Category Taxation

Entries 5 Total

Puppies, Drugs and Guns – an issue of demand

Dec 5, ’11 7:23 PM

Michael Mooney published an article in D Magazine titled, “Dallas’ Puppy Problem, Last year, the city killed 14,732 dogs. Until that number drops, it should be illegal to sell them.” My friends on the left think the quickest way to solve things like illegal drug use, gun crimes and puppy massacres is to ban them. Simply pass a law and people will stop taking drugs, killing each other and abandoning their dogs, right? In fact if Michael gets his way we will have more unwanted dogs and even more puppy mills.

Interestingly, Michael explains my point in his article when he explains, “Meanwhile, plenty of people in Dallas are willing to spend hundreds—sometimes thousands—of dollars on commercially bred puppies. Whether operating from a temporary setup in a parking lot or through the dozens of classifieds each week advertising designer puppies for sale, sellers rarely collect sales taxes or report earnings.”

Dog breeders who violate State and Federal tax laws at the risk of real jail time aren’t going to worry about a municipal regulation requiring they NOT to sell a puppy. How is a citywide ban going to solve the underlying population of unwanted dogs? Will the ban make people want to buy fewer puppies? Michael knows that it won’t. Ironically, such a ban would likely make the underlying problem worse. The good breeders – i.e. high quality breeders who screen for genetic problems, good owners and pay their sales and use taxes – are going to STOP selling puppies. The demand side – i.e. people that want puppies – won’t decrease simply because the city passes an ordinance, instead the BAD breeders (the ones who don’t pay their taxes) are going to get a boost in demand and sell even more. Many of these ‘defective’ dogs will be abandoned by their owners because they are, frankly, defective.

The answer likely lies with technology and taxation. Technology used to register/title dogs much as we register/title cars (RFID style tags implanted before sale). Taxation at the original sale and in the event of an abandonment. Banning something doesn’t stop it. Drugs and guns are just like puppies – you can’t stop them unless you can stop demand (and good luck with that).

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You don’t have to pick both Perry and a Flat Tax

Oct 25, ’11 10:15 AM

Presidential hopeful, Rick Perry, has proposed a massive overhaul of the current tax code. His idea isn’t new, but it is very compelling to conservatives like me. Perry proposes a so-called Flat Tax to replace our current 60,000+ page tax code. His proposal is as follows:

  • 20% flat tax for all taxpayers – individual and corporate (taxpayers who want to keep their current marginal rate are free to do so).
  • Keeping mortgage and charitable deductions for households earning less than $500K per year and increasing the standard deduction to $12.5K.
  • Cap on federal spending to 18% of GDP.

Perry’s plan is pretty interesting. It takes a huge bite out of opponents of a flat tax – i.e. that it hurts middle class people who pay less than 20% today (a very small group) by allowing them to opt out of the new flat rate. It makes our corporate rate competitive with other countries – making it more likely companies will choose to earn their income here rather than in Ireland or other low corporate tax havens.

I can’t tell you how excited I am that tax policy is now in the debate – Cain, Perry and Newt all have plans that attempt to reform the tax code. I would love to see Congress pick this up and see if we can come up with something – oh, and by the way, you don’t have to elect Perry to get this done.

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The truth about the Occupy Wall Street Movement

Oct 18, ’11 2:57 PM

Everyone seems to have their own opinion about what the Occupy Wall Street folks are fighting for, but very few have any facts to back up their positions. Democratic pollster, Douglas Schoen, polled 75% of the actual protesters in New York’s Zuccotti Park and shared the results in a Wall Street Journal article earlier today.

According to the pollsters, “what binds a large majority of the protesters together—regardless of age, socioeconomic status or education—is a deep commitment to left-wing policies: opposition to free-market capitalism and support for radical redistribution of wealth, intense regulation of the private sector, and protectionist policies to keep American jobs from going overseas.”

If you are in solidarity with the Occupy Wall Street folks you are in a VERY small minority and out of step with most Americans. According to the study, “41% of Americans self-identify as conservative, 36% as moderate, and only 21% as liberal.” Strangely, Obama, in an ABC interview that will air tonight, indicated, “We are on their side“. I hope he is just pandering and doesn’t actually oppose free-market capitalism…

Here are some of the results from the polling:

  • 52% have participated in prior political movements
  • 98% support civil disobedience to achieve their goals
  • 31% support violence to advance their agenda
  • 85% are employed (within single digits of national unemployment rate)
  • 90% supported Obama in 2008
  • Today 51% disapprove of Obama (44% approve)
  • Today 48% say they will vote to re-elect Obama
  • 32% call themselves Democrats
  • 33% say they don’t belong to a political party
  • 65% believe government must guarantee access to health care, college education and secure retirement (regardless of cost)
  • 77% support raising taxes on the rich
  • 58% oppose raising taxes on everyone
  • 49% of protestors think bank bailouts were necessary
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Bipartisan Defeat of Obama’s Jobs Bill

Oct 12, ’11 9:28 AM

If you listen to MSNBC or NPR today you will hear that Republicans in the Senate killed Obama’s jobs bill. You might be surprised to learn that the vote against the jobs bill was bipartisan. In fact, the Democratic leader of the Senate, Harry Reid along with Democratic Senators Ben Nelson and Joe Manchin voted with Republicans against Obama’s jobs bill.

Reuters has reported that “Washington is likely too paralyzed to take major steps to spur hiring“. Their assumption/belief is that Obama’s plan would create jobs (in my estimation it is not clear at all that more spending will create more jobs). Senate Minority Leader Mitch McConnell noted that there were 1.5 million fewer jobs since Obama’s last jobs bill back in 2009.

The real issue is the 2012 election. Obama, along with Democratic Senators, crafted a bill purpose built to create campaign issues in the presidential election. Obama has said, time and time again that if you vote against this bill you are against jobs and for millionaires. Nice argument, but it isn’t true. If Obama and the Democrats truly wanted to create jobs they would sit down with the Republicans and pass the parts of the bill that both Democrats and Republicans support. Of course it is MUCH better to be able to say Republicans hate jobs.

 

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Taxation

Apr 8, ’11 3:09 PM

Our existing tax system is broken.  It is unfair and too complex.  We need a simpler, fairer, pro-growth tax system.  My proposal is a so called flat tax.  The idea is to a) increase revenue, b) increase growth and c) make our system fair for everyone.  Here is my idea:

  • Married Americans earning less than $50,000 pay no federal income tax.
  • Single Americans earning less than $25,000 pay no federal income tax.
  • Married Americans earning more than $50,000 pay 20% on all income over that amount.
  • Single Americans earning more than $25,000 pay 20% on all income over that amount.
  • Corporations (partnerships, sole proprietor, professional, farm and rental) simply pay 20% on income (difference between revenue and expenses).  Alternatively, a corporation could choose to pay 8% on revenue (similar to the Russian system).
  • All deductions are eliminated.
  • Withholding would be eliminated, everyone pays taxes due on a quarterly basis.
  • Federal government would be prevented from paying non-taxpayers through such programs as the ‘Earned Income Tax Credit’.
  • 20% would be highest allowable tax rate; however, it is conceivable that the rate could be lowered to 17% (Armey/Forbes plan), 13% (Flat rate in Russia) or any other percentage of income lower than 20%.

This plan is VERY simple.  Anyone can easily calculate their taxes due.  There are no loopholes or special programs for the rich.  Too many wealthy Americans spend their money, time and attention looking for ways to avoid paying taxes.  Corporations locate offshore to avoid taxes.  Why?  Our system is designed to benefit the rich.

Countries all over Eastern Europe have implemented flat tax programs with great results.  Dr. Daniel Mitchell explains, “Remember the saying: “To the victors go the spoils”? It must not be true. We won the Cold War, but Russia gets a flat tax while America is stuck with a Byzantine tax system based on class-warfare ideology.”  Russia implemented a flat tax rate of 13% in 2001.  Since then their economy has grown by more than 10% and their tax revenues have increased by more than 50%.  Why?  Dr. Mitchell explains, “Because people are willing to produce more and pay their taxes when the system if fair and tax rates are low — exactly what Ronald Reagan predicted when he triggered America’s economic boom with lower tax rates 20 years ago. Ironically, the former communists in Moscow now understand supply-side economics, yet liberals in Congress are still relying on the politics of hate-and-envy.”

Russia didn’t invent the idea of a flat tax.  Hong Kong has been the worlds fastest growing economy for 50 years – their taxes have been flat for a very long time.  The highlighted countries below have what are known as flat taxes:

 

 

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