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Archive for July 2015

Here We Go Again: Online Sales Tax Resurrected

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Patriot Post

An online sales tax bill passed the Senate (with 27 mostly Republicans voting “no”) in 2013 but flamed out in the House. Its sponsors, however, are undeterred. The Hill reports, “Senate Minority Whip Dick Durbin (D-Ill.) and Sens. Lamar Alexander (R-Tenn.), Mike Enzi (R-Wyo.) and Heidi Heitkamp (D-N.D.) rolled out the Marketplace Fairness Act (S. 698) on Tuesday (March 10, 2015), which would give states more power to collect sales taxes from businesses that don’t have a physical location within their borders.” As Mark Alexander explained two years ago, the MFA is designed to force states to collect taxes for the states in which a purchaser resides, and this amounts to taxation without representation. Clearly, politicians want this bill passed to raise new tax revenue for broken state governments facing budget shortfalls. Mitch McConnell opposed the bill as Senate minority leader. Now that he’s majority leader, we’ll see if he holds true.


Written by Leatherneck Blogger

July 31, 2015 at 05:00

Grab your wallets: House to consider internet sales tax

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Because we’re just not taxed enough, don’t you know?

Old-line retailers are pushing Congress to enact the sales tax bill passed by the Senate last year to “even the playing field.” What they rarely mention is that it will drive some smaller online outlets out of business while hugely complicating online purchases due to thousands of state and local tax jurisdictions that have to be considered.

The Hill:

Supporters and opponents of online sales tax proposals are focusing their lobbying energy on Goodlatte (R-Va.), who has released a set of seven principles that an online sales tax bill would have to meet in order to be considered by his committee

“House Judiciary has a busy schedule,” but Goodlatte has plans to hold a hearing on Internet sales taxes in the first half of the year, according to Steve DelBianco, executive director of NetChoice, which represents Facebook, Yahoo and online sales tax critic eBay.

Goodlatte “wants to hear legislative concepts that would fit his principles,” DelBianco said.

A Judiciary aide declined to comment on whether the committee has plans for a hearing. The committee is “not actively drafting legislation at this time” but continues “to welcome ideas consistent with those principles from interested parties,” the aide said.

Few people involved in the push expect the chairman to move quickly on a bill, especially now that he is being tasked with leading a legislative push on immigration reform.

Still, lobbyists are optimistic that the chairman can craft a bill with broad support.

The fight over an online sales tax bill shifted to the House last summer after the Senate passed the Marketplace Fairness Act, which would allow states to collect sales tax on purchases that citizens make from out-of-state online retailers.

Currently, state sales tax is technically due for all purchases, but states only have the authority to collect sales tax on purchases that citizens make from retailers with a physical presence in each state.

Supporters say the bill would even the playing field between online retailers and brick-and-mortar stores. Opponents argue it would create mass confusion as online retailers are forced to navigate tax rates and rules for nearly 10,000 state and local tax jurisdictions.

Goodlatte has said that he wants to consider the issue carefully.

His “principals” specified that an online sales tax bill should not create a new or discriminatory tax, should not create greater burdens for online retailers than brick-and-mortar stores and should give online retailers “direct recourse” to challenge taxes an compliance burdens.

Additionally, an online sales tax bill should be simple enough for small businesses to easily follow, should encourage states to compete on tax structures, should respect state sovereignty and should protect customer privacy, he said.

Those are actually pretty good principles to follow when considering an internet sales tax. Unfortunately, they will be next to impossible to meet. The “greater burden” principle will be especially difficult to achieve. Brick and mortar stores only have to figure sales tax for their specific location – state, county, and local. Online retailers will have to develop software that can be plugged in to their existing checkout system that can handle transactions from everywhere in the US – a daunting and very expensive proposition.

The online shopping experience is so much easier with far less hassle that old line retailers can’t match. In store purchases are fraught with bad service, limited choices, and all the hassle of driving and parking. Complicating the online shopping experience may benefit some chains, but in the end, internet sales will continue to rise even for the brick and mortar outfits.


Written by Leatherneck Blogger

July 30, 2015 at 05:00

Everybody Pays for Blue-State Extravagance

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By Larry Cline

Alexis de Tocqueville once observed that “In a democracy, the people get the government they deserve.” With that in mind, conservatives happily ensconced in low-tax red states sometimes engage in a bit of schadenfreude when they consider the much higher state income taxes many liberals face.  Whether it’s the cost of welcoming illegal immigrants with food, housing and education, questionable school curricula about the history of the gay rights movement, or frivolous and expensive programs to address “global warming,” it’s easy to take satisfaction in thinking “well, at least it’s not my state taxes paying for it.”

But when or if the federal tax code ever faces serious reform, it should be remembered that under the current structure, in which state and local property taxes are deductible on federal income taxes,  the taxpayers of states with more moderate taxes (or none at all) are subsidizing the overpriced liberal government of so-called “progressive” states.

Although the total taxes paid are higher in a state with a higher income rate, a Texan (for example) will end up paying more federal income tax than a Californian with the same income, simply because the Californian can take a deduction on his much-higher state and local tax bite.

Consider two earners, one in Texas and the other in California, each earning $100,000 in the year 2013.  The Texan pays no state income tax.  The Californian owes his state 9.3% + $2191, for a total of $11,491.

For federal taxes, the rate for an individual taxpayer at that income level is $17,891 + 28% of income over $87,850.  The Texan’s federal income taxes come to $21,293.  But since the Californian can deduct his state income taxes, his taxable income drops to $88,509.  $17,891 + 28% over $87,850 makes his federal income tax liability only $18,075.

The Californian is paying $3218 less to Washington than the Texan!

Remember that when someone spouts the tired liberal myth that red states collect more from the government than they pay (a specious argument that counts military expenditures as money sent to the state by Washington.)

But bear in mind that this example takes into account only state income taxes.  Since property taxes are also deductible, and the states with the highest state income taxes also tend to have higher property tax rates, the “subsidy” provided by red states is often even greater.

Lawmakers in blue states are more willing to raise taxes to cover frivolous programs when they know that their constituents will not have to bear the entire cost.  Were this not the case, voters in those states might be less forgiving of their overspending.  Personally, I’d be willing to lose the deduction for my state income taxes and property taxes if I knew taxpayers in San Francisco (and Los Angeles, New York, Chicago, and Seattle) were suddenly getting the same wake-up call.  If the Californian making $100k had to pay his much-higher state taxes in addition to the exact samefederal taxes as the guy in Texas, support for liberal nanny-state expenditures, and the high state taxes they require, might dry up rather quickly.



Written by Leatherneck Blogger

July 29, 2015 at 05:00

Property Taxes Pave the Road to Serfdom

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Under the feudal system of the middle ages, a serf was an agricultural laborer who was bound to work on his lord’s estate. The lord owned the land, and the laborer had no choice but to live on the lord’s property and hand a significant amount of the fruits of his/her labor over to the lord.

A similar, but more subtle, system exists today in counties throughout the United States. Homeowners and owners of farmland are bound to pay property taxes to the County Assessor. And if they don’t pay the property taxes, the assessor has the legal right — which they essentially gave themselves — to take the property away. The names of the local officials may not be on the deed to your house, but since they have the legal authority to seize it from you, the result is the same.

This seemed reasonable as long as the property taxes were reasonable. But as Americans have had their wages and benefits reduced, the public sector workers, whether they are unionized or not, continue to enjoy the privilege of raising property and other taxes so that their benefits, salaries, and pensions are not reduced. Teachers’ unions, SEIU workers, and AFSCME workers make all or much of their income through property tax assessments. And interestingly, all give most of their money to the Democratic Party, who, since they run most urban areas of the U.S. and receive this money, are then largely responsible for the high property taxes forced upon middle class Americans.

The taxpayers, who are the voters and theoretically run the government, are left paying for the privileged few who have managed to work themselves — or a members of a family — into positions of political power. And incredibly, this issue of the political control of property taxes is kept hidden from voters: they are just sent an annual bill.

There has been a conscious, nationwide effort to avoid the issue of property tax increases. Federal measures of the cost of living do not include property taxes. Measures of consumer spending do not mention how consumers spend more every year on property taxes. And while everyone knows, and can look up, the national and state income tax rates, the rate they are taxed on their home is not easily found. And even if the rate seems to be fixed, at any time a local auditor can say they have to pay years of back taxes, simply by stating that there was a “mistake” in the assessment of the home’s value.

Property taxes are an open doorway to administrative corruption, since the assessors, auditors, and tax appeal boards answer to no one. In reality these assessments are a violation of the due process clause of the Fourteenth Amendment, but they are allowed to go on. At some point their constitutionality should be challenged. The homeowner has no option but to pay the new tax or move away, and potentially lose all the equity in their home.

Politicians do not want the property taxes challenged in regular court. After all, most jurors would let their neighbors off of their property tax burden. Cities stubbornly, and arrogantly, refuse to write property taxes off the books when homes are abandoned. For example, in Detroit someone can buy a house for ten dollars, but they still have to pay the back property taxes. The local pols want their money.

Property taxes are the province of politicians, their campaign contributors, and their families and friends. And human nature being what it is, the elites make sure they themselves often pay much less than the masses who have no power. For example, Chicago Tribune columnist John Kass once wrote how in 1998 how the Hispanic political leader of Chicago, Congressman Luis Gutierrez, only paid$274 a year property taxes on a home valued at $350,000. His neighbor paid $5,000 for the same size home, built by the same builder. Gutierrez was a former chairman of the Committee on Real Estate.

So those who profess to advance the cause of social justice above all things end up taxing the middle class to support themselves and their campaign contributors. Of the 12 largest campaign contributors in the past 23 years, four are public sector unions, who earn their salaries and pensions largely, and often exclusively, through property tax assessments. So this motivates politicians and their media supporters to remain silent about the property tax issue.

And property taxes are not trivial. In 2010 the median real estate tax in the U.S. was $2,043 per year. But the term “median” means that half of the taxes are higher.

Working Americans are fortunate that home values have dropped. This enables them to be able to afford both a mortgage and the home’s property taxes. But the long-term trend doesn’t look good for working Americans. If property taxes continue to rise, and the incomes of Americans continue to fall, home values will have to fall as well. Supply and demand works both ways; as people earn less they can afford to pay less for homes.

Property taxes went up from 2005 to 2010. This happened during the housing bubble, when home values skyrocketed. But when home values collapsed, the property taxes did not go down in many areas. In fact, in many areas, particularly large urban areas, property taxes continue to rise, while the average American has seen their income drop to where they now earn as much as they did in 1996.

What is sorely needed is a national dialogue on the issue of property taxes, and the fact that taxpayers, who foot the bill, must have some say, not a tax board that is entitled to give themselves pay raises through coercion. This is clearly a violation of every Democratic concept of taxation and self-governance. American property taxpayers — and renters pay property taxes as well through their rent — must take back their local governments. A political mechanism must be found to restrain the outrageous behavior of local tax appeal boards.

The situation is set up for greed and corruption: those who raise taxes have no one to answer to but themselves, and they, unlike corporations, can give themselves raises, have conventions in Hawaii, and use employees for chauffeurs and maids, all while extorting the money from local homeowners, who are already suffering from excessive taxation, higher costs of living, and lower incomes. It is a more subtle but real duplicate of the feudal system: a few elites own all the property and demand annual payments or they will seize the land.

The property tax issue in the U.S. today is a clear illustration of what Friedrich Hayek referred to in his book The Road to Serfdom. Today, that road is being paved by property tax bills throughout the entire U.S.

Written by Leatherneck Blogger

July 28, 2015 at 05:00

Property Tax Corruption

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By Michael Bargo, Jr.

If anything approaches “taxation without representation” in contemporary American government, it is property taxation.  This is because as a practical matter voters – as property owners – have no say in the amount of property taxation they endure.

Harold Lasswell, a prominent U. of Chicago political science professor, once said that the country is made up of two groups: the political elites and the masses.  The exploitation of the masses is now being achieved through property taxation.

Since political elites have, in most counties, complete control over issues of assessments and property taxes, they have the opportunity to exploit this power to achieve their own ends.  This continues for the simple reason that the masses can’t stop them.  Traditionally, the goals of corruption are to maintain political power and accumulate wealth.

This piece will use the City of Chicago, Cook County, and the state of Illinois as examples of how property taxation results in political corruption.

Chicago is located in the County of Cook.  Its treasurer is Maria Pappas, who has been featured on local TV news exposés for forcing taxpayers to finance her lavish lifestyle.  For example, she has a chauffeur paid $94,000 a year and paid an office employee $57,000 a year a clean her office.  Both are so-called office workers paid for by taxpayers.

She also set up to have three homeowner exemptions on three different pieces of property, something that is against state and county law.  She made this “mistake” for eight years until exposed by the IL Better GovernmentAssociation.  In spite of all these faux pas, she did not resign.  And Congressman Luis Gutierrez paid only $274 in 1998 for his property taxes when his neighbors paid up to $5,000 for an identical piece of property.  Both Luis and his neighbors live in identical townhouses built by the same builder.

In a form of the old-fashioned shakedown, the two most powerful politicians in Illinois, Chicago – Alderman Ed Burke, who happens to be chairman of the City Council’s Finance Committee, and House Majority Leader Michael Madigan – earn millions a year from their law firms.  The most lucrative part of their law practice is winning property tax appeals.  Their have very high success rates, particularly for big-dollar clients who want to save tremendously on their property taxes.

A growing number of people are losing their homes to fraudulent tax lienprocedures.  Stories come from all over the country, and the federal government has convicted some county treasurers of conspiring with realtors, lawyers, and judges to rig phony homestead exemption fees, late fees, and penalties.  This scheme seems to be growing.  Fortunately, since it involves federal investigations and prosecutions, it is largely immune to local political connections.  While this is taking place all over the country, the county treasurer of Madison County, Illinois was involved in rigging auctions to purchase homes for tax liens.  His friends and campaign contributors were the beneficiaries of a scheme that involved over 2,000 properties.

Another version of property tax power is demonstrated through the special property tax waivers given to corporations who move into cities or states.  New York State, for example, is apparently finally admitting that its high taxes can discourage job creation and is using taxpayers’ dollars to fund a national TV and radio ad campaign to tell those who move to New York State that they will be relieved of property tax liability for ten years.  This may be disconcerting to those who have struggled to keep their businesses open while paying the high taxes of the state.  It’s similar to the DREAM Act grants given to illegal immigrants that are not given to legal citizens and lifetime residents of states whose parents paid state property taxes and income taxes all of their lives.

These practices are not unique to Chicago, Cook County, and the State of Illinois.  These areas merely provide a good study of the possibilities of corruption.  Property taxes are used by the political elites in every way imaginable, and they make it a goal to come up with new avenues of corruption.

These abuses can be found just about anywhere in the U.S., but the Democratic Party has a particular affinity for them.  The largest cities are run by Democrats, and they have reigned since 1932, the beginning of FDR’s New Deal programs, in these cities.

This long one-party reign has prompted the second, and more damaging, type of property tax abuse: the use of property taxes to keep Democrats in power.  It is more than fair to accuse Democrats of using property taxes to stay in power, since the national teacher unions, SEIU, and AFSCME give the great majority of their campaign money, much of it obtained through property taxes paid for by middle-class homeowners and renters, to the Democratic Party.

Those liberal media types who go into rages over how Halliburton may affect the Republican Party or the Koch brothers may share their personal wealth with politicians running for office seem to turn the other way when the very people they claim to protect, the working classes of the country, are forced to support Democrats through property taxes.

For example, in Cook County, IL, 60% of the property tax bill goes to education.  There’s more.  Democrats use the property tax system to promote their political agenda as well.  Illegal immigrants who move into the city pay much lower property taxes.  After all, if they are doing low-paid jobs no one else will do, no one can expect them to be able to afford to live in the city without extensive property tax subsidies.  This raises the level of property tax bills for all the legal citizens, white, black, Asian and Hispanic, who are stuck living in the county.

And property taxes finance local elections, state elections, national elections, and policymaking through the shadow party of public sector union employees.

And of course the State of Illinois, which sets up this entire arrangement, now has the lowest credit rating of all fifty states, just one step above junk bond status, with its debt estimated by Moody’s to be $205 billion.  This does not include the debts of the County of Cook and the City of Chicago.

It is generally recognized that exploiting others requires a position of domination.  Then this position can be used to create the power to take wealth from others.  This wealth is used for more political power, cleaning ladies, and personal chauffeurs.  And the way this exploitation is accomplished today is largely through property taxes.  In fact, one can use the property tax test to prioritize the initiatives of the Democratic Party: anybody who gets a property tax break is part of their up and coming strategy.  Anyone who doesn’t pays for those who are members of the party avant-garde.



Written by Leatherneck Blogger

July 27, 2015 at 05:00

Posted in Taxes

Obergefell v. Hodges and Tax Exemption for Churches

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By Lee Cary

The Supreme Court decision on same-sex marriage settled little. It merely launched a bigger struggle over the definition of marriage.

Now, resistance to Obergefell v. Hodges will join Roe v. Wade in becoming another, long-tailed comet moving across the socio-political skies of America.

A third, landmark Supreme Court initiative waits over the horizon. It will involve the 2nd Amendment. Perhaps not soon, but coming.

Following Obergefell v. Hodges, much discussion now centers on the potential loss of tax-exempt status to churches that resist.  Same-sex marriage zealots will look for opportunities to cement the Court’s decision by forcing churches, through the lower courts, to perform same-sex marriages.

Either they do it – the churches – or lose it (their tax-exempt status).

Meanwhile, denominational hierarchies will huddle behind closed doors and examine options beyond compliance or non-compliance when their doctrine clearly forbids clergy to conduct marriage ceremonies for any couple other than one man and one woman.

The Roman Catholic Church will, of course, be the lead ecclesiastic actor in this drama.

The federal government is unlikely to undertake a frontal assault on Roman Catholics, but it could move aggressively against one of the smaller, less financially endowed, Protestant denominations. Or, it may act against a very large, independent congregation.

When a church refuses to perform a same-sex marriage, the threat will be to remove the organization’s tax-exempt status.  If the entire denomination, or a territorial division of the whole, supports an individual congregation that refuses to comply with what plaintiff’s lawyers will represent as a same-sex couple’s constitutional “right” to have their ceremony performed in the church, the entire denomination may be threatened with the cancellation of its tax-exempt status.

The anticipation of this confrontation will provoke chin-scratching and hand-wringing in the cloistered halls where the officialdom of ecclesiastical bureaucracies deliberates on matters of church and state polity. Risk assessments will be examined, strategies planned, statements released.

Prudent clerics will search for a third way beyond compliance or non-compliance — a compromise way. One with minimum blowback from the laity who fund their institution.

In both state and church, politics is the art of compromise.

It will be at that moment — when the grease is being applied to skid past threats to withhold the institution’s tax-exempt status — when the descendents of Polycarp, 2nd Century Christian Bishop of Smyrna, Turkey, will need to step-up.

Polycarp was martyred about 155 A.D.  He was first burned at the stake, and then stabbed to speed up his dying.

According to the traditional account of his death, before his final ordeal the Roman official asked him, “What harm is there to say ‘Lord Caesar,’ and to offer incense, and all that sort of thing, to save yourself?”

Saint Polycarp replied: “I’m not going to do what you tell me to do.”

The government cancelled his life; he had no tax-exempt status to sacrifice.

His Church, no stranger to strife, was born in adversity. It grew from its courage to resist. It matured by failing to conform.

Over time, as it matriculates into comfort, it grows into complacency, and aligns itself within cultural relativism.

Until, eventually, it ceases to matter.

In the near future, all governments — but particularly the federal one — will search for new and enhanced sources of tax revenue. Churches, called upon to pay their fair share, will have less income as the charitable donation tax-deduction is phased out. Obergefell v. Hodges may accelerate that process.

As that happens, the call for fairness should, also, be addressed to endowed private universities and tax-exempt foundations. They are, at least, as much recipients of favored government treatment as the welfare mother with six kids. And much less needy.

Those that worry about the fate of the Church without tax-exempt status do so without cause.

When, after years of separation, Joseph of the Old Testament was reunited with his brothers who sold him into slavery, they feared he would seek revenge, even though he had flourished in Egypt. He allayed their fears saying, “You meant it for evil, but God meant it for good.”

If churches lose tax-exempt status because of non-compliance with government edicts mandating they perform same-sex marriages, then whatever the government’s intentions, the end result will be good for the church. Or, better than good.

Lee Cary, a frequent contributor to the American Thinker since 2007, is a retired United Methodist Church minister, and holds Master’s and Doctorate degrees in Theology.

Written by Leatherneck Blogger

July 24, 2015 at 05:00

Posted in Taxes

This State Created Jobs and Surpluses Through Tax Cuts

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By Stephen Moore

Four years ago, North Carolina’s unemployment rate was above 10 percent and the state still bore the effects of its battering in the recession. Many rural towns faced jobless rates of more than 20 percent.

But in 2013, a combination of the biggest tax rate reductions in the state’s history and a gutsy but controversial unemployment insurance reform supercharged the state’s economy and has even helped finance budget surpluses.

As Wells Fargo’s Economics Group recently put it: “North Carolina’s economy has shifted into high gear. Hiring has picked up across nearly every industry.”

The tax cut slashed the state’s top personal income tax rate to 5.75 percent, near the regional average, from 7.75 percent, which had been the highest in the South. The corporate tax rate was cut to 5 percent from 6.9 percent. The estate tax was eliminated.

Next came the novel tough-love unemployment insurance reforms. The state became the first in the nation to reject “free” federal payments for extended unemployment benefits and reduce the weeks of benefits to 20 from 26. The maximum weekly dollar amount of payments, $535, which had been among the highest in the nation, was trimmed to a maximum of $350 a week. As a result, tens of thousands of Carolinians left the unemployment rolls.

In an interview at the governor’s mansion, Gov. Pat McCrory tells me that when he took office in January 2013 he looked at the data and knew “we couldn’t stay on the course we were on. We had the highest unemployment benefits and yet at the same time businesses were routinely complaining they couldn’t find workers until benefits ran out. We heard a lot of stories of workers waiting until benefits ran out before going back to work.” In sum, the state was paying people not to work.

While these measures were passing the legislature, the state capital boiled over with rancorous political rallies, called Moral Mondays, designed to block the “cruel” GOP agenda. Rev. William Barber II, one of the protest organizers, lambasted Republicans for making the Tar Heel State a “crucible of extremism and injustice.” The national media piled on with claims that the Republican agenda cut taxes for the rich while slashing benefits for the poor.

Then a funny thing happened. After a few months, the unemployment rate started to decline rapidly and job growth climbed. Not just a little. Nearly 200,000 jobs have been added since 2013 and the unemployment rate has fallen to 5.5 percent from 7.9 percent. There is a debate about how many of North Carolina’s unemployed got jobs and how many dropped out of the workforce or moved to another state. But the job market is vastly improved and people didn’t go hungry in the streets. On the Tax Foundation index of business conditions, North Carolina has been catapulted to 16th from a dismal 44th since 2013.

The most recent news will make many other governors jealous. The state didn’t take the extra federal benefits — which require repayments later to the feds — and it cut the weekly benefits. So the state government has been able to pay back $2.8 billion in unemployment insurance money owed to the feds, and it now has a trust fund surplus. This means it will be able to provide employers with at least $500 million in cuts from the state and federal unemployment tax on payroll over 18 months.

This comes at a time when other states are having to raise payroll taxes to pay off the loans for the rich benefits they doled out in the recession and its aftermath. The lesson: Handouts from the feds are never free.

An even bigger surprise — even to supporters — is the tax cut’s impact on revenue. Even with lower rates, tax revenues are up about 6 percent this year according to the state budget office. On May 6, Gov. McCrory announced that the state has a budget surplus of $400 million while many other states are scrambling to fill gaps.

This is the opposite of what has happened in Kansas, where jobs have been created but revenues have fallen since the top personal income tax rate was cut from 6.45 percent in 2012 to 4.6 percent today and the income tax for small business owners who file as individuals has been eliminated. North Carolina’s former budget director, Art Pope, says one difference between the two states is that “we cut spending too. Kansas didn’t.”

The story gets better. Because North Carolina built in a trigger mechanism that applies excess revenues to corporate rate cuts, the business tax has fallen to 5 percent from 6.9 percent, and next year it drops to 4 percent.

You won’t hear much about this in national news media, where the preferred story line is that tax cuts don’t work because they were followed by budget deficits in Kansas. In North Carolina, policies to reduce taxes and stop paying people for not working have created jobs and surpluses. Pope says: “I wish people criticizing Kansas would look at what’s happened here.”

Republished from The Daily Signal.

Written by Leatherneck Blogger

July 23, 2015 at 05:00

Posted in Taxes

IRS defends giving tax refunds to illegals who didn’t pay any taxes

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There’s plenty to be mad about with Obama’s executive orders on immigration. But this ruling by the IRS that illegal aliens who didn’t pay any taxes or file a tax return can recieve a tax refund on monies they never paid is about as outrageous as a government action can get.

Washington Times:

The IRS is defending its decision to let illegal immigrants claim up to three years’ refunds on income even if they never paid income taxes, telling Congress in a new letter last week that agency lawyers have concluded getting a Social Security number triggers the ability to go back and ask for previous refunds.

President Obama’s new deportation amnesty could grant Social Security numbers to as many as 4 million illegal immigrants, making many of them eligible for tax refunds under the Earned Income Tax Credit even for years when they cheated on their taxes, by working off the books and not filing tax returns.

“Section 32 of the Internal Revenue Code requires an SSN on the return, but a taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed,” IRS Commissioner John Koskinen wrote in his letter to Sen. Charles E. Grassley on Wednesday.

The IRS’s chief lawyer had reached that conclusion in 2000, and the agency has newly confirmed it, Mr. Koskinen said.

Mr. Grassley called that a mockery of the law and said he will try to write a bill specifically prohibiting it.

“The tax code shouldn’t reward those who broke our immigration laws,” the Iowa Republican and chairman of the Senate Judiciary Committee said in a statement.

The tax issue has become one of several flash points over Mr. Obama’s deportation amnesty, which grants tentative legal status, Social Security numbers and work permits to illegal immigrants who qualify. The newly legalized workers would also likely be eligible for driver’s licenses, and could even be more attractive than native-born workers to some employers trying to figure out ways to save money under Obamacare mandates.

Mr. Koskinen has previously said that illegal immigrants must be able to prove they worked off-the-books in order to claim the EITC, and it’s unclear how many of the population Mr. Obama is aiming to cover would be able to offer such proof.

The three-year time frame is part of general tax law, allowing anyone who didn’t file to go back and claim a refund for up to three previous year’s worth of taxes.

How does this encourage illegals to pay taxes? Or go home, for that matter. Perhaps threatening to prosecute illegals who work off the books and don’t pay taxes would be better than beefing up border security..

But no, we have to coddle them.

Here’s another quirk in the law:

But the IRS lawyer’s ruling creates an odd circumstance where illegal immigrants who cheated by not paying taxes before can see if they would benefit from refunds. If they do benefit, they could file, but if they don’t benefit they could continue to avoid taxes for those years.

Mr. Obama’s new amnesty program does not require payment of back taxes.

During the debate over the Senate’s immigration bill, Senator Grassley and others demanded that before illegals could be put on a path to citizenship, they must pay back all the taxes they owe. But Democrats scotched that idea. And the president couldn’t include it in his executive orders because it’s not the executive’s place to say who has to pay how much in taxes.

Or is it?

White House Press Secretary Josh Earnest confirmed Monday that President Obama is “very interested” in the idea of raising taxes through unitlateral executive action.

“The president certainly has not indicated any reticence in using his executive authority to try and advance an agenda that benefits middle class Americans,” Earnest said in response to a question about Sen. Bernie Sanders (I-VT) calling on Obama to raise more than $100 billion in taxes through IRS executive action.

“Now I don’t want to leave you with the impression that there is some imminent announcement, there is not, at least that I know of,” Earnest continued. “But the president has asked his team to examine the array of executive authorities that are available to him to try to make progress on his goals. So I am not in a position to talk in any detail at this point, but the president is very interested in this avenue generally,” Earnest finished.

As recently as last November, the president said that he couldn’t raise taxes by executive order. So I guess his position on that is “evolving.”


Written by Leatherneck Blogger

July 22, 2015 at 05:00

Posted in Taxes

Taxing Patriots — Liberty v the U.S. Tax Code The Greatest Threat to Liberty Is the Power to Tax

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By Mark Alexander

“The people of the U.S. owe their Independence and their liberty, to the wisdom of descrying in the minute tax of 3 pence on tea, the magnitude of the evil comprised in the precedent.” —James Madison (1823)

It is no small irony that in the same week we observe Patriots’ Day — the opening salvos at Lexington and Concord to establish American Liberty — working Americans also endure the April 15th deadline to forcibly surrender a growing portion of our earned income to a gravely bloated central government, which redistributes much of that income to ensure public support for its malignant growth.

Excessive and unjust taxation led to the first American Revolution, and our government today appears heedless of that history as it seizes income for purposes clearly not authorized by our Constitution. Much of that income is redistributed to Democrat constituents in return for their political allegiance that, in turn, drives more growth and redistribution. This cycle is perilous to Liberty.

This year, American Patriots had to work, on average, the first 114 days of 2015 to cover their federal, state and local tax burdens. Of course, that doesn’t include the additional days of work required to pay the hidden regulatory tax — the cost of regulations built into consumer products and services — which adds about another 30 days of labor.

To put the redistribution of your income in perspective, let’s review the history of income taxes, the control government drives from the power to tax, and the resulting contest between free enterprise and socialism.

On December 16th, 1773, “rebels” from Boston, members of a secret organization of American Patriots called the Sons of Liberty, boarded three East India Company ships and threw 342 chests of tea into Boston Harbor. This iconic event, in protest of oppressive taxation and tyrannical rule, is immortalized as “The Boston Tea Party.”

Resistance to the British Crown had been mounting over other taxes — the 1764 Sugar Act, 1765 Stamp Act and 1767 Townshend Act — which led to the Boston Massacre and gave rise to the slogan, “No taxation without representation.”

But it was the 1773 Tea Act, under which the Crown collected a three-pence tax on each pound of tea imported to the Colonies, that instigated the first Tea Party protest and seeded the American Revolution. The Tea Party uprising galvanized the Colonial movement opposing British parliamentary acts, as such were a violation of the natural, charter and constitutional rights of the British colonists.

Oppressive taxation was the catalyst for our Declaration of Independence in 1776 and the American Revolution.

The first alliance between the states was the Articles of Confederation in 1781.

That alliance and enshrinement of Liberty were then more functionally codified with the full ratification of our Constitution in 1789 and the appending of Ten Articles, known collectively as The Bill of Rights, which were ratified in 1791. (I should note here, though the Bill of Rights is commonly referred to as “the first ten amendments,” it is important to distinguish articles from amendments. The former are an integral part of our Constitution, while the latter modify parts of our Constitution. The addition of the Bill of Rights was the source of hotly contested debates among our Founders. Many objected to listing the innate Rights of Man, which are ““Endowed by our Creator”, because such listing might convey that those indigenous rights are somehow subject to amendment by man.)

Our Founders were uniformly concerned about government power to lay and collect taxes, most notably direct taxation of income, and, accordingly, they enumerated specific limitations on taxing and spending.

James Madison, the author of the Constitution, addressed the issue of unlimited spending, and he warned that misconstruction of “the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States” would result in “an unlimited commission to exercise every power which may be alleged to be necessary for the common defence or general welfare.”

To ensure that federal taxation would be limited to these constraints, Article I, Section 8, Clause 1 of our Constitution (the “Taxing and Spending Clause”), as duly ratified in 1789, defined the “Taxes, Duties, Imposts and Excises,” but Section 8 required that such “Duties, Imposts and Excises shall be uniform throughout the United States.” This, in effect, limited the power of Congress to impose direct taxes on individuals, as further outlined in Section 9: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.”

That constitutional limitation survived until 1861, when the first income tax was imposed to defray Union costs of the War Between the States. That 3 percent tax on incomes over $800 was sold as an emergency war measure. In 1894, congressional Democrats tested the Constitution again, passing a peacetime tax of two percent on income above $4,000. A year later, that tariff was overturned by the Supreme Court as not complying with the limitations set forth in Article 1.

However, the most devastating insult to economic Liberty was dealt by the father of American socialism, Woodrow Wilson, who was elected due to his mastery of classist rhetoric as outlined by Karl Marx’s Communist Manifesto in 1848. Wilson used that rhetoric to gain rapid passage of theSixteenth Amendment in 1913, which specified, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

“From whatever source derived” indeed.

The top tax rate levied under the new Amendment was 7 percent on incomes above $500,000 (about $13 million in 2014 dollars), but today, almost every individual with an income of $25,000 or more (less than $1,000 in 1914 dollars) is taxed. If Wilson had attempted to impose his tax on incomes of $1,000, a second American Revolution would have commenced immediately. But, like most usurpations of Liberty, the income tax levy has avoided insurrection by incremental imposition on ever-broader income groups over the last century.

As Madison warned, “I believe there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power, than by violent and sudden usurpations.”

The Sixteenth Amendment has been used to enact unequal and discriminatory taxation of targeted groups of income classes — “progressive” taxation as it is known, which resulted in classism and the bulwark of all socialist movements, “class warfare.” It opened the floodgates for populist executives and legislators to enact taxes for expenditures not expressly authorized by our Constitution, and thus brought about the end of limited government under Rule of Law in favor of the rule of men.

The most notable of those populists was Franklin D. Roosevelt, a wealthy aristocrat. At the onset of the Great Depression, he instituted a plethora of policies that further challenged constitutional limits on our government, the cost of which would, today, threaten our nation’s economic solvency.

FDR’s economic and social solutions were shaped by his upbringing as an “inheritance welfare liberal” (those raised dependent on inheritance rather than self-reliance). He used the Great Depression as cover to redefine and expand the role of central government via countless extra-constitutional decrees, and he expanded Wilson’s program for redistribution of wealth in order to fund such folly.

Roosevelt proclaimed, “Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.”

If that language sounds somehow familiar, it is because that “American principle” is essentially a paraphrase of Karl Marx’s communist maxim, “From each according to his abilities, to each according to his needs.”

Roosevelt’s “principle” had no basis in Rule of Law or the principles of free enterprise, and consequently, his New Deal policies and programs set the standard for extra-constitutional government expansion funded by wealth redistribution under what is the central government’s most oppressive weapon: The U.S. Tax Code.

As Chief Justice John Marshall put it in McCulloch v. Maryland (1819): “An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation.”

Nearly a century later under Wilson, government began to nibble around the edges. Today, it gobbles wholesale.

The net effect of this expansion was and remains the abject violation of our Constitution’s Article Ten: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The resulting corruption of constitutional Rule of Law by the rule of men has propagated a persistent and perilous assault on Liberty.

The ability to impose direct taxes to support a welfare state was anathema to our Founders and theEssential Liberty they fought so hard to secure for their posterity.

Of government welfare programs, Madison wrote, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents. … Charity is no part of the legislative duty of the government.”

Neither Article 1, Section 8 of our Constitution nor its Sixteenth Amendment gave Congress the authority to collect taxes for bailing out banks, mortgage institutions, or automakers, or to subsidize production or service sectors like health care, or to fund education and welfare, or to issue tens of thousands of earmarks for special interest “pork” projects.

Nor is Congress authorized to institute countless conditions for the redistribution of wealth in its nearly 75,000 pages and four million words of tax code alone, or to impose millions of regulations on everything from carbon emissions to toilet water volume.

Madison’s wisdom notwithstanding, at the dawn of the 21st century, more than 70 percent of the federal budget would be allocated for “objects of benevolence” for which there is no original constitutional authority.

By 2010, taxes on the top 50 percent of income earners totaled almost 97 percent of government revenue, while some 40 percent of Americans bore virtually none of the cost of government. Much more ominous is the fact that almost 35 percent of Americans are now utterly dependent upon government largess. Thus, they are predisposed to vote for the redistribution of others’ incomes rather than work for their own. Indeed, in the words of socialist playwright George Bernard Shaw, “A government which robs Peter to pay Paul can always depend on the support of Paul.”

Despite its massive and unauthorized confiscation of our wealth, the federal government can’t seem to get enough. When George W. Bush took office in January 2001, our national debt was $5.8 trillion. Today, under Barack Hussein Obama, it is $18.1 trillion and skyrocketing. What is most unconscionable, however, is that we are obligating future generations for the repayment.

Of such debt, Jefferson concluded, “The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

This year, working Americans will pay almost $5 TRILLION in taxes to federal and state governments. But the federal government still runs a regular deficit, and the national debt per taxpayer amounts to $155,000. To put that in perspective, if the average family budgeted like the government, they would spend more than $60,000 on income of $52,000, even though they are already almost $310,000 in debt. There is not a government revenue problem. There is a government spending problem.

Under siege of such oppressive taxation and debt accumulation, can the Republic survive? Can Liberty endure?

In answer to that question, Benjamin Franklin said, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

This tax and debt burden most assuredly will, in the end, break the back of free enterprise and replace it with the statist policies of Democratic Socialism. The only way to sustain Liberty and prosperity, and thwart the “fundamental transformation” of our nation into economic decline, rests on the ability of conservatives to offer articulate rebuttal to the Left’s “tax fairness” rhetoric.

And not a minute too soon…


What 2016 Presidential Candidates Need to Know About Tax Reform

Republican House Tax Restructuring

Republican Senate Tax Restructuring

Where Your Tax Dollars Go

State and Local Tax Rates

Breaking the Budget

Pro Deo et Constitutione – Libertas aut Mors
Semper Vigilans Fortis Paratus et Fidelis

Written by Leatherneck Blogger

July 21, 2015 at 05:00

Posted in Taxes

We Must Rally Behind the Kleins

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Sorry folks, I just cannot let this go. Every fiber of my being screams out in outrage. I don’t know what to do, but We the People must do something! Our side is composed of Conservatives, Christians, and true patriots with brilliant minds. Surely, we can come up with a solution to defeat a handful of evil Leftist arrogant tyrannical Oregon government bullies.

In case you were abducted by aliens and just returned to earth (I watched the movie Close Encounters yesterday), Christian bakery owners Melissa and Aaron Klein, were fined $135K and state ordered not to speak publicly about it. The Kleins’ crime is refusing to bake a cake for a lesbian wedding.

Now get this folks: the Kleins served their lesbian client on numerous occasions. But, the Kleins’ religious faith forced them to decline from doing anything in support of a behavior that is contrary to the Word of God. That is the Kleins and our First Amendment right.

Leftists have masterfully entrenched the absurd claim that not supporting a behavior is the same as “discrimination” against a person. Oregon officials figuratively told the Kleins, “screw your rights; comply or suffer economic death”.

Who are these Oregon officials who think they can give the Constitution and 220 million Christians the finger and get away with it? Brother and sister patriots, we cannot let this go unabated; literally stand by and watch Christians slaughtered right before our very eyes.

Donald Trump said his rising presidential poll numbers confirm America’s “silent majority”. Rush Limbaugh asked why are we not seeing proof of their existence; push back against SCOTUS redefining the thousands of years old definition of marriage, the bullying of the Kleins and so on?

Explaining his point, Rush cited when Obama sent busloads of illegals toMurrieta, California. Local residents rose up in protest and would not allow the buses to unload. Why are we not seeing that kind of resistance against the Left’s government minion’s full court press, no-holds-barred assault on our freedom?

I will not give the ministers’ names because I think it is unproductive to beat up on people on our side. Focus on defeating our Nemesis, not each other. In response to SCOTUS unlawfully and outrageously cramming same sex marriage down America’s throats, I heard a few TV preachers say let’s not over react. It is just the world acting like the world.

It felt like the preachers were conceding the point, advising us to speak gently about the topic. Let’s just keep our beliefs safe and warm within the walls of our churches. Well guys, the Left “ain’t” gonna allow Christians to do that.

When a reporter asked a homosexual activist attorney will there be a “ceasefire” now that they have been given the right to marry, the attorney said absolutely not. She said that while they respect religious rights, they will continue to fight for gays to have the cakes and flowers they want. Do you see the insidious crafty way the attorney solidified the Left’s determination to force Christians to act against their faith? Who in the world is stopping gays from having the cakes and flowers they want? Nobody.

The totalitarian attorney is really saying they will not rest until every Christian is government mandated to fully embrace homosexual behavior.

Rush quoted this famous chilling poem by Pastor Martin Niemoller.

“First they came for the Socialists, and I did not speak out – Because I am not a Socialist.

Then they came for the Trade Unionists, and I did not speak out – Because I am not a Trade Unionist.

Then they came for the Jews, and I did not speak out — Because I am not a Jew.

They they came for me –and there was no one left to speak for me.”

What am I saying? I am saying if we passively allow the Left to destroy the Kleins, we are next!

I thought another “Dan’s Bake Sale” style rally in Oregon might be in order for the Kleins. Imagine, multiple thousands showing up in support of the Kleins and protesting the Left’s unconstitutional tyranny. We would need someone with a big platform like Rush to pull it off.

As I stated earlier folks, I prayerfully covet your ideas and solutions. All I know is We the People can not simply stand idly by and allow what is happening to the Kleins go unabated. Quoting the heroic Todd Beamer, “Let’s Roll!”

Lloyd Marcus, The Unhyphenated American

Chairman, Conservative Campaign Committee


Written by Leatherneck Blogger

July 20, 2015 at 05:54

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