Let’s see … if I’m a CEO and I can cut my corporate taxes by about 14% by moving overseas, why wouldn’t I?
Feel free to answer that question. And when you do, then perhaps you can figure out one thing that the politicos could have done a loooong time ago to keep corporations here and to spur business expansion and create jobs but haven’t?
Here we go again. Unaccountable bureaucracy has decided it needs to tax you some more:
The Federal Communications Commission is eyeing a proposal to tax broadband Internet service.
The move would funnel money to the Connect America Fund, a subsidy the agency created last year to expand Internet access.
The FCC issued a request for comments on the proposal in April. Dozens of companies and trade associations have weighed in, but the issue has largely flown under the public’s radar.
Well, for the usual reasons, of course:
"Today we propose three goals for contribution reform: efficiency, fairness, and sustainability," Genachowski said. "And we underscore that any reforms to the contribution system must safeguard core Commission objectives, including the promotion of broadband innovation, investment, and adoption."
That’s right friends, they have first claim to your earnings out of "fairness". Because, you know, not everyone has internet and well, it’s a "right" now, or something.
If you’ve ever looked at your phone bill, you know that you’re already paying a fee (tax) called the Universal Service Fund . But that fund just isn’t making it:
Consumers already pay a fee on their landline and cellular phone bills to support the FCC’s Universal Service Fund. The fund was created to ensure that everyone in the country has access to telephone service, even if they live in remote areas.
So last year the FCC established the Connect America Fund to funnel subsidy money (taxes) into construction of an internet infrastructure, because, you know, private companies, the one’s who’ve made the internet what it is today, simply can’t be left to do that.
And in recent years, with more people sending emails instead of making long-distance phone calls, the money flowing into the program has begun to dry up. The Universal Service fee has had to grow to a larger and larger portion of phone bills to compensate.
As more and more homes go fully wireless that fund (taxes) they had is drying up.
Time to update the fee (tax) and fund. How? It’s only "fair" of course.
The FCC could run into legal problems with the Internet Tax Freedom Act, a 1998 law that bans the government from taxing Internet access. But the FCC has long argued that Universal Service is a fee that the providers choose to pass on to consumers and not a tax.
Ah, providers chose to pass that along to consumers so it’s not a tax. Right. I see how that works.
Numerous companies, including AT&T, Sprint and even Google have expressed support for the idea.
Gee, there's a surprise (*cough* cronyism *cough*).
Stephen Moore does yeoman’s work via the Manhattan Institute debunking the left’s class warfare mantra of “tax the rich”. He does it with thousands of words accompanied by many charts. I’m just going to concentrate on a few the charts (do read the piece, it’s good) since they tell the story quite succinctly.
Remember it’s about those nasty rich paying their “fair share”:
For instance, we’re constantly told by those who would tax us more that we’re woefully under taxed compared to the rest of the world (like that’s a good reason to raise taxes). Well that really depends on what income group you’re in, doesn’t it:
So it’s not really true if you’re among the upper 10% in this country is it?
Who is so under taxed then. Well if you look at the tax rolls you’ll find that almost 40% of those filing tax returns had zero or negative tax liability.
That’s right, they paid nothing or actually got money from the government. I’m not talking about a tax refund either. I’m talking about redistributed wealth.
The United States taxes the top 10% of its “richest” people more than anyone else and well above the average tax found in all OECD nations.
That sort of takes the starch out of the “fair share” nonsense that we constantly hear the left prattle on about doesn’t it?
But wait, there’s more as the old Ronco commercial used to say. What about the share of taxes collected. It’s about “fair share”. Surely they’re not really paying what any thinking adult would consider their fair share of taxes are they? Well I don’t know about you, but yes, I think they are. In fact, the top 1% are paying twice as much in taxes as they were in 1980. That seems to go against the conventional wisdom, or at least the claims of the left, doesn’t it?
Why yes, it does. The chart at the right also shows that the top 20% are paying 84% of all income taxes collected. I don’t know what you consider a “fair share”, but I’d guess for most we’re way beyond fairness with this structure.
How much more? And where does fairness enter the question. Looking at this next chart on the left, why should those on the higher end pay more than they are now given the information available? If you have the bottom 50% paying 3% and the bottom 40% paying nothing or getting money via redistribution, yet benefiting from the infrastructure that the left likes to use to claim “you didn’t build that”, who really did build it?
Those paying 3% or those paying 40%? The government has no money and can’t build anything without taxes so who paid to build all that infrastructure that President Obama likes to claim? The chart tells that story, doesn’t it. In fact the top 25% of taxpayers ought to be yelling back at him every time he says that, “well we paid for it”.
There are a ton more examples and charts. There’s one more I want you to see as the left continues to point to taxes on the rich as some sort of panacea to all the revenue shortfalls that ail us (btw, it’s not about revenue, it’s about spending).
Look at what the recession has done to the “golden goose” of the rich.
Oh, my … they’ve actually seen huge percentage drops. Note how many there are in the bottom rung ($200k and above). Sorry folks but that simply isn’t “rich” in the terms I think of rich. That’s likely to be the guy next door who has a family of 5 and is trying to make ends meet. Anyone who thinks $200k is rich isn’t living in the same world as I am. But many of those in that category are going to be the small-business owners and entrepreneurs that help drive the economy.
The plan? Tax them even more. In France, since their tax the rich scheme has been unveiled, the “rich” are looking across borders into friendlier countries. We’ve seen a reduction in all categories of “rich” since 2007. Do you suppose those in those categories now are going to lay back and just accept more taxation without trying to do something to hold on to their hard earned money?
Anyway, rant ends. Read the whole thing. Peruse the graphs. It is very interesting and telling information.
The “you didn’t build that” gang’s attempt to get the “rich” to pay what they characterize as their “fair share” in taxes (when in fact in almost every western country they pay more than their fair share) is about to get tested in France:
The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.
President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.
The question asked by the client is typical of what will happen if such a tax is imposed … anywhere. If you believe “the rich” are going to lay back and take it, you’re crazy. They will do what is in their best interest and paying 75% taxes on what they earn isn’t in their best interest. We’ve often talked about the Laffer curve and how it applies to taxes. How at some percentage of taxation, revenues will drop and in some cases drop dramatically.
That’s precisely what that client’s question indicates will happen in France with a 75% “rich” tax.
France has a history of punitive taxation which is one reason it no longer is considered much of a economic power:
[T]he proposal is the latest red flag in a country that has long labored under the image of being a difficult place to do business. France has a 33 percent corporate tax rate — the euro zone’s second-highest, after Malta’s 35 percent. That contrasts with the 12.5 percent rate in Ireland, which has deliberately kept a lid on corporate taxes as a lure to businesses.
Businesses don’t have to stay and take France’s coercive tax rates anymore. There are countries more than happy to accept their businesses and the boost to the economy they bring.
And, that goes for “le rich” as well. ‘Leaving the country’, in the case of France, doesn’t necessarily mean moving too far:
“It is a ridiculous proposal, but it’s great for us,” said Jean Dekerchove, the manager of Immobilièr Le Lion, a high-end real estate agency based in Brussels. Calls to his office have picked up in recent months, he said, as wealthy French citizens look to invest or simply move across the border amid worries about the latest tax.
“It’s a huge loss for France because people and businesses come to Belgium and bring their wealth with them,” Mr. Dekerchove said. “But we’re thrilled because they create jobs, they buy houses and spend money — and it’s our economy that profits.”
You’d think, for anyone with an ounce of common sense, this outcome would be obvious. Apparently not. And so France will drive off its rich, see revenues in that income bracket drop even while the tax percentage is increased to 75% and attack those who’ve avoided those taxes as “greedy”. Just watch.
Of course I agree with the words of Dr. Thomas Sowell in that regard:
“I’ve never understood why it is “greed” to keep money you’ve earned, but not greed to take somebody else’s money”.
Yeah … me neither. Right now, the greediest entities on earth are governments.
I know there are some out there that will say, “hey you were whining the other day about taxing the winnings of Olympians”, weren’t you? And now a politician plans to fix it and you bitch?!”
Yes. Yes, I do. Because this is exactly the wrong way to go about it:
Sen. Marco Rubio introduced a bill Wednesday to eliminate the federal government’s tax on Olympic medals, saying the levy amounted to yet another way the government tries to punish those who succeed.
Athletes who win a gold medal also earn a $25,000 honorarium — and with it an $8,986 tax bill to the IRS, according to Americans for Tax Reform, which crunched the numbers. That covers both the honorarium and the tax on the value of the gold in the medal itself.
The silver medal tax comes to $5,385, and the bronze medal tax is $3,502 — including $2 for the value of the bronze medal itself, and the $10,000 honorarium.
That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S.
Mr. Rubio said that shouldn’t happen.
Of course you can make special pleadings for all sorts of types of special interest taxpayers, can’t you?
But isn’t taxation supposed to fund the legitimate functions of government and be fairly applied to everyone?
How does exempting special constituencies because of their, well, “specialness”, do that?
Certainly Olympic level (and other) athletes compete in other competitive venues and it wouldn’t be at all unusual for them to win some sort of honorarium there. So why is that taxable and this isn’t?
Quite simply visibility and outrage.
That’s no way to run a government. There’s nothing rational about this exemption. It is as arbitrary as many of the taxes we suffer under.
Important issue? After the economy is up and running again, it is time to push – and push hard – for a total revamping of the tax structure and code in this country.
We suffer one of the least representative and certainly the least fair or equitable tax codes in the world.
Time to take it apart and start over again. And this time, let’s make it impossible for Congress to fiddle with it in terms of rewarding or punishing special constituencies arbitrarily at its whim
Are you watching the Olympics? Did you enjoy the gold medal performances of the US women’s gymnastics team?
It was nice to see them bask in the glory of the fruition of all those years of hard work and sacrifice. They reached the peak of accomplishment. They took the gold. The stories of the athletes were as interesting as the victory. Years of monetary sacrifice, hard work, dedication and practice. Families, who moved to avail their daughter of coaching, who lived from paycheck to paycheck to ensure money was available for their daughter’s training, the hundreds of meets and competitions, etc.
But hey, we all know they “didn’t build that” themselves. They traveled on roads to their practice sites and meets, used other common infrastructure improvements and now they get to pay the piper.
It’s time for them to pay up for winning those gold medals, and the IRS will ensure they do.
At today’s commodity prices, the value of a gold medal is about $675 according to Americans for Tax Reform. And the gold medal brings with it $25,000 in prize money. The IRS will tax them at 35%.
So for all those years of hard work, sacrifice and performance, our gold medalists will pay the IRS $8,986 for each gold medal they win. The silver will cost them $5,385 ($15,000 prize money, and $385 for the medal) and bronze $3,502 ($10,000 prize money, $5 for the medal).
Of course they’ll be about the only athletes in the world so treated because you see, the US is one of the few countries in the world that takes it upon itself to tax the world wide earnings of its citizens.
Because, you know, that infrastructure is everywhere and it’s expensive. </sarc>
But I’m sure we’ll hear from our usual apologists for intrusive government trying to spin these taxes as something both necessary and proper.
Just a note to them – most Americans don’t at all agree with the sentiment that they didn’t build what they now have. But you have to hope the Democrats keep trying to sell that. Our Olympians and their tax experience make as good a case against that as any I can imagine.
Pete DuPont does a little analysis of what should be major issues in the upcoming election. They don’t bode well for the current administration if, in fact, Republicans can get the media to actually pay attention and address them:
• Taxes. Big tax hikes coming in January will serve as dampers on economic growth.ObamaCare imposes a new 3.8% tax on investment income. On top of that, if the Bush tax [rates] aren’t extended, the top income tax rates will rise to 23.8% from 15% on capital gains and to 43.4% from 15% on dividends.
But beyond the economic impact, the Obama administration’s focus on class warfare fuels the nation’s dissatisfaction and plays on an unwise resentment towards successful businesspeople. Mr. Obama continues to push for higher taxes and does so in a way that is an attack on those who are successful–demanding that higher-income taxpayers pay their "fair share," when they already pay more than that.
The economic impact shouldn’t be waved off. When and if both capital gains and dividend incomes are taxed at a higher rate, they will effect both investment and retirement incomes. Don’t forget those” rich folks” whose retirement income is structured to depend on dividends from blue chip stocks they’ve methodically bought in small quantities over their working years. It obviously doesn’t matter that their incomes really don’t reach the “rich” threshold that the Democrats want you to envy, their retirement incomes will take an almost 200% tax increase hit regardless if the current rates aren’t extended. Apparently to collect less than a trillion dollars over 10 years taxing the “rich” (so they’ll pay their “fair share”) vs. spending $46 trillion Democrats are happy to sacrifice those folks.
As for investments, there’ll be a recalculation given the increase on capital gains and it will dampen investments, thus business expansion and finally job growth.
• Energy. The American people hear Mr. Obama talk about a broad energy strategy, but they see an administration that has attacked the coal industry with onerous regulations, done little or nothing to assist the natural gas boom, done what it can to slow down oil production, and wasted money on other initiatives that please green supporters but don’t lower the cost of energy.
This administration’s energy policy is a joke, but unfortunately it’s a very expensive joke. Its priorities are completely backward, but purposefully so. To call what they are doing a “policy” is simply absurd. This is agenda fulfillment with the people’s money on pie-in-the-sky projects that have yet to yield (nor do they even promise to yield) the energy required to make them viable. Meanwhile they’ve done everything humanly possible to retard the fossil fuel industry’s growth at a critical time for our economy. On the issue of energy, this administration gets an F-.
• Health care. Although ObamaCare remains unpopular, the Supreme Court ruling upholding it means that a 17% transfer of our economy from the marketplace to the control of the federal government is coming unless Congress and a President Romney can stop it. At a time when our nation needs lower taxes and more flexibility in health-care decisions, ObamaCare has increased taxes by hundreds of billions of dollars and allowed government to regulate most of our health care decisions.
The secretary of health and human services can now set rules that constrain doctors and hospitals and mandate prices. Mr. Obama once promised us all that if you were happy with your current health plan, you’d be able to keep it. The more we learn about ObamaCare, the unlikelier that looks–and the more the government will intrude in the relationship between doctor and patient.
Despite the disapproval of a majority of Americans, Democrats and this President rammed the legislation through anyway. That should tell most Americans what they really think of their opinion. It is a classic “we know what’s best for you” elitist move.
The second paragraph gives a hint though to the powers this legislation has given an unaccountable government bureaucrat. The Secretary of HHS now has tremendous power to make unilateral decisions that will effect everyone’s health care. Of course, that’s been discussed by some on the right, but for the most part the level of intrusion these powers will confer won’t really begin to be felt until, conveniently, after the election.
• Spending. Federal expenditures under Mr. Obama is both unparalleled and unsustainable. As National Review’s Jonah Goldberg notes, from the end of World War II until the end of the George W. Bush administration, federal spending never exceeded 23.5% of GDP, and the Bush years’ average was around 20%. The Obama spending rates have stayed above 23.5% in every year of his presidency. In the past four years, America has added $5 trillion in federal debt, and around $4 trillion of that was from Obama policies, according to The Wall Street Journal. Federal debt held by the public was 40.5% of gross domestic product in 2008. It’s now 74.2% and rising.
Despite the attempts by Democrats using fudged numbers and trying to spin it so Bush gets the blame, the spending by this administration is, as DuPont points out, “both unparalleled and unsustainable”. And, don’t forget, the President hasn’t signed a budget in over 1,000 days because the Democratic Senate has refused to pass one, despite the Constitutional requirement it do so.
Those are the things we ought to be talking about. Not whether or not Romney pissed off the Palestinians (who doesn’t piss off the Palestinians when they take a principled stand on Israel? How is this even news?).
These are where Obama’s skeleton’s are to be found. He’d prefer to keep this closet door firmly closed. The media, for the most part, seems content to help in that endeavor.
This election isn’t about anything but his administration’s abysmal record. Spending time talking anything else is simply a distraction. Unfortunately, given its unprecedented level of economic intrusion, we’re going to live or die economically with the policies that government applies. Talking about whether a candidate may or may not have insulted the London Olympics isn’t going to change that fact one iota. But it sure does distract from examining the previous administration’s record, doesn’t it?
Oh, my … the White House is on the offensive trying to save the middle class, or something:
The White House has launched a new offensive in its fight with congressional Republicans over taxes, arguing 114 million middle-class families will see their taxes rise without action by Congress.
A report from President Obama’s National Economic Council released Monday contends the families would see their taxes rise by an average of $1,600 if the George W. Bush-era tax cuts expire as scheduled at the end of the year.
A) they’re not tax cuts, they’ve been the tax rate for years.
B) Republicans have already made an offer. They said they are willing to extend the rates for all so it is obviously not a tax increase the middle class must suffer.
Of course, that’s where the rub is, because the Democratic Senate and the White House want to raise taxes on a certain level of income earner. They’ve staked their class warfare gig on it.
Because, you see, they’re trying to convince everyone that’s only “fair” and to further imply it will solve the insolvency problem. Well they’re wrong, as usual, on both counts.
Here, take a look at this. Even those who don’t count economics as their strong suit should be able to figure out what this means:
That’s right, the problem isn’t revenue. The problem has nothing to do with high income earners and their “fair share”. It has to do with out of control spending which has accelerated dramatically under this president. And, oh by the way, the increase in taxes on the wealthy would be a mere drop in the bucket of red ink Obama has charted out for the next 10 years.
So while he whines about a $1,600 tax per family if no action is taken, ask him what he’s adding in debt per family with a 10 year plan to spend $46.9 trillion dollars we don’t have, okay?
As I’ve mentioned many times, the engine of America is small business. Those businesses provide jobs to 85% of Americans. And according to the US Chamber of Commerce, they’re not going to be doing much if any hiring in the near future:
Small business owners’ concerns about the future—particularly on health care and taxes-—are impacting their hiring, according to the U.S. Chamber’s fifth quarterly small business survey released today.
Only one in five small businesses (20%) expect to add employees in 2013, according to the poll of 1,225 small business owners, conducted by Harris Interactive. The majority of small businesses say they are likely to keep the same number of employees over the next year – meaning there is likely to be little change in overall unemployment figures.
Concerns about health care and taxes (both brought to you by Barack Obama) are causing caution among small businesses and that’s because they perceive an “unsettled” business climate. Consequently there’s no incentive for them to change the status quo. In fact, they obviously believe there is some safety in the status quo (see the survey to see how they feel about their businesses locally) .
As we’ve mentioned repeatedly, government policy does have an effect on the economy. It can be an enabler that helps create incentives for businesses to expand and hire or it can be a disabler, doing precisely what it is doing now to unsettle the business climate, create disincentives for expansion or hiring and have small businesses go into a defensive posture.
It doesn’t get more defensive than now.
More from the Chamber survey:
- 78% want government to get out of the way.
- 90% are concerned about the impending fiscal cliff and are worried that Congress will fail to take action to prevent it.
- Nearly 60% say that expiration of the 2001 and 2003 tax rates and other business provisions, coupled with sequestration, will directly impact their business’ growth.
As you might imagine the road map to a better business climate is not hard to follow. There’s just no desire by the class warriors to do that.
Instead of doing the hard work of creating a business climate that will provide small business incentives to expand and hire, they’d rather tax them while demonizing them as the evil rich and talking about “fair shares” to 50% of the country that pay’s no – zero- income tax.
If this doesn’t paint the picture of what is wrong with the policies of this administration, I’m not sure what will. This is Econ 101 stuff. And apparently it is like a foreign language to this administration.
The golden goose is on life support, and the administration is about to pull the plug.
But let’s talk about Bain Capital, shall we?
President Obama is on his newest attempt to change the subject and find something to take to the people that might interest them and distract from his abysmal economic performance. It’s taxes. Specifically, he’s decided to make an issue of the automatic tax increases that will take effect in January and claim he does not want to see taxes increase on anyone but those nasty rich who need to “pay their fair share”. Or, back to class warfare.
A) He likes to refer to these as the “Bush tax cuts”. In fact, they’re the current tax rate. Have been for years. What he wants to do is see a tax increase on the rich, but no one else. I’m not sure how else one characterizes that but “class warfare”, especially given the percentage of total taxes that top income group pays already.
B) Republicans are saying no tax increases on anyone. Democrats like to characterize that as protecting the rich. I like to characterize it as an attempt to address the real problem – out of control government spending.
C) The nasty “rich” Obama wants to tax also include almost a million small businesses. That’s one of the primary reasons, in this weakening economy, that Republicans are right not to agree to any tax increases. It is both stupid and economically suicidal. But then you have to know about economics and the business world to understand that.
D) Democrats had two years of a complete monopoly on government to get this done and didn’t. It’s not the Republicans who have prevented anything. It is total incompetence on the Democratic side of the aisle. And, as Obama’s favorite pastor likes to say, “those chickens are coming home to roost”.
E) Finally, Barack Obama has already raised taxes on the middle class despite his statement in a speech yesterday claiming he had no desire to raise middle class taxes.
The tax is called the mandate in ObamaCare. It goes like this:
75% of the mandate tax falls on the middle class. That is a middle class tax hike in anyone’s book.
So when he claims he has no desire to raise the taxes on the middle class, that may be true … now. Because, in fact, he’s already done it.