Posts tagged Income tax
We went right up to the edge of the cliff, peered into the abyss, and turned back. For now. But what exactly came out of the cliff-averting bill? Let’s take a look at the details, as well as their potential ramifications.
First, because so many people want to keep score, who “won” this battle? Nobody. Seriously. There are no winners here. President Obama, who had the trump cards (though not Trump’s endorsement), gave an astonishing amount of ground. Again. Republicans didn’t get a lot of what they wanted, either. And all of us lost because this deal kicked most of the problems down the road a few months.
Anyway, on to the details.
I concluded a prior post on my own blog with the following statement:
As I mentioned, I have yet to find a single economic study that purports to show evidence that any income tax cut has ever paid for itself. If anyone who reads this should know of one, please leave a comment with a link to that study. Thanks.
I received a couple of replies to that request but neither of them focused on income tax cuts in the United States. One focused on capital gains tax cuts and the other focused on countries with relatively weak tax authorities where tax cuts might increase compliance (like Russia). In any case, I replied to both. I also have not found an economic study that shows an income tax cut paying for itself from any other source. However, I am continuing to search for such a study and have posted links to any related information that I’ve found at this link. I believe that only one of those links is to a study that purports to show a tax cut that paid for itself. It is a paper published by Laffer Associates titled “The Onslaught From The Left, Part III: The Capital Gains Tax”. (more…)
Last fall, we began to hear the drumbeat of “half of all Americans pay no taxes”. Specifically, it was that they pay no federal income taxes, though that detail was often lost in the rhetoric. The topic became a hot one among the Republican Presidential candidates starting in mid-August, 2011.
With Tax Day nearly upon us, it seems worthwhile to investigate this topic in more depth.
Since this is a meme watch article, let’s start by looking at what was going on at that time that would trigger the meme’s formation. (more…)
Editor’s Note: Reed Davis has returned with an Op-Ed for us at Logarchism. As always, we welcome contributions from our readership.
The January 23rd issue of Time features Warren Buffett on its cover and contains a story titled “Warren Buffett Is on a Radical Track”. Following is an excerpt:
Buffett paid a tax rate of only 11% on adjusted gross income of $62,855,038 in 2010. (After deductions, most of which were for charitable contributions, he paid a still low 17% rate on his $39,814,784 of taxable income; his office staff, meanwhile, paid percentages somewhere in the 30s.)
Buffett discussed this in an op-ed that he wrote that was published in the New York Times on August 14. He discusses the exact method by which he calculated these tax rates in a letter sent to Representative Tim Huelskamp (R-Fowler, KS). (more…)
This week, Representative Paul Ryan (R-WI) published a budget proposal called “The GOP Path to Prosperity.” As I mentioned on Monday in “Shutdown Showdown,” the proposal neither addresses the issues in the 2011 or 2012 budgets, nor makes realistic assumptions about the expected economic impacts of the proposed changes.
But that was a really hand-wavy, dismissive aside to the now-almost-certain shutdown. Today, I’d like to elaborate further on Ryan’s proposal.
Last week I described four incidental burdens that arise from income taxes:
- They conflict with key elements of the Bill of Rights
- Calculating the correct amount of tax costs many taxpayers significant amounts of money and/or time
- The rates, coupled with the large number of collection points, create incentive for tax evasion
- The underground economy is entirely untaxed (at a federal level)
In order to alleviate those burdens, several people have proposed forms of consumption taxes, ranging from value-added taxes (VATs) to national sales taxes. One of these proposals is called “FairTax.” The notion of “fair taxation,” as I mentioned two weeks ago, is a matter of perspective. Nonetheless, as currently proposed, FairTax has some degree of progressivity.