Rep. Marsha Blackburn addresses tax relief and spending cuts over at Bill Hobbs’ place. I didn’t realize there were still Republicans interested in cutting spending.

Bill Hobbs asks if tax referendums are a threat. It seems Tennessee Tax Revolt is a pain in the butt to people who want to raise your taxes. Good for them.

Via Bob, a judge has ruled:

Requiring voters “to purchase a photo ID card effectively places a cost on the right to vote,” he said, adding that is the equivalent of a poll tax and is unconstitutional.

I concur with Bob. The solution is to eliminate the fee for the ID cards.

Ricky notes that Boortz has taken on Tennessee Reps. Lincoln Davis and Zach Wamp. On Zach Wamp:

I’ve told you that the FairTax would be the biggest transfer of power from politicians to the people since the Constitution was ratified. This may be the true reason Wamp is so opposed. When he ran for his seat in the Congress he promised to serve for only six terms and then resign. Well .. his time is up, and he’s now telling voters that he “made a mistake” when he made that promise.

He’s not going to quit after all. In fact, he sees himself as part of the new leadership in the Congress. What we may very well have here is a congressman who has become addicted to the prestige and power that comes with serving in Washington. This love of political power will be a primary influence on many elected officials who stand in opposition to meaningful tax reform

On Davis:

So … here is another congressman who simply hasn’t read the bill.

Tennessee Governor, and very infrequent blogger, Phil Bredesen has stated he would not seek an income tax. B4B rounds up reactions from the Tennessee blogs.

Bob Krumm notes the sales tax increase in Davidson County was not approved by voters. I loved this quote from Metro Councilman Michael Craddock:

We don’t spend what we’ve got now wisely, so the people have chosen not to give us anymore

The Feds want to make 401(k) contributions mandatory:

The Labor Department says the proposed regulation should give employers who automatically enroll workers in a 401(k) plan some protection from lawsuits if the investment options chosen are “reasonable.” Some companies are reluctant to use automatic enrollment for fear that employees whose investments lost money would sue.

Don’t we already have a compulsory retirement system?

Update: Yeah, the slavery bit in the title was bit much. Uncle sort of pulls a Godwin. Consider it rescinded. However, I think this could be a precursor to requirements for mandating retirement.

It took 8 tries, but the Blount Commission finally got a wheel tax referendum on the ballot. In August 2006, county residents get to decide if they want to get taxed more:

The referendum resolution, which came from the commission’s Financial Management Committee, passed 12-5, with one commissioner passing.

If the measure is approved, the county would begin collecting the tax in January 2007.

I’ll be voting a hardy Hell no and advise my fellow Blount Countians to do the same. The Daily Times rounds up the votes:

With little discussion, Commissioner Bob Kidd’s motion to approve the referendum passed 12-5 with one commissioner passing and three absent.

Voting for the referendum were Commissioners Bob Arwood, Keith Brock, Dennis Cardin, Joe Everett, David Graham, John Keeble, Kidd, Jeff McCall, Kenneth Melton, Chairman Robert Ramsey, Otto Slater and Mike Walker.

Voting against the referendum were Commissioners Gary Farmer, Steve Hargis, Robby Kirkland, Dan Neubert Sr. and Shirley Townsend.

Commissioner Ernie Tallent passed on the vote, and Commissioners Donna Dowdy, Bob Evans and Steve Gray were absent.

Shame on Tallent for not making a decision. And shame on the absent folks for not showing up to do the job people elected them to do. Also, there was some disagreement from the citizens:

Linda King of Citizens for Blount County’s Future spoke against the wheel tax earlier in the meeting, but said after the vote that she was “glad” the issue was at least going to be in the hands of the voters.

“We hope to get the word out to people that a wheel tax wouldn’t be necessary if commissioners would cut waste from the county,” she said. “If they would be conservative with taxpayers’ money, we would already have money for highways.”

One citizen, however, spoke in favor of the wheel tax.

Robert Sliker told commissioners he had spoken with Highway Superintendent Bill Dunlap about how he could use the $1 million generated by a wheel tax to get an additional $4 million in federal grants.

“I’d rather pay 20 percent than the total cost,” he said, comparing the deal to buying one tire and getting the other three free. “I think it’s a very good use of our taxpayers’ money.”

The WaPo doesn’t seem to recall a Republican leader with a pair:

THREE TIMES in the past quarter-century, conservative leaders have promised to restrain wasteful government spending. President Ronald Reagan tried it and showed he was at least half-serious by vetoing the pork-laden 1987 transportation bill. House Speaker Newt Gingrich tried it and risked his party’s electoral standing by battling to restrain the growth in programs such as Medicare. And President Bush has tried it, declaring on numerous occasions that he expected spending restraint from Congress. None of these efforts proved politically sustainable. As The Post’s Jonathan Weisman and Jim VandeHei reported Thursday, Mr. Bush’s attempt at spending discipline has been especially limp.

No party is the party of small government and only the Democrats tried to balance the budget (yeah, it was fedmath but at least they tried it). It’s true.

So, with that in mind, here’s the deal: I am willing to buy my freedom. It’s true, I’ll cave. I yammer on and on about taxes being too high and that I pay too much and that my money pays for a bunch of useless crap. And that’s all true too. But I would gladly pay that price; deal with the 1,395,000 words and 693 sections of the IRS Code; and 20,000 pages of regulations containing over 8 million words from the Treasury department; etc. if I knew that my freedoms weren’t under attack.

But that’s kind of the problem, really. The more they tax, the more resources they have to bureaucratize my freedoms away. And that’s what they do (seriously, 26,911 words dealing with the sale of cabbage?).

I’m willing to let the .gov use my money to pay for all the roads, space programs, indoor rainforests, golf course repair work, etc. that it wants to, if it leaves me alone, stops taking people’s land, stops trying to pass nanny laws, etc. Think that will work?

Looks like Blount County is taking another stab at passing a wheel tax:

Homemade signs, honking horns and a standing-room-only crowd at the Blount County Commission meeting Thursday could not kill the wheel tax.

Commissioners voted 11-9 to refer it to the Financial Management Committee, “where it should have gone to begin with,” said Commissioner Donna Dowdy.

A wheel tax, which failed in December and again in February, was back on the commission’s agenda this month, though there was no corresponding resolution setting an amount or a designation for revenues.

Despite the ambiguity — or perhaps because of it — the wheel tax sparked a rally from the anti-tax group Citizens for Blount County’s Future. About 20 tax foes staked out points around the courthouse for an hour prior to the commission meeting, encouraging other tax opponents to honk horns in protest of a wheel tax. One wore a bumper sticker proclaiming Blount County “the most crooked little county in the South.”

Tax revenue is up even though taxes have been cut.

Bill Hobbs notes that The Tennessean swallowed a press release hook, line and sinker. Bill notes the drug tax is costing more than it’s making (something I’ve already pointed out here many times). However . . .

Bill also says:

The Tennessean editorialized in favor of the tax on illegal drugs on April 14, 2004, and again on Jan. 1, 2005.

Back in December, before the law went into effect, Bill supported the idea and editorialized in favor of it:

This actually works – and is a pretty good idea, though it sounds a bit odd at first. The law will require sellers of illegal drugs to pay excise taxes, just legal businesses. Most drug-pushers won’t comply, of course, but the law can be used to assess back taxes on dealers who are caught by law enforcement, adding an additional financial penalty to their crimes while also bringing in a few extra dollars for the state budget.

In his comments, I told him it wouldn’t work. I was right.

A reader sent me a scan of the Tennessee Department of Revenue Unauthorized Substances Stamp (note: Background on Tennessee’s Illegal Drug Tax can be found here). Here it is:

It has a what I assume is a serial number. I also assume that means this is only the 127th one they sold. It costs the reader $0.50 and a price list can be found here.

I think I may use this as the logo on my AR15 Lower receivers since I only received three entries in my contest (David, Tom, and Cube). Maybe not, that’s probably illegal. Guess none of the readers are photoshoppers.

Update: Say, I wonder if that serial number is tied to anything that could later be used to identify the purchaser? Maybe the security system cameras?

Update 2: Huh?

Tennessee’s unauthorized substances tax has generated more than $600,000 in collections and $15 million in assessments since it took effect Jan. 1.

I assume by collections they mean property seized without due process. Because $600K divided by 127 is about $4,700 per stamp. That is, of course, assuming that the stamps are sequentially issued.

Update 3: The Tennessee Center for Policy research disagrees. A press release I got states:

Read the rest of this entry »

In my home county:

County commissioners will take a $450 per month pay cut in a budget that includes no property tax increase, the Blount County Commission voted Tuesday.

To keep the property tax rate a steady $2.43, however, the county will have to dip into its general fund balance for some $2,584,000.

Commissioners tackled the proposed pay cut — from $900 per month to $450 per month — first thing, with Commissioner Steve Hargis moving to strike it from the appropriations resolution.

Ben Livingston was tracking his efforts to purchase tax stamps on illegal drugs as required by Tennessee law. It starts out with this opening email:

I am interested in purchasing the new illegal drug stamps that Tennessee now offers. I called this morning to purchase some of these, but I was told I could not buy them without travelling 2500 miles to Nashville.

You would generate more revenue if you sold these stamps without requiring purchasers to travel to Nashville. It is likely that this tax is not legal and is instead double jeopardy punishment, especially given that the State of Tennessee will not sell these stamps unless a purchaser physically stands before the Department of Revenue, incriminating themselves in the process. Supposedly the DOR keeps no identifying information on the purchaser, but this additional burden is proof that these stamps are not easily acquired and thus isn’t really a tax but a penalty, which is disallowed by the Supreme Court decision Montana Department of Revenue v. Kurth Ranch, et al.

I am also inquiring on behalf of a disabled friend who would like to buy these stamps. It is possible that your refusal to sell stamps to this person without their physical presence is a violation of the Americans with Disabilities Act. It seem unreasonable to require a wheelchair-bound patient to travel to your office in order to pay their taxes. I am cc’ing W. Alan Beckelheimer of the Crossville Chronicle, where I read about these tax stamps. I am also cc’ing NORML, a marijuana legalization group that was mentioned in some articles I read about the drug tax; I believe your refusal to sell me stamps may help them get this new law ruled unconstitutional.

He’s received responses that are interesting. Worth reading. The correspondence does confirm, as stated here before, that to buy the stamps a person must appear in person at the Department of Revenue Office in Nashville. It’s not a tax or a penalty, it’s a scam.

In August of 2006, Tennessee will have a sales tax holiday. This will be that special time of year where, for an entire weekend, the powers that be acknowledge that sales taxes in Tennessee are ridiculously high and people need a break. If you buy a car during the holiday, you could save a few thousand bucks.

I, of course, advocate buying some guns. But they won’t be exempt because, as with most tax benefit schemes, those without children in school will probably get screwed:

Tax-free items will include clothes and school supplies costing $100 or less, and computers costing $1500 or less. The sales tax holiday does not include software, fashion accessories or sports equipment.

Guess that means no cars, too.

Why Won’t Hilleary Sign the Taxpayer Protection Pledge?

Michael Silence reports that the effort to tax internet sales has been slowed by opposition. Good. The article:

Plans to allow states such as Tennessee tax Internet sales are still a long way off – good news for online shoppers but bad news for a state losing billions in sales taxes.

They’re not losing money. It’s money that was never earned. Some stats:

In Tennessee alone, nearly $500 million is not collected each year in sales taxes on Internet shopping. That’s almost enough to cover a shortfall in the state’s expanded Medicaid program, which the governor has proposed cutting by 323,000 people.

Across the country, more than $21 billion in sales tax is not being collected, according to a University of Tennessee study.

When the Supreme Court decided 13 years ago to exempt mail-order businesses from the tangled web of various state and local tax codes, no one envisioned Internet commerce exceeding $1 trillion.

I see mentioning TennCare and taxes in the same sentence has started early this year.

WBIR reports that Gov. Bredesen wants to take our revenue surplus and give raises to state employees:

In his budget for fiscal 2006, Bredesen has proposed about $44 million for a one percent pay raise for state employees, and earmarked the same amount for a one time one percent bonus. If state revenue stays strong, the governor would like to double the pay increase.

The governor could give everyone in the state a raise by cutting our ridiculous sales tax of 9.25%. Some quick math based on those numbers:

1%X = $44M
X= 4,400,000,000.00

Ok. Looks like the budget for salaries is (at a SWAG) about $4.4B. Per the Census, the Median salary in TN is about $36K. The article states that state employees earn about 20-25% less than average. So, to be generous since governments tend to be top heavy, we’ll call it $30K. So:

$4.4B / 30,000 = 146,667 state employees.

Seems like a lot to me. Of course, my math was quick and riddled with assumptions.

Anyway, cut the sales tax and we all get raises. Spending this surplus is why Tennessee will (in the future) be crying about fiscal crisis and budget woes. Whoever brings up income tax next time should be sacked.

A panel reporting to the President has vowed to revamp the tax code:

Breaux said the recommended options could include an overhaul similar to the sweeping legislation passed in 1986 or perhaps even a “new tax system,” likely featuring a consumption tax, such as a sales tax, or perhaps a flat tax, where all income is taxed at one rate.

The advisory panel issued a strong statement Wednesday calling the current tax code “unstable and unpredictable” and in a “dismal condition,” harming businesses, individuals and the U.S. economy.

“Our tax laws have been compared to an overbuilt and dilapidated house with conflicting architectural styles and a crumbling foundation, a sick patient who is about to expire, and a factory that has been littered with so much garbage that it can no longer operate productively,” the panel said.

Not funny ha ha but funny sad:

So let me get this straight: Lawmakers continue to insist on a Byzantine, gordian mess of a tax code that requires us to spend billions annually on tax advice and preparation.

Yet if you call the IRS and ask for advice, not only are you unlikely to get a reply, if you do, there’s a good chance the advice you get will be wrong, and following it could still get you prosecuted?

Happy fun tax fact:

People scurrying to meet Friday’s tax deadline might consider this: It’s taking you and your fellow Americans 6.6 billion hours to do all that paperwork.

The basic tax return — the Form 1040 filed by most people every year — accounts for 1.6 billion hours.

And, here’s a round up of happy fun tax facts past:

Bribes and kickbacks to governmental officials are deductible unless the individual has been convicted of making the bribe or has entered a plea of not guilty or nolo contendre.

In 1999, taxpayers contacted the IRS for assistance approximately 117 million times.

The Internal Revenue Code consists of approximately 1,395,000 words.

There are 693 sections of the Internal Revenue Code that are applicable to individual taxpayers, 1,501 sections applicable to businesses, and 445 sections applicable to tax-exempt organizations, employee plans, and governments.

As of June 2000, the Treasury Department had issued almost 20,000 pages of regulations containing over 8 million words.

In 2000, there were 129,373,500 returns filed. Of which, 96,817,603 were taxable and 32,555,897 were not.

In 2002 individuals, businesses and non-profits will spend an estimated 5.8 billion hours complying with the federal income tax code (henceforth called “compliance costs”), with an estimated compliance cost of over $194 billion

As of 1998, 32% of individual federal income taxes are needed in order to pay the interest on the national debt.

It is estimated that total income tax receipts in 2003 will be $1,211,843,000,000.

The instructions for filing the Easy Tax Form are 32 pages

At least it’s also buy a gun day. Nothing bought yet, still haven’t decided what I want.

Update: Ravenwood reflects on what he pays for.

More: Foxtrot weighs in.

The Entrepreneurial Mind has more too. Via Bill.

George Will:

[John Linder's] bill would abolish the Internal Revenue Service and the many billions of tax forms it sends out and receives. He would erase the federal income tax system — personal and corporate income taxes, the regressive payroll tax and self-employment tax, capital gains, gift and estate taxes, the alternative minimum tax, and the earned-income tax credit — and replace all that with a 23 percent national sales tax on personal consumption. That would not only sensitize consumers to the cost of government with every purchase, it would destroy K Street.

He notes that K Street defends and complicates the tax code and the corruption of various tax bills by the powers that be. Tax compliance costs alone are several billions. I’m all for it.

However, it will never pass. Congress likes doling out favors using the tax code. The tax law and accounting lobby has a ton of money to fight it. And it would require repeal of the 16th amendment or, mark my words, a few years out we’d have both a sales tax and an income tax.

Regarding Tennessee’s tax on illegal drugs, a commenter over at Michael Silence’s blog writes:

The Department of Revenue claims that to date nobody has attempted to voluntarily pay this tax. I would like to point out that this is untrue.

I attempted to voluntarily pay this tax on January 6, but all of my attempts were rejected by DOR because I am unwilling to travel to Nashville and stand before DOR employees to pay the tax.

This is the only tax in Tennessee that must be paid in person, which serves only to intimidate and unduly burden the taxpayer, discouraging them from paying the tax. Because of this, I believe this is not truly a tax, rather a penalty, which is unconstitutional under the Supreme Court decision Montana Department of Revenue v. Kurth Ranch, et al.

The Department of Revenue should change their tune from “nobody buys them” to “we won’t sell them.”

Actually, I think the tax serves only as an additional charge and fine in the event someone is caught with drugs.

Any of my Tennessee readers know the street value of 42.5 grams of marijuana in Knoxville? Actually, can someone translate that into some useful measure for me too (such as joints)?

I’m not up on drug values since I don’t do drugs but I am thinking of heading down to the local Tennessee Department of Revenue office and buying some of those Unauthorized Substance Tax stamps. You can read the silly tax FAQ at the DOR site here. I’ve talked about Tennessee’s tax on illegal drugs before.

I read the law and it doesn’t make it a crime to possess the stamps and no drugs. Wonder if I could buy them and get a refund? Of course, it’s probably a crime to falsify a tax document. I may just pick up a form and see.

Thanks to Marc for the inspiration.

Update: Thanks to hellbent, I learned that’s about $200 of cheap stuff and a whole lotta joints.

Update 2: A reader obtained a copy of the form you’re supposed to fill out to pay your tax on illegal drugs. Here’s a copy of the form.

I’ve yammered about Tennessee’s stupid new law requiring those that deal in illegal drugs to buy a tax stamp before. It serves only as a tax on stupid people or as another crime to charge someone with in the ever expanding war on drugs. Surprising to no one, is the fact that drug dealers aren’t buying the tax stamps:

In fact, officials said nobody involved with illegal drugs or unstamped liquor has yet taken time to get the required stamps on packages used for their products.

“We haven’t had anybody to date,” said Al Laney, director of revenue enforcement in the Tennessee Department of Revenue. “To tell you the truth, we don’t expect anybody to (ask for a stamp). But we have to afford the taxpayer the opportunity to voluntarily pay.”

Tennessee has long had some odd rules for nudey bars. For example, a bar with naked dancers can’t sell alcohol. Bars get around this by either having the dancers wear see-through pasties on their nipples and thongs. Or they just let their patrons bring in beverages and they charge you price per bottle that you bring in (PSA: if in Tennessee, it’s expensive to take in beer). Now, it’s going to get a bit more odd:

The Tennessee Film Commission is hoping that a plan to tax strip club patrons will raise millions of dollars to lure Hollywood producers to the state to make their blockbuster hits.

So, the tax is to subsidize the making of movies? We want to actually tax regular Joes to pay money to a high dollar industry? No thanks:

”That is awfully dangerous territory,” said Ben Cunningham with Tennessee Tax Revolt, a public interest group. Cunningham is cool on the idea because the money would be raised from a $2 cover charge for every person walking into either an adult bookstore or strip club. In essence, he said, that’s a predatory tax that’s tapping one industry to help support another.

Michael Silence notes that Wheel Tax Bill may be dead. He also has a round up of the issue.

Michael Silence notes a proposed income tax, which is called an Employer Privilege Tax:

Taxes, Privilege – Enacts a 1 percent privilege tax on employer’s payroll and dedicates revenue to funding special payments to certain hospitals and funding some portion of a reenacted Tennessee Comprehensive Health Insurance Pool. – Amends TCA Title 4; Title 6; Title 56; Title 57; Title 67; Title 68; and Title 71.

Blake has more.

In Blount County, no wheel tax for now.

We’re gonna tax ya:

So Just bought a fuel efficient hybrid and said goodbye to his gas-guzzling BMW.

[snip]

And that saves him almost $300 a month in gas. It’s great for Just but bad for the roads he’s driving on, because he also pays a lot less in gasoline taxes which fund highway projects and road repairs. As more and more hybrids hit the road, cash-strapped states are warning of rough roads ahead.

Officials in car-clogged California are so worried they may be considering a replacement for the gas tax altogether, replacing it with something called “tax by the mile.”

Spent the last few days working on my taxes. Bastards. This year, we Tennesseans can deduct sales tax (which was particularly helpful since I bought a new ride this year) so the sting is slightly less than I thought it would be. Still, they’re bastards.

The light at the end of the tunnel is that April 15 is also buy a gun day for Schumer, Feinstein, The IRS, Michael Moore, ad infinitum. The point is to buy a gun because it annoys some people. So, plan accordingly.

CounterTop, noting Aaron is gone, has taken up the reigns to promote it.

Looks like Phil Bredesen isn’t just a Republican in disguise after all:

Gov. Phil Bredesen said he is adamantly against putting a proposed “taxpayer bill of rights” into the state constitution, but he will not actively oppose an amendment to forbid gay marriage.

Questioned during an interview about proposed state constitutional amendments, the governor said he thinks popular election of the state comptroller, treasurer and secretary of state is a bad idea but is less strongly opposed to permanently banning a state income tax.

The “taxpayer bill of rights,” also known by the acronym TABOR, is modeled after a provision in the Colorado Constitution. Bredesen said it is “a disaster” in that state today after “some short-term success” in prior years.

“I think the taxpayer bill of rights is a bad thing that goes to the heart of my ability to operate government day-to-day as opposed to some of the other things that are out there,” he said.

I support anything that limits the government’s ability to tax. Bredesen has brought some long needed fiscal conservatism to Tennessee government. His opposition could indicate the first step in raising taxes or implementing new taxes.

Not content with taxing damn near everything, some lawmakers are looking into vanity taxes:

Lawmakers trying to plump up the bottom line are considering a “vanity tax” on cosmetic surgery and Botox injections in Washington, Illinois and other states.

Bill Hobbs notes that Tennessee will start taxing illegal drugs next year (I’ve mentioned this before). Says Bill:

This actually works – and is a pretty good idea, though it sounds a bit odd at first. The law will require sellers of illegal drugs to pay excise taxes, just legal businesses. Most drug-pushers won’t comply, of course, but the law can be used to assess back taxes on dealers who are caught by law enforcement, adding an additional financial penalty to their crimes while also bringing in a few extra dollars for the state budget.

Depends on what works means. Will it curb illegal drug sales? Nope. Will it generate tax revenue? Unlikely. What will it do? It will give prosecutors another criminal charge (tax evasion) to apply against drug dealers. It will also give the powers that be another justification for seizing assets.

The Blount County (my county) commission is set to have their second and final reading of a proposed $30 wheel tax:

Blount County Commissioners have their second and final reading of a $30 county-wide motor-vehicle tax, or wheel tax, at Thursday’s meeting.

The wheel tax passed on first reading last month. To fund road improvements, commissioners marked $10 of the tax for the county highway department. The other $20 a resident pays will go for school capital projects, like new schools.

County finance department estimates project that the $30 tax would bring in about three million dollars annually in new revenue — one million dollars for roads and about two million dollars for school capital projects.

As with any new tax, I don’t like it.

Smijer has info on the the Tennesseans for Fair Taxation proposal. The state is in trouble but I am inclined to think it’s the spending not revenue side, with TennCare being the perfect example that spending is the trouble. Also, without limiting or eliminating sales tax, the proposed income tax could result in excessive taxation over time.

IRS cleared to employ private bill collectors:

When Reps. Shelley Moore Capito, R-W.Va., and Chris Van Hollen, D-Md., teamed up in September to get the House to pass an amendment blocking the use of private companies to collect back taxes from delinquent taxpayers, it seemed the Bush administration plan might be doomed for at least a year.

But in the final hours of drafting a 3,300-page spending bill last month, House and Senate negotiators eliminated Capito and Van Hollen’s handiwork, clearing the way for the Internal Revenue Service to hire commercial debt collectors. These private agents could keep as much as 25 percent of the amounts they recovered.

I have no doubt that private debt collectors will be more efficient than civil servants but that’s kind of the problem. This seems to open the door for abuse, particularly if compensation for the private collectors is excessively based on money collected. I tend to think a private company may be less inclined to follow appropriate laws of restraint that a government entity would follow.

Land Surveying Weblog notes that Missourians may face increased taxation to regulate well water. Looks like owners of wells would be forced to pay for and install meters and other regulatory stuff.

The GOP is discussing the idea of a national sales tax:

President Bush and House Speaker Dennis Hastert have both said the idea of a national sales tax deserves a serious look. For many, the idea of a world without the Internal Revenue Service is very seductive.

“We spend about $400 billion a year complying with the tax code. We spend $200 billion a year just filling out IRS paperwork,” said Rep. John Linder, R-Ga., who has proposed a bill that would create a national sales tax.

Proponents have spent millions on research and have concluded that a national sales tax can replace the income tax, payroll tax, estate tax and corporate tax. Advocates say the new tax would lower the cost of manufacturing and job creation and attract foreign investments, among other things.

“If we were to get rid of the sales or the income tax and the payroll tax and all compliance costs, we would be so ferociously competitive in a world economy that corporate America would not be competed with unless foreign corporations started building their plants in America,” Linder said.

Other Constitutional issues aside (i.e., is sales tax justifiable), I oppose such a proposal unless it calls for the repeal of the 16th amendment. If the sales tax passed and the sixteenth was not repealed, it would only be a matter of time before we were hit with both. After all, it’s happened in many states exactly like that.

It would eliminate compliance costs and put some accountants out of business. It would also create new forms of tax evasion. Conversely, people (not just the rich ones) could control their tax burden by controlling spending and the immediate effect would be to put money back into the economy as folks wouldn’t be paying employment taxes or having their payroll checks hit.

Some East Tennessee election coverage:

Jamie Hagood is decimating her opponent.

Surprisingly, the wheel tax passed in Knoxville (what were you suckers thinking?).

And, more importantly, you will soon be able to get liquor by the drink in Alcoa.

I’m over in the WBIR chatroom hearing that the wheel tax vote is going to be defeated. Looks like property tax hikes for Knoxvillians.

Update: Surprisingly, the wheel tax passed.

LA, which apparently needs money, is trying to scare it out of people:

The measure would raise the sales tax in Los Angeles to 8.75 percent, among the highest rates in the nation. It is intended to pay for the addition of 5,000 new police officers to the 22,000 who now work for the city police and county sheriff’s departments.

Opponents of the initiative argue that local leaders are pushing it as a quick fix and lack the political will to deal with larger and more divisive issues facing the region, including an overwhelming wave of illegal immigrants and nearly broken-health care system.

But most galling to the opponents is a commercial that shows a woman and her daughter cowering next to a bed in a suburban home, screaming helplessly for police who are too late to save them from a shadowy intruder slowly climbing the stairs.

The ad ends before the little girl and her mother meet their presumably violent fate. It fades to black as the woman screams “No!” — followed by the sound of a heartbeat and empty dial tone.

That’s pretty abysmal.

This article, unlike others, actually tells us what the tax bill does. Of special note:

Residents of states without income taxes will be allowed to deduct state and local sales taxes from their federal income returns. This will primarily benefit people in Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, all of which have a state sales tax, and Alaska, which has local sales taxes but not a state sales tax. Cost: $5 billion for a deduction that would last until Dec. 31, 2005.

Start saving your receipts.

When not being grossed out by a particular type of porn he finds offensive yet won’t describe (I think it involves lots of guys, a girl and probably a tarp; or at least a lot of moist towelettes. – Ed.), Clayton Cramer talks about taxes:

Remember: an income tax isn’t a tax on rich people. It’s a tax on those trying to get rich.

Yup.

The NYT on the corporate tax bill:

The Senate today approved a bill handing out about $140 billion in corporate tax breaks.

So, taking less money from corporations is a handout? Why not just call it corporate welfare?

Additionally, why do we get at least four paragraphs about sausage being made and no substantive mention of, I don’t know, what the bill actually does? Probably because 633 pages is a lot to read.

House and Senate negotiators have reached a tentative agreement on a bill that will allow Tennesseans (and other states) to deduct sales taxes they paid for federal income tax purposes:

Lawmakers in the states without an income tax have sought the sales tax benefit, which was taken away nearly 20 years ago in another federal tax overhaul.

The change would benefit Tennesseans who itemize deductions on their federal returns. The Congressional Research Service says that’s about one in four state taxpayers.

The agency estimates the tax benefit would average $470 for those who itemize.

That just seems like a paperwork nightmare.

A global tax on gun purchases:

This is not the first time Chirac and other world leaders have called for a global tax.

Last year, some at the G8 summit meeting floated the idea of a global tax on arms sales, including – at Chirac’s suggestion – a tax on gun purchases by individuals.

In a speech at the annual meeting of the “Group of Eight,” or G8, da Silva pushed the arms-sales tax as a scheme whereby the world’s wealthiest nations could fund efforts to eliminate world hunger.

XRLQ told me I should blog about why he should leave California. More to the point, he wanted to convince his wife of their need to leave California. I would recommend coming to Tennessee and here’s Exhibit A:

New Yorkers pay the highest state and local taxes in the nation, shelling out nearly $131 for every $1,000 of income in 2002, according to a new study.

Tennessee taxed its citizens the least — they paid just under $84 for every $1,000 of income.

Cali ranks 17 and pays $106 per $1,000 in income.

Knoxvillians get to decide exactly which way they’ll get screwed:

It’s now a property tax increase vs. the wheel tax.

Knox County commissioners voted Wednesday night to enact an 18-cent property tax boost if a referendum to repeal the wheel tax succeeds.

In an 11-6 vote, the 6 percent property tax increase would only go into effect if voters repeal the current $30 wheel tax.

I don’t live in Knoxville, but I’d say ax the wheel tax. The reason is that your property taxes will go up some day anyway. That is the same reason I oppose the state income tax. I know that if they pass it, the sales tax will go up eventually anyway. Why give the bastards two avenues to raise the rates?

Add the ATF and portions of the EPA to the list:

A domestic centerpiece of the Bush/GOP agenda for a second Bush term is getting rid of the Internal Revenue Service, the DRUDGE REPORT has learned.

The Speaker of the House will push for replacing the nation’s current tax system with a national sales tax or a value added tax, Hill sources tell DRUDGE.

It is Drudge, so it’s probably made up since no penises are involved.

Your tax dollars should apparently pay for manslaughter:

A judge ruled Tuesday that former Rep. Bill Janklow was on duty when he caused a deadly traffic accident, meaning taxpayers would have to pay for any civil damages in a wrongful-death lawsuit.

Via CAGW.

Quote:

“For us to be different by $140 billion is nothing,” said the director of the Congressional Budget Office, dismissing the controversial discrepancy between his estimate of the prescription drug benefit’s cost and Medicare actuaries’ figure.

As long as us tax payers are picking up the tab, it’s immaterial. I figure the discrepancy costs each of us about $500 ($140B/280M of us). I’d rather have the money, loser.

A bill to allow Tennesseans and residents of seven other states to deduct sales tax for federal income tax purposes is hitting snags:

”Senator Frist is a co-sponsor of sales-tax deductibility legislation, and now that the House has acted, he is hopeful that Democrats will support our efforts to go to conference,” Smith said.

Frist and Sen. Lamar Alexander said they would lobby Senate colleagues to accept the deductibility provision.

”This is a matter of simple fairness since citizens in other states are allowed to deduct their state income tax payments,” Alexander said.

Matter of fairness? Doesn’t Tennessee receive more federal funds than it pays? Don’t get me wrong, I’m all for tax cuts of any kind, but this likely doesn’t have a snowball’s chance in Hell of passing.

And can you imagine the record keeping involved? Digging up receipts from the grocery store, gas, etc.?

The IRS is offering rewards for ratting people out:

Suspect your company is cheating the IRS out of millions in taxes?

Pass along the inside information to the Internal Revenue Service and you stand to collect up to 30 percent of taxes and penalties recovered under whistle-blower legislation aimed at snaring high-dollar tax cheats.

The proposed IRS Whistleblower Office is designed to give tax agents an inside advantage when fighting complicated, often invisible tax shelters developed for and used by wealthy taxpayers and corporations.

It would go after individuals and corporations with more than $200,000 in income who use shelters that hide $20,000 or more.

Informants who blow the whistle on tax evasion stand to win 15 percent to 30 percent of the recovered taxes and penalties if they contribute substantially to the case. Those who make less substantial contributions can win up to 10 percent of recovered money.

Massachusetts is posting the names of tax delinquents on its Department of Revenue website. There’s a reason the state is called Taxachusetts.

First, the good news: It is also Buy a Gun day. So, go buy a gun or two.

Some bad news: Phelps writes:

. . . a communist long-term goal has been achieved. (Second Plank of the Communist Manifesto.) Half of the population effectively pays no income tax, making this a tax progressive enough that a majority has absolutely no personal financial impact in reducing this tax. (They have a giant indirect impact, but that is hard to explain to people with government educations.)

Of course, that half of the population gets shafted by other taxes (sales, payroll, use, etc.). But it’s tax day, we’re all getting shafted.

Here’s a presentation that tells us we don’t have to actually pay taxes on most income. You better get over there quick before some judge shuts them down.

And your Happy Fun Tax Fact for today:

Bribes and kickbacks to governmental officials are deductible unless the individual has been convicted of making the bribe or has entered a plea of not guilty or nolo contendre.

-IRS official taxpayers’ guide

Here’s some Happy Fun Tax Facts from the past:

In 1999, taxpayers contacted the IRS for assistance approximately 117 million times.

The Internal Revenue Code consists of approximately 1,395,000 words.

There are 693 sections of the Internal Revenue Code that are applicable to individual taxpayers, 1,501 sections applicable to businesses, and 445 sections applicable to tax-exempt organizations, employee plans, and governments.

As of June 2000, the Treasury Department had issued almost 20,000 pages of regulations containing over 8 million words.

In 2000, there were 129,373,500 returns filed. Of which, 96,817,603 were taxable and 32,555,897 were not.

In 2002 individuals, businesses and non-profits will spend an estimated 5.8 billion hours complying with the federal income tax code (henceforth called “compliance costs”), with an estimated compliance cost of over $194 billion

As of 1998, 32% of individual federal income taxes are needed in order to pay the interest on the national debt.

It is estimated that total income tax receipts in 2003 will be $1,211,843,000,000.

The instructions for filing the Easy Tax Form are 32 pages

It is now four days after tax freedom day and I’m not feeling so free.

Update: Gets better and better. Blake points to this article on how taxes violate civil liberties.

The Comedian reports that Tax Freedom Day will be the earliest it has been since 1967. April 11, 2004.

What is Tax Freedom Day:

Tax Freedom Day is the day when Americans will finally have earned enough money to pay off their total tax bill for the year. Every dollar that’s officially called income by the government is counted, and every payment to the government that is officially considered a tax is counted. Taxes at all levels of government are included, whether levied by Uncle Sam or state and local governments.

They blame the Bush tax cuts and that artificially inflated economic boom a few years ago.

Reader Drake emails this article:

The Legislature is considering new taxes and some fee increases, but it’s unlikely most people would pay them.

One new tax would apply to drug dealers.

Sen. Randy McNally, a Republican from Oak Ridge, proposes to tax marijuana, cocaine, methamphetamine and other illegal drugs. Those who step forward to pay the tax voluntarily would be granted confidentiality by the Department of Revenue.

However, those found in possession of drugs without a tax stamp could be required to pay the tax.

Additionally, the legislature anticipates $3.6M in revenue from the measure (they also anticipate monkeys flying out of their own butts, but that is a different story). There are also proposals to up fees for electrical inspections and liquor licensing.

If I am the type of person inclined to disregard the law with respect to dealing drugs, I very likely am also the type of person who would disregard paying taxes.

This post by the comedian really is scary.

When the tax code encourages investment overseas, why are people shocked to learn that companies are, well, investing overseas?

Last week, Sen. John F. Kerry (Mass.), the likely Democratic nominee for president, made such lucrative income-tax deferrals a focal point of his campaign, asserting that they are driving companies to expand abroad. Merck’s numbers appear to back that up, and so do those of several other big U.S. companies.

By the way, we can probably stop calling him the likely Democratic nominee for president.

Bill Hobbs rips the Tennessean a well-deserved new one over it’s opinion err coverage of the taxpayer bill of rights.

Tom has created a nifty little spreadsheet where you can enter your AGI and figure out what the Bush tax cuts saved you err if Kerry will raise your taxes. It’s neat. It does assume that Kerry will stick to his campaign promise of only raising taxes on the top income bracket.

The Taxpayer Bill of Rights is being taken seriously. Bill Hobbs has been on this issue for about two years now. What it does:

When the state government takes in excess money, taxpayers would get a refund of the extra cash under a proposal going before a legislative committee Tuesday.

The ”Taxpayer Bill of Rights” is designed to keep state revenue from growing more than population growth plus inflation.

Money over the amount set by that formula would be refunded to taxpayers through a check or a reduction in taxes.

It’s modeled after a law in Colorado that taxpayer advocates cheer but advocates for public services call a devastating straitjacket on government finance.

The constitutional provisions would also give voters the last say on tax increases.

All you rich folks who have been putting off getting your SUV absolutely free due to an evil loophole in the tax code should act quickly. They’re on to you.

At long last, I will become a part of the problem. I’ve been working on it for a while. I have been engaged in various real property investments for a while. Now, it is time for this evil, capitalist, free-trading bastard to commit the orgy of the market. I am going to incorporate myself. Why? Well, for a plethora of reasons:

Tax deductions, tax deductions, tax deductions: Mileage, meals and entertainment, interest expense, and deductions for health insurance.

I can purchase Class 3 NFA firearms without getting approval from local law enforcement.

I can salary myself.

Plus, I get to give myself a cool title like God Emperor of SayUncle, Inc. Impressive on a résumé.

Now, there will no longer be just dinner with the wife at the dining room table. It will be a SayUncle, Inc. meeting of the Board of Directors. Hell, I’ll make Politically Incorrect Dog the Treasurer. Politically Correct Dog gets the title of Vice President In Charge of Making Poo on the Neighbor’s Lawn.

That feeling of being drunk with power.

And, the créme de la créme, I get an SUV absolutely free.

I can’t wait! Power to the people. Long live capitalism. Fear me, I am the man. In league with the Forces of Darkness. I’ve already got my application to join the Republican National Committee.

Wow! My trip into darknéss has causéd mé to put moré tildés ovér léttérs than évér béforé. Go mé! Béing évil is fun.

Update: Les points out in comments that, as a corporation, I won’t be personally liable for anything. And for his benefit, this post is meant to be, uhm, sarcastic but yes I do plan on incorporating myself.

A town in Maine wants to dissolve itself for tax breaks:

“They’ve got absolutely nothing. They don’t have any fire department. They don’t have a police department. No water department. No sewer department. There’s nothing,” said Rep. Jim Annis of neighboring Dover-Foxcroft, who wrote the bill proposing the town’s deorganization.

Roughly half of the state belongs to unorganized territory, bringing an estimated 22,000 accounts when property tax is assessed each year.

Snip

The last time a town dissolved in Maine was in 2001, when Madrid, population 180, won lawmakers’ permission. Centerville, population 25, in Washington County will do so this year. And officials said inquiries have come from other towns, including Cooper in Washington County, in light of Atkinson’s push.

Maybe good news:

Two federal appeals court judges on Tuesday repeatedly expressed skepticism about the government’s effort to ban the sale of a book that purports to show people how they can legally stop paying income taxes, a theory that one judge called nonsense.

I’ve blogged about Schiff here, here, and here.

Doing my taxes, got a refund this year. Thanks, Dubya. Did it electronically and got this message:

The Patriot Act requires [Bank] to collect your physical address from you when you choose a bank product. Physical address is the address of your personal residence. It may differ from the address you entered to be used on your tax return if you do not receive mail delivery at your home.

Do you feel safe?

Unsurprisingly, Oregonians said no to a tax hike. Power to the people.

As of 1998, 32% of individual federal income taxes are needed in order to pay the interest on the national debt.

Justfacts.com:

Medieval serfs paid an effective tax rate of 33.3% and were considered slaves.

I figure I spend 37.7% of my income on taxes.

First of all, Revenue Measures is typically government-speak for we spent too much and want the tax payers to pick up the tab. With that said, I have seen a few pundits and bloggers express a desire for revenue based taxation for corporations to raise revenues. Their logic is that corporations get a hefty amount of deductions (that coincidentally individuals don’t get) for things thereby reducing taxable income to non-existent levels. For example, a corporation can deduct health insurance costs for employees from income to arrive at taxable income. This same luxury is not afforded to folks who purchase their own insurance.

The problem with revenue based income taxes is that it if a company isn’t profitable to the extent that it’s revenue is taxed, that company cannot survive. Low margin companies (such as various manufacturing firms that make money by cranking out lots of small profit items) would cease to exist unless the revenue tax rate was considerably less than their margin.

I think the country needs some tax reform but don’t think this is the best route. What is? Beats me. Flat tax may be it. Or just mass simplification of the tax code.

TaxFoundation.org:

In 2002 individuals, businesses and non-profits will spend an estimated 5.8 billion hours complying with the federal income tax code (henceforth called “compliance costs”), with an estimated compliance cost of over $194 billion.

So, stories like this make me wonder if Tennessee municipalities are pondering taxing the winnings from the recently established (today) lottery.

Via Bill Hobbs, comes an article in The Tennessean that states a panel essentially concluded Tennessee needs a state income tax. I don’t oppose an income tax on the surface. What I do oppose is income tax without repealing sales tax. Most states have a history of lowering sales taxes to implement an income tax. Then in a few years sales taxes are raised again. That’s what one of my former accounting instructor’s told his class and I have no reason to doubt him and do not for a minute trust our legislators to not do otherwise.

Until sales tax is repealed and constitutionally held so, I’ll oppose the state income tax.

In 2000, there were 129,373,500 returns filed. Of which, 96,817,603 were taxable and 32,555,897 were not.

It is estimated that total income tax receipts in 2003 will be $1,211,843,000,000.

In 1999, taxpayers contacted the IRS for assistance approximately 117 million times.

As of June 2000, the Treasury Department had issued almost 20,000 pages of regulations containing over 8 million words.

Per this Dean Tax Calculator, Dean’s tax plan would cost me $3,338.12.

Clark’s plan would save me $488.

Via Bill Hobbs.

Oh, and here’s your happy fun tax fact for the day:

There are 693 sections of the Internal Revenue Code that are applicable to individual taxpayers, 1,501 sections applicable to businesses, and 445 sections applicable to tax-exempt organizations, employee plans, and governments

Getting a lot of hits to the site for the SUV tax deduction. It’s gearing up to be tax season. Today’s fun tax fact:

The Internal Revenue Code consists of approximately 1,395,000 words.

A guy goes and argues that, per the tax code, he shouldn’t have to pay taxes. The court rejected his motion without any opposing argument from the government and the judge provided no reason as to why the motion should be denied.

Sure, the guy may be wrong but the courts at least need to hear his case. That’s why we have courts, in case you were wondering.

Update: Tom’s smarminess in comments got me to looking for the case at the Court’s site and I noticed the PDF was blank. So, I googled up this Evans person and he has a website. On his website, he has the court’s opinion from October 2, 2003. It seems (and I am happy to say) the court did not dismiss his case without a reason. I guess the guy tried to do it again in December and was dismissed outright for trying that before.

The 2003 1040EZ instruction booklet is 32 pages. We need 32 pages to fill out the easy form.

You cannot use the phrases tax avoidance and tax evasion interchangeably. Tax evasion is illegal. Tax avoidance is not. A rather important difference.

Wow!

Accounts Receivable Tax

Alcohol Tax

Building Permit Tax

Capital Gains Tax

CDL license Tax

Cigarette Tax

Corporate Income Tax

Court Fines (indirect taxes)

Dog License Tax

Estate Tax

Excise Tax

Federal Income Tax

Federal Unemployment Tax

Fishing License Tax

Food License Tax

Fuel permit Tax

Gasoline Tax

Hunting License Tax

Intangible Tax

Inheritance Tax

Interest expense (Tax on the money)

Inventory Tax

IRS Interest Charges (Tax on top of Tax)

IRS Penalties (Tax on top of Tax)

Liquor Tax

Local Income Tax

Luxury Taxes

Marriage License Tax

Medicare Tax

Property Tax

Real Estate Tax

Septic Permit Tax

Service charge Taxes

Social Security Tax

Road usage Taxes (Truckers)
Sales Taxes

Recreational Vehicle Tax

Road Toll Booth Taxes

School Tax

State Income Tax

State Unemployment Tax
Tobacco Tax

Telephone federal excise Tax

Telephone federal universal service fee Tax

Telephone federal, state and local surcharge Taxes

Telephone minimum usage surcharge Tax

Telephone recurring and non-recurring charges Tax

Telephone state and local Tax

Telephone usage charge Tax

Toll Bridge Taxes

Toll Tunnel Taxes

Traffic Fines (indirect Taxation)

Trailer registration Tax

Utility Taxes

Vehicle License Registration Tax

Vehicle Sales Tax

Watercraft registration Tax

Well Permit Tax

Workers Compensation Tax

For the punchline, visit Rodger.

Granted this story may lack confirmation, but a man details a search executed on his house because he wrote a paper which argues that federal income tax on wages isn’t required by law.

Per this:

The U.S. House of Representatives voted on Wednesday to make permanent a ban on Internet use taxes and to require nine states to repeal existing taxes on access fees.

While I think the decision may violate states’ rights, every time a tax is repealed an angel gets its wings. However:

The tax ban could run into some hurdles in the Senate, where some lawmakers want to include a promise that states will be able to tax online sales if enough of them simplify their tax codes.

First things first:

Tax Evasion is illegal – If I fail to report income, I have evaded taxes. If I just don’t write a check payable to Da Man, I have evaded taxes.

Tax avoidance is not – If I (as I usually do) dump $4K at the end of the year into an IRA account to avoid paying taxes on $4K in income, I have avoided paying taxes using a legal means.

Via Publicola comes this media advisory about the IRS and nine states cracking down on abusive tax avoidance. The money shot:

Abusive transactions to avoid taxes, according to private estimates, deprive state and federal governments of billions of dollars annually.

First of all, if the money isn’t earned to begin with, then no one is depriving governments of anything. Secondly, if it is tax avoidance, it is in every way perfectly legal.

The webcast occurred today. I haven’t seen it yet (no speakers at the office). I’d like a transcript if one is available. Cracking down on abusive tax avoidance sounds to me like code for cracking down on the self-employed.

Update: tgirsch informs me i have my IRAs confused. I meant traditional. Bad CPA! Down boy! Corrected. Did I mention I don’t do taxes? I should.

Alabama said No! to new taxes 67% to 33%. Good for them.

Kevin, who for some unfathomable reason thinks tax hikes are good, opines the following two points that strike me as odd:

1: So, for the time being, Alabama will remain a backwater unable to attract any decent jobs.

I fail to see how taxes negatively affect job creation. Companies like to operate in states with low taxes. In fact, many states offer companies exemptions to taxes for coming to the state. I think Alabama did that with Mercedes, but can’t find a source. And the other truth about taxes is that companies don’t pay taxes. They pass that cost on to their customers, plus a service charge.

2: The terms of the debate are shifting, and the “tax cuts will lead to nirvana” era is coming to a close.

Tax cuts do not lead to Nirvana, they lead to cash in people’s pockets. I am of the opinion that everyone gets screwed by taxes in this country, it just depends on the tax. For example, poorer folks are excessively burdened by gas taxes, sales taxes, employment taxes, and other fees. The wealthy are abused via the income tax. The middle class gets it from everywhere.

One truth remains, at the end of the day: it’s the spending, stupid. And by stupid, I don’t mean Kevin. I mean to rip-off a famous quote.

AlphaPatriot has a good piece on corporate corruption and its ties to tax codes. I tend to agree. A great many problems in this country could be solved by simplifying the tax code.

Good! Prodigy doesn’t have to pay sales taxes on services it provides in Tennessee.

Bill has some info on a Fairer Tax, a National Sales Tax. Why didn’t I think of that? Oh, I did.

This is beautiful:

On Friday, a Memphis federal jury acquitted FedEx pilot Vernice Kuglin of six counts of felony Tax Evasion and Willful Failure to File tax returns.

Ms. Kuglin’s attorneys, Tax Honesty Movement barristers Larry Becraft and Robert G. Bernhoft, told reporters that Kuglin was indicted seven months ago and had refused to plead the case out for a lesser sentence. During her testimony Kuglin testified that since 1995, she had sent numerous letters to the IRS requesting that they inform her of what law required her to pay the Individual Income Tax. To this day, she has not received an answer.

At 1:30 Friday afternoon, the jury returned not guilty verdicts on all counts.

After the jury had been excused the U.S. Attorney reportedly demanded that the Judge order the defendant to file her forms, pay her taxes and obey the law. The Judge reportedly replied “Sir, I don’t work for the IRS.”

The case is: U.S. District Court, Western District of Tennessee (Memphis) # 03-CR-20111, USA v. Kuglin.

Makes me feel all warm and fuzzy inside.

A common conception throughout the world stipulates progressive taxation. The concept being rooted in From each according to his ability. In other words, poor folks pay less and wealthy folks pay more. At least it should work that way in theory. It doesn’t. The rich have cash at their disposal that can be used to avoid taxes. The poor do not. If you have $4,000 laying around, dump it in a Roth IRA and avoid (defer) paying taxes on it. Form an S-Corp and salary yourself. Buy an SUV. People with cash do these things and avoid taxes. And I don’t blame them one bit and I do it when I can. And people pay accountants $150 – $300 per hour to tell them how to avoid paying taxes.

Enter the flat tax. Under this method, all people pay a certain percentage. Progressive tax folks say it’s not fair because it places an undue burden on the poor (15% of $10,000 in income has a greater impact on the quality of life than 15% of $1,000,000). I thought there was some truth to that until now.

In parts of what was the Soviet Union, there has been a flat tax of 13% implemented by Putin. Some of the results:

One senior government tax official estimates that before the flat tax took effect at the beginning of 2001, Russians on average declared as little as 25% of their income. Since it was introduced, there has been a marked increase in both payment rates and revenue. Official statistics show that income tax revenue rose 28% between 2000 and 2001, and a further 21% by last year, after adjustment for inflation. Total government revenue from personal income taxes shot up from an unadjusted $6.2 billion in 2000 to almost $12 billion last year.

The government made more money while reducing the tax burden of a large number of citizens.

In the US, things are different due to our progressive tax structure:

Total tax collections in the U.S. are expected to be $2,667,000,000,000 in 1998. This represents 35.4% of the country’s total income.

In 1997, the median tax rate of a single income family was 35.9%. A dual income family paid 37.6%.

In addition, accounting fees for tax preparation and compliance fees cost Americans about $593 billion per year. And low income earners lost $1B in 2002 in loan charges and fees for rapid refund tax loans. And if you exclude the lowest incomes from paying any taxes at all, you can avoid the rapid tax refund rape that they currently go through (and, of course, they’re not taxed).

Why have a progressive tax system that doesn’t work?” asks Vladimir Redkin, an economist at Russia’s Bureau of Economic Analysis.

Yup.

Apparently, we states without income taxes pay more federal income taxes than other states with income taxes. So, here’s a law proposal that will allow us to deduct sales taxes.

Guess I need to start keeping receipts.

Just noticed my first check at my new tax rate. I don’t know what I’m going to do with that extra $8. Only benefits the rich, my ass.

The internet tax plan has passed both houses. Nevermind that the Supreme Court has said (twice) that businesses aren’t required to collect taxes for a state unless the business has a presence in the state. I love how the local news rags have spun this as 1) a plan to streamline taxes, 2) a benefit for people who actually have a store presence, and 3) that the lack of a tax on internet sales is actually a loss for the state. And the biggest spin of all is that of the amount of money they lose because there is currently no tax on internet sales. Our legislators are either lying or are ignorant, either is bad.

In our state’s desperate attempt to pilfer from err tax citizens more, our legislators hurry Internet tax plan.

Tennessee is poised to join an elite group of states planning to simplify their tax codes and become part of a governing body that would create a national standard for collecting taxes on Internet and mail-order sales.

Legislation moved swiftly and unexpectedly through various state House and Senate committees yesterday. It is part of a national effort to persuade Congress to allow the states to impose such a tax. The full House and Senate are scheduled to take up the measure today.

State officials estimate Tennessee will lose $300 million this year in uncollected sales tax revenue because of Internet and catalog sales. That figure could balloon to $1 billion by 2007, said Sen. Bill Clabough, R-Maryville, the bill’s sponsor

First, as Bill Hobbs has pointed out numerous times, online sales-tax losses are overstated.

Also, note to Mr. Clabough, there will be no loss because the money hasn’t been earned yet. Stop trying to spin this as a loss, it’s just poor revenue projections. I can’t say my business will make a particular amount and then when it doesn’t say that it’s a loss.

Update: Bill Hobbs also reports that because the Supreme Court has ruled that states may not impose online sales taxes (or any other tax) across state lines unless the seller has a physical presence or “nexus” in the state, the legislators have their work cut out for them. Hobbs is currently bloggered, scroll down to Whackamole Redux.

The Dems are cringing after (thanks to Cheney’s vote) that $350B in tax cuts passed.

It’s been kicked around on many sites, but are the Dems reliant upon the economy doing badly to regain power?

Lawmakers in Tennessee are still working on how to tax internet sales. Currently, Tennessee doesn’t enforce the existing internet tax law and there is no federal requirement for retailers to collect it. My favorite line: Some lawmakers are worried the bill would be used by opponents claiming they’ve raised taxes. Well, isn’t that what you’re doing? A tax we don’t pay becoming a tax we do pay is a raise in taxes.