Remy on Taxes

Without any ado, intertubes sensation Remy, on taxes:

Taxation, Humane, and Other Words

In looking, via the wordpress reader, through posts of various topics, I ran across a post which claims “taxes are an expression of mans humanity.” Those of you who read my posts in favor of libertarianism will have already guessed that I do not agree with that assertion. And I could leave it at that, but I think the whole concept needs some unpacking and some sarcastic, mocking ridicule a serious and reasoned rebuttal. You may be thinking you already know where this is going. Well, let us just see where this does lead.

More Annoying Political Comments

I really should be leaving this stuff alone, but certain things just irk me. This time, it is a quote from the mayor of Newark, New Jersey, Cory Booker.

Tax Cuts Are Not Expenditures

From what I have heard in the news lately, I guess I need to go over this one again. Tax cuts are not expenditures. Tax cuts are not expenditures. Tax cuts are not expenditures.

Mitt Romney’s Taxes

Yes, I am going to talk politics again. This time about the news story of comments by Harry Reid about Mitt Romney’s taxes.

More on the Obamacare SCOTUS Ruling

I cannot state strongly enough how very much I dislike the ruling from the Supreme Court today on Obamacare. One the one hand striking down the use of the commerce clause is good, but then turning around and saying the mandate works as a tax is horrible. Basically now the Supreme Court has established precedent for Congress to use taxing behavior or lack of behavior as a means of controlling what individuals do. One of the arguments against the use of the commerce clause to support the mandate was that if the government could force people to buy health insurance, it could then force people to buy broccoli. Well, now, the government can, if it chooses, tax people for not buying broccoli. In other words, you still end up punished for not doing what the federal government tells you you must do.

This is what comes of sacrificing principle for so-called “practicality.” This is what comes of voting into office the “electable” candidate rather than the one who shares your principles. This is what comes of all the excuses for not protecting liberty. You lose liberty little by little.

Thankfully, the number of people willing to fight back against this is growing. The situation is not hopeless. There are rising politicians who are starting to push back against the government expansion of power. And there are growing numbers of people who are willing to support those politicians. Things will change slowly, but they will change.

And I am still holding out hope that someone like Justice Janice Rogers Brown will be nominated to the Supreme Court. I will be very happy when that happens. And mark my words, one day it will happen. Maybe not specifically Justice Brown, but someone like her. Then you will know we are working our way forward to a more free and just society.

Obamacare Ruling from SCOTUS

So now instead of using the commerce clause as an excuse to do whatever it wants, Congress can now use taxation powers as an excuse to do whatever it wants. Or basically a combination of the two. This is my understanding of what the SCOTUS ruling means for the U.S. in the long term. Because even if Republicans take control of Congress and repeal Obama care, this legal president will still remain on the books.

Ugh.

Little by little the government whittles away the limitations placed on its power. People sworn to uphold the Constitution are instead using any means they can to ignore it. And now SCOTUS just gave them another tool for that purpose.

And do not even come to me with your “You must be against Obamacare because you don’t care about helping people” nonsense. I am so much not in the mood today. Obamacare is going to hurt the nation, society, and individuals. I oppose it exactly because I do care about my neighbor, about helping others in need.

I really do not like what this SCOTUS ruling portends for the future. 

Senator Chuck Schumer Is Appalled

Via reason.com, I came across an article in the politics section of the Huffington Post about Senator Chuck Schumer being “appalled” that his proposed plan to punish people for renouncing their citizenship would ever be compared to, frankly, similar legislation that was passed in Germany in 1931. According to the video at the top of the Huffington Post article, Senator Schumer believes that and similar comparisons are “absurd” and “odious”. Why? Senator Schumer explains in the video:

The law Mr. Norquist refers, references in Nazi Germany was purely discriminatory. It targeted a particular race of people, the Jewish people, and punished them for nothing other than being Jewish and exercised freedom of movement. It was meant to constrain that freedom by forcing Jews to reside inside Germany. Our proposal targets no single race, creed or class. It doesn’t punish you for factors beyond your control, like who your parents were. It applies based on actions you take, namely disowning the United Stated to avoid taxes. Our law is not triggered by a wish to travel beyond America’s borders, or even reside permanently in a foreign country. It’s the act of renouncing one’s U.S. citizenship for the purpose of avoiding taxes that triggers our bill.

Don’t be so sure. According to the Wikipedia page about the German law:

The Reichsfluchtsteuer (“Reich Flight Tax”) was a capital control law implemented in order to stem capital flight from the Weimar Republic. The law was created through decree on 8 December 1931 as part of the “Fourth Decree of the Reich President on the Protection of the Economy and Finance and on the Defense of Civil Peace” (“Vierten [Not-]Verordnung des Reichspräsidenten zur Sicherung von Wirtschaft und Finanzen und zum Schutze des inneren Friedens”), as published in the Reichsgesetzblatt 1931 I, pp. 699-745. The Reichsfluchtsteuer was assessed upon departure from the individual’s German domicile, provided that the individual had assets exceeding 200,000 RM or had a yearly income over 20,000 RM. The tax rate was set at 25 percent.

During the Third Reich, the use of the Reichsfluchtsteuer shifted away from dissuading wealthy citizens from moving overseas. Rather, the departure of Jewish citizens was desired and permitted by the Nazi government — even after the Invasion of Poland — until a decree from Heinrich Himmler forbade Jewish emigration on 23 October 1941. The Reichsfluchtsteuer was used as a “partial expropriation” of the assets of Jewish refugees who were persecuted and driven to flee their homeland.

In other words, the German law was initially passed before the Nazis came to power and, at least initially, targeted people of wealth rather than race.

Senator Schumer also goes on to say

I know a thing or two about what the Nazis did. Some of my relatives were killed by them. And saying that a person who made their fortune specifically because of the positive elements in American society, in turn, has a responsibility to do right by America is not even on the same planet as comparing to what Nazis did to Jews.

Basically Senator Schumer is trying to claim his proposed legislation is nothing like the Reichsfluchtsteuer because he is not doing what the Nazis did to he Jews. Yes, no one is claiming Senator Schumer or Senator Bob Casey (the cosponsor of the bill) are out to kill people who are renouncing their U.S. citizenship. That does not mean, however, that the proposed legislation bears no resemblance to the Reichsfluchtsteuer. And the fact that Senators Schumer and Casey are being more egalitarian in who they seek to punish does not mean this law is patriotic or a good idea.

But the good senator was not finished. In the video he also says:

Mr. Saverin is, in essence, an economic tax dodger. And once upon a time, the right-wing castigated draft dodgers for failing to heed their nation’s call. Those who fled the country were vilified as cowards, as self-absorbed traitors. Yet in this case, the same exact kind of unpatriotic, un-American behavior is actually being defended by the right-wing. It’s off the deep end.

Wow. Several objections immediately come to mind. The left once lauded draft dodgers. They also have tended to disprove of criticism of draft dodgers. And no, a person renouncing U.S. citizenship to avoid taxes (if that was Mr. Saverin’s intent) is not exactly like avoiding conscription by leaving the country. Obviously just leaving the country is not the same as renouncing U.S. citizenship. What is telling in this is that the senator wants to equate conscription, something we stopped doing in the U.S., with his notion that people who are economically successful in the U.S. automatically owe the U.S. government anything the U.S. government says they do. Which is does not put a favorable light on the proposed legislation.

But wait, there’s more.

According to the article:

Schumer added that he found it troubling that conservatives would lionize someone like Saverin, who was called an American hero on Forbes’ website.

“Can you believe it? An American hero? Renouncing your citizenship now qualifies as heroic for the hard right wing?” Schumer said.

[…]

“This has gone so far, this idolatry they have taken to such an extreme end, [that] they make Eduardo Saverin into their patron saint,” Schumer said. “In the name of low taxes for the wealthy, they have lionized an inherently unpatriotic person.”

“It is scary. It is a scary, absurd place where even a tax dodger who renounces America for his own 30 pieces of silver is celebrated as a patriot and an American hero. It is perverse,” said the senator. “I am appalled by making heroic a man who renounces citizenship to escape a tax rate of capital gains of 15 percent.”

Whoa there, senator. You are the one clearly going off the deep end. Thirty pieces of silver? What is scary is a U.S. senator trying to equate Mr. Saverin’s renunciation of U.S. citizenship with the betrayal of Jesus. People should be appalled by the senator’s serious lack of perspective. His comments are absurd and border on the asinine.

Mr. Saverin dropping his U.S. citizenship (for which he turned in the paper work in January of 2011 let us not forget) is not a betrayal. The man will still be paying taxes to the U.S. government. That Senators Schumer and Casey are having a hissy fit over the fact that Mr. Saverin managed to escape merely the capital gains tax is ridiculous. And if Mr. Saverin renounced his U.S. citizenship to avoid taxes, I wish he would take this opportunity to throw this back in the faces of the senators and claim his expatriation as a protest against unfair taxation. Which would be a protest with a great American tradition. (Boston Tea Party ring any bells?)

Tax “Avoidance” by Apple Computers and President Obama

A few days ago, The New York Times ran a lengthy article about, according to the headline, “How Apple Sidesteps Billions in Taxes”. There is some predictable whining in there about how Apple Computer is avoiding paying taxes. Where was the whining about President Obama avoiding paying taxes?

Although the Times article itself is interesting, there are some spots of sad cluelessness in it. For example:

A mile and a half from Apple’s Cupertino headquarters is De Anza College, a community college that Steve Wozniak, one of Apple’s founders, attended from 1969 to 1974. Because of California’s state budget crisis, De Anza has cut more than a thousand courses and 8 percent of its faculty since 2008.

Now, De Anza faces a budget gap so large that it is confronting a “death spiral,” the school’s president, Brian Murphy, wrote to the faculty in January. Apple, of course, is not responsible for the state’s financial shortfall, which has numerous causes. But the company’s tax policies are seen by officials like Mr. Murphy as symptomatic of why the crisis exists.

“I just don’t understand it,” he said in an interview. “I’ll bet every person at Apple has a connection to De Anza. Their kids swim in our pool. Their cousins take classes here. They drive past it every day, for Pete’s sake.

“But then they do everything they can to pay as few taxes as possible.”

Yeah. Of course Apple tries to pay as few taxes as possible. Anybody with a modicum of income and sense does. (And, oddly but not surprisingly, that includes President Obama.) The California budget crisis has pretty much nothing to do with what Apple pays in taxes and everything to do with massive California government spending. But once again we see this odd attitude that if people and/or businesses cared about their city/state/country, they would pay more taxes. The question I want answered, and which the article does not address, is: does De Anza College president Brian Murphy claim deductions on his personal income taxes? In other words, does he do everything he can to pay as few taxes as possible? If so, he is a hypocrite to then complain about Apple.

Some days back, President Barack Obama’s tax records were released, and apparently he paid about 20.5% of his income in taxes, which was, we were assured, slightly higher than the rate paid by his secretary. Somehow this proves we need to raise taxes on the wealthy. I suggest that this proves first that the taxes the secretary pays is probably too high, and second that Obama is choosing to claim deductions on his taxes. The reason his tax rate was so low, we were told, is because he donated lots of money to charity. But those deductions are voluntary. No one forced him to claim those deductions on his tax return. So if, as we were told, Obama believes he should pay more in taxes, then why did he not do so? Even if he had someone else prepare his tax return, he could very easily tell that person to claim no deductions. Apparently he did not do this.

So what about Obama contributing money to the U.S. Treasury? As I pointed out the other day, President Obama is not going to do that because, according to David Axelrod anyway, that is not the way things are done. Yet Obama says the wealthy, including himself, ought to pay more taxes to the government. Why they must be forced to do so rather than choosing voluntarily to do so, no one has yet explained.

Back to the Times article and Mr. Murphy’s whining:

“When it comes time for all these companies — Google and Apple and Facebook and the rest — to pay their fair share, there’s a knee-jerk resistance,” Mr. Murphy said. “They’re philosophically antitax, and it’s decimating the state.”

Again we come to the “fair share” argument. Fair is entirely subjective. Apple does actually pay billions in taxes and contributes millions of dollars to various organizations and charities. Were I a betting man, I would bet Google and Facebook and Intel and Cisco do the same. The idea that somehow the financial crisis is all their fault because they’re just not paying enough in taxes is silly. That is sort of like a person who makes a $50,000 per year salary spending $70,000 and then blaming his massive debt on his employer for not paying him more.

In any case, again and again and again I have to come back to the idea that if you want government have more of your money, then you should give the government more of your money. Take responsibility for yourself. If Obama and Warren Buffet want the government to have more of their money, why are they not writing checks to the U.S. Treasury? I’m not sure what Buffet’s problem is, but I can guess at Obama’s motivation. He is, after all, a politician.

In Obama’s case, the obvious answer is that what he wants is for government to have more control. He probably also wants to be able to claim he cares about middle-class voters by sticking to the wealthy. He does seem to like his class warfare rhetoric. But mostly, in my opinion, he believes the government needs more control. His intentions may well be entirely good. But good intentions are not enough. Good intentions do not mitigate bad and unintended consequences. The problem, in general terms, is that Obama and people like him believe the solution to everything is more government control. And all the evidence that more government control does not help in the long run (and often not in the short run either) is simply ignored.

If you think this is somehow not about controlling other people, then I will point again to Obama not choosing to take zero deductions on his taxes and his choosing not to give more money to the U.S. Treasury. If he genuinely believed the government needed to have more of his money, he would have given it to the government. People act on what they believe. When they say one thing and do another, they indicate a lack of belief in what they say. There is a word for this. I’ll give you a hint. It starts with an h and ends with ypocrisy.

“We don’t run bake sales” Addendum

Shikha Dalmia of the Reason Foundation made a excellent point:

If Buffett has trouble putting his money where his mouth is, he’s not alone. Obama’s tax returns (released last week) show that he paid a 20 percent effective tax rate on his $790,000 income — slightly lower than his secretary’s and a whole four points lower than the average rate for people in his income category. He could have easily avoided this by filing his tax returns the way he advocates millionaires do — by forgoing all deductions. But he didn’t. Not only did he claim a $47,564 mortgage deduction on his $1.6 million home in Chicago, he also claimed tax breaks on the $172,130 — about 22 percent of his gross adjusted income — he gave to charity.

This would be perfectly legitimate for someone who didn’t believe that the government is the best vehicle for doing good. But the president does. He has repeatedly said that the Buffett Rule is not about raising revenues to pay down the country’s massive deficits and debt.

After all, 250 years of Buffett revenues wouldn’t so much as pay for last year’s deficit.

Rather, Obama insists that the rule is about “fairness,” ensuring that the rich pay at least the same tax rate as middle-income people. But if that’s the case, why didn’t he hand Uncle Sam the donations he gave to charity or at least not take deductions for them?

The rest of the op-ed can be found at The Daily.