Categories
Thoughts

Where’s my money?!?

The IRS is still holding my money and there doesn’t seem to be a sign on when they’ll send it back. Maybe they’re having trouble finding enough cash because of all the trillions upon trillions we’re spending. At least I’m not alone.

This year a host of problems rooted in the Covid-19 pandemic have led to unprecedented customer-service problems at the IRS. They include delayed processing—and refunds—for millions of 2019 and 2020 returns, a frustrating inability to reach the IRS by phone, and 260,000 notices saying taxpayers failed to file 2019 returns when they likely had, among other things.

Tax professionals, who have a dedicated phone line to the agency, are also frustrated. “Even with a special line, it’s hard to get the IRS on the phone and it’s taking months to resolve issues that should take weeks,” says Jan Lewis, a CPA with Haddox Reid in Jackson, Miss.

Wall Street Journal
Image by Steve Buissinne from Pixabay
Categories
Thoughts

Illinois Governor JB Pritzker increases pension obligations

JB Pritzker aka Fat Blagojevich

How do you take a pension system that is only 18.4% funded and make it solvent? Well, you make the pensions more generous of course.

Previously, a Chicago firefighter born on or after Jan. 1, 1966, would receive a non-compounding annual 1.5% cost-of-living adjustment to his or her pension, with a lifetime limit of 30%. Firefighters born before that date got a 3% annual increase.

Outside the city, firefighters hired before 2011 receive annual 3% compounding increases to their pensions, while those hired in the past decade receive a less generous increase.

The new law removes the Chicago pension differences based on date of birth, and also eliminates the 30% cap on cumulative cost-of-living adjustments.

Chicago Tribune

I don’t feel so bad reading these stories anymore since I relocated to Georgia. This is why property taxes continue to climb in Illinois.

In a letter to Pritzker in February, Chicagoland Chamber of Commerce President and CEO Jack Lavin argued the change would lead to another property tax increase for city homeowners and businesses.

Chicago Tribune

Pritzker is a buffoon.

Categories
Thoughts

Gwinnett County Tax Commissioner seeks to nearly double salary

Why is it the first thing Democrats do when they get into office is to fleece the taxpayers?

Newly elected Democrat Tiffany Porter proposes to tack on $2.00 per parcel in fees in order to boost her own salary. She was elected in November 2020.

Gwinnett Tax Commissioner Tiffany Porter, who was elected in November, makes $141,098. But a proposal to charge cities $2 a parcel in additional fees would raise her salary by $110,734, according to Lawrenceville City Manager Chuck Warbington.

The increase would make her the highest paid elected official in Gwinnett County.

ajc.com

This mirrors the proposal to double the Gwinnett County chairwoman’s salary. She is also a newly elected Democrat.

Legislators Tuesday rejected a request to reconsider three Gwinnett County bills that would have almost doubled the chairwoman’s salary and remade the elections board.

The rejection came a day after the bills were voted down, 97-70. Rep. Park Cannon, D-Atlanta, reintroduced the bills Tuesday. The second rejection, by a 90-69 vote, means the bills are dead for this session.

ajc.com

Rest assured this will come back. My experience with Democrats in Illinois government means these Democrats will be successful if they are not voted out the next election.

Categories
Thoughts

We’ll pay for that $1.9 trillion handout… in 10 YEARS

Here’s a lesson in how to redistribute $1.9 trillion dollars and say its in balance. Pass a tax bill that, in theory, pays for the redistribution from tax increases OVER 10 YEARS.

The planned increases reportedly include: raising the corporate tax from 21 percent to 28 percent; increasing the income tax rate on people making more than $400,000; expanding the estate tax; paring back tax preferences on pass-through businesses such as limited-liability companies; and setting up a higher capital gains tax rate for individuals making at least $1 million…

As Bloomberg notes, an independent analysis of the Biden campaign’s tax plan conducted by the Tax Policy Center found that it would raise around $2.1 trillion over 10 years.

The Hill

Like this can’t be repealed if the government flips to republican control again.

Here’s an idea. Cut government at all levels and return the savings to the people. The only redistribution we need is from government to the people Stop taking so much of our money in the first place.

Image by Piyapong Saydaung from Pixabay
Image by Clker-Free-Vector-Images from Pixabay
Image by Clker-Free-Vector-Images from Pixabay
Categories
Thoughts

Chicago is so flush with cash it can provide Guaranteed Basic Income to residents

Some genius Chicago aldermen have the brilliant idea to provide a “Guaranteed Basic Income” to city residents.

Alderman Gilbert Villegas, Alderwoman Maria Hadden and Alderwoman Sophia King introduced the resolution to the Committee on Economic, Capital and Technology Development of the Chicago City Council.

“Distributing cash directly to Chicago families would transform life for millions of Chicagoans for generations to come,” Villegas said.

ABC 7 Chicago

The schools that gave them diplomas should be shut down for educational malpractice because these people cannot perform basic addition and subtraction.

The people of the City of Chicago would have to tax each and every taxpayer $41,100.00 in order to eliminate the city’s current debt burden of $36 billion. Hmmm. That’s a little more than the $37,103.00 per capita income according to the U.S. Census. I think it’s gonna be a little difficult to pay that off.

Chicago ranked next-to-last and was labeled a “sinkhole city” in Truth in Accounting’s latest report, “Financial State of the Cities.” The rankings of the nation’s 75 largest cities reflect financial data prior to the COVID-19 pandemic, showing how poorly positioned major cities such as Chicago were for a financial disaster.

The report found Chicago’s net debt – or the amount of money needed to pay its bills after accounting for everything the city owns – was $36.4 billion. That represents a per-taxpayer burden of $41,100, meaning each taxpayer would need to send that amount to the city in order for Chicago to eliminate its debt, earning the city an F for fiscal health. Chicago’s debt per taxpayer increased by $4,000 from the previous year and is 5.5 times the average burden of $7,355 per taxpayer across all 75 cities.

Only New York was in worse shape, with a whopping $68,200 taxpayer burden on $186.7 billion in net debt.

illinoispolicy.org

I lived in the Chicago area for 53 years. I relocated partially because Illinois and Cook County have crushing public pension debts. The debt is so large that the only way out is to tax the bejeezus out of people because the government refuses to do anything to reign in pensions.

Calls for a pension amendment continue to grow louder in Illinois, but Gov. J.B. Pritzker has remained silent on the topic since incorrectly claiming in his budget address last year that an amendment is prohibited by the contracts clause in the U.S. Constitution.

illinoispolicy.org

But wait… there’s more! Chicagoans are also responsible for the state’s pension debt. So each Chicagoan needs to add $52,000 ON TOP of the $41,100 in order to eliminate their debt burden. That’s three times their per capita median income. Stuff that in your pipe and smoke it.

Chicagoans should also know the city debt is not their only liability. Every Illinois taxpayer also owes $52,000to pay all the State of Illinois’ debts, Truth in Accounting reported in September. The $41,100 Chicago debt is on top of the state debt.

illinoispolicy.org
Image by Rilsonav from Pixabay
Categories
Thoughts

IRS halts one man’s circular income generator

A brilliant man walks into a grocery store and buys the maximum number of gift cards he can buy. He does this as often as he can using his American Express card and enjoys the 5% reward for each purchase. In turn he purchased money orders using the gift cards, deposited those back into his account, and paid off the AMEX card and pocketing the difference between his reward and the fees from the gift cards and money orders. All was well until it worked too well.

Mr. Anikeev’s financial-optimization plan in 2013 and 2014—including $6.4 million in credit-card charges—led to an Internal Revenue Service audit and a finding that he and his wife had more than $310,000 in income that should have been taxed.

Wall Street Journal

The government is always watching!!

Categories
Thoughts

Why Georgia needs to remain red

I come from Illinois where the government never met a tax or fee it didn’t like. Living in Illinois for 53 years, never has a proposal been pushed to reduce taxes of any kind. We had one case where the state raised the income tax rate from 3% to 5% then rolled it back to 3.75% for two years. This only happened because the huge percentage increase was shocking to people. But the shock quickly wore off because the state increased it again to 4.95% where it sits today.

This takes me to Georgia where I currently reside. During 2020 when the nation was shut down Georgia cut it’s budget to weather the storm.

… lawmakers cut state spending by $2.2 billion because they feared tax collections would plummet due to the COVID-19 recession.

Atlanta Journal-Constitution

Illinois did no such thing. Georgia instituted a soft lockdown that didn’t completely destroy the state’s economy. Illinois had strict lockdowns all across the state crippling its already virtually bankrupt position. Georgia had better than forecast revenues into the state. Illinois also did better than forecast but the economy still cratered because there were no cuts to spending. Here’s where things get strange for me. Georgia is proposing to return money to the taxpayers.

Almost a year after the COVID-19 pandemic sent the economy tumbling and forced Georgia lawmakers to reduce spending, a revenue recovery has state House leaders looking to cut state income taxes.

House Ways and Means Chairman Shaw Blackmon, R-Bonaire, filed legislation this week to increase the standard deduction Georgians can take when they do their income taxes. By reducing the amount of income taxed, House Bill 593 would cut what’s owed by millions of Georgians who use the standard deduction when they fill out their returns.

“It’s the fairest way to help the most people keep more of their money,” Blackmon said. “If we are able to afford it, we ought to let people keep some more of their money.”

Atlanta Journal-Constitution

What a concept! It’s fair to help people keep more of their money?? I’ve heard of these things happening before but never experienced it. The news story was even fairly reported. Nothing about “how will we pay for this tax cut” baloney. If Georgia becomes controlled by the Democrat Party I will guarantee this state will never see this sort of thing again. The majority of my life Illinois was controlled by the Democrats at almost all levels of government. It resulted in hundreds of billions of dollars in unfunded public employee pensions that are draining the taxpayers dry.

I just might like it here.

Image by Clker-Free-Vector-Images from Pixabay
Categories
Technology Thoughts

Remote work proves the income tax is obsolete and should be abolished

COVID-19 has killed a lot of things. I hope it kills the income tax… at least at the state and local levels.

Let’s say you live in Waterloo, Iowa and work from your home for a company in Manhattan. To what government entity do you owe income tax? New York City and New York State believe you must pay them income tax because the origin of your income comes from their state. But, you never set foot within their borders so how is this legal or just?

However, five states besides Massachusetts (New York, Pennsylvania, Delaware, Arkansas, Nebraska) tax nonresidents working at home. New York requires nonresidents who telecommute for an in-state employer to pay its income tax unless “necessity, as distinguished from convenience, obligate the employee to out-of-state duties.”

If an employee of a New York-based firm chooses to work most days from home in another state, New York still taxes him as if he worked the entire day in Manhattan. In October state tax regulators said there would be no pandemic exception for nonresident telecommuters unless their employer “established a bona fide employer office at [the] telecommuting location.”

So unless Goldman Sachs sets up a satellite office in its bankers’ vacation homes, they will still have to pay New York taxes as long as they work remotely. Welcome to Hotel New York—you can check out but never leave.

Wall Street Journal

You don’t travel their roads, use their public transportation, or use any of their public services so why should you pay their tax? This is why all states, and maybe even the federal government, should abolish the income tax and move exclusively to a consumption tax.

A tax by its very nature reduces the activity of the thing being taxed. It’s why we have “sin taxes”. These taxes are supposed to raise the price of things like cigarettes and alcohol for the supposed purpose of reducing the consumption of those products. The same concept works for the income tax. When you tax income you reduce that activity. People who can will try to change the way they are paid so it doesn’t appear on a W-2 or 1099-MISC. Less income means less tax paid.

Also, think of the complex web of laws that are going to result nationwide as states grapple with what to do. It’s complicated enough to file a personal tax return. Think how much more complex that will be when you have to figure out where every dollar you made came from and pay a remote income tax on those dollars. It’s not only inefficient it’s just plain stupid.

If we move to consumption taxes the way we pay tax is then straight forward. The more you consume the more tax you pay. It’s probably the most fair way to tax a population with varying levels of income. People with higher incomes and more wealth spend way more money than people with less. In addition taxes on necessities like food, clothing, and utilities can be kept very low while taxes on luxury items can be set higher.

This concept also eliminates the penalties for earning more money. If anything it incentivizes people to make more money because they get to keep more of their earnings.

In a world where people lived where they worked income taxes, while to me still unfair, worked. Now they don’t. Let’s get rid of them.

Image by Steve Buissinne from Pixabay
Categories
Thoughts

New York Times preys on American ignorance on business and tax law

The New York Times’ is misleading the public on President Trump’s tax returns because the editors know most Americans know nothing about how business works and how tax law works. If you have ever owned a business or was at least in control of a business you would know that everything the NYT is “exposing” is normal course of business and there really isn’t anything you can truly glean about Trump’s true wealth from what they are showing.

The share of all tax returns subject to an audit declined by 46 percent from 2010 to 2018, according to the Congressional Budget Office. Astonishingly, the decline was even steeper for millionaires — the audit rate fell 61 percent over the same period.

Hmmm… wasn’t Barack Obama President in 2010??
The New York Times

What I’d like to see is an audit of the NYT, it’s editors, as well as President Trump. Let’s see who is taking advantage of the tax code the best!

Everyone should be trying to pay as little in taxes as possible and using every part of the tax law to their advantage. To do anything less is stupid.

Categories
Books Thoughts

The relevance and prescience of “Free to Choose”

I just finished Milton Friedman’s book “Free to Choose”. This book was published back in 1979 when the country went through one of the worst recessions since the Great Depression (Seems to keep happening doesn’t it?). Comically Friedman had the opinion that socialism had been adequately relegated as a failed ideology but what he failed to foresee is the Millennial Generation. He did not know that the parenting philosophies of the Baby Boom Generation would bring back the cycle of socialist utopian ideas.

Given the current state of the nation and the opinions of people under the age of 35, I doubt Milton Friedman is discussed much in political science or economics classes in high school or universities. He should be. This book should be in every curriculum.

The final conclusion in the book says it all.

The two ideas of human freedom and economic freedom working together came to their greatest fruition in the United States. Those ideas are still very much with us. We are all of us imbued with them. They are part of the very fabric of our being. But we have been straying from them. We have been forgetting the basic truth that the greatest threat to human freedom is the concentration of power, whether in the hands of government or anyone else. We have persuaded ourselves that is is safe to grant power, provided it is for good purposes.

Fortunately, we are waking up. We are again recognizing the dangers of an overgoverned society, coming to understand that good objectives can be perverted by bad means, that reliance on the freedom of people to control their own lives in accordance with their own values is the surest way to achieve the full potential of a great society.

Fortunately, also, we are as a people still free to choose which way we should go — whether to continue along the road we have been following to ever bigger government, or to call a halt and change direction.

Milton Friedman – Free to Choose

Consider the democrat presidential candidate debates that just occurred this past week. How many of them stand for personal AND economic freedom? Every single candidate wants more control over your life and your wallet. Sure, it’s all in the guise of doing good things for the “middle class” and the “poor”. But that’s the danger. Centralized control over the distribution of wealth only leads to abuse. Human beings are fundamentally flawed that way.

That’s not to say anything is better on the republican side either. They want to do the same thing through different means. The budget deal that just passed the house and senate is proof that few republicans are interested in restraint with our tax dollars.

We need to ask ourselves what has the ever expanding government done for us? Has it liberated us to pursue happiness? Has it made life better? With all the money we spend on war, on education, on the environment, on subsidies for business and the poor have we ever seen an improvement? It seems to me the larger government has grown and the more money we spend on all these things have only made things worse. Maybe it’s time for a change in direction.

Amazon link to Free to Choose