FCC Asks for Internet Taxes

The Washington Times alerts readers to a passage buried in the Federal Communications Commission’s (FCC) National Broadband Plan released this week:

Digital Goods and Services Taxation

RECOMMENDATION 4.20: The federal government should investigate establishing a national framework for digital goods and services taxation.

The National Broadband Plan is focused on increasing beneficial use of the Internet, including e-commerce and new innovative business models. The current patchwork of state and local laws and regulations relating to taxation of digital goods and services (such as ringtones, digital music, etc.) may hinder new investment and business models. Entrepreneurs and small businesses in particular may lack the resources to understand and comply with the various tax regimes.

Recognizing that state and local governments pursue varying approaches to raising tax revenues, a national framework for digital goods and services taxation would reduce uncertainty and remove one barrier to online entrepreneurship and investment.

Using the twisted logic found only in government halls, this recommendation is listed under Broadband Competition And Innovation Policy. New taxes are being proposed to increase innovation. To increase competition.

I’m stunned.

The thing is, they’ll probably get it. Big government takes big money. Washington Times explains:

The Obama Era has become a protracted, nightmarish Whack-A-Mole game of tax increases and bureaucratic self-enlargement. In sector after sector of American life, another scheme to expand government and wrench more earnings from Americans’ pockets pops up.

Exactly.

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Posted April 2nd, 2010 Filed in Taxes and the IRS

How Many IRS Agents . . .

. . . does it take to collect 4 cents? Answer: Two:

Arriving at Harv’s Metro Car Wash in midtown Wednesday afternoon were two dark-suited IRS agents demanding payment of delinquent taxes. “They were deadly serious, very aggressive, very condescending,” says Harv’s owner, Aaron Zeff.

The really odd part of this: The letter that was hand-delivered to Zeff’s on-site manager showed the amount of money owed to the feds was … 4 cents.

Inexplicably, penalties and taxes accruing on the debt – stemming from the 2006 tax year – were listed as $202.31, leaving Harv’s with an obligation of $202.35.

You tax dollars at work.

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Posted March 23rd, 2010 Filed in Taxes and the IRS

78% Expect Middle Class Tax Hike for ObamaCare

From Rasmussen, 78% Expect Middle Class Tax Hike To Pay For Health Care Reform.

With almost 25 percent real unemployment, is it any wonder that the vast majority of Americans want Congress to start over?

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Freshmen Dems Defy Pelosi on Tax Plan

From The Hill, via Drudge:

Twenty-one freshman Democratic House members have signed a letter opposing their leadership’s plan to raise taxes to finance a healthcare overhaul.

Rep. Jared Polis (D-Colo.) circulated the letter, saying that the income surtax on the wealthy would place an undue burden on small businesses, some of which pay taxes in the same way as an individual. The letter had 22 signers, all freshmen except for Rep. Paul Hodes (D-N.H.), who is in his second term.

“Especially in a recession, we need to make sure not to kill the goose that will lay the golden eggs of our recovery,” the letter said. “We are concerned that this will discourage entrepreneurial activity.”

While some would be hopeful on news like this, I suspect that this bit of mutinous behavior will be short-lived.

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Posted July 17th, 2009 Filed in Taxes and the IRS

The “Robin Hood” IRS

Democrats are putting an escalating surcharge in place to increase the tax burden on the wealthy, as high as an additional 5.4% on the “ultra” high earners in our society. Former Treasury Department economist and Forbes contributor Bruce Bartlett notes:

Former Labor Secretary Robert Reich calls this “the most blatant form of Robin Hood economics ever proposed.” An outspoken liberal, Reich meant this as praise.

And there you have it — Democrats have become so arrogant that they have no problem in publicly admitting that they are out-and-out stealing from the rich to give to the poor. Wealth redistribution by any other name is still, well, socialism.

Bartlett goes on:

The real problem is that higher tax rates will encourage the wealthy to spend more of their time and resources engaging in tax avoidance rather than making money. . . .

When the top federal income tax rate went as high as 70% back in the 1970s, it led to a vast amount of tax sheltering activity. . . .

It almost goes without saying that tax sheltering is socially and economically wasteful. It does nothing to increase the size of the economic pie and is essentially parasitic. It is far better for people with the talent and skill to earn large incomes to concentrate their efforts on ways to earn more by starting new businesses, revitalizing old ones, finding investment opportunities and so on. Spending more time with their accountants and tax lawyers trying to figure out how to keep their money away from the tax collector does nothing to enrich anyone except the accountants and tax lawyers.

As the top rate rises we can expect Congress to create new tax loopholes for their wealthy campaign contributors. No doubt, they will be justified on the grounds of meeting some critical social need, but their effect will be to lower the effective tax rate–the rate that is actually paid–well below the statutory rate. The result will be to further complicate the tax code and bias investment decisions, which will reduce growth.

In the end, it is highly unlikely that the surtax will bring in anything close to the projected revenue. This is almost inevitable because the models used to project the revenue effects of tax increases are largely static and assume that they don’t significantly impact on economic behavior. . . .

I remain convinced that just down the road major tax increases will be needed to avoid national bankruptcy. When that day comes, it will be harder for Democrats to go back to the same well and demand that all the burden fall upon the wealthy, especially if it is clear by then that the surtax didn’t raise nearly as much revenue as expected. Congress will have no choice except to look for ways to tax people who have much more limited opportunities for tax avoidance: those who have only wage income, which means the middle class.

Historically, increases in the top rate have tended to pave the way for higher rates on the middle class. Holding down the top rate in effect places a cap on how high tax rates on the middle class can go. If the top rate rises, higher rates on the middle class probably won’t be too far behind.

The wealthy aren’t going to just give up vast amounts of money without a fight. As taxes go up, time and attention that should be devoted to getting on with one’s life will be diverted to protecting one’s possessions and legacy. And when taxing the wealthy won’t pay for the massive “stimulus” packages and enhanced entitlement programs, the Democrats will turn to other “haves” in order to give to the have-nots.

Higher taxes are coming for all. Personally, I’m looking for tax shelters now in order to avoid the rush later.

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Posted July 17th, 2009 Filed in Economics and the Economy, Taxes and the IRS

Forbes: The 81% Tax Increase

Forbes’ columnist Bruce Bartlett posits that 2 government reports on long-term budgetary trends released this week, one on Social Security and the other on Medicare, prove that an 81% tax increase will be necessary to fund these two government programs alone.

They both show that we are on an unsustainable path that will almost certainly result in massively higher taxes. . . .

Since many taxpayers have just paid their income taxes for 2008 they may have their federal returns close at hand. They all should look up the total amount they paid and multiply that figure by 1.81 to find out what they should be paying right now to finance Social Security and Medicare. . . .

The reality, which absolutely no one in either party wishes to face, is that benefits are never going to be cut enough to prevent the necessity of a massive tax increase in the not-too-distant future. Those who think otherwise are either grossly ignorant of the fiscal facts, in denial, or living in a fantasy world.

So while we hurtle down the path of growing government entitlements in the midst of a recession depression, Obama is forced to wait to raise taxes in order to keep from totally sinking the economy and the deficit is ballooning out of control. This will make the ultimate day of reckoning even more disastrous.

Can’t wait until Obama gives us “free” health care.

Fred Nails Dems on Tax Policy

If you missed Fred Thompson’s speech at the 2008 Republican National Convention today you can view it on YouTube or read the text at CNN.

My favorite bit concerned the Dem tax policies:

Now our opponents tell you not to worry about their tax increases.

They tell you they are not going to tax your family.

No, they’re just going to tax "businesses"! So unless you buy something from a "business", like groceries or clothes or gasoline … or unless you get a paycheck from a big or a small "business", don’t worry … it’s not going to affect you.

They say they are not going to take any water out of your side of the bucket, just the "other" side of the bucket! That’s their idea of tax reform.

Exactly.

Perot and His Charts are Back

Billionaire and presidential race spoiler Ross Perot is back. During the 1992 race Perot was famous for making economic charts and graphs part of his political process as he attempted to explain in clear terms the economic trends of taxation, government spending, GDP and national debt, and why he thought we were headed towards disaster.

Now Perot has launched a web site, Perot Charts, which is just stock full of charts and graphs highlighting America’s “economic crises” due to deficit spending.

In a statement Monday, Perot said the nation’s debt reached $9.4 trillion in April and is rising more than $1 billion a day.

"We are leaving our children and grandchildren with debt they cannot possibly pay," he said. "The economic crisis facing America today is far greater than anything since the Great Depression."

There’s also a blog with some additional materials. I rather like this chart:

taxation09

It clearly shows that the top 10 percent of earners pay an astounding 69.7 percent of the taxes in this country. Add in “earned income tax credit” and what we have here is wealth redistribution (can you say “socialism” children?).

Now we hear that Obama wants to eliminate the $250K limit on Social Security taxes:

The presidential candidate told senior citizens in Ohio that it is unfair for middle-class earners to pay the Social Security tax "on every dime they make," while millionaires and billionaires pay it on only "a very small percentage of their income."

This would be the largest expansion of FDR’s “New Deal” since LBJ’s “Great Society”. Obama would be turning something that was originally intended to be a pensioning program for retirees into yet another liberal wealth redistribution scheme. It’s bad enough that the government takes my money and returns it years later with a fraction of the interest that I could earn in the private sector. Now he wants to take money and flat out give it to people who didn’t earn it.

To further complicate matters, Obama is proposing a “Doughnut Plan” in which income between $102K and $250K would still be immune to Social Security tax. Any doubt that once in place, the hole of this “doughnut” would gradually shrink until it completely disappears?

McCain, on the other hand, would not consider an increase “under any imaginable circumstance” (something Obama would never promise). Then again, he is mangling the presentation of his Social Security plan to the point of appearing to be flip-flopping on the word that frightens liberals so much: “privatization”.

Hey McCain, when you allow younger workers to choose the accounts they want to put their retirement savings into it is in fact partial privatization, so don’t be afraid of calling it that. Old people will understand as long as you guarantee their retirement income too. We have to get out of this hole. Lead us there, and maybe even libertarians like me will follow.

When Do You Get Your "Rebate"

Many people are wondering when they’ll get their piece of the pie when the federal government engages in this year’s blatant wealth redistribution scheme. Here’s the answer, directly off of the IRS website.

First of all, note that this schedule is only for those whose invasive, fascist information gathering survey tax form has been received and processed by the government bureaucrats by 15 April. Second, if you want to know how much you’ll be getting, you can use the IRS’ online calculator — if you have your tax return handy and about ten minutes to spare. Third, those of you who do direct deposit will be served first (isn’t this unfair to poor people .

88 – 99
July 11
For married taxpayers who filed a joint return, the first Social Security Number on the return determines
the mailing date. Source: Internal Revenue Service

Posted March 14th, 2008 Filed in Taxes and the IRS

Stripping for Rape Victims

Beginning New Years Day, Texas will begin levying a $5/head tax on strip club patrons in order to redistribute money from normal, healthy males to organizations that help rape victims.

We have seen behaviors taxed before, such as high taxes on cigarettes to help pay for the state’s health care costs. Apparently, Texas legislators think that men (and women!) that go to strip clubs are more likely to commit rape than those that don’t. Why else would they link the two activities through taxation?

Next up, a tax on toy store sales to support victims of drunken drivers. After all, everyone knows that dads are driven to drink after a Christmas Eve night of trying to assemble toys from instructions written by a poorly educated Chinese peasant.

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Posted December 22nd, 2007 Filed in Taxes and the IRS