Tax Policy

[Crafty_Dog]

https://washingtontimes-dc.newsmemory.com/?token=1bbc291ec07c58e48febbdb68812e89f_64886f11_6d25b5f&selDate=20230613

[Crafty_Dog]

Is a U.S. Wealth Tax Constitutional?
A bad Ninth Circuit ruling needs Supreme Court review.
By The Editorial BoardFollow
Updated June 14, 2023 7:21 pm ET



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The Ninth Circuit Court of Appeals in San Francisco PHOTO: MONICA M. DAVEY/EUROPEAN PRESSPHOTO AGENCY
Progressives have long dreamed of imposing a tax on wealth, and it looks as if an arcane corner of the 2017 tax reform might give them a legal opening. The Supreme Court can shut this constitutional door if it takes up a bad ruling on appeal from the Ninth Circuit Court of Appeals.

The Sixteenth Amendment revised the Constitution to allow “taxes on incomes, from whatever source derived.” The Supreme Court has long held that income is defined as money that is realized from, say, wages or the sale of a property or financial asset. It has never been defined as unrealized income, such as from an increase in the value of an asset on paper that isn’t paid out to the owner.

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Enter 2017’s mandatory repatriation tax, which taxed shareholders of some foreign corporations on their retained earnings. Congress was scrambling for revenue to pay for its reduction in tax rates, and foreign companies were an easy political target. But the tax also hits unsuspecting American bystanders.

Two of them are Charles and Kathleen Moore, of Washington state, who invested in a friend’s venture to distribute farm equipment in rural India. The company reinvested earnings to distribute more proceeds in India, and the Moores received no payout. Yet they were hit with a tax bill of $14,729 under the mandatory repatriation tax.

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The Moores sued the Internal Revenue Service and sought a refund on grounds that the tax is an unconstitutional levy on income. They lost in federal district court, and a panel of the Ninth Circuit Court of Appeals upheld the tax. ruling that “realization of income is not a constitutional requirement.”

The Moores also lost a request for hearing by the full Ninth Circuit. But Judge Patrick Bumatay issued a hard-hitting dissent that called out the majority decision as contrary to “ordinary meaning, history and precedent.” In Eisner v. Macomber in 1920, the Supreme Court held that a gain in an asset’s value qualifies as income only if it is “received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal.” That sure doesn’t apply to the Moores. The High Court has reinforced that ruling in more recent cases.

As Judge Bumatay writes, the Ninth Circuit is the first court in the U.S. to depart from this Supreme Court definition of income for tax purposes. He rightly notes that the ruling opens the door “to expansion of the federal taxing power beyond the limits” of the Constitution, including taxes an “all sorts of wealth and property” that has never been subject to the federal income tax.

The Moores have appealed to the Supreme Court, and we hope the Justices will hear the case. The Ninth Circuit ruling controls only in its area, but if the High Court lets it stand, it will encourage Democrats in Washington, D.C., to think that they could get away with imposing a wealth tax.

No less than the Chairman of the Senate Finance Committee, Oregon’s Ron Wyden, has floated a wealth tax proposal. The Justices have a chance in Moore v. U.S. to restore the proper legal application of the income tax and avoid a constitutional clash that could do substantial economic harm

[DougMacG]

Do you know of ANY tax that remained only on the super rich?

I think these people are morons but really it's the ones who are buying it are the cognitively questionable. Cut the voters of the left just this once you something beyond first level thinking?

From the article:
"The extreme wealth inequality we see today, which disproportionately impacts Black and brown families, is a result of centuries of discrimination towards working-class, vulnerable communities while allowing tax breaks for the rich and wealthy," he said.

https://www.foxbusiness.com/politics/dems-propose-new-tax-extreme-wealth-combat-aristocracy

Umm, there is no math or science behind his accusation of causation, the facts are exactly the opposite.  The legalization of wealth creation "lifts all boats".

This is also a false flag distraction.  Democrats are now the party of the rich and the states with the highest 'income inequality ' are California and New York.

Wealth tax failed everywhere it was tried. cf. France.  Is there a right of privacy for what you own? How will they value your assets? How often, when?  Will they tax you on the value of your guns? Will they need to come inspect and count them? Wealth means all assets, right? Tax you on wild swings in value of bitcoin, gold, even if you've sold none of it?  How did they know the little people aren't super rich? They will need to know all of their assets and values too.  Income involves a transaction, and it is legal to tax because the leftists in charge at the time sold us an amendment to the Constitution to change what was previously banned. The Revenue Act of 1913 imposed a one percent tax only on people five times greater than the median income.  Do you think that amendment would be ratified if we were shown then today's tax code? 

It's all about politics for the gullible.

I don't care about the rich. I care about the process that makes the pursuit of wealth creation possible.  That is what they are attacking.

A tax on the rich is a tax on the economy.  It NEVER hits just the rich and does not benefit the poor.  They know it won't pass now (Republican House, divided Senate) but put the snake oil out there for political gain nonetheless.

Teachers pay more tax than billionaires?  Oh good grief. False of course, aimed at the gullible, but all the maladies they complain of would be solved with a flat tax.  Tax every dollar of income the same no matter who earned it or how, and limit all the funny business to the spending side of the equation. Key word is equation. Limit the tax rate to what all are willing to pay and limit the spending to the amount of money that brings in.

But no ...
-----------
P.S. Note that Black is capitalized, brown is not, ('people of color' is acceptable, 'colored people' is not.).  What the f*** does race have to do with tax rates?? Woke journalism poisons our language and has infected even fox business in economic coverage.

Rise up now or lose everything.  The intent here is poison your mind and empower a regime.  YOU are the target, not some zillionaire.

Is it constitutional?  See previous post:
https://firehydrantoffreedom.com/index.php?topic=1791.msg159971#msg159971

[DougMacG]

Hat tip. Steve Moore, CTUP

Grace-Marie Turner is one of America’s top healthcare analysts, but she also has the distinction of having sat in on a famous dinner in Washington that changed economics forever. She recently wrote about her recollections of that meeting.

Birth of the Laffer Curve - by Grace-Marie Turner (substack.com)

Grace-Marie was a young reporter and attended the dinner in 1974 between then White House chief advisors to Gerald Ford – Dick Cheney and Don Rumsfeld – along with the Wall Street Journal editorial writer Jude Wanniski. Jude coined the phrase “the Laffer Curve.” It was at this meeting that Laffer wrote the curve (below) on a famous cocktail napkin (now in the Smithsonian Institute).
 
Here is how Wanniski described what happened:

“'There are always two tax rates that yield the same revenue,’ observes Arthur Laffer…[who] drew the curve shown above to illustrate his point.

When the tax rate is 100 percent, all production ceases in the money economy. People will not work in the money economy if all the fruits of their labor are confiscated by the government. An individual will not work for $1,000 a day if, after taxes, his paycheck comes to zero. Because production ceases, there is nothing for the government’s 100 percent rate to confiscate, and revenues to the state are also zero.

On the other hand, if the tax rate is zero, people can keep 100 percent of what they produce in the money economy. There is no government wedge, and thus no governmental barrier to production, so production is maximized … but because the tax rate is zero, government revenues also are zero.”

Political leaders’ job is to find that optimal balance where workers and investors are incentivized to work and produce but where there is sufficient revenue for the government to operate and provide its essential services.

Some 50 years later, why is this concept so hard for politicians to understand?

[DougMacG]

Posting this in Tax Policy as well.

Deficits in the 1980s and every other time we're all about excess spending, not undertaxation.  And the House of Representatives, where all spending ordinates, was under complete Democrat control the entire decade of the 1980s, also Biden's first two years when all this current spending was passed.

"Income inequality between the wealthiest 1% and everybody else really took off under Reagan"

Logic fallacy called post hoc ergo propter hoc, as old as the Roman empire.  This preceded that therefore this caused that.

Income inequality is widest today in the blue run states of California and New York.  Is that because tax rates there are too low?

When you have to lie about the opposing argument to win, are you really winning an argument?

[Crafty_Dog]

"Income inequality between the wealthiest 1% and everybody else really took off under Reagan"

This is because under the pre Reagan 70% tax rates money hid in tax shelters (e.g. real estate or . .. ahem , , , commodity futures in Arkansas.  After the Reagan cuts the math was not there (i.e. the shelters no longer made sense at 30% rates) and thus money allowed itself to be taxed.  Voila, income disparity increased!  When actually the rich were paying MORE in taxes!

[DougMacG]

Excellent point. 

Another point along those lines, revenues doubled in the decade of the 80s, even at lower rates, for the same reason.  Prima facia proof that the lower rates weren't the problem, spending was.

[Crafty_Dog]

Using skills developed in my "Foreign Exchange Risk Management" course at Wharton, at the end of the Reagan years I went into IMF data books at the library (twas pre internet after all haha) and per my calculations adjusting for inflation etc. at the end of the Reagan years in constant dollars federal revenues were up 35%.  In that the tax rate cuts were phased in over three years, I had to make certain assumptions and now over 30 years later I do not remember what they were.

The other big picture thing to keep in mind is the effect of baseline budgeting.

If a multi-year budget (and that is how they have been done for decades now just like a 5 year or 10 year plan in the Soviet Union) there is an assumption of a certain level of inflation in determining nominal spending.  If inflation turns out to be less than that, then the numerical increase in spending has a greater component of a real increase.

[DougMacG]

Yes and exactly right on baseline budgeting as that comes back to bite Biden lies in the ass.

Voters don't usually get too deep in math but this one is kind of obvious.

Biden and Dems took covid crisis temporary spending to be the new baseline.  We were on a path to a 3 trillion deficit.  While Biden says he cut the deficit by a trillion, the debt went from 31 to 33 trillion, exposing the complete BS of "baseline" thinking.

The deficit went from 1:00 to 2 trillion right while he is saying he cut it by a trillion the best liberal fact checkers can't get him out of this one.

Meanwhile, voters know their costs went up by thousands more than their income.



The bleep has hit the fan, reckless spending is no longer cost free to anyone and we all know it.

[ccp]

https://www.msn.com/en-us/news/politics/maddow-blog-gop-s-tom-cotton-points-to-taxes-he-d-like-to-see-raised/ar-AA1jl1GG?ocid=msedgntp&pc=DCTS&cvid=1a248c35d41847f980b1296f9bcd333d&ei=8

I understand the thinking but not clear I agree with it in philosophically.

[Crafty_Dog]

I'll go further than that.

This is crap that diminishes our moral authority.

This is the sort of crap that Trump not infrequently comes up with.

I cannot picture DeSantis supporting this.

[DougMacG]

"two years ago, Cotton unveiled a bill he called the “Ivory Tower Tax Act,” which called for a 1% tax on the wealthiest private colleges’ endowments, in order to finance vocational education and training."
--------------------------------------------------------------------------------------

I like Tom Cotton and he can explain his own thinking for himself.  It could be he's just messing with them because he knows it's never going to happen, exposing that they care only about themselves.

But this, this is a Leftist tactic.  Let's say allocating 1% of those funds "to finance vocational education and training" is a good idea.  Why would you start with making it a federal mandate?  Why wouldn't you form a foundation and ask these groups, pressure these groups, guilt these groups, publicize your idea, before you mandate these groups to spend their money your way.

A better argument might be made for putting 100% of that money to that purpose, but not without their consent.

If this, then what next.

[DougMacG]

https://www.businessinsider.com/selling-sunset-los-angeles-mansion-tax-millionaires-housing-crisis-2023-11#:~:text=On%20the%20new%20season%20of,sold%20for%20over%20%245%20million.

Article stumbles into big truths.  How could a mansion tax hurt regular people?  Just as the yacht tax did.
https://www.washingtonpost.com/archive/opinions/1991/12/31/luxury-tax-everybody-loses/11141980-feda-4982-a43e-8fb4189e7b9a/

Maybe a doctor could tell us how a bad right knee could hurt your left hip if you walk badly on it, it's all connected.

If I have a dozen properties I won't sell because the capital gains tax rate is too high, and they each would have sold again 3 times since then but didn't, that's a lot of (taxable) transactions that did not happen.  Transactions that didn't happen are the hardest things to measure in economics., but perhaps the largest cost of all.

How do you measure the number of new businesses that did not start up because of bad tax policy and excessive regulations are an even bigger tax. It's hard to describe and impossible to measure.

Looks like young people are helping us here with economics language.  "To chill" is an 'action verb' for doing nothing.  Explains a lot.  Chilling effect, doing nothing is the enemy of the salesman and the tax man, and of GDP, velocity of money, and everyone directly and indirectly affected. Customer says, oh we're going to think about it.  The new refrigerator stays on the showroom floor.  No sales tax collected.  No commission.  No tax collected on the commission.  No delivery needed.  No reorder at the factory to replace the (not) sold inventory, and so on.  Whatever caused the no sale, inflation, tax, regulations, all have a "chilling effect" from here to China and back, including the waitress at the restaurant where the salesman might have taken his wife out to eat that night and the valet parking guy.  It's all connected. And nobody seems to know.

[Crafty_Dog]

The converse is true as well.

With the Reagan tax rate cuts, RE tax shelters losts their viability and the money hidden therein allowed itself to be exposed to realization events.  This yielded tax revenue increases-- as promised by the Laffer Curve.  At as atendant effect, the number of millionaires "seen" by the IRS increased triggering Dem howls of increasing concentrations of the rich.  Oy vey.

[ccp]

https://www.npr.org/2023/11/20/1214135694/shakira-tax-fraud-deal-trial

I don't know the legal system in Spain

but on the face of it the deal makes no sense

she owes 15 million but makes a deal to pay half with 3 yr "suspended" sentence whatever that means

so it pays NOT to pay tax in Spain. She saved 7.5 million euros.

what did she do give them a private dance?



perhaps they figured a jury would not convict the celebrity as usual.

if they have juries there.

[DougMacG]

https://www.msn.com/en-us/money/markets/this-lawsuit-could-disrupt-the-u-s-tax-system-key-facts-are-in-dispute/ar-AA1kAxgo?ocid=msedgntp&cvid=538bd15435324f05b524fe8d94256c2c&ei=73

[Crafty_Dog]

Tax law rests on ruling over $15,000 bill for investors

Feds hold couple liable for unrealized profits

BY ALEX SWOYER THE WASHINGTON TIMES

The Supreme Court is scheduled to hear a case early next month that could nullify part of the 2017 tax reform law enacted by congressional Republicans and President Trump — all over a Washington state couple’s $15,000 tax bill.

Charles and Kathleen Moore’s case centers on unrealized profits from investments in a foreign company. In 2006, they invested in a friend’s business, KisanKraft Machine Tools Private Ltd., which serves rural farmers in India.

The Moores put up $40,000 for a 13% share in the company. They said they never realized any profits because the money was always reinvested to help the company grow.

In 2018, they were told they owed money to the federal government as part of the mandatory repatriation tax, part of the Tax Cuts and Jobs Act of 2017. They were taxed on a proportion of their ownership dating to 2006, rendering a tax bill of

$14,729.

Their court filing says the bill runs afoul of the 16th Amendment because it is a tax on income they never received from their investment. The 16th Amendment allows Congress to assess an income tax without regard to a census.

The 9th U.S. Circuit Court of Appeals ruled against the Moores, reasoning that income doesn’t have to be realized to be taxed under the Constitution and that shareholders can be taxed on their portion of a corporation’s profits, not only on the individual’s direct income.

“The decision below sweeps away the essential restraint on Congress’s taxing power, opening the door to unapportioned taxes on property (as in this case) and anything else Congress might deem to be ‘income,’” the Moores’ legal filing reads.

The federal government argues that the 16th Amendment gives Congress the power to collect taxes from income “from whatever source derived.”

“Nothing in the Amendment’s text refers to the concept of realized gains,” the federal government’s brief reads.

The central question for the justices is what constitutes income.

Experts say the Supreme Court could nullify the so-called wealth tax. The Mandatory Reparation Tax was intended to apply to investors with a 10% or greater share in a corporation as a onetime tax. It was expected to generate roughly $340 billion in revenue, according to The Associated Press.

The Moores own 13% of their friend’s foreign company.

“I would be surprised if 1% of individual taxpayers are in this position,” said Duke University law professor Lawrence Zelenak. “Most of the taxpayers who are subject to this tax … are not individuals at all. They are corporations.

“This case, where it involves married couple individual shareholders … is very atypical of the application of this tax,” he said.

In hearing the Moores’ case, the high court will look at the 1920 Eisner v. Macomber ruling, in which justices decided that taxing unrealized gains is unconstitutional. That case has never been overruled but has not been applied as tax laws evolve.

Adam Chodorow, a law professor at Arizona State University, said a victory for the Moores based on the Eisner ruling could implicate other parts of the tax code because taxes wouldn’t be due until income is realized. He said such a decision could impact the partnership tax and some limited liability companies.

“The initial effect would be corporations and the international setting, but it would expand way beyond that,” Mr. Chodorow said. “It could undo huge swaths of the tax code.”

American University law professor Caroline Bruckner said tax experts are paying close attention to the Moores’ case and how the justices reason their decision.

“If the U.S. Supreme Court rules in favor of the Moores and finds that the tax is unconstitutional, there is a great deal of concern among tax experts and practitioners that other taxpayers will challenge settled law on how the U.S. taxes international investments,” Ms. Bruckner said.

A decision in Moore v. United States is expected by the end of June.

[DougMacG]

“It could undo huge swaths of the tax code.”

Pretty much the whole tax code is a massive law that never went through Congress.

In-come, as opposed to outgo, isn't the idea to tax money that comes to you from work, investment, etc, presumably when it comes in.

Individual taxes are never based on accrual versus cash basis, are they?  In other words, if you work in December and get paid for that work in January, it is taxed in January (the following year) , not when it was earned.

In contrast, a wealth tax takes part of your wealth, something the constitution, in my view, clearly identifies as a "taking", and bans it without 'just compensation' , meaning it must be made not a taking to be allowed .

Does the international aspect of this change anything? They were trying to force or entice taxpayers to bring assets back into this country, repatriate. But you can't bring back a 13% share of a foreign company.  You can only Force the sale, or as is the case here, try to make them pay attacks on it out of other income and assets that were already taxed.

Does anyone still think elections don't matter, party doesn't matter, when you might otherwise have 9 Sonia Sotomayors or 9 Bernie Sanders deciding the limits on government?

[Crafty_Dog]

"In other words, if you work in December and get paid for that work in January, it is taxed in January (the following year) , not when it was earned."

IIRC the precise term is an "Actualization Event" , , , or was it when "realized"?

[ccp]

https://finance.yahoo.com/news/trump-era-tax-cuts-set-160750197.html

[Crafty_Dog]

The Supreme Court Will Finally Decide What ‘Income’ Means
The justices hear Moore v. U.S., a case asking if Congress can tax unrealized capital gains under the 16th Amendment.
By Hank Adler and Lacy Willis
Dec. 4, 2023 5:37 pm ET



The Supreme Court hears oral arguments Tuesday in the most important tax case in decades. Moore v. U.S. will answer the question of whether Congress can tax unrealized capital gains as if they were income under the 16th Amendment.

The case has attracted a flood of friend-of-the-court briefs, mostly cheering for the tax collectors. Many argue outright that there is no requirement for profit to be realized—which usually means selling an asset at a profit—for a taxpayer to be hit with an income tax as the Constitution means it.

The case before the justices is straightforward. In 2006, Charles and Kathleen Moore invested $40,000 in a 11% equity interest in a foreign corporation. Between 2006 and 2017, the company was profitable but reinvested all its earnings in the business. The Moores thus didn’t receive dividends or any other income from the investment.

Under the Tax Cuts and Jobs Act of 2017, however, the Moores became subject to a new federal levy called the “mandatory repatriation tax,” applicable to investors in overseas corporations. The new tax treated their allocable share of the corporation’s undistributed earnings as if they were actually received by the shareholders. The tax was retroactive, covering the entire period beginning with the Moores’ initial investment through 2017. The rate of tax was unusual. Instead of a statutory rate, it was a floating rate that varied according to the balance-sheet liquidity of the corporation.

The legal problem is how any of this could qualify as a tax on income. The federal income tax is constitutional, but a constitutional amendment was needed to make it so. The Constitution requires that any direct tax levied by the federal government be apportioned according to each state’s population, so that the per capita tax is the same in all 50 states. Income taxes couldn’t fit that description, so the 16th Amendment was necessary to allow taxing of individual income.

In 2018, long before we heard of the Moores, we noted the unconstitutionality of the mandatory repatriation tax in an essay titled “The Worst Statutory Precedent in Over 100 Years.” We argued that it isn’t a tax on income and therefore is an unconstitutional direct tax. We questioned whether Congress could tax the undistributed earnings of a corporation retroactively to 1986, which is what the law did. We noted that the rate was based on liquidity, making it not an income tax but a balance-sheet tax.

The result—a noncontrolling shareholder being taxed on undistributed earnings, retroactively for more than a decade, based on the corporation’s liquidity—made the mandatory repatriation tax unconstitutional in the extreme.

That the justices agreed to hear the Moores’ appeal is encouraging. Some of the usual reasons for the high court to hear the case were missing: There was no split among the circuit courts, and the amount of the Moores’ tax ($14,729) wasn’t momentous. The decision to grant review likely demonstrates that at least four justices recognize the horrible precedent the Ninth U.S. Circuit Court of Appeals set by upholding this tax. If realization is no longer a requirement for taxable income, then “income tax” has no boundaries in the Constitution, and Congress can directly tax wealth.

Among the briefs from those who want to save the law, several switch subjects to other sections of the Internal Revenue Code instead of arguing the fairness and reasonableness of the mandatory repatriation tax. A win for the Moores, they claim, could result in calling other sections of the Internal Revenue Code into question—even such well-established precedents as taxing partnerships or Subchapter S corporations.

This is a red herring. Neither partnerships nor Subchapter S corporations pay income taxes. They simply act as pass-through entities for partners or shareholders, who are liable for taxes on their share of earnings. Income that isn’t passed through immediately clearly belongs to the partner or shareholder, and thus creates no issue of realization.

Even if the outcome of the case does call some other sections of the tax code into question, the justices are obligated to focus on whether this tax is constitutional. The Supreme Court will likely decide the case by June. A decision that carefully, thoughtfully and clearly defines “income” is at least a century overdue. If in the process we also learn something about when retroactive taxes are unconstitutional, the taxpaying public will be the better for it.

Mr. Adler is an associate professor and Ms. Willis is an assistant professor at Chapman University.

[Crafty_Dog]

IRS Expansion Led to 53 Percent Increase in Prosecutions: Report
By Mark Gilman
12/7/2023

Additional staffing and a post-pandemic focus on tax fraud have led to the Internal Revenue Service (IRS) and its U.S. Sentencing Commission (USSC) prosecuting 53 percent more tax offenders in the past two years, according to a December report from Scholaroo. According to its research, in a state-by-state breakdown, those attempting fraud against the IRS in the states of Pennsylvania, Rhode Island, and Wyoming had the greatest chance of getting caught. 

But according to Scholaroo's research, to be in the IRS crosshairs, you must make some serious money. “The IRS suggests that approximately 75 percent of tax fraud is committed mainly by individuals in the middle-income range,” the Scholaroo data team shared in a written statement to The Epoch Times. “However, the highest incidence of evasion is observed among the wealthiest 5 percent, with an income of at least $200,000. In this elite group, taxpayers hide more than 20 percent of their income from the tax authorities.”

Scholaroo has made its mark as an online college scholarship cloud platform and has recently gotten involved in the data research business. The report comes as some taxpayers have been concerned about the purpose of the Biden administration's plan to add 30,000 IRS employees over the next two years as part of an $80 billion funding mandate from the Inflation Reduction Act passed in the summer of 2022.

Initially, the concern was that the additional IRS employees would target independent contractors and small-business owners. But Robert Nassau, a law professor and director of the Low Income Taxpayer Clinic at Syracuse University, told The Epoch Times that making less-than-honest claims on tax forms will still get you in trouble no matter your income level.

“Those independent contractors who get audited must have a stamp on their head that says audit me. It’s complete BS. The wealthier people who are going to get audited are engaged in more sophisticated planning,” he said. “Occasionally, I have seen business expense audits, and I’ll tell you some of those people frankly are idiots. They haven’t embraced the saying ‘the pigs get fat and the hog gets slaughtered.’ Obviously, you’re going to get audited if you show $41,000 in income and $75,000 in write-offs four years in a row.”

Scholaroo's U.S. Tax Evasion report, examined tax evasion behavior among Americans and found that the average loss in these crimes in fiscal year 2022 was $301,009.

According to a November press release  from the IRS, its Criminal Investigation team initiated over 2,550 criminal investigations, getting a 90.6 percent conviction rate on cases accepted for prosecution. The agency continues to make statements assuring American taxpayers that audit rates will stay the same for taxpayers earning less than $400,000 annually, representing the top 2 percent of income earners.  They claim that their 2,077 special agents spent 70 percent of their time investigating tax-related crimes, including tax evasion and tax fraud, in 2022, while nearly a third of their time was devoted to money laundering and drug trafficking cases.

Mark Luscombe, principal North American analyst for tax and accounting for Wolters Kluwer Tax & Accounting, says that even though the IRS is becoming more aggressive and adding to its ranks to bring down those with high-level tax crimes, the agency’s increased staffing is a far cry from what they had over a decade ago.

“If you look at the IRS criminal division headcount in 2010, it was 40,000. In 2023, it’s up from 2022, but only a total of 3,138,” he said to The Epoch Times, but added that most of the people being added now are working in customer service, not tax fraud convictions. “The IRS claims that between 2022 and 2023, they made a significant increase in having people available to answer phones, picking up calls from 15 percent of the time to 85 percent, but I think it's one thing to answer the phone and another to answer the questions taxpayers have. They’re still inexperienced and not answering the questions.”

In a Pew Research poll  conducted earlier this year about how Americans feel about federal agencies, the IRS was the least popular of the 16 mentioned in the survey. More than half (51 percent) had an unfavorable opinion of the IRS and only 42 percent said they had a favorable view of the agency.

“I don't think they’re the evil empire, but they’re still trying to get the right answers. From everything you’ve read, there’s billions not being collected right now, and I feel like the American perception of the IRS’s role is just not right,” Mr. Nassau said. 

[DougMacG]

How long is the tax code?  No one knows?
https://www.politifact.com/factchecks/2017/oct/17/roy-blunt/tax-code-so-long-nobodys-really-sure-its-length/

Makes me (and millions of others) afraid to make a transaction, sell an asset etc because in the reporting of it I might end up in jail.  Better to sit still.  And stagnation is the result, opposite of a dynamic, flourishing economy.

Mentioned earlier today, Biden (Hunter) was deducting sex club memberships while I'm afraid to deduct a roof repair that might be hard to prove.

I'm enjoying life right now; why take a chance?  On anything.

An example I use, open a lemonade stand, experience a little success with it and tell me how many laws, federal, state and local you may be breaking.  It's so many that no one knows, and I have a degree in it.

[ccp]

https://www.msn.com/en-us/money/retirement/41-states-that-won-t-tax-social-security-benefits-in-2024/ar-AA1mNYKT?ocid=msedgntp&pc=DCTS&cvid=61268459f90d45a896659852f211cfd9&ei=23

NJ is surprisingly not on the list
Doug, sorry but MN is 

[DougMacG]

https://www.msn.com/en-us/money/retirement/41-states-that-won-t-tax-social-security-benefits-in-2024/ar-AA1mNYKT?ocid=msedgntp&pc=DCTS&cvid=61268459f90d45a896659852f211cfd9&ei=23

NJ is surprisingly not on the list
Doug, sorry but MN is 

This hurts.  I know so many retirees leaving I don't know who to share this with that cares but doesn't already hate Left governance.

People elsewhere think, people in high tax states get what they deserve, but California for example has the most Republicans of any other state, and Minnesota is an almost purple state, Hillary won by 1.5%, but with far Left governance.  A LOT of people are subject to laws they don't support. Dividing lines will be tricky to set up once the war begins.

[ccp]

who then paid more as a total percentage of total taxes:

https://nypost.com/2024/02/29/opinion/data-prove-it-the-trump-tax-cuts-soaked-the-rich/

supply side worked again.

[DougMacG]

who then paid more as a total percentage of total taxes:

https://nypost.com/2024/02/29/opinion/data-prove-it-the-trump-tax-cuts-soaked-the-rich/

supply side worked again.

Thank you for posting this ccp and thank you to NY Post for getting the word out.

We already knew all this on the forum but now we have more data, more proof.

Weird thing.  They cut corporate tax rates and black and Hispanic unemployment dropped to historic lows, and per capita incomes rose to historic highs (who knew?)  - before covid shutdowns and Bidenflation killed the boom.

Democrats like to talk about the "education level" of their voters.  But how many of their voters know that revenues to the Treasury went up when tax rates were cut? It hasn't made the NYT yet. (If they knew, would they be Democrats?)

["Modern Journalism, covering the biggest stories of the day, with a pillow, until they stop breathing."]

Instead they 'straw man' the Laffer Curve.  It doesn't say all tax rate cuts bring in more revenue.  It says there is a level of taxation where higher rates won't bring in more money - because it stifles the incentive to work and produce.

It's not rocket science to know that under a 100% tax rate (zero pay) not much work or investing would get done.  From there it follows that at some point between 0 and 100%, further tax rate increases aren't helpful and tax rate cuts might be.  We are provably past that point.

Recall the question Charlie Gibson asked candidate Barack Obama in 2008:
https://taxfoundation.org/blog/obama-and-gibson-capital-gains-tax-exchange/
-------------
GIBSON: "All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28 percent. It’s now 15 percent. That’s almost a doubling, if you went to 28 percent.

But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?"

(Obama's answer:  Uh Charlie, it's about fairness.)
------------

What they fail to recognize is how powerful this economic law is.  If tax revenues are even the same at a significantly lower tax rate as they were at the higher rate, it means INCOMES went up that much as well.  And the converse, when we raise the rates and revenues drop, it mean incomes are falling by even more than the rate increase!  [Hey Washington, incomes falling is a bad thing.]

It has even more profound meaning than that.  Since higher rates will not bring in more money at this point, it means the ONLY WAY to move at all toward a more balanced budget is to cut spending.  Imagine that!

But instead of any attempt to cut spending, the powers in Washington have brought forward so many new multi-trillion dollar spending bills no one can remember what they all were. 

[DougMacG]

https://issuesinsights.com/2024/03/11/bidens-criminally-fuzzy-tax-math/

Angry Joe said billionaires pay only 8% in federal taxes.  They actually pay 23%. according to the measurements of his own government.  Just off by 3-fold.  He wants them to pay 25% (with rounding they already do).  25% of WHAT??!!  His new definition of TAXABLE income that includes taxing unrealized capital gains, in other words a WEALTH TAX.

It's such a great new idea that it was tried, failed and repealed in France multiple times and other European countries. Do we want their economic growth rate?  Their unemployment rate?  Their exodus of wealth and job creation?
https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/

Taxable income is a measure developed over the last 90 years that Joe has been in Washington.  Is he really not familiar with it. 

And how much more revenue do we really raise when we keep raising the top rate?  ZERO??  But by Joe's static math it will pay interest on the debt for a little over 20 days.  What a deceptive liar this demented man is.

And why do we learn this TRUTH about it from a distant pro-growth opinion site instead of from "This is CNN", or MSLSD, don't they care about the truth?  I've seen them fact check other Presidents.

May I remind, a tax on the wealth in an economy is a tax on the economy.  It doesn't limit its impact to wealthy, in fact it doesn't hurt those already wealthy.  It hurts all of us.  But who is Joe to tell you that - when he can raise up some more anger and division over zero dollars in additional revenues to the Treasury.

We are in deficit because we spend too much.  There is no way around that.

[ccp]

and are tax cuts at this point actually counter productive and will no longer pay for themselves:

https://patriotpost.us/articles/105324-tax-cuts-a-reappraisal-2024-03-20

[Crafty_Dog]

A pleasantly and well reasoned piece.

[ccp]

WH claiming they cut taxes for the middle class with solar payouts.

https://dnyuz.com/2024/03/25/biden-promising-corporate-tax-increases-has-cut-taxes-overall/

 

[DougMacG]

and are tax cuts at this point actually counter productive and will no longer pay for themselves:

https://patriotpost.us/articles/105324-tax-cuts-a-reappraisal-2024-03-20

He makes some good points but misses a few things.

He says 2017-2018 tax rate cuts were unpopular, maybe so, but the voting public trusts Trump more than Biden on the economy by a huge margin, enough to win the election perhaps, and that happens to be what he did to get his results.

Trump tax cuts did pay for themselves. Revenues never dipped.  The casual observer misses how profound that effect is. Real incomes had to rise an offsetting amount, and they did!  Under Biden, real income fell with spending based inflation.

Author misses the flip side argument of the Laffer curve.  He thinks further rate cutting is not helpful, maybe so, but the issue before us is a president and ruling party that wants further rate hikes that will (most likely) bring in no new revenue. Biden will shrink incomes by the proportion of the increases, if not worse. Obama said it to Charlie Gibson, they don't care. The rhetoric is popular with the base, but the economic results of stagnation recession are not popular with anyone. If he really wanted to raise rates, why didn't he do it while he controlled all the levers of government? Even Biden's leftist guides knew what that would do to the economy.

Author misses the point of who pays the corporate tax.  People noticed they benefitted but not necessarily how or why.  Repatriating a trillion dollars is a lot of productive investment, benefitting those who want to work.

This is when black unemployment fell to record lows and Hispanic incomes rose to record highs.  Not because they own a lot of big corporations but because we are an interconnected economy.

Without investment, the job market sucks.

Author worries about inequality and fairness but the rich already pay most of the (direct) taxes.  The other 40% pay indirectly.

Our problem today is with spending.

[Crafty_Dog]

https://www.atr.org/biden-calls-for-44-6-capital-gains-tax-rate-highest-capital-gains-tax-since-its-creation-in-1922/

[ccp]

The chart is a great image of how Biden is even worse than James Earl

yet we have lib historians warping history in a partisan way claiming he is great.

[DougMacG]

https://www.atr.org/biden-calls-for-44-6-capital-gains-tax-rate-highest-capital-gains-tax-since-its-creation-in-1922/

His advisers must be frustrated that they can't destroy the economy and the  country any faster.

1)  Is he going to make it INFLATION ADJUSTED ?? ?? ??

Inflation is not a "gain", you DC immersed d*ckhead.

44.6% is not the rate most investors would face.  Many states tack on 10% or more to that.  When and where did tax rates raised above 50% bring in more money?

This idea has been a failure for more than a thousand years:
https://en.wikipedia.org/wiki/Muqaddimah

2)  Before passing this we should see how other countries are doing that stomp out capital investment, Cuba, Venezuela, Iran, Somalia, North Korea, Syria, Zimbabwe, how are THEY doing with this approach?
https://www.heritage.org/index/pages/report

3)  Will it bring in one more dollar of additional revenue?  NO.

Candidate Barack Obama told us, that's not the point:

https://taxfoundation.org/blog/obama-and-gibson-capital-gains-tax-exchange/
https://www.c-span.org/video/?c4830724/user-clip-obama-increase-capital-gains-tax-fairness
https://www.c-span.org/video/transcript/?id=691

4)  Capital employs labor.  What happens to THAT?!!

[DougMacG]

https://www.atr.org/biden-calls-for-44-6-capital-gains-tax-rate-highest-capital-gains-tax-since-its-creation-in-1922/

It's worse than just the highest rate EVER on capital investment.

From the link:

Biden’s proposed capital gains tax hike will also hit many families when parents pass away. Biden has proposed adding a second Death Tax (separate from and in addition to the existing Death Tax) by taking away stepped-up basis when parents die. This would result in a mandatory capital gains tax at death — a forced realization event.

As previously reported by CNBC:

“When someone dies and the asset transfers to an heir, that transfer itself will be a taxable event, and the estate is required to pay taxes on the gains as if they sold the asset,” said Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center.

Biden’s proposal to take away stepped-up basis has already been tried, and it failed: In 1976 congress eliminated stepped-up basis but it was so complicated and unworkable it was repealed before it took effect.

As noted in a July 3, 1979 New York Times article, it was “impossibly unworkable.”

NYT wrote:

“Almost immediately, however, the new law touched off a flood of complaints as unfair and impossibly unworkable. So many, in fact, that last year Congress retroactively delayed the law’s effective date until 1980 while it struggled again with the issue.“

As noted by the NYT, intense voter blowback ensued:

“Not only were there protests from people who expected the tax to fall on them — family businesses and farms, in particular — bankers and estate lawyers also complained that the rule was a nightmare of paperwork.“


Larger point is:  People create wealth in order to leave it to the next generation, to leave each generation better off than we were.  [When they create the wealth for themselves it's called consumption.]

All these people want to leave the next generation is failed socialism and debt.

The Left wants that whole concept of leaving the next generation better off destroyed.  They don't want just the majority dependent on the government; they want ALL dependent on the government.

Fine, but if all ride in the wagon, who pulls the wagon?

And back to the first point, these policies don't bring in more money to pay for the government - exposing their real vulnerability, they don't care about paying for the government.  If they wanted government paid for, they would have to spend less.