Tag Archives: Money/Economy/Taxes

Epic Analysis & Predictions

I envision us looking back at this statement with great sadness. Let it not be said that no one tried to prevent what is about about to happen.

I’m glad I was able to find a transcript of Congressman Ron Paul’s statement. Youtube videos sometimes vanish. I’m storing the transcript here.

Ivorian tax-free rebel city flourishes

Too good to last. Some government will soon come and exploit them.

“Here no-one can say to you: ‘No, that’s pirated’ or ‘You can’t sell that here,'” he tells me when I ask if he ever has any trouble from the authorities.

“If we were in the south of the country, you could complain that no customs tax has been paid for example, but when you’re in the New Forces-zone everything can come in and be sold,” he says.

The north of Ivory Coast – an area covering 60% of the country and a zone bigger than England and Wales – remains under the authority of an ex-rebel group, the New Forces, who split the country in two after a rebellion in 2002.

Bouake is the ex-rebel capital of “Soroland”, as the zone is sometimes nicknamed, after the New Forces leader, Guillaume Soro.

. . . .

Things are a lot cheaper than in the south – we see that people from the south often come here to stock up for less

Soroland may not be a breakaway zone, but for seven years the inhabitants of this zone have got used to living without government taxes, customs charges and even water and electricity bills.

Reunification – already under way – will be a challenge to complete.

Hussein Doumbia is one of many local business leaders who have learnt to profit from this vast black market zone.

Members of the government’s armed forces formerly aiming to recapture Bouake now profit from the duty-free shopping. (Read more from news.bbc.co.uk)

No consequences for lying borrowers

The government shouldn’t reward liars. But that’s the effect of changes to the Obama administration’s failing program to help homeowners modify their mortgages.

Until recently the rules were clear: if you grossly understated your income to qualify for the program, you had to restart the loan modification process. It made sense. After all, we got into this housing mess partly because too many people were dishonest about how much they made.

Fast forward to today. The federally funded Home Affordable Modification Program was aimed at getting banks to rework mortgages for homeowners in order to slow the pace of foreclosures. The government set a goal of modifying up to 4 million mortgages over the next three years.

The program isn’t working like it’s supposed to. Since March, just 31,000 homeowners have won permanent relief. One big reason why is that lenders are doing what they should have been doing all along — requiring things like proof of income.

How’s the government responding? By letting homeowners who fudge their income numbers off the hook with little more than a wink and a nod. (Read more from news.yahoo.com)

Rewarding irresponsible people is horrible economics, not to mention morality, but in D.C., political expediency rules all else.

Recovery Propaganda

Leave it to the WSJ to report the truth – and then try to paper over it:

Sales taxes declined 9% to $70 billion in the third quarter compared with the year-ago period, the Census Bureau said. Income taxes plunged 12% to about $58 billion. Together, sales and income taxes make up roughly half of state and local tax revenue.

The WSJ then goes on to opine:

State and local tax revenues tend to lag behind the downturns as well as the upturns in the economy because of the time it takes for collections to catch up with depressed store sales and diminished incomes.

This is true for income taxes.

It is absolutely false when it comes to sales taxes.

As someone who ran a registered establishment for more than a decade that was responsible for filing and paying sales taxes (I signed more returns “under penalty of perjury” than I can count during those years!) I can state that it is an absolute fact that sales tax returns are filed and monies are remitted MONTHLY – if there is an upturn in business – an actual upturn – it shows up NOT MORE THAN ONE MONTH LATER in sales tax receipts. Period. (Read more from market-ticker.denninger.net)

The False Promise of Energy Self-Sufficiency

All the goods and services of modern life are the result of the division of labor carried to immense proportions. Self-sufficiency in anything, whether it be energy or toilet paper, means that we should restrict the division of labor to some extent. Think of our economic world as a bulls-eye. The small dot in the middle would be the goods and services represented by a subsistence economy, such as that of the North American Indian tribes. Small bands of people provided everything they consumed themselves. As capital and the division of labor expand, we move further out on the rings and the size of the economy grows exponentially larger. Instead of hunting our own food and weaving our own clothes, we rely upon the specialized skills of others, who perform only small pieces of the entire process but who perform their process unbelievably efficiently and productively. The division of labor expands to such a degree that we no longer understand how most goods that we consume are produced. We take all this for granted, yet it is a miracle of the free market. The more people engaged in the division of labor, the greater will be the total amount of goods and services available. Of course, the largest possible extension of the division of labor, until we trade with alien worlds, is the entire population of planet earth. (You can be assured that shortly after encountering our first alien civilization, entrepreneurs will be looking for trading opportunities!)

It is clear from this explanation that reverting backward from a more extensive division of labor society to a less extensive one means that society must accept a lower standard of living. There are two main causes for such an unfortunate occurrence—war and misguided economic policy. (Read more from patrickbarron.blogspot.com)

Recovery Propaganda

The surge in commodities “is a reflection of extremely strong demand in the emerging world, and growing hopes of stronger demand in the developed world,” said Jim O’Neill, head of global economic research at Goldman Sachs in London. It is “encouraging so long as it isn’t too persistent.” (From online.wsj.com)

Conspicuously absent is any mention of the gigantic quantities of money being printed all around the word.

The Myth of European Socialism

Euro Zone Grapples With Debt Crisis
The European Commission warns that public finances in half of the 16 euro-zone nations are at high risk of becoming unsustainable

Governments will spend the next year and beyond balancing the urgent need to fix public-sector debt and deficits — without imperiling what appears to be a feeble economic recovery.
(Read more from online.wsj.com)

Commentary by Patrick Barron: Many people support increasing social welfare programs in the U.S. by citing the experience of Europe; that is, that Europe has far more generous welfare benefits than the U.s. and seems to be doing “just fine”. Well, the European Commission itself disputes the long-term viability of many of Europe’s finances.

[But] None of the welfare plans in any of the Eurozone countries are financially sound. They are simply state-sponsored Ponzi schemes that must crash when the demographic reality of a declining birthrate makes their payment impossible.

Three Cheers for the Swiss People

In this great article, Paul Green discusses how Switzerland remains resolutely free and prosperous.

Guns and the military are yet another example. Guns are everywhere – and crime is nowhere. In fact they have at least two of the most peaceful, crime-free cities in the world – according to various online authorities. Zurich even has a half-holiday in October for the “boy shooting” contest and American-style fair where young boys – and girls too – compete with assault rifles at targets.

Notes from the Tax Prof. Blog

The Tax Prof[essor] Blog is one of a collection of blogs by law professors. I love the way Tax Prof Blog exposes the shamelessness with which the tax code is abused to favor the privileged, and the incompetence of our vast government bureaucracies.

Two recent posts:

IRS Cannot Verify Taxpayer Eligibility for 2/3 of $325 Billion of Stimulus Tax Benefits
The Treasury Inspector General for Tax Administration today released Evaluation of the Internal Revenue Service’s Capability to Ensure Proper Use of Recovery Act Funds (2010-41-011):

The Treasury Inspector General for Tax Administration today publicly released its review of the IRS’s ability to verify taxpayer eligibility for tax benefits and credits provided by the American Recovery and Reinvestment Act of 2009.

The Recovery Act contains 56 tax provisions with a potential cost of more than $325 billion that are intended to provide tax relief for individuals and businesses. These include 20 provisions for individuals that provide tax relief to working or retired Americans and their families. Thirty-six additional provisions provide tax relief and incentives for businesses, including provisions that encourage investment in sources of renewable energy and promote the hiring of unemployed veterans. They also allow for the sale of bonds to provide for construction, financing, environmental and manufacturing improvements.

TIGTA found that the IRS is unable to verify taxpayer eligibility for the majority of Recovery Act tax benefits and credits at the time a tax return is processed.

My thoughts: This is further evidence that government “help,” doesn’t. In pandering for support, our overlords have created an unwieldy bureaucracy that mostly helps only the privilege people who have the time, money and power to navigate it. It also keeps armies of tax lawyers and consultants employed in what Bastiat called rent-seeking, and rent-avoidance. If the gargantuan tax code was thrown into the garbage can, more people would employ their talents in the production of goods and services that society actually wants. Instead, time, talent, capital, creative energy is employed in fighting and manipulating the forceful hand of government.

***

Over 275,000 Federal Workers Are Tax Deadbeats

Over 276,000 federal workers and retirees owed more than $3 billion in back income taxes in 2008 (up from $2.7 billion owed in 2007).

The cabinet departments with the largest percentages of employee/retiree tax deadbeats are:

1. Housing & Urban Development: 4.05%
2. Veterans Affairs: 3.91%
3. Health & Human Services: 3.86%
4. Army: 3.76%
5. Education: 3.60%
6. Air Force: 3.25%
7. Defense: 3.16%
8. State: 3.14%
9. Navy: 3.01%
10. Commerce: 3.00%

The agencies and commissions with the largest percentages of employee/retiree tax deadbeats are:

1. National Capital Planning Commission: 10.42%
2. Advisory Council on Historic preservation: 9.26%
3. U.S. Office of Special Counsel: 8.65%
4. U.S. Election Assistance Commission: 8.51%
5. Federal Labor Relations Authority: 7.20%
6. U.S. Commission on Civil Rights: 7.14%
7. Federal Mine Safety & Health Review Commission: 6.82%
8. Government Printing Office: 6.29%
9. Federal Retirement Thrift Investment Board: 5.33%
10. Court Services & Offender Supervisors: 5.23%

Other departments and agencies:

* Federal Reserve Board: 4.32%
* U.S. House of Representatives: 4.17%
* U.S. Senate: 3.19%
* SEC: 2.56%
* U.S. Tax Court: 1.43%
* Treasury Department: 0.98% (the lowest delinquency rate among cabinet departments)

My thoughts: I wonder how these rates compare to national average for the 5/6th of us who don’t work for government. There is a class struggle, but it isn’t between laborers and owners of capital, it is between government workers and those of us who produce goods and services that society voluntarily consumes.

More Fantastic Commentary by Peter Schiff


* Healthcare legislation unconstitutional because it treats citizens of different states differently.
* “Patriot” Act mandates that money managers be agents of the FBI & IRS.
 
 
 

* Sacraficing Security for Liberty
* Ridiculous executive pay for Fannie & Freddie executives. They run bankrupt, government subsidized companies. Congress should regulate these pseduo-government companies, instead of sticking their noses into the business of private enterprises.
* Idiotic Federal Reserve policies to withdraw liquidity and preserve our phony recovery.
* Government propping up home prices. Talking heading claiming recovery.