Wednesday, June 30, 2010

Thursday, June 3, 2010

Would You Limit Your Definition of Media to Newspapers and TV?

Think about that question as you read the following:

Friday, May 14, 2010

The Real Cost of Taxes

Often times, we think of the dollars we pay to the IRS as the cost of income taxes. Most would say that they understand why taxes need to be paid, and many times don't even argue the amounts that are paid. However, how about the cost of complying with our complex tax code, which only seems to get more and more confusing with each new legislation. From the Fair Tax website:

New Health Care Legislation Brings Massive New IRS Requirements on Businesses

Hidden within recently enacted healthcare legislation are small provisions with massive implications for American businesses (see "In the News" below).

"With one stroke of the pen, American businesses are about to see a huge increase in paperwork and in tax compliance costs," said Hoagland. "We already pay more than $350 billion a year in tax preparation paperwork costs," said Hoagland. "That number is about to get a lot larger with new filing requirements on every American business."

The legislation requires businesses to provide every business buyer of goods and services a special tax report that the buyer is then required to submit to the federal government. "The additional 16,000 workers added the IRS to handle the healthcare program taxes and penalties will likely not be enough. Worse, the cost of obeying the already indecipherable tax code is about to go way, way up," said Hoagland. "As usual, the American taxpayer, the American worker, and American businesses will pick up the huge new cost of increased complexity. Those wasted costs will be paid for with dollars that would otherwise go to savings, new jobs and investments," he said.

"Congress just can’t stop itself from adding to the complexity of the tax code," said Hoagland. "This is another example of why the country will never achieve economic strength until this corrupted and expensive tax system is finally ditched forever."

Monday, April 19, 2010

National Taxpayer Advocate

My previous post mentioned an article I found in the economist called "The Joy of Tax." In that article, the author mentioned a department of the IRS called The National Taxpayer Advocate. I have been a tax paying citizen for more than 20 years, and yet I had never heard of this group. Perhaps if they promoted it in a similar fashion as they do the Census...but I digress.

A little search on Wikipedia uncovered the following:

"The Taxpayer Advocate Service (TAS) consists of approximately 2,000 employees. About 1,400 of these are Case Advocates, who personally assist taxpayers in resolving their problems with the Internal Revenue Service...

In addition, the TAS identifies systemic problems that exist within the Internal Revenue Service and, to the extent possible, propose changes in the administrative practices and identify potential legislative changes which may be appropriate to mitigate such problems. These observations and proposals are presented to Congress each year in the National Taxpayer Advocate's "Annual Report to Congress."

OK. So I did a little web search and found the 2009 Annual Report to Congress. (By the way, the report is just that, a report. The TAS has no power to influence change as far as I can tell.)

The first thing that struck me about this report appeared on page 7 regarding a specific IRS goal:

"During a time of great need for taxpayer assistance, the IRS’s goal for fiscal year (FY)2010 is to answer 71 percent of the calls from taxpayers who want to speak with an assistor (not a recording), down from 83 percent in FY 2007. In other words, the IRS is planning to be unable to answer about three out of every ten calls it receives. Moreover, those taxpayers that are able to get through to an assistor will have to wait, on average, twelve minutes."

Customer service at its best.

At the risk of making this my longest post ever, I wanted to spread the word about a specific point this document addresses. Please pay particular attention to the length of time this has been going on, and the direction Congress has gone.

Quote from the document:

"Fundamental Tax Simplification Is Desperately Needed."
"In several prior reports, I have designated the complexity of the tax code as the most serious problem facing taxpayers and the IRS alike. The need for tax simplification is not highlighted as a separate discussion in this year’s report to avoid repetition, but the omission of a detailed discussion in no way suggests the lessening of its importance.

As I detailed in last year’s report, TAS analysis of IRS data shows that U.S. taxpayers and businesses spend about 7.6 billion hours a year complying with the filing requirements of the Internal Revenue Code. It would require 3.8 million workers to consume 7.6 billion hours, effectively making the “tax industry” one of the largest industries in the United States. U.S. taxpayers deserve a simpler and
less burdensome tax system.

Sooner or later, tax reform will come. And while the Office of the Taxpayer Advocate generally refrains from becoming involved in tax policy discussions, we have sought to make a contribution by presenting a taxpayer perspective on tax simplification and by addressing the tax administration implications of certain aspects of tax reform.

In 2004, we presented recommendations to streamline the bewildering array of education and retirement savings incentives in the tax code. In 2005, I made a presentation to the President’s Advisory Panel on Federal Tax Reform and suggested that emphasis be given to six taxpayer-centric core principles. We also presented a proposal to reform the rules governing married persons filing joint returns and the taxation of community property. Last year, we recommended simplifying the “family status” provisions in the tax code, reducing the use of “tax sunsets,” reducing the use of income “phase-out” provisions, and simplifying worker classification determinations. Last year’s report also contained a comprehensive set of recommendations to simplify the penalty provisions in the tax code. This year, we present two studies in Volume 2 that should assist in developing tax reform – one on principles for running social benefit programs through the tax code and one
discussing administrative considerations that should be kept in mind if the U.S. decides to adopt a Value Added Tax-like tax. Our office does not take a position on whether running social programs through the Code or adopting a VAT is good policy, but we do believe that policymakers should be aware of these concerns if these policies are adopted.

We will continue to do our part to encourage support for fundamental tax simplification and to offer a taxpayer perspective on what tax simplification should look like."

Well, somebody's talking, but is anybody listening?

The Joy of Tax

I have found the economist to be a pretty objective source when it comes to political views. Here is an article I found interesting.

The Joy of Tax

Friday, April 9, 2010

I Love Tax Day...NOT!

At a time when our latest health care legislation just increased the power and control of the IRS, I saw this and couldn't help but spread the word...

In “Washington Whispers” by US News and World Report

Top Ten Things Wrong with the Income Tax System
by: Ken Hoagland

1. It’s too complicated. Even a degree in rocket science won't save you from 67,500 pages of all but indecipherable tax code regulations. It confuses the IRS, the Secretary of Treasury and even the former Chairman of the House Ways and Means Committee. It’s an annual nightmare that has spawned a tax industry based on complexity created by our own government.

2. It’s too expensive. The complexity of the code costs a lot of money—more than $310 billion last year on the paperwork alone. Small businesses often pay more in paperwork expenses than the taxes they pay. Can any law be just, much less efficient, that costs so much to obey?

3. It’s unfair. Income is commonly double and triple taxed, married people pay a higher rates than singles living together and Congress’ mistake in failing to index the Alternative Minimum Tax for inflation now threatens to define as “wealthy” those with as little as $80,000 a year income. How just can a tax be that rewards those who hide income either here or offshore or have tax lobbyists to broker special deals?

4. It damages the economy. Income taxes are levied on work, savings and investments. In essence, the government grows by taking money from what makes the economy grow. Such a system retards capital formation, job growth and a higher savings rate and, as such, stymies economic growth or recovery.

5. It’s been corrupted. More than a billion dollars a year is spent lobbying the tax code. Congress has sold off two to three tax breaks a day every day they've been in session for the last 20 years. It makes Congressmen powerful and lobbyists rich and creates a tax system with more loopholes than Swiss cheese. It’s very lucrative for those in Washington and very bad for those without a lobbyist.

6. It undermines American companies. Foreign governments often forgo domestic taxes on products for sale overseas. American companies don't get that break and carry the second highest corporate tax rate in the world, employee FICA taxes and significant tax compliance costs as the cost of doing business here. It puts the “Made in America” label at a significant producer price disadvantage and drives jobs overseas.

7. It hides the cost of government. Taxes are withheld from paychecks, hiding from plain sight the cost of federal spending and its relationship to our own earnings. For many Americans, federal spending mistakenly seems like “free money”. The resulting tenuous connection between personal wealth and government profligacy allows politicians to promise more and more from the Treasury to win elections and satisfy their own political ambitions. That's destructive.

8. It’s intrusive. Once upon a time it was no one’s business how much money we made or how we spent it. Today it is the right and duty of the federal government to track every penny we earn, save or spend. It has created a system where every business decision is weighed against tax consequences and where pastors are told what they can and can't say from the pulpit to keep their non-profit status.

9. It hurts consumers and workers. Business taxes don't come out of CEO’s personal accounts but are paid for by consumers when taxes are “embedded” in wholesale and retail prices. When competition with foreign producers won't allow a higher price point to cover taxes, employee’s wages and benefits take the hit.

10. It makes us into modern day serfs. We get what’s left over in our paychecks after the federal government has taken its share. That means the fruits of our labors belong first to our government. That’s backwards and not at all what the Founding Father’s had in mind.

Wednesday, March 10, 2010

Wednesday, February 24, 2010

Friday, January 29, 2010

16th Amendment the Most Amazing Racket in U.S. History

By Jamie Allman

Once Rep. Allyson Schwartz of Pennsylvania came up with the brilliantly greedy idea of taxing even unearned income, I had half a mind to conjure Jonathan Swift’s “A Modest Proposal.” The famous wit suggested eating young people as a means of easing economic stress, and I felt perhaps it was time to apply his deficit reduction technique to modern times by devouring Democrats like Schwartz.

But first I realized there’s no amount of Herbes de Provence to cover up what would surely be a gamey taste.

Second, I realized that our most crippling and liberty-depriving tax assault came at the hands of a Republican in the first place. The original RINO, William Howard Taft, first started fantasizing about a federal income tax in 1909. The actual passage of the 16th Amendment providing the Feds the right to directly tax citizens ironically came after a failed game played by conservatives. They greedy Republicans like Taft and his equally greedy Democrat cohorts were going to team up and try to get the issue passed in Congress. So the conservatives tried a bluff and introduced the Constitutional Amendment. They figured there’d be no way enough states would ratify it and such an idea would go away forever.

But a majority of states did ratify it. Game over. Liberty and pursuit of happiness: done.

Now it’s time to repeal the 16th Amendment altogether.

Our Founding Fathers revolted over less. Our income is taxed more by the federal government than we ever were under British rule. In fact, not even the Brits dared tax income.

Direct taxation of income is a clear violation of Article I of the Constitution. The Supreme Court ruled as much in 1895. But that didn’t stop the organized criminals of yore to go full-speed ahead with the 16th Amendment.

If you and I came up with an idea to take people’s hard-earned money and use it to buy votes and secure our own income we’d have to talk about it with the door locked and only after the room was swept for FBI bugs. But now the income tax has been institutionalized, and the country hasn’t been the same since.

You can’t blame the greedy political pigs back in 1913. How perfect a ploy: You force the citizenry to hand over a portion of their money so that you can use it to create programs and entitlements that would essentially be used to buy votes and, thus, keep you permanently employed. On top of that, you take the money in increments, out of every paycheck, over a period of time and then, when you return some of the money you siphoned, you call it a “refund.”

The introduction of the direct federal income tax is responsible for transforming our government from servant to master. It turns out about 40 percent of our workday is solely for the purpose of funding the federal budget. The windfall created by the direct income tax has served as a blank check for politicians to use our money with no requirement whatsoever that they be prudent. Our money is a constant flow.

Why not force the government to live like the citizens do? Most of us, when the kids need clothes, would never consider sending the kid to the mall with a credit card. No. We give them a set amount of cash and they can buy two shirts and a pair of pants, or two pairs of pants and a shirt, or three shirts. In other words, they can get what they want within their budgets. And when mom and dad need something for the house or need to take a vacation they don’t go to the neighbor’s house and demand the neighbors pay. The federal government, aided by the bottomless pit of income tax dollars, operates in the opposite fashion of its citizens.

Instead of being a slim machine providing only border control and national security (the way the Founding Fathers created it), the government has for decades continually come up with new ways to spend the money that floods in from our paychecks. Usually the politicians come up with programs most likely to addict citizens to government help, intervention and oversight.

We have reached a point in America where there is no living citizen who remembers the country when it existed in the fashion the Founding Fathers intended.

Repeal the 16th Amendment. Continue to allow states to collect income taxes and allow the feds to collect revenue. Impose a national sales tax to provide a revenue source for proper federal government functions. And always reserve the option of devouring a politician as a last resort.

Jamie Allman is host of “Allman In The Morning: Common Sense Radio” on 97.1 FM Talk in St. Louis. He is a 14-time local-television Emmy winner in investigative and political reporting and a multiple Edward R. Murrow Award winner.

Monday, January 4, 2010

Great RR Quotes

"Socialism only works in two places : Heaven where they don't need it and hell where they already have it." -Ronald Reagan

'Here's my strategy on the Cold War : We win, they lose.'
- Ronald Reagan

'The most terrifying words in the English language are : I'm from the government and I'm here to help.'-Ronald Reagan

'The trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so.'
-Ronald Reagan

'Of the four wars in my lifetime, none came about because the U.S. was too strong.'- Ronald Reagan

'I have wondered at times about what the Ten Commandments would have looked like if Moses had run them through the U.S. Congress.' -Ronald Reagan

'The taxpayer : That's someone who works for the federal government but doesn't have to take the civil service examination.'- Ronald Reagan

'Government is like a baby : An alimentary canal with a big appetite at one end and no sense of responsibility at the other.'- Ronald Reagan

'The nearest thing to eternal life we will ever see on this earth is a government program.' - Ronald Reagan

'It has been said that politics is the second oldest profession.. I have learned that it bears a striking resemblance to the first.'- Ronald Reagan

'Government's view of the economy could be summed up in a few short phrases : If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it'
- Ronald Reagan

'Politics is not a bad profession. If you succeed, there are many rewards; if you disgrace yourself, you can always write a book.'- Ronald Reagan

'No arsenal, or no weapon in the arsenals of the world, is as formidable as the will and moral courage of free men and women.'- Ronald Reagan

'If we ever forget that we're one nation under GOD, then we will be a nation gone under.'-Ronald Reagan