It’s not that government is too big, it’s that you are giving money to n*****s:
“That’s a conundrum, isn’t it?” asked Jodine White, 62, of Rocklin, Calif. “I don’t know what to say. Maybe I don’t want smaller government. I guess I want smaller government and my Social Security.” She added, “I didn’t look at it from the perspective of losing things I need. I think I’ve changed my mind.”
Their problem is that a black man is President.
Yeah, right, only the rich pay all the taxes
The latest right wing meme is that 47% of the population pay no taxes.
Of course, it’s not true, though it is true that that number owe no federal income tax, but the do owe significant amounts of Social Security, Medicare, and state and local taxes.
As this handy, dandy chart shows, it’s simply not true, and my guess would be that if this were broken up into deciles, as opposed to quintiles, that the top 10% would pay even less, since they are above the social security cutoff, and get far more of their income in capital gains and dividends.
Warren Buffet once noted that his receptionist paid a greater percentage of her wages in taxes than he did, and that still holds true.
The German tax authorities have decided to pay €2.5 million to a whistle blower who stole information on 1500 accounts, with the payments being dependent on the data being real. (See also here, and here) in order to catch tax evaders.
They did this before, with Lichtenstein in 2008, where payment netted tax revenues in excess of €200 million.
The Swiss have a problem, because I bought a 4 Gig memory stick a year ago for $12, and it’s smaller than a pack of gum.
Even if you assume 100K per account, this stick can hold about 40,000 accounts on each memory stick, and with the going rate from German tax authorities of about €1,666 per account, that memory stick could net an insider well over €50 million, with a bulk discount.
Their style of bank secrecy is likely to go away, because it is unsupportable.
Now, Germany needs to learn about the “Perp walk”.
And I don’t mean politically correct. I mean companies involved in the personal computer business, most notably Microsoft, Hewlett Packard, and Dell, who are aggressively lobbying against a proposal to prevent tax evasion through transfer pricing:
Software and computer companies such as Microsoft Corp., Hewlett-Packard Co. and Dell Inc. are gearing up to fight an Obama administration plan to curb offshore tax avoidance.
The $15.5 billion proposal in President Barack Obama’s 2011 budget targets what the Internal Revenue Service calls the growing problem of so-called transfer pricing. The technique allows companies to reduce their tax bills by transferring intangible property such as patents, trademarks and licenses to offshore subsidiaries.
They use our courts and our law enforcement and our regulators to enforce their IP licenses, and they want to assign that IP to dummy corporations
Additionally, Microsoft has evaded Washington state taxes over the past 13 years, to the tune of $1.27 billion, with a similar shift by opening up a store front in Nevada. (see vid)
But don’t you worry about Microsoft, they are lobbying to have the tax gutted, as well as getting an amnesty in the lege, so they won’t owe anything, and the state will find some way to deal with their $2.8 billion deficit over the next few years.
Silly voter, taxes is for plebes.
It’s actually called a “Tobin Tax“, and the idea is that a tax of about 5 basis points (0.05%) on non-consumer bank transactions (otherwise known as “speculation”).
As was noted with the original Tobin proposal, this is actually very hard to evade, because they sales have to be settled something, and for any transaction of any significant size, this means only a few places, New York, London, Paris, Frankfurt, Tokyo, etc. settle (i.e.) pay.
If you moved from highly trafficked settling institutions to obscure ones, the costs of settling become much higher, and in fact will likely likely be much higher than 5 basis points.
There is an organization in the UK, the Robin Hood Tax campaign, which is lobbying for the idea, and produced the above video, which illustrates how it would work, and how it would benefit everyone except for the vampire squids* of the world.
In an interesting twist to all of this, the folks at the campaign put up an online poll, and some online entities spammed the poll to oppose the proposal.
I wonder who might have done this?
The Robin Hood Tax campaign alleged that a Goldman computer was one of two computers that allegedly “spammed” the internet poll with more than 4,600 “no” votes in less than 20 minutes on Thursday.
Technical staff for the Robinhoodtax.org.uk website said the “no” counter increased at a “dramatic rate” from 3.41pm.
The number of “no” votes jumped from 1,400 to 6,000 before campaigners – who are calling for the introduction of 0.05pc tax on banking transactions – tightened the site’s security.
Robin Hood’s security team claimed it traced the erroneous votes to two computers, one of which is allegedly registered as belonging to Goldman.
Goldman is saying that it has, “just received this information and is investigating fully,” which in the UK means busting which ever staff member is of Indian or Pakistani extraction, I guess.
In any case, the “Yes” vote is winning by about 9:1, 41488 to 4626.
I approve of their program, though I think that 5 basis points is too low. It should be at least 25 basis points (¼%).
*Goldman Sachs and their Evil Minions™
Well, yesterday was, as Atrios says, jobless Thursday, and unemployment claims fell more than forecast, falling to just 440,000, which is still not enough for an increase in non-farm employment.
The White House is predicting about 95,000 new jobs a month being created in 2010, but based on some quick numbers, a 1.1% annual labor force growth times 155,200,000 people in the US labor force divided by 12 months, there need to be about 142,000 jobs created each month just to accommodate natural growth, so things aren’t getting better, they are just getting worse more slowly.
On the other hand, the news out of California, that tax receipts are well in excess of predictions, is legitimately good news.
Finally, in a discovery of the blatantly obvious, a the TARP’s Congressional Oversight Panel has determined that commercial real estate is imploding, and this threatens the viability of many small and mid sized bank. …………Hoocoodanode?
First, and most visibly, it’s the fact that the New Orleans Saints are now the world champions, having won the Super Bowl.
Secondly is that fact that David Stockman, one of the young Turks at the core of the “Reagan revolution,” he was Budget Director during Reagan’s first term, is arguing that the government should tax the financial sector to shrink its size:
While supply-side catechism insists that lower taxes are a growth tonic, the theory also argues that if you want less of something, tax it more. The economy desperately needs less of our bloated, unproductive and increasingly parasitic banking system. In this respect, the White House appears to have gone over to the supply side with its proposed tax on big banks, as it scores populist points against the banksters, too.
Not surprisingly, the bankers are already whining, even though the tax would amount to a financial pinprick — a levy of only 0.15 percent on the debts (other than deposits) of the big financial conglomerates. Their objections are evidence that the administration is on the right track.
Make no mistake. The banking system has become an agent of destruction for the gross domestic product and of impoverishment for the middle class. To be sure, it was lured into these unsavory missions by a truly insane monetary policy under which, most recently, the Federal Reserve purchased $1.5 trillion of longer-dated Treasury bonds and housing agency securities in less than a year. It was an unprecedented exercise in market-rigging with printing-press money, and it gave a sharp boost to the price of bonds and other securities held by banks, permitting them to book huge revenues from trading and bookkeeping gains.
Stockman is suggesting that people who he saw in the 1980s as the epitome of the heroes in Ayn Rand’s fiction should be taxed with the explicit aim of shrinking their size, because the business they do does not serve the public good.
This is a refutation of the “Objectivist” philosophy at the core of much of Mr. Stockman’s public life, which saw the glorification of greed as a force for good, and a legitimate basis for public policy decisions.
It looks like there is increased momentum in the Senate for raising the tax rate on big bonuses for bailed out firms
Senators Barbara Boxer and Jim Webb proposed a 50 percent tax on 2009 bonuses above $400,000 at any firm that has received more than $5 billion in government assistance.
The senators said they had not yet gathered broad support for the proposal, and neither sits on the tax-writing Senate Finance Committee, which would likely have to take up the bill. A 35 percent tax on bonuses at bailed-out companies was proposed last year by the leaders of the Finance Committee, Democrat Max Baucus and Republican Charles Grassley, but it has not been acted on.
I call it a half step, because in order to fix this, it needs to apply to a lot more people than that, and to apply to all income.
The marginal tax rate for people earning more than about $5 million a year should be north of 75%.
I don’t care if it’s Lloyd Blankfein, A-Rod, or Lady Gaga, let’s raise their taxes.
Having gone to high school in Portland, I am shocked that Oregonians have passed initiatives increasing taxes on the wealthy and large corporations, measures 66 and 67, by large margins.
This is surprising for Oregon?
I’m sure that a lot of you are saying, but it’s Oregon, it’s liberal, and you would be wrong.
In the 1920s, Oregon was the most Klan dominated state ever, and on taxes:
The double-barreled victory is the first voter-approved statewide income tax increase since the 1930s. Other states, facing similar budget woes, are watching the outcome closely because Oregon, after all, is a state that capped property taxes and locked a surplus tax rebate program into the constitution.
The last time voters approved a tax increase was 2002, when they agreed to bump up tobacco taxes to help pay for the Oregon Health Plan. Voters rejected income tax increases twice in recent years.
People in Oregon, which has a vociferous anti-tax streak in the electorate, have realized that if you want services, you have to pay for them.
More notably, it’s a broad based tax.
Cigarette taxes are seen as punishment for bad behavior, while the income taxes are seen as dues for being a part of society.
This is a big deal because it’s not a sin-tax, or a lottery, it’s a real broad based tax.
It looks like the fat cat Wall Street Bankers are looking at a legal challenge to Obama’s proposed bank tax:
Wall Street’s main lobbying arm has hired a top Supreme Court litigator to study a possible legal battle against a bank tax proposed by the Obama administration, on the theory that it would be unconstitutional, according to three industry officials briefed on the matter.
Ummm ……… Despite the fact that these guys destroy £7 of wealth for each dollar that they are paid, and the fact that this is intended to collect money to replace those spent under the TARP law, which required such a levy, they still believe themselves to be the masters of the universe, and they are outraged at that Obama has unveiled a modest tax on their liabilities and spoken about them with less than glowing terms.
It’s really kind of whiny, since the tax is modest, and largely geared toward forestalling more punitive measures floating around Congress.
The tax is nominally 15 basis points (0.15%) on liabilities over $50 billion, and it appears to weigh more heavily on investment banks than depositor banks, though the legal distinction was erased when the brokers all became bank holding companies. (See the FAQ from the Treasury Department)
What’s more the tax is profoundly weak tea, as the effective tax is halved, yielding a tax of 7½ basis points, which is well under the 78 basis point advantage in cost of funds that the “too big to fail banks” have over their smaller brethren.
Note also that this only covers the $117 billion or so of the TARP, but when other bailouts are considered, we are approaching $30 trillion in money handed to banks, without a thought of clawing that back.
So they are getting a sweetheart deal, and they are screaming like stuck pigs.
They do not realize how angry people are, and they won’t until people literally start burning down their houses with torches.
If we had wanted McCain’s plan, we would have voted for McCain.
Well, it’s nice that that the conservative Liberal Democratic Party is not in power, because now the Japanese government is proposing a carbon levy on marine fuel:
Japan, one of the world’s top shipping operators, will submit details of its proposal for an international levy on marine fuel ahead of a meeting of the U.N.’s shipping agency in March, a government official said on Friday.
Under the proposal, which was first touted last year as an alternative to an idea supported by some European countries to introduce an emissions trading system in the sector, money raised would be used to help cut carbon dioxide emissions relating to shipping in developing countries.
Funds would be spent in areas including improving conditions at ship recycling yards, many of which are located in India and Bangladesh, the official said.
Ships that improve their fuel efficiency and new ships that exceed efficiency requirements would be offered partial refunds on the levy.
(emphasis mine)
Everyone wins, except, of course, the traders on Wall Street, the City, and the Nihombashi in Tokyo, because they don’t get to charge commissions on the fees for carbon trading, charge yet more fees for creating carbon based derivatives, and then get bailed out by the taxpayers when their house of cards collapses.
I can live with that.
Boris Johnson, Mayor of London, and perhaps the stupidest man in England, has come out against the proposal:
Boris Johnson threw down the gauntlet to shadow chancellor George Osborne today, urging him to rule out extending the supertax on bonuses.
The Mayor is seeking reassurances that Gordon Brown’s tax would not be imposed by a Tory government. The showdown comes after Mr Johnson claimed that up to 9,000 bankers could leave London to escape paying.
Mr Osborne has said he does not oppose the tax, and the Conservatives have not ruled out imposing it again if they win the general election.
If the Tories come out against the tax, they may very well snatch defeat from the jaws of victory.
On a more utilitarian note, when a rich banker leaves for Switzerland (only Switzerland does not want them either) it means that that 2500 square foot penthouse flat in London becomes 4, or 5 more modest flats, increasing the supplies of housing, and drives down rents, making London a better place for the Londoners.
The rich bankers, and the expat tax dodgers who live in London in very large numbers, don’t make London better, they make it worse: They push out the middle class, and productive industry.
He’ll have to pay a fee.
He won’t
The proposal recently mooted by the Obama Administration, to levy a fee on financial institutions in order to recover TARP funds (see also here) seems like a good start.
But between Mssrs. Summers and Geithner, along with the DINO back-bencher pukes on the House Banking Committee, you can be sure that it will be so full of loopholes that the only banks that might have to pay anything will be the mom-and-pop banks who’ve done all the right thing.
Note also that this makes no mention of recouping the facilities that the Federal Reserve has offered, which have gone largely to the very large banks, and banks that have former Federal Reserve board members working for them.
The problem is that people are either:
What really needs to be done is:
Now there’s a recruiting slogan for the USAF: Join up and blow up a banker.
Yes, Barack Obama is finally taking a stand in the healthcare bill, and he is lobbying for a tax on high cost healthcare plans, as opposed to a tax on the wealthy. This means that older people, who have to pay more for health insurance, and labor unions, who literally shed blood for their health care, are getting completely screwed.
It’s also horrifically bad policy:
Seriously, I knew that we had elected a center-right Democrat as president, but I am surprised that we apparently elected a Republican.
Unsurprisingly, Obama is getting some pushback from the liberals in the House, most notably Raul Grijalva (D-AZ), who is saying that this clusterf%$# is his baby now, and he needs to work to make the bill better, and that this tax proposal violates Obama’s campaign promise not to raise taxes on the middle class.
Of course, whenever a politician promises not to raise taxes on the middle class, he’s lying.
After years of offering capital improvements and tax abatements to big businesses to lure them to town, some cities are now going after those business for their taxes when the companies do not fulfill their end of the bargain:
Cash-strapped communities have a message for corporations that promised jobs in return for tax breaks: A deal’s a deal.
As the recession drags on, municipalities struggling to fix roads, fund schools and pay bills increasingly are rescinding tax abatements to companies that don’t hire enough workers, lay them off or close up shop. At the same time, they’re sharpening new incentive deals, leaving no doubt what is expected of companies and what will happen if they don’t deliver.
The example they give is a $600K tax bill in DeKalb, Il, when they did not meet the mandated job level (500) in their distribution center.
My suggestion, and it’s one that would involve lots of tax lawyers, is not that the taxes be waived in such a deal, but that the amount of the taxes be a loan, so that when a company violates the terms, you can claw back all the money, plus interest.
If some rich guy dies in the next few days, it could get very ugly for his wife:
Spouses of those wealthy who die this year might find themselves with nothing if the family will isn’t revised—a major wrinkle that could follow Friday’s repeal of the federal estate tax.
As started on Jan. 1, estate taxes will be repealed for 2010 only. That means unless Congress acts otherwise, there is no limit to the wealth that can be passed on to heirs without incurring federal estate taxes through the end of the year.
But wills have often been written on the expectation that estate taxes were a fact of life for years to come, estate planners say. As a result, wills typically direct assets not subject to the tax be passed on to children—for 2009, up to $3.5 million—with the rest directed to the spouse.
“You could be in a situation now where everything would go into a trust downstream to the kids and nothing is left to the spouse,” …………
So, in addition to giving heirs a motive to bump you off, you could leave your spouse without anything when you die, and if the taxes go back into effect, which is a highly likely scenario, you have lawsuits to claw it back.
It ain’t just the Supreme Court where the misdeeds of Bush and His Evil Minions™ will be felt for years.
On the subject of raising marginal rates for rich people:
Here’s why: in 2007, there were 495,000 tax returns filed for millionaires. That means a significant fraction were corporate CEOs, CFOs, finance people, and professional athletes/best-selling textbook authors/TV celebs.
Peyton Manning makes about $30 million a year — let’s explore his potential behavioral responses to changes in taxes. Let’s raise Peyton’s taxes by 10%. Under the logic of Alan Liard, Greg Mankiw’s student, and under the logic that all economists know to be the truth, people respond to incentives. Peyton Manning is a person, so he responds to this tax hike by working 6% less, and decides now he’s going to sit for the Colts playoff games since he makes less money per game, and he enjoys watching Tom Brady play in the playoffs more than being there himself. Doesn’t really sound likely, does it?
Of course, Peyton Manning is going to play 16 NFL games and the playoffs even if you raise his taxes considerably. The same is true of a wide variety of other professions — corporate execs usually have two choices, they can choose to work or not work — there are no part-time CFO jobs, and it’s probably tough to be a “part-time” hedge-fund manager as well… So, let’s say Greg the textbook publisher or Chuck the hedge-fund manager decides, due to higher taxes, that they are just going to retire. In that case, the government loses 100% of the taxes Chuck or Greg would have paid! The multiplier is -10!!!
Except, according to logic which is totally obvious to a pre-schooler, if Greg the textbook author doesn’t sell textbooks, then Thorstein the textbook publisher will. If Peyton the quarterback doesn’t play in the playoffs or appear in Gatorade commercials, then Tom the quarterback will. If the CEO of Anthem, who routinely makes $40 million, quits due to high taxes, Anthem will pay the next CEO extravagantly. If Chuck the hedgefund manager doesn’t manage Peyton’s money, then Emilio the hedgefund manager will manage Tom’s money…
(emphasis mine, and I think that the hedge fund manager managing Tom’s money would be named Ashok, not Emilio, and he work out of Bangalore, not Wall Street, or at least he would in a system that was truly efficient.)
What he does not note is that the massive amounts of money received is not because they will do the “productive” “work” for only that amount of money, but because Peyton, and Tom, feel that they deserve more than the next best guy at their position.
If you engage in policies that discourage extremely high income, for example, expanding the AMT to include all forms of income, and increasing the marginal tax rate for the AMT (Currently 26%, and which has little/no deductions), at $¼ million by 1%, and by an additional 1% at $250K increments, so that a income beyond $1 million is taxed at 29%, and at $5 million it is taxed at 45%, at $10 million it is taxed at 65%, and it maxes out at 85% at $15 million,* then you will find that business will be less inclined to ginormous packages,† and you would see a moderation in this trend.
*Note that these are marginal tax rates, so the 85% is the tax payed on the dollars earned beyond $15 million, the 50 thousandth dollar would still be taxed at around 20%.
†Yes, I know, “ginormous package” sounds dirty, but the executive pay levels are obscene.
No, really, I am completely serious:
Some of the most senior bankers in Britain are planning to convince the Treasury to drop the new 50% tax on bonuses by dangling the prospect of a combined contribution to the exchequer of £2bn. The promise of the boost to Britain’s depleted coffers has been made in recent days and is almost four times the £550m Alistair Darling has said he intends to raise through his payroll tax on bonuses. The Chancellor has been met with anger in the City since he announced the one-off tax in his pre-budget report last week and been warned of a mass exodus of high-flying bankers to countries with a less punitive tax regime.
(emphasis mine)
I don’t know what is going on here, but when Britain’s own little vampire squids wrapped around the face of humanity,* decide that it’s time to overpay their taxes by a factor of 4, something very hinky going on.
Somewhere in these bonus pools that Chancellor Darling wants to tax is something bad….Something Really, Really, Really, Really bad.
We are talking something murder-for-hire and laundering drug money through child prostitutes bad. Something is rotten in the Street City,† and they, whoever exactly they are, very badly want it covered up.
*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm Goldman Sachs, The Great American Bubble Machine.
†The UK equivalent of Wall Street. Corrected my error on edit.
50% Tax on bank bonuses above €27,500. ($40,000)
I’m not surprised about the tax, though I am surprised that it happened so quickly, and that the threshold is so low.