Sleepless in Midland

Democrats want to raise our taxes

Our government spends too much money, and the only glimmer of hope is that a growing economy can eventually reduce the debt. But if any of the leading Democrats win the presidency in November, we'll have to say goodbye to that economic boom we've been experiencing.

This chart appeared in the Wall Street Journal the other day showing how each much Biden, Buttigieg, Sanders, and Warren will raise taxes. It's frightening.

Perhaps we can hope voters will react to it the same way voters did when Walter Mondale announced taxes would go up if he became president.

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1:17 PM 1/28/2020

Vote yes for amendment prohibiting Texas state income tax

Texas voters are slowly turning Texas blue with the influx of new Texas residents and a determined effort by Democrats.

While the state is still mostly Republican it's probably a good time to make it harder for lawmakers to install a state income tax.

Next month Texas voters will have the opportunity to vote on amendments to the Texas constitution, and the Houston Chronicle helpfully summarizes them in Voter guide: 10 Texas constitutional amendments on Nov. 5 ballots.

Here's what they say about Proposition 4:

What it says: “The constitutional amendment prohibiting the imposition of an individual income tax, including a tax on an individual’s share of partnership and unincorporated association income.”

What it means: Texas has long maintained its anti-income tax position. Current law says that an income tax can be proposed but must be voted on before going into effect. In the past, voters have blocked such attempts at the ballot box.

Proposition 4 would change the state’s constitution and impose an explicit ban on an income tax. If legislators want to remove that ban at any point in the future, they would need another constitutional amendment to do it.

Supporters say this is a symbolic gesture demonstrating Texans’ commitment to a low-tax economy. Opponents say the anti-tax bar is already high, and raising it even higher cuts off a stream of revenue that the state could someday need.

The state of Texas has a high sales tax (around 8%). And that's something many of us don't particularly like. But bringing it down would be a herculean task. And if lawmakers ever did try to implement an income tax, it would be in addition to the sales tax, not as a replacement.

It's not to early to stop any state income tax in its tracks.

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2:36 PM 10/14/2019

government waste -- agencies practically give money away at end of year to spend what they asked for

A few years ago a friend was boasting about a slightly used computer he got free from his employer. His boss was the United States government. And the agency that employed him had some money left over at the end of the fiscal year which was spent on new computers it didn't need.

The system is set up so that agencies always expect a little more each year, but if they hadn't spent all they got in the previous year, then they wouldn't get as much. That logic has worked for decades. And taxpayers get the bill.

How do we end that practice? Sen. Joni Ernst, Iowa Republican, has a modest proposal:

To that end, Ms. Ernst has proposed the End-of-Year Fiscal Responsibility Act. The legislation, which she said has the support of many federal procurement officers, would mandate that spending in the final two months of each fiscal year not exceed the average spent in the previous 10 months.

What has happened year after year is departments, loath to come before appropriators with flush accounts, rush to deplete their coffers, according to Open the Books, a nonprofit group that tracks government spending.

Found at Feds rush to spend 20% of $500 billion in one month in 'use it or lose it' spending spree. It's a good starting place.

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3:39 PM 9/24/2019

Big Texas property tax reform bill won't reduce taxes but it might slow the increase

Governor Abbott campaigned on property tax reform and no doubt got a lot of votes just for that. But now that the bill is approaching his desk it's looking like the give and take between the parties wanting higher taxes or lower taxes has resulted in a compromise.

Dallas Morning News provides some detail at Texas House passes massive property tax overhaul, moving one step closer to Gov. Abbott’s desk. Their summary follows:

Here's the latest version of Senate Bill 2 as passed by the House:

3.5% revenue cap on local governments. This means cities and counties can collect only up to 3.5% more in property tax revenue than they did the previous year. The original versions of the House and Senate bills had a 2.5% cap. Local governments can exceed the cap if they hold an election and voters approve the additional tax hike. Currently, they can increase property tax revenue by up to 8 percent a year without the threat of an election.

Schools districts included under the cap, but only "symbolically." In the original versions of the bills, school districts were also included under the 2.5% cap -- which the House Ways & Means Committee changed to 2% last week. Burrows said that legally, the cap doesn't hold water in their bill and has to be addressed in school funding legislation. The Senate's version of the school funding bill includes a 2.5% cap. School districts make up more than half of a property owner's tax bill.

No exemption for rural and small districts. The original version of the bill excluded small cities and counties that collect less than $15 million in revenue. This was an important carrot for rural Republicans in the Senate to get on board. But the House committee cut the exemption. "All property tax bills big or small deserve property tax reform," Burrows said.

Exemptions for hospital and community college districts. The cap as originally written applied to special taxing districts, which include utility districts, community colleges and hospital districts. House Ways and Means carved out the latter two because of a concern that community college tuition would increase and because hospitals endure high medical inflation costs, Burrows said.

Passage of property tax overhaul tied to passage of House school funding bill. The House's No. 1 priority this session is a massive $9 billion bill that increases funding for schools, gives teachers raises and rewrites how school districts receive money. The bill ensures that if the school funding bill does not pass, the property tax bill doesn't go into effect. Burrows said this is significant because the school bill also includes property tax relief, and capping cities and counties alone isn't enough to make a meaningful impact.

Every year, our own city council here in Midland, Texas, puts an item in its budget for lobbying. It would be interesting to see how much money various municipalities spent lobbying to keep taxes high.

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10:46 AM 5/1/2019

Turbotax vs taxpayers. Turbotax wins in Congress

We touched on this the other day in No easy way to prepare tax return anytime soon. But with tax day here, maybe it's an appropriate subject to revisit.

The idea is that the IRS could provide free software for taxpayers to use in preparing the forms themselves. But there is a lot of money to be made in the industry of tax return preparation. And the industry fought hard to keep the gravy train rolling.

In short, the Taxpayer First Act of 2019 sponsored by John Lewis (D-Georgia) makes it illegal for the IRS to create its own online system of tax filing. A win for the tax prep firms and their lobbyists.

Related:
Free IRS software for filing taxes to be banned by US Congress in win for TurboTax
Congress Is About to Ban the Government From Offering Free Online Tax Filing. Thank TurboTax.
Filing Your Taxes Is Already Difficult. The House Just Passed a Bill That Keeps It That Way Forever.

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1:34 PM 4/14/2019

No easy way to prepare tax return anytime soon

Elizabeth Zach was on C-Span's Washington Journal -- watch the interview here. She was on because of her article Why the Government Makes Filing Your Taxes Intentionally Difficult, and she made some interesting remarks about who is to blame.

Inthesetimes.com is a progressive online news outlet, and the article contain the obligatory stories of sympathetic people with tax problems. But eventually she addresses the subject of tax return preparation, including the idea that the IRS could prepare tax returns. However, companies that make money from that process have blocked efforts to make the preparation of a tax return more user friendly. From the article:

The tax lobby is spearheaded by the software giant Intuit, maker of the tax-filing program TurboTax. Intuit alone has spent more than $20 million since 2009 in federal lobbying to maintain the status quo. H&R Block has spent $3.4 million lobbying the current Congress and maintains a permanent governmental relations staff. An analysis by University of California at Davis law professor Dennis J. Ventry Jr. found that, in the five years in which California was testing ReadyReturn, Intuit spent more than $3 million on lobbying and political campaigns, including $1 million campaigning for a state controller candidate who opposed ReadyReturn.

Intuit, H&R Block and other for-profit tax preparation companies, such as Liberty Tax, are members of a consortium called the Free File Alliance, which seeks to preempt any IRS free online tax preparation programs with their own services for low-income taxpayers. ...

President Barack Obama campaigned in 2008 on a filing system called “The Simple Return.” In one speech Obama stated, “There is no reason the IRS can’t send Americans pre-filled tax forms to verify.” Two years prior, his senior economic advisor, Austan Goolsbee, had authored “The ‘Simple Return’: Reducing America’s Tax Burden Through Return-Free Filing,” which echoed Bankman’s ReadyReturn plans, to make tax filing simpler by having the IRS use all of the information they already have to create a prepared return the taxpayer can approve or reject.

However, even with Goolsbee in his cabinet, Obama never passed any federal simple return legislation. Meanwhile, in 2008, Intuit almost doubled its lobbying budget and since then has spent between $2 million and $3 million per year lobbying Congress. To date, Intuit has lobbied against almost every tax-return simplification bill proposed.

Ms. Zach also says that conservative anti-tax advocates like the difficulty of tax return preparation because it helps make tax payers hate taxes. Maybe. President Trump and then Speaker Ryan put on a show about how they would make tax form preparation simple. But that didn't happen. The simplification of the tax code and preparation of tax forms should be a bipartisan goal, but apparently the anti-simplification forces are too powerful.

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11:50 AM 4/6/2019

Use it or lose it is the taxing entity attitude about excess revenue

One of the things that is or at least should be annoying to voters is the "use it or lose it" mentality of the agencies on the receiving side of the tax equation.

It probably occurs at the top of the top agencies and works its way down to the bottom levels.

Here's an example of that happening in plain sight, albeit at the lower level. Midland College is a taxing entity in Midland, Texas. And there's a plan on the books to build a new dining hall even though the old one is quite sufficient to serve the students and the public. But with the booming economy, tax revenue is high, and the college has money to burn.

The article on the right was in the March edition of the school newspaper -- the Midland College Press.

The budget for the new dining hall jumped up by a million dollars simply because they had the money, not because of any need. It's almost as if they searched for a way to spend the money.

The students will not learn any lesson about fiscal responsibility from this. In this era of "free everything," that lesson will have to wait for the next recession. Or as Margaret Thatcher famously said, "the problem with socialism is that eventually you run out of other people's money."

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2:32 PM 3/22/2019

Progressive Dem candidates now favor slavery reparations

We're learning from news reports that both Elizabeth Warren and Kamala Harris support reparations for black Americans. The knee jerk reaction to that is that they are using Democrats' tactics of identity politics to pander to a voting bloc.

The problem for taxpayers, who comprise only *37% of the US population, is that all the burden falls on them whether they feel the need for absolution or not. Eloquent writers have provided plenty of reasons to oppose reparations. But let's accept for the moment that there would be some societal benefit to a system that provided absolution to the guilt ridden.

The problem for taxpayers, who comprise only *37% of the US population, is that all the burden falls on them whether or not they would like to do it.

Michael Eric Dyson's Individual Reparations Account provides a solution. Make the payments into the account optional. That way those who feel the need can do it, and those who don't don't.

What's not to like about optional reparation payments?

Previously: Individual Reparations Account not such a bad idea if donors can withdraw money if race relations sour

*numbers come from US Debt Clock as of the time of this writing. 122,425,807 ÷ 328,644,256 = 0.3725

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2:41 PM 2/26/2019

Kamala Harris tries to capitalize on misunderstanding about tax refunds

For several days viewers of cable news programs have been hearing that IRS tax refunds will be lower than in the past. Whether that's good news or bad news depends on your political perspective, it seems.

A tax refund means the taxpayer had too much withheld from his/her paycheck or otherwise paid more than was actually due for the year. It's smart to pay just the right amount, but that's not always possible.

Perhaps we should be grateful that the IRS refunds the over payment, but it's no reason to celebrate. And a lower refund is no reason to fret.

So those news commentators who lament the lower refund amounts have it all wrong. And along comes Kamala Harris chiming in on that wrong headed belief:

The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.
12:09 PM - 11 Feb 2019

WaPo's Glenn Kessler rips it apart in Kamala Harris leaps to unwarranted conclusions in tax tweet:

This tweet combines two factoids into a highly misleading package. Yes, tax refunds are smaller, based on preliminary data. And, yes, in the long run, the Trump tax cut raises taxes on the middle class — if you make the probably unrealistic assumption that Congress will not act to rescue tax cuts for individuals.

But Harris presented these facts without nuance or qualification, making it appear as though the smaller tax refunds were evidence of a tax hike on the middle class. In reality, the size of a tax refund reflects nothing about the size of a tax cut or tax increase — and at least in 2018, the vast majority of middle-class Americans can expect to pay less in taxes as a result of the Trump tax law.

Harris earns Four Pinocchios

But being wrong and wrong headed has never hurt a politician pandering to popular belief.

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5:35 AM 2/14/2019

The prospect of hosting Amazon's HQ2 must have been irresistible to cash rich development agencies, even if Amazon had already made up its mind

WaPo attempts to identify the categories of Winners and losers from Amazon’s HQ2 decision. But those of us out here on the taxpayer side of the incentive question wonder whether it's worth it to pay dearly for a company to move to their neighborhood.

How dearly? WaPo answers that question with this: Amazon HQ2 to benefit from more than $2.4 billion in incentives from Virginia, New York and Tennessee. Add that to the $1,613,000,000 in enticements Amazon has already received across the nation.

Nathan M. Jensen in the Wall Street Journal made an interesting observation about that. SeeThe Amazon HQ2 Fiasco Was No Outlier. (Alternate link). Excerpt:

When Amazon announced last month that it would split HQ2 between New York City and Arlington, Va., losing applicants cried foul: They accused Amazon of an extraordinary bait-and-switch, enticing dozens of bidders to increase the competition and the incentive offers, only to end up with two of the most obvious candidates all along.

The reality is that this sort of competition for big projects, while unusually large in the Amazon case, is the rule not the exception in economic development and has been for a long time. It has been happening in the U.S. since Alexander Hamilton received local tax exemptions in 1791 to build up the city of Paterson, N.J. as an industrial center. What’s different in our own era is that most companies aren’t actually changing their decisions based on incentives but are pocketing substantial benefits anyway.

Studies show that the cost and frequency of incentive packages—which cities and states typically offer companies to either relocate or stay put—have been rising. Secrecy surrounding many of the deals makes a full accounting difficult, but a new database assembled last year by the Upjohn Institute for Employment Research covers programs for 47 cities in 33 states. It found that the cost of such incentives more than tripled from 1990 to 2015, to $45 billion.

Numerous companies applied for incentives after they had already broken ground and, in some cases, after they had completed building. ...

This points to the open secret of economic development: Though incentives are rarely effective in changing firms’ investment decisions, they do allow politicians to attend ribbon-cutting ceremonies where they can highlight their own role in attracting a new company (or retaining an old one) and creating jobs.

Our own little city of Midland, Texas, had the experience of watching politicians hi five each other when the local taxpayer funded Midland Community Development Corporation bought into the idea that XCOR would build a space plane and take high paying passengers on a low orbit flight. When the company went bankrupt the MCDC was left scrambling to perfect liens on property left behind by the high flying dreamers who sold them on the idea.

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3:33 PM 12/17/2018

IRS uses sneaky switch to raise taxes

The recent tax cut law reduced the tax bite on many people. But the law also required the IRS to implement a slower moving measure of inflation. The IRS has put it in effect, and the result will be a slower growing standard deduction. So tax payers using the standard deduction will pay a higher tax for a longer period than they would under the old rules.

This comes to us by way of wsj.com: Trump Tax Cut to Be Eroded Next Year by Inflation Switch (titled "New Calculus on Inflation Erodes Tax Cut" in the print edition). Alternate link.

It seems a bit sneaky. But at least it was the lawmakers who wrote it, not the IRS doing it on its own.

Meanwhile, some good news: As predicted, GOP tax cuts prompt record tax revenues. Unfortunately, the government is still in the red as spending is still outpacing revenue. And worse, no one seems to care.

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2:07 PM 11/17/2018

It's sad that theft of $1.6 billion from IRS is considered good news

A few years ago on this blog I recounted my experience with the IRS when trying to report that someone had filed a tax return with my name and identifying information asking for a fraudulent refund. One would hope that the IRS would be eager to get that report. But the agent at the local IRS office turned my effort to be a dutiful citizen into an antagonist endeavor.

This eye opening news item from WaPo should be infuriating. But we take it as another sad episode of the IRS being unable to do a better job. Thieves targeted $12 billion through IRS tax fraud. This part sounds almost like satire:

The IRS estimated online robbers attempted to steal least $12.2 billion, if not more, through identity theft tax refund fraud in 2016, according to the Government Accountability Office (GAO). IRS vigilance thwarted most of those attempts, but the fakers got away with at least $1.6 billion. The good news is the 2016 data represent a steady and significant drop in tax identity theft since 2012.

"Good news." Yeah right. That's about a 13% success rate for what is probably minimal effort on the part of the thieves.

Get busy, IRS.

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12:42 PM 10/21/2018

New York's sneaky way to collect high taxes with tax payers still getting a credit on fed taxes

A Democrat friend years ago chided business owners, if he had actually known any, who conducted business in a manner that minimized taxes. He called any such maneuvers tax schemes.

The worm turns.

Talk about tax schemes. Taxing entities in the state of New York now have a scheme to allow the tax payers to avoid the $10,000 cap on state and local tax deductions. The scheme involves new laws that seek to maintain a credit against federal taxes by calling the local tax payments "charitable contributions" when the money goes to certain qualified institution.

Here's WaPo from last April: Gov. Cuomo tries shielding New Yorkers from GOP tax law, in possible model for Democratic-controlled states:

On Saturday, New York became the first state to approve new tax measures designed to shield residents from tax hikes under the GOP bill signed by President Trump.

The two provisions — one creating a new “charitable” fund to replace local property taxes, and the second a largely technical change in how taxes are assessed — aim to help taxpayers avoid a new $10,000 cap on the amount of state and local taxes they can deduct from their federal taxes.

But the IRS is resisting. Note this from WSJ.com: New York Towns Gearing Up to Fight IRS Ruling on Local Taxes, (Alternate link), to wit:

State lawmakers approved a bill in March that allowed the creation of the charitable funds. Under New York’s law—which is similar to legislation adopted in New Jersey and Connecticut—localities can issue a taxpayer a credit against their property taxes for up to 95% of the amount donated to a designated charitable fund. New York may issue credits against state income tax for up to 85% of a donation.

Fourteen New York municipalities have set up the charitable funds, according to a database of local laws and interviews with municipal officials. Charitable deductions against federal income aren’t limited, but the IRS rule would block the relief intended by New York lawmakers by requiring taxpayers to subtract the value of the state credits from the amount of their donation.

Who would have ever thought that Democrats could get conservatives to root for the IRS?

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2:45 PM 10/2/2018

Taxpayers are ignored in Midland County wealth distribution scheme

Elected officials revel in favorable media coverage, and the Midland County Judge Mike Bradford must certainly be feeling good.

His term in office is about to end, and perhaps as a going away shot he has orchestrated a huge transfer of funds from the county to various other taxing entities and foundations. The county is awash with cash due to boom-time sales tax collections which they were shocked, shocked, to discover.

For background see two consecutive front pagers from the Midland Reporter-Telegram:
County answers call for collaboration, subhead: "Commissioners to divide $11.86 million from sales tax collection among 10 local entities," and
COLUMN: Commissioners add another chapter to Midland’s philanthropic story.

For those of us who are fiscally conservative the whole thing strikes us as unseemly. Taxpayers can decide best what to do with their money, not elected office holders. Unfortunately, there is almost never any serious mention of lowering local taxes, only of how much to raise them.

Drain the swamp.

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8:01 AM 8/5/2018

Once again local taxing entity expresses surprise at high sales tax revenue

Local taxing entities plug a number into their annual budgets to account for an expected revenue from sales taxes. And they are always shocked, shocked, that too much money came in. If only all of us could get such surprises on such a regular basis.

The latest example comes to us by way of Stewart Doreen at MRT.com in County breaks record for sales tax collected in fiscal year.

The only problem the taxing entities have is deciding what to buy with all that money. They never give any thought to giving it back to the tax payers.

Fortunately at the Midland County level, the winner of the Republican Party runoff for County Judge, Terry Johnson, having been the one least favored by the establishment, is likely to win the position in November. Those of us on the paying side of the tax equation have high hopes for the future.

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2:32 PM 7/13/2018

Supreme Court just created a huge new business -- software for small internet sellers who now have to collect local taxes

How much would a small business spend for software that would do the meticulous calculation for the sales tax amount and supply remittance addresses for every taxing entity in jurisdictions in which they make internet sales? My guess would be thousands, if they could hike the price of the product they sell to pay for this additional expense.

In deciding in favor of tax collectors in South Dakota v. Wayfair, Inc., Justice Kennedy didn't need to bring up the Keynesian Broken Window Fallacy as he had tax revenue in mind -- it's not just for the common good, it's for fairness!

But that famous Broken Window Fallacy has some application. All that money spent by customers on taxes and by vendors on the collection process is money that could have been used elsewhere.

We don't need taxing entities to decide how best to use our money. Out here in the Permian Basin tax collectors are awash in sales tax revenue already. The dilemma they see is how to spend all that money. Nowhere is there a serious consideration of the concept of giving it back to the people.

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12:50 PM 6/23/2018

Stay of execution on tax filing -- due date is April 17, 2018

Not really a stay of execution, but it is an extra day to get the 1040 prepared. And there I was busting my rear over the weekend to get mine ready.

Turns out not only did the 15th fall on Sunday, April 16th is Emancipation Day in Washington D.C., a holiday. So the true deadline is 4/17/18. If it's postmarked on or before 4/17/18 then it's on time.

On the down side, there will be no swamp draining on the 16th, either.

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3:05 PM 4/16/2018

Tesla -- note to Democrats, conservatives don't hate Tesla, it's the tax subsidies they hate

A few years ago a Democrat relative sent a screen shot and a link to Consumer Reports calls latest Tesla best vehicle they've ever tested, right wing goes nuts along with a note that one of her friends was buying one. I questioned why conservatives would go nuts. But without reading the article, I assumed it was because Elon Musk and Teslas were so highly subsidized with tax dollars.

I, as a conservative, love to see entrepreneurs succeed. And I would love to see Tesla succeed AND wean itself off subsidies. I would also like to see more established companies, like Toyota, make an electric vehicle with the high quality Toyota buyers expect from that company.

Because Tesla is having some problems. For example, Tesla employees report flawed parts are causing Model 3 delays.

Not long ago I watched a TV show with a title something like, "How They are Made," which featured in that episode about how the Tesla automobile was made. It was a very slow building process with a very high "hand made" aspect to it. Sometime later when Elon Musk announced a very ambitious production rate for the cars, I didn't go nuts, but I did question whether he could pull it off with so much hands-on work involved. Turns out he couldn't.

In any event, good luck Musk. But please quit clamoring for tax dollars.

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12:45 PM 3/16/2018

Paying for highways: Toll roads or gas tax

The government should be smaller and do less. However, some things do need upkeep, and highways are a good example.

President Trump has suggested a gasoline tax of as much as $0.25 per gallon. Texas residents already pay a hefty gasoline tax, and an added two bits to every gallon will be felt. But if we have to have it, it needs to be fair. And it must have a sunset provision. If not it will be permanent, continue to grow, and the money will end up being spent of other things.

Proponents of toll roads, like Robert P. Murphy, in A Gas Tax Hike Is the Wrong Way to Fund Highways, make a strong libertarian case. And they might work if there's a way to pay the toll without having to stop at a toll booth.

Dwight Eisenhower got us off to a good start with the U.S. highway system, much of which is still in place, paid by taxpayer money. So if the infrastructure really needs a gigantic shot in the arm and legislators are unwilling to cut spending somewhere else, then maybe these two options are the only ones left.

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1:56 PM 2/26/2018

Texas Governor Abbott wants to alleviate property tax pain

Property owners in Texas were hoping the 2017 legislature would do something about property taxes, but they didn't come through.

Governor Abbott is still on the case. See Abbott wants to limit local jurisdictions' ability to raise Texans' taxes.

Here in Midland, Texas, the city council hikes taxes every year. It seems inevitable. And t citizens' complaints at the council meetings are usually accepted politely. But the citizens are usually wasting their time.

So it's nice to hear that the governor listens.

The above mentioned dallasnews.com article links to this document purporting to be Governor Abbott's plan: Titled Texans for Greg Abbott 2018 Property Tax Reform Rollout. Here are the bullet points:

- Cap property tax revenue growth at 2.5% per year;
- Prohibit legislated unfunded mandates;
- Require appraisal district directors to be locally elected;
- Improve property owners' rights to protest;
- Improve property tax transparency;
- Improve transparency and use of local debt; and
- Require 2/3 vote to issue new local debt.

Let's hope the next legislative session will deliver.

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2:42 PM 1/19/2018

Letters to morning paper editor propose better idea than road bond -- Midland, Texas

Voters in Midland, Texas, are facing an election next week where a $100,000,000 road bond will be voted up or down. See JPG on the right for the propositions. Elected council members tell us they must have it, and there's a well financed movement underway to get out the "yes" votes.

But wait a sec. These two letters to the editor in the 10-22-17 Midland Reporter Telegram -- from Rubin B. Reavis and Charles R. Sessions -- suggested a sales tax as a viable alternative to the bond. See below:

Not a bad suggestion. The idea isn't getting a lot of play, but it seems like a workable alternative.

Editor's note: The government is like Harvey Weinstein. Regular citizens are like Weinstein's girls. Resist and he can make life miserable for you. - Robo-ed.
Hey, that's pretty good! You really earned your pay this time! - Sleepless.
Pay! Ha! What pay! - Robo-ed.

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2:04 PM 10/28/2017

Taking a knee and biting the hand

All those rich professionals ball players on the field who refuse to respect the U.S. flag have every right to do so. They should thank our founding fathers for giving them that right, but that wouldn't fit the narrative.

In any event, the politicization of pro sports could have a positive effect. The case for taxpayer funded ball parks for pampered professionals and wealthy owners has always been a misuse of tax dollars. Voters who will inevitably be asked to pay for new sports stadiums might have second thoughts about that concept.

So maybe voters will balk the next time some pro team owner comes to them with his hand out. The ballot box is where conservatives protest. Let the millionaire players pay for their own stadium.

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9:13 AM 9/24/2017

Instead of trying to improve, IRS take their budget cut out on taxpayers -- evergreen headline

I began this blog post a few years ago and kept adding related links. But it worked its way down on the priority list. But the issue is still with us.

Check out this headline from 2014: Republicans seek to cripple IRS with the subhead: "The GOP’s moves will gut the tax agency, advocates warn."

The IRS definitely needs reform. But the problem with trying to reform an agency by cutting their budgets is that instead of reforming they'll take it out on the taxpayers then gnash their teeth and wail away about how much the cut hurts the service they are supposed to provide. Expect big news stories about how some sympathetic victims are so badly harmed simply because the IRS can't afford to help them.

Bump it up to 2015: House report: Cash-strapped IRS prioritized bonuses, union activity over helping taxpayers.

Fast forward to the other day and check out this one: As Trump Budget Plans Cuts to IRS, Agency Asks for More Money, subhead, "Only 40 percent of taxpayers were able to reach the IRS last tax filing season."

IRS commissioner John Koskinen needs to be kicked out so he can pursue some lucrative job at a Democrat dominated law firm. Drain the swamp.

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2:30 PM 5/26/2017

Lois Lerner claims she received death threats -- I don't believe her

This is a remarkable claim: IRS Officials Claim Lives in Danger if They Testify About Tea Party Bias Case:

Former official Lois Lerner and Holly Paz both argued in recent filings under seal in the U.S. District Court in Cincinnati that the death threats and other harassment they have faced take precedence over the public's right to hear their testimony on the case of IRS bias against conservative groups, USA Today reported.

They just want to get out of testifying. Lerner has already taken the fifth, so she knows the routine.

Meanwhile, she's in less danger than conservatives. See Violence And Intimidation Against Republicans Are Becoming The New Normal which chronicles some of the recent violence while noting that some progressives call for more of the same.

Oh, but we're supposed to sympathize with Lois Lerner?  It's pathetic.

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2:07 PM 5/15/2017

Proposed in Texas -- no property tax hike without voter approval

We touched on this yesterday when talking about a sales tax vote in Midland, Texas, last Saturday that got rejected by voters.

This time it's the movement to require voter approval of property tax hikes without them having to navigate through the obstacles set up by the legislature.

EmpowerTexans.com tells us about it in Legislative Priority: Give Voters A Say On Excessive Tax Hikes. Currently, only the school districts are required to seek voter approval of a tax hike over the rollback limit. For the other taxing entities, EmpowerTexans.com says this:

Under current law, taxpayers only have one option—a burdensome petition drive.

In both rural and urban areas, this onerous process requires that taxpayers collect an overwhelming number of voter signatures over a very short period of time – and hire lawyers to protect their validity – before a public vote on the proposed tax increase is triggered.

Politicians routinely instruct their staff to fight and discredit these efforts. They also spend taxpayer money on lawyers to resist holding public votes, forcing citizens to file expensive lawsuits.

Upon closer review, it becomes obvious that state laws pertaining to the citizen-petition process were designed to thwart voters in favor of money-hungry governments. These petition requirements should be replaced with automatic elections.

Texas Governor Gregg Abbott is very much in favor of property tax reform. Here's part of his State of the State where he talks about it in this Youtube video. In it he refers to Senator Bettencourt who can be found here.

Other advocates of giving more power to voters include Sarah Davis of Houston who has introduced several bills on the topic. One is HB 1144 which, if passed, would extend the restrictions on the school districts to all taxing units for proposed increases over the rollback tax rate.

"Rollback tax rate" -- weasel words, as that rate is set by the legislature which has its own budget challenges, and one might fear that they would be sympathetic to other entities dependent on tax revenue. But Ms. Davis proposed two other statutes which would peg the rollback rate to the consumer price index during the year preceding the proposed tax hike. That would be HB 1146 and HB 1147.

Other legislators have proposed similar statutes. Go to the list and do a page search for "valorem" to see them all.

All that having been said, hundreds of bills get proposed in each Texas legislative session, and only a fraction of them get passed. So we'll have to wait and see what they do with these important issues. Having Abbott on board certainly can't hurt.

Midland Mayor Morales complained about low voter turnout on tax vote -- if he really wanted a large turnout he would have put the issue on the November ballot

Just about everyone assumed that the reason the Midland, Texas, mayor and city council put their wished-for tax on the May ballot instead of the November ballot was to get out their loyalists to outnumber the "no" votes that they feared would come out to vote in the presidential election.

So when the Mayor Jerry Morales complained about the low turnout on May 6 we are left wondering to whom was he referring.

The issue was whether to extend the 1/4 cent sales tax for a dozen years or so. The original tax was approved by voters long ago to fund a sports complex. The complex was built and has been operating for quite some time. The promise was that the tax would eventually expire. But it's hard for tax collectors to give up on a revenue source, so as the expiration date approached, they sought to keep it going.

On May 6 the voters said "no."

Now the people who were elected to redistribute tax revenue are contemplating a property tax hike.

Local property taxes go up each year, and the excuse for the past few years is that population growth means they have to spend more money. Well, maybe. But that argument ignores the fact that the people moving in pay taxes, too, so they are basically self funding. But no, the taxes for all of us keep going up.

So the race is on between those who want to raise property taxes and those who support Governor Gregg Abbott's drive to require voter approval of property tax hikes. Go Governor Abbott!

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2:29 PM 5/8/2017

The BAT is BAD -- Arthur Laffer explains

Although the border adjustment tax (BAT) wasn't included in the most recent Republican tax plan, Arthur Laffer puts another nail in its coffin. See Arthur Laffer: Trump's tax plan should follow the Reagan model:

Let me be clear about why a BAT is even being considered: The only reason that Republicans are willing to endure this risky scheme is because they are being held hostage to the faulty logic that their tax cuts must be revenue-neutral in a static analysis. This demand that tax cuts be "paid for" will act as a brake on economic growth and force us down rabbit holes like the BAT proposal. These silly "pay for" rules aren't actual laws, but politicians view them as necessary for responsible fiscal policymaking.

But, the truth is that this economy needs growth. Marginal income tax rate cuts bring growth, not new protectionist taxes that subsidize exporters at the expense of anyone who imports goods. Let me tell you that if our nation's historic major tax reforms of the 1920s, 1960s and 1980s had required marginal rate cuts to be "paid for," we never would have had the Roaring Twenties, Go-Go Sixties or the Reagan Eighties.

So the deficit doesn't matter? Actually, the proven theory is that lower taxes bring in more revenue. More:

Politicians should focus their attention on reducing tax rates sharply, while eliminating the loopholes and deductions that create inefficiencies in the economy and reward special interests at the expense of a more rational, growth-oriented tax code. If Republicans are courageous and willing to cut tax rates dramatically while wringing the complexity out of the code, the economy will take off and generate more tax revenue that will put the country in a stronger position to deal with the long-term consequences of entitlement spending and debt. But their first priority must be growth, and the BAT is counterproductive to that national imperative.

Laffer is a very smart fellow -- he's been more right than wrong -- and well worth listening to.

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10:18 AM 5/2/2017

Republicans might tighten the reins on IRS -- that's a start

According to Washingtonexaminer.com, the Republicans' tax plan will put IRS funding at 2008 level. GOP freezes IRS funding in 2017 spending plan. The IRS still hasn't satisfied its obligation to the people for its partisan treatment of conservative groups back when they seemed to be doing everything they could to thwart the fledgling tea party groups.

And when faced with budget cuts the agency typically threatens that it will cut service to citizens first. So it was nice to read this:

A summary of the bill provided by the House Appropriations Committee said the frozen spending level will still provide "sufficient resources to perform its core duties."

For example, it said $2.1 billion would be provided for taxpayer services, the same as fiscal year 2016.

But the committee made it clear that there are still problems at the IRS, and that it would be a mistake to boost spending by the agency.

It's a start. But the IRS has a long way to go to make amends.

Let's take a breath before repealing the Johnson Amendment

The Johnson Amendment, according to Wikipedia, is this:

The Johnson Amendment is a provision in the U.S. tax code that prohibits all 501(c)(3) non-profit organizations from endorsing or opposing political candidates. 501(c)(3) organizations are the most common type of nonprofit organization the United States, ranging from charitable foundations to universities and churches. The amendment is named for then-Senator Lyndon B. Johnson of Texas.

Some are celebrating Donald Trump's proclamation to church groups that he intends to abolish it. For example, see Trump Is Right. Churches Should Be Free To Express Themselves Politically.

That's probably the right thing to do -- free speech should be available to everyone. The focus now is on Christian churches. However, it's useful to remember that it would to apply to all religious groups.

Jihadists take the long view toward taking over the U.S. The visionaries among them realize that terror attacks by themselves won't do it. But think they will weaken our will, and eventually with enough pressure from all directions, our government will capitulate with the people's consent.

Imagine this scenario. An oil rich middle eastern country donates large amounts of money to Mosques around the U.S. That money gets channeled into political campaigns. Eventually they can get enough Islamic sympathizers in the government to bend the law toward Sharia.

So am I being Islamophobic? Well, if Islamophobic means the fear of being subjected to Sharia law, then yes, I'm Islamophobic.

4:14 PM 2/6/2017

A single gunshot can cause hearing loss -- free the silencer from federal regs

Several years ago I participated in a few competitive handgun events in an indoor range. The noise in a confined area was deafening, even with both plugs and shooting earmuffs.

I was reminded of that recently while reading an autobiography in which the writer described the time he and his apartment neighbor had a conversation. The neighbor was wearing shooting earmuffs. His explanation was that he wanted to protect his hearing if he had to shoot an intruder. Good idea, as half baked as it was, but how would he have heard the intruder?

However, he certainly had a point. Even a single gunshot in close proximity can cause hearing loss. Shoot a gun in a household hallway, and the concussion can raise the roof. That's an exaggeration, but it could very easily damage unprotected ear drums.

In the movies they are called silencers, and they were the province of the professional killers and international spies. Currently, they are treated like fully automatic guns by the federal government, i.e., the buyer has to go through a class 3 firearms dealer, pay a hefty fee, get local law enforcement approval, and wait.

But all that might change. See Hill Republicans try to ease purchase of gun 'silencers,' as NRA-backed Trump arrives

Congressional Republicans are trying to change federal guns regulations to make buying a silencer, or suppressor, easier. But critics don’t agree with the argument that the proposed legislation is a safety measure to prevent hearing injuries.

The Hearing Protection Act, introduced earlier this week in the GOP-controlled House and Senate, if passed, would still require a background check to buy a silencer, which muffles or suppresses more than silences the sound of a shot.

However, buyers would no longer have to pay a $200 fee or wait for months after filing extensive paperwork with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives.

House Bill 367 and Senate bill 59 both would eliminate the fee and provide that silencers would be treated the same as long guns. The House Bill would be effective for transfers after October 22, 2015. So could silencer buyers after that date get a tax refund? Not so fast. The Senate bill is almost exactly the same except that it's effective only for transfers after January 9, 2017. And we can probably assume lawmakers aren't going to authorize rebates for taxes paid as far back as October 2015.

So I would hold off until those bills are reconciled and signed into law before shopping for a silencer. But I've already added one to my Christmas wish list.