush tax cuts, except that the $250K threshold of "rich" households facing higher taxes will be raised to $1 million as a compromise (there have been rumors of this) to have him save face and avoid vetoing an extension. I don't think the Republicans will allow the tax rates rise for everyone over $250K (but with the Maine twins etc. you never know), and I would be mildly surprised if Obama vetoed a bill raising taxes only on incomes above $1 million and thus caused everyone...

Lack of congressional action on 2011 income taxes may force the Treasury Department to make unprecedented moves to prevent U.S. workers from seeing large tax increases in their January paychecks. The issue: 2011 tax-withholding tables. Treasury officials usually release the tables, which determine the take-home pay of millions of wage-earners, by mid-November because it takes payroll processors weeks to adjust their systems before Jan. 1. But congressional leaders recently postponed voting on taxes until after the election and lawmakers don't reconvene until Nov. 15. The Senate is scheduled to take up several nontax issues when it returns and is expected...

DENVER — With Republican candidates thundering against government spending and the Tea Party’s popularity soaring in parts of the country, one might think that any proposal aimed at lowering taxes would be a safe bet for the Republican Party these days. But in a state known for strict constitutional limits on taxation, even Colorado’s conservative Republicans are alarmed by three ballot measures that would — of all things — cut taxes. The measures — which would lower property, income and sales taxes; limit government borrowing; and reduce vehicle registration fees — are widely seen as too extreme by Democrats and...

Over the years a lot of suspicion has built up across the country about Washington and its population of opportunistic transients coming to see themselves as a special kind of person, somehow above average working Americans who don't work down in that former swamp. Well, finally, an end to all those undocumented doubts. Thanks to some diligent digging by the Washington Post, those suspicions can at last be put to rest. They're correct. Accurate. Dead-on. Laser-guided. On target. Bingo-bango. As clear as it's always seemed to those Americans who don't feel special entitlements and do meet their government obligations. We...

Did you know there are nine states that have no state income tax? The non-income-tax states (see accompanying chart) are geographically and economically diverse, ranging from the state of Washington in the Pacific Northwest, to Texas and Florida in the South, and up to New Hampshire in the Northeast. Why is it that some of the states with the biggest fiscal problems have the highest individual state income tax rates, such as New York and California, while some of the states with the least fiscal problems have no state income tax at all? High-tax advocates will argue that the high-tax...

Trenton If the citizens of New Jersey like candor, Chris Christie is the governor they’ve been waiting for. Or I should say citizens of “the failed state” of New Jersey, as he tends to call it. It’s a “broken state” and a state that’s “broke.” New Jersey was in “a shambles,” he says, when he became governor in January. It’s “a fiscal basket case,” suffering from the “madness” of tax increases and excessive government spending, a “wonderful state” that’s been brought to “the edge of bankruptcy” and faces “the ruination” of its economy and “the quality of life that we...

Even in the best of times Tax Day stinks, but this Tax day is worse than most. The economy remains in the pits, spending has skyrocketed, taxes have gone up, and it seems as if with each passing day the American voter's voice in how those tax dollars are being spent, diminishes. That's the good news, the bad news is that next year's tax burden will be worse. "I can make a firm pledge, under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax,...

WASHINGTON (AP) -- Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem. About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization. Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it's still almost always better...

Some people are fighting for a fair tax, replacing our income tax structure with a VAT, a Value Added Tax(country wide sales tax). Others argue for a Flat tax, one tax rate on income for everybody, no deductions etc. Both sides are fighting for the same concept. Simplify the way the federal government collects taxes. America's Tax Structure is just so complicated and is getting more complicated every day. The $600 Billion plus in brand-spanking-new taxes passed as part of the Obamcare bill only serves to add to the tax code confusion. But Americans shouldn't feel bad because the general...

Fiscal Policy: The latest data show a record number of people with no tax obligation. We also have the highest-earning nontaxpayers ever. With more riding the wagon and fewer pulling, it should soon break down. A record number of the 142 million tax returns filed in 2008 resulted in no taxes owed, according to the Tax Foundation's analysis of the latest IRS data. About 51.6 million returns, or 36.3%, were filed by those whose deductions, exemptions and tax credits wiped out any federal income-tax obligation. These aren't people who have overpaid their taxes or had so much withheld from their...

The Senate health-care bill would raise effective marginal tax rates on lower and middle-income singles and families up to 41%. The effective marginal tax rate is the answer to the question: "If I earn $1 more, how much less than $1 do I get to save or spend?" If you can keep that full dollar for your disposal, the effective marginal tax rate is zero. If earning another dollar does not raise your disposable income by even a penny, the effective marginal tax rate is 100 percent. Consider, then, the figure below constructed for a two-earner family with two school-age...

State Changes to Individual Income TaxesIncreasesCalifornia in May added 0.25% to each income tax bracket, retroactive to January 1, 2009 and expiring December 31, 2010. Connecticut in September added a new top bracket of 6.5% on income over $500,000, retroactive to January 1, 2009. Delaware in June added a new top rate of 6.95% on income over $60,000 retroactive to January 1, 2009. Hawaii in May added three new brackets retroactive to January 1, 2009: 9% on income over $150,000; 10% on income over $175,000; and 11% on income over $200,000. New Jersey in June added three new brackets retroactive...

Liberal Democrats like to say that if our government took all the money spent on the Iraq war it could pay for health insurance for all of the uinsured. Well, that may be, however, the Iraq war was a matter of national security. Regardless of what one believes, the purpose of the war was to prevent another terrorist attack. However, there is something liberal Democrats can do to help the government pay for the uninsured. This won't require changing the insurance status of the 90% of Americans who are very satisfied with the current system. Liberal Democrats just need to...

Pennsylvanians: We've been slimed!A strange, mucous-like slime trail that originated in Harrisburg and continued into central Pennsylvania a few days ago was caused by Governor Edward "G. Tax Me" Rendell, according to members of the Pennsylvania Department of Environmental Protection cryptozoological clean-up team.Originally, team members feared that it was the trail of a giant snail, not a gelatinous slimeball--or several of Rendell's cronies, said team leader Nick Draffenstoots."There is absolutely nothing to fear, at least from a toxicity standpoint," said Draffenstoots. "On the other hand, if you're afraid of living the rest of your days mired in a sewer pit...

We note a growing movement against interfering and over-instrusive government these days, and that movement is embodied by the TEA (”Taxed Enough Already”) Party phenomenon. A quick check of the national TEA Party movement’s website — and the Tea Party sites in various states — reveals that literally thousands of these parties are going to take place across the United States on July 4th, the 233rd anniversary of the country’s declaration of independence from its colonial masters, the British. We have to say that this growing movement — which at its heart seeks to rein in out-of-control government spending at...

Had enough yet? Rick Reiss Friday, May 22nd, 2009. Big government proponents frequently remind us that taxes are the price we pay for a civilized society. This line is actually attributed to the former Supreme Court Justice Oliver Wendell Holmes. While true in some respects, our current tax system is anything but civilized. America now has a government riding roughshod over people and businesses with even higher taxes and more rules and regulations. It is only fitting to remember a quotation by another famous American jurist. “That the power to tax…” wrote US Supreme Court Justice John Marshall “involves the...

In his first three months in office Obama has authorized the biggest government spending in history and thus doubling the deficit and the national debt. Because of this insanely wasteful spending that count in the trillions of dollars the only way for Obama to make up for this money is to massively increase the taxes to the Carter Era levels. Here is the simple math that proves the theory above. For 2008 the most optimistic estimates for income tax revenues will be around $ 1.1 trillion which is similar to what the government collected in incomes taxes revenues in 2007....

In news that will be bad for activists hoping to start another American Revolution with a series of protests modeled on the Boston Tea Party, a new Gallup Poll finds that a solid majority of American say the income tax they pay is “fair,” and that slightly more than half classify their own tax burden as either “about right” or “too low.” According to Gallup, their annual April poll on taxes found this year that 48 percent of Americans said the amount of federal income tax they pay is “about right,” 3 percent say it is “too low,” and 46...

It's bad for our democracy to exempt half the country.If you thought Bernard Madoff's Ponzi scheme was bad, wait until you hear about the inverted pyramid scheme the federal government is working on. While Mr. Madoff preyed on people who trusted him with their money, the federal government has everyone's money, and the implications of its actions are worse. Picture an upside-down pyramid with its narrow tip at the bottom and its base on top. The only way the pyramid can stand is by spinning fast enough or by having a wide enough tip so it won't fall down. The...

[Obama's] agenda is a bold one in many ways. Yet his tax code would still look more kindly on wealth than Nixon’s, Kennedy’s, Eisenhower’s or that of any other president from F.D.R. to Carter. And only part of the reason for this is widely understood. It’s well known that tax rates on top incomes used to be far higher than they are today. The top marginal rate hovered around 90 percent in the 1940s, ’50s and early ’60s. Reagan ultimately reduced it to 28 percent, and it is now 35 percent. Obama would raise it to 39.6 percent, where it...

[T]his week new [Illinois] Governor announced plans to raise state income taxes by 50%. Pat Quinn [...] is proposing to raise the personal income tax rate to 4.5% from 3% and the business tax to 7.2% from 4.8%. [...] Mr. Quinn ran as Mr. Blagojevich's Lieutenant Governor on a platform of no new taxes. But now he defends his huge tax increase by saying this will only hit those who have the "ability to pay." Of course, employers and the wealthy also have the ability to leave -- which they have been doing. In the last decade 736,000 more Americans...

It is perhaps the most potent argument offered by those who oppose increasing the income tax on wealthy New Yorkers: If you raise it, they will flee. That case has been made repeatedly by Gov. David A. Paterson, who says that higher taxes should be a last resort. It has been featured in a campaign by Taxpayers for an Affordable New York, a coalition of real estate and business interests. And it has been on the mind of Mayor Michael R. Bloomberg, New York City’s richest person, who said in a radio interview, “You can’t tax too much those that...

According to a report by CBS Chicago, Governor Pat Quinn of Illinois is proposing a 50 percent hike in State income taxes. “The income tax increase could bring in nearly $4 billion. The budget deficit is expected to be more than $9 billion by the summer of 2010. State lawmakers are also talking about raising gasoline taxes to pay for road and bridge construction. Fees on driver's licenses and license plate stickers may also go up. In addition, some business tax

Lawyer gets 5-cent IRS bill, 4-cent refund Detroit defense attorney remains confused over two notices DETROIT - James Howarth is a little confused by two letters he has received from the Internal Revenue Service. The Detroit defense lawyer received one letter in November that said he owed the IRS money — five cents. He was warned that he should pay "to avoid additional penalty and/or interest," the Detroit Free Press reported Saturday. Howarth said he then received a second letter telling him the government owes him money — four cents. He was told he would have to request the refund...

In the United States, workers in cities offering above-average nominal wages pay 30 percent more in federal taxes than otherwise identical workers in cities offering below-average wages. In The Unequal Geographic Burden of Federal Taxation (NBER Working Paper No. 13995), author David Albouy estimates that federal taxes lower long-run employment levels in high-wage areas by 15 percent, depress land prices there by 25 percent, and reduce housing prices in the area by 4 percent. Economists term these negative outcomes "locational inefficiencies", and Albouy estimates that they cost taxpayers $34 billion in 2005. In the United States, highly taxed areas tend...

Lou Dobbs Tonight -- CNN -- November 14 "They're using identities of American citizens and the IRS is allowing it to happen." Casey Wian: More than 1,300 illegal aliens near Greeley, Colorado, have been using either stolen or phony Social Security numbers to receive at least $2.5 million in tax refunds, according to local law enforcement officials. (unbelievalbe video clip) Chief Jerry Garner, Greeley PD: These folks that are here illegally are victimizing American citizens by stealing their identity. Very, very often they are victimizing American citizens who are Latino. John Cooke, Weld County Sheriff: They're using identities of American...

Anyone who thinks the path to "fiscal discipline" is through higher taxes ought to look at the current budget spectacles in New York and California. The two liberal states have among the highest tax burdens in the country, yet both now find themselves with huge budget deficits and are debating still higher taxes to close the gap. California has the highest state income tax rate in the country (10.3%), while New York State also has a high income tax rate (6.85%), with the combined state and city rate rising to 10.5% in New York City. Their overall government spending totals...

...The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. Barack Obama says he's going to cut taxes for those at the bottom, but that's also going to be a challenge because Americans with an income below the median paid a record low 2.9% of all income taxes, while the top 50% paid 97.1%. Perhaps he thinks half the country should pay all the taxes to support...

Big corporations give him money. Presidential candidates seek his endorsement. He has influential friends in Congress and the governor's mansion.  The Rev. Al Sharpton has emerged over the past decade as perhaps the nation's most prominent civil rights leader, a status that was demonstrated again this week when he led protests against police brutality that briefly shut down six of Manhattan's major bridges and tunnels.   But he still carries baggage from his early days as a fire-breathing agitator: Government records obtained by The Associated Press indicate that Sharpton and his business entities owe nearly $1.5 million in overdue taxes...

The embattled government trimmed income taxes for 22 million people on Tuesday, as soaring food and fuel bills sent inflation rocketing and dented hopes for more interest rate cuts soon. Higher household bills are creating a headache for increasingly unpopular Prime Minister Gordon Brown and the tax handout came after Labour came third in this month's local elections -- its worst post-war performance on record. "This family tax cut provides support this year for those on middle incomes at a time where they face increased bills," Chancellor Alistair Darling told parliament as he unveiled the surprise tax cuts. Ordinary tax...

Why Do We Need You, Government Man? "You must pay Social Security," said the government man. "Why?" I replied. "I can walk to the bank and save my own money or get an annuity with an insurance company. I don't need you to steal money from my pay check every week, then hope I live to 67 to get some of my hard-earned money back." "You must use our Post Office." "Why?," I said, "UPS, DHL, and Fed Ex give me better service." "You must support Medicare." "Why?" I replied, "I can pay for my own health insurance that lets...

These are my top-10 beefs with the Federal Income Tax. This is the enemy. We should first focus on particulars of why it is bad rather than battle among ourselves about suggested alternatives. Please keep to the subject and tell me if you somehow think I am unfairly disparaging the Income Tax. 1: It allows over 1/3 of all Americans to escape paying Federal taxes altogether, either because they don’t report earned income correctly or they hire tax accountants to help them jump through tax loopholes. And who pays an average of 30% higher taxes because of all this tax...

The German government's purchase of data stolen from a Liechtenstein bank has reinvigorated longstanding debates about privacy, law enforcement and international relations. Much of the fallout has followed predictable patterns. Some argue that Germany's richest citizens should be brought to justice for failing to comply with the tax laws, while others point out that it is unseemly for a nation to spy on a peaceful neighbor. The conflict between Germany and Liechtenstein also has triggered a broader debate about tax competition and the role of so-called tax havens. The Paris-based Organization for Economic Cooperation and Development is trying to use...

To the Memory of ALBERT J. NOCK Foreword THIS WAS, to be sure, "the home of the free and the land of the brave." Americans were free simply because the government was too weak to intervene in the private affairs of the people-it did not have the money to do so-and they were brave because a free people is always venturesome. The obligation of freedom is a willingness to stand on your own feet. The early American wanted it that way. He was wary of government, especially one that was out of his reach. He had just rid himself of...

Chart: Percentage of taxpayers paying the alternative minimum tax, by townA federal tax originally designed to prevent the super-rich from avoiding taxes altogether continues to dun more and more of North Jersey, including thousands of families earning less than $100,000.  The latest data from the Internal Revenue Service shows a dramatic increase in the number of North Jersey families required to pay the alternative minimum tax, which produces higher bills than the regular income tax.  New Jersey is home to the highest percentage of AMT payers in the nation.There is general agreement in Congress that the AMT is growing...

Montana still relies more heavily than do other states on property taxes for revenue, but the actual tax levels are not abnormally high... Doug Young, professor of economics at MSU-Bozeman, also told a meeting of Montana business and political officials that residential and commercial real estate is shouldering a greater share of the property tax burden in the state. Young spoke in Helena at the annual meeting of the Montana Taxpayers Association, a group that primarily represents business taxpayers. Property taxes account for 37 percent of tax revenue in Montana, while the national average for states is 31 percent... Income,...

In today's competitive global economy, a fair, simple, and pro-growth tax system is essential for America's success. America must be the best place in the world to invest and create high-paying jobs. Fred Thompson's Plan for Tax Relief and Economic Growth promotes fairness and simplicity in the tax code and will create greater growth in the economy. It is based on a fundamental assumption that keeping tax rates low increases economic growth and enhances American competitiveness in the global economy. Increased economic growth will lead to higher wages and higher levels of employment in America. Equally important, lower taxes enhance...

A report left out of the public spotlight for more than six months reveals that officials at the Texas Department of Transportation want to toll interstate highways and shelter private investors from paying income taxes on toll revenue. On Feb. 28, Texas transportation officials submitted the report to the 110th Congress entitled “Forward Momentum.� The report did not attract much attention at the time. State lawmakers have only recently begun to speak out about it. Texas state Sen. John Carona, R-Dallas, called the recommendations a form of double taxation, according to The Associated Press. In the report, TxDOT urges federal...

"There are frequent complaints that U.S. income inequality has increased in recent decades. Estimates of rising inequality that are widely cited in the media are often based on federal income tax return data. ..............." -------------- "However, there have been large changes in U.S. tax rules over time that have made a dramatic difference on what is reported as income on individual tax returns. .........." ---------------- "Measurements of inequality have also been affected by large reductions in income tax rates, particularly in 1986..........." ---------------- "In sum, studies based on tax return data provide highly misleading comparisons of changes to the U.S....

Maybe the era of big government isn't over, after all. As Americans finish their annual tax-filing flurry to meet a Tuesday deadline, it is true that tax rates are lower than they were a few years ago. But according to a different yardstick, the federal government's reach is expanding. Slightly over half of all Americans – 52.6 percent – now receive significant income from government programs, according to an analysis by Gary Shilling, an economist in Springfield, N.J. That's up from 49.4 percent in 2000 and far above the 28.3 percent of Americans in 1950. If the trend continues, the...

For years, Trenton lawmakers knew property taxes were suffocating homeowners. They watched school boards and municipal councils approve spending that piled one 6.5 percent property tax increase on top of another, year after year. They bemoaned the highest-in-the-nation tax bills. But they never did anything. For them, decrying confiscatory taxes was a safer political choice than actually doing something. They realized that lowering property taxes, seemingly a good thing, would trig ger consequences -- most of them unappealing. Simply put, reducing reli ance on property taxes as the major funding source for schools and local government can be achieved only...

Ron Deval - boomer, ecologist, humanist, peacenik, political agnostic and unapologetically Canadian - has a surprise for fans of all causes liberal. Reliably left on most issues, Deval is nonetheless passionate about a tax revolution whose growing army is populated largely by conservatives and libertarians. Describing himself as an "advocate of things that favor humanity," Deval is, in short, a Fair Tax maniac. Encouragingly, the Land O' Lakes man is not just another guy with an opinion and a couple of Web sites. He can navigate a spread sheet. After about 20 years designing programs that helped wealthy clients of...

Mr.Buffett. As an avowed supporter of the estate tax, Mr. Buffett could have let the government take its share of his estate after he dies. But just as Mr. Buffett has accumulated his vast wealth without paying much personal income tax, he has found a way to avoid the tax man in this maneuver as well, even writing in his letter to Bill and Melinda Gates that a condition of the gift is that the foundation “must continue to satisfy legal requirements qualifying my gifts as charitable and not subject to gift or other taxes.” On the estate tax, watch...