Archive for the ‘Taxes’ Category

In total, how much do Americans pay in taxes? For what? To whom?.

January 26, 2017

Since tax reform is on the front burner, it’s time for some tax facts.

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Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

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* * * * *

By type of tax

Roughly 1/3 of the $5 trillion is income taxes individual and corporate)

about 1/4 is ad valorem taxes (think sales and property taxes)

just under 1/5 are social insurance (i.e. Social Security, Medicare, Medicaid)

… slightly more than 1/5 are fees and charges (think tolls, business licenses)

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* * * * *

Income taxes

Roughly 1/3 of the $5 trillion – about $1.8 trillion — is income taxes

…  83.4% are individual income taxes; only 16.6% are corporate income taxes

… about 80% of income taxes go to the Feds; around 20% goes to the States & Locals

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* * * * *

Ad-valorem taxes

Roughly 1/4 of the $5 trillion in total taxes paid – about $1.2 trillion – is ad-valorem taxes – taxes paid based on the value of something bought or owned.

…  about 40% of ad-valorem taxes are Local property taxes

…  about 1/3 are Sales Taxes …  going mostly to the States

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* * * * *

Social Insurance

Roughly 1/5 of the $5 trillion in total taxes paid – about $961 billion – is social insurance – with about 80% going to the Feds

…  roughly 60% of the social insurance payments going to the Feds is for Social Security

…  almost 1/4 of the social insurance payments going to the Feds is for Medicare.

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* * * * *

Pulling it all together Ken’s Rosetta Stone of Taxes

All the details — now much? to whom? for what?

Click for a PDF: Ken’s Rosetta Stone of Taxes

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PDF          Data Source

>> Latest Posts

To bring back jobs, don’t cut the the corporate tax rate …

January 25, 2017

Rather, double the corporate tax deduction for workers’ wages earned the U.S. workers.

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Let’s start with an interesting analysis from Nate Silver’s  535.com titled Manufacturing Jobs Are Never Coming Back

“It’s understandable that voters were angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers.”

“Manufacturing in particular embodies something that seems to be disappearing in today’s economy: jobs with decent pay and benefits available to workers without a college degree are vanishing. The average factory worker earns more than $25 an hour before overtime; the typical retail worker makes less than $18 an hour.”

“In 1994 there were 3.5 million more Americans working in manufacturing than in retail. Today, those numbers have almost exactly reversed, and the gap is widening. More than 80 percent of all private jobs are now in the service sector.”

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How can that be?  Aren’t we hearing a lot about “re-shoring” and foreign capital investing in U.S. based manufacturing plants?

(more…)

Isn’t it time to dust off the Simpson-Bowles Report ?

January 24, 2017

Now that tax reform and spending “rationalization” are on the front-burner, I wonder why there has been nary a mention of old Simpson-Bowles Report.

You may remember that former President Obama commissioned Simpson, Bowles and a blue-ribbon committee to recommend ways to cut the deficit  … and the skyrocketing national debt.

The report took shots at some sacred cows like capping home mortgage deductions and taxing employer-paid healthcare.

But, S-B had the gall to suggest pulling back some entitlements so Obama deep-sixed the report.

Maybe DJT should try to locate a copy.

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Maybe it’s time to re-visit the Simpson-Bowles Report .

Here are some of the highlights …

(more…)

Flashback: Buffett says”increase taxes on estates (since mine is sheltered)”

October 4, 2016

OK, he really didn’t say the last part …  I added that nugget.

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The NYT dust-up on Trump’s tax loss carryforward reminded me that Hillary is proposing to jack-up the estate taxes on fat cats.

Of course, her favorite billionaire — Warren “I’m with her” Buffet — won’t be subject to the higher estate tax rates.

Why not?

Let’s flashback to my long ago proposed “Buffett Rule” … designed to get fat cats like him to stop whining about their too low taxes and pay their fair share.

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According to CNBC, Warren Buffett is one of several dozen wealthy people who have signed a statement calling for a “strong tax on large estates.”

Buffett & friends say:

  1. “Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward a plutocracy.”
  2. We (the wealthy) have “benefited significantly” by government investments in schools, infrastructure. and public safety, among other things, so it is “right morally and economically” to have a “significant” tax on large estates because it “promotes democracy by slowing the concentration of wealth and power.”
  3. “It is right to have a significant tax on large estates when they are passed on to the next generation …  it is right morally and economically, since an estate tax promotes democracy by slowing the concentration of wealth and power.”

OK, so what constitutes a sizable estate and how much of it should the government take?

(more…)

NY Times Bombshell: Trump had a tax loss carryforward … disqualifying?

October 3, 2016

 P.S. Hillary had one, too (but the NYT missed that one).

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This would be laughable except it will probably gain more traction with the MSM than Miss Piggy.

Here’s the “smoking gun”:

The New York Times obtained records from 1995 showing that Donald J. Trump declared a $916 million loss.

The figure is so substantial that it could have allowed him to legally avoid paying federal income tax for 18 years.

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Let’s unpack this journalistic gem …

(more…)

Happy Tax Day … and, about the 47%.

April 18, 2016

Infographic from CNBC cuts to the chase re: the “money comes in, money goes out.”

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More interesting: What’s up with Mitt Romney’s infamous 47%?

(more…)

What percentage of Americans prepare their own taxes? How many of them like it?

April 15, 2016

Since we’re heading down the home stretch to Monday’s filing deadline …

According to Pew Research:

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

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Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Even if manufacturing may be coming back … manufacturing JOBS, not so much.

March 23, 2016

Interesting analysis from Nate Silver’s  535.com titled Manufacturing Jobs Are Never Coming Back

There’s no mystery why candidates love to focus on manufacturing and trade.

“It’s understandable that voters are angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers.”

“Manufacturing in particular embodies something that seems to be disappearing in today’s economy: jobs with decent pay and benefits available to workers without a college degree. The average factory worker earns more than $25 an hour before overtime; the typical retail worker makes less than $18 an hour.”

“In 1994 there were 3.5 million more Americans working in manufacturing than in retail. Today, those numbers have almost exactly reversed, and the gap is widening. More than 80 percent of all private jobs are now in the service sector.”

image

=======

How can that be?  Aren’t we hearing a lot about “re-shoring” and foreign capital investing in U.S. based manufacturing plants?

(more…)

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

February 16, 2016

According to Pew Research

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

image

Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

On the move: “We’re outta here” …

January 12, 2016

Each year, United Van LinesUnited Van Lines published a report indicating the number of net moves made into and out of states.

Here’s the summary …

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And, here are the details re: states with the highest outflows and inflows …

(more…)

Bernie Sanders missed a big opportunity on Monday …

August 26, 2015

Yesterday, we posted about high frequency traders crowing about their high profits from Monday’s unprecedented stock market volatility.

Arguably, their methodology — hinging on fast data and low transactions’ costs — fanned the volatility flames.

I was surprised that Bernie Sanders didn’t seize the moment to say “I told you so” … and to pitch his Financial Transactions Tax.

Given the stock market bounces this week, I though it would be timely to reprise a post from a couple of weeks ago which has heightened relevance and timeliness …

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Shocker: I agree with Bernie Sanders’ Financial Transactions Tax … err. make that “half-agree”

Dem-Socialist candidate Bernie Sanders doesn’t serve up much that I agree with … but, there is one reheated idea that I half-support.

Sanders proposes that financial transactions be taxed … roughly 1/2% for most trades … slightly lower for for some categories of investments … say, Municipal Bonds.

Sanders would use the new tax proceeds to fund public college for low-income students.

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Let’s dissect the proposal … then, for what it’s worth, I’ll tell you where I agree and where I disagree …

(more…)

High frequency traders crow: “Best day since the 2010 Flash Crash” … say what?

August 25, 2015

Yesterday was a historically spectacular day on Wall Street … DJIA down 1,000 on the open, rebound by about 750 points, back down by 750.

Unprecedented volatility.

DJIA 08-24-15

Geez, was the world’s economic structure changing that much hour-to-hour?

Was new economic  information flowing in at warp speed?

Nope.

Sure, there was a deepening understanding that the market is over-valued and that China’s economy is in trouble.

That explains a big correction, but what about the hour to hour volatility?

(more…)

Jet: Start-up targets Amazon and Walmart … say, what?

July 29, 2015

After months of testing and and network-building, the e-commerce start-up Jet.com opened its digital storefront last week, marking the official kickoff of the company’s ambitious effort to battle Amazon and Walmart for price-conscious customers.

According to the Washington Post, Jet is taking a new approach to pricing. Its algorithm doesn’t simply look at the price of each individual item in your online shopping cart.

It looks at all the items you want to buy, as well as your Zip code, to determine which retailer or warehouse can ship that unique combination of items to you the cheapest.

Shoppers can only buy things on Jet if they’ve signed up for a $49-per-year membership.

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Let’s dig a little deeper and assess the odds …

(more…)

Shocker: I agree with Bernie Sanders’ Financial Transactions Tax … err. make that “half-agree”

July 22, 2015

Dem-Socialist candidate Bernie Sanders doesn’t serve up much that I agree with … but, there is one reheated idea that I half-support.

Sanders proposes that financial transactions be taxed … roughly 1/2% for most trades … slightly lower for for some categories of investments … say, Municipal Bonds.

Sanders would use the new tax proceeds to fund public college for low-income students.

image

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Let’s dissect the proposal … then, for what it’s worth, I’ll tell you where I agree and where I disagree …

(more…)

Nums: Who pays taxes? Who benefits?

April 15, 2015

Since it’s tax day, I thought I’d flashback to a drill down I did on the tax system —  who pays in, where does it go and who benefits …

In a prior post, we drilled down on taxes … or, as my Dem friends would say government “revenues”.

We posted that in 2012 Americans paid a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively. Note that the Federal portion is just under $2.5 trillion.

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* * * * *
If these are “revenues” there must be matching services provided, right?

I found a study by the non-partisan Tax Foundation that analyzes taxes paid and benefits received.

The study is old – using 2004 data – but, in my opinion is a good starting point to calibrate the answer.

(more…)

Taxes: The only thing to love about the AMT …

April 9, 2015

Just finished this year’s taxes.

One interesting twist ….

In 2012, like a lot of folks, I sold a bunch of stocks to beat Obama’s hike in the capital gains tax …  from 15% to 23.8% (including the 3.8% ObamaCare surcharge)

As a result, my state tax bill paid in 2013 was higher than usual … Virginia’s share of the capital gains.

At first I was delighted this year.

Why?

Because, on my Federal return,  I could deduct the higher-than-normal taxes that I paid to Virginia.

Unfortunately, the thrill was short-lived.

I’d forgotten about the AMT … you know, the Alternative Minimum Tax.

I’d forgotten, but TurboTax hadn’t.

Bottom line: My VA tax deduction got wiped away by the AMT calculation.

Like many folks, I had internalized that state income taxes are annoying, but no big deal since they get written off at the Federal level.

Not so if you’re among the millions of Americans who get snared in the AMT trap.

Oh, well.

At least there is one small delight I get from the AMT …

(more…)

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

April 2, 2015

Since, I started preparing my taxes this weekend, I got curious …

Pew Research says that overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

image

Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Hacked: File early to beat crooks to your tax refund …

March 31, 2015

A couple of years ago I jumped on the bandwagon and e-filed my first ever tax return.

 

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A couple of weeks later I was an identity theft victim.

Coincidence?

I can’t prove the connection … I also can’t shake the suspicion.

Now, crooks have a new online hack: filing online returns that claim other folks refunds.

I good friend just got burned on this specific new tax hack.

Here’s what’s going on …

(more…)

Why is gas cheaper in New Jersey?

March 12, 2015

I’ve always wondered that … especially since NJ is the only place on Planet Earth that won’t let you self-pump your own gas.

Nope.

Gotta wait for the attendant to notice you’re there and do it for you.

 

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Of course, the attendants don’t look like the guy in the picture.

Nope.

They all look like folks who should be reported to Homeland Security.

My point: having attendants should push gas prices up, right?

A common hypothesis is that there are a lot of gas storage facilities along I-95.

Cheaper supply?

That doesn’t square since there isn’t much gas drilled in the local area.

OK, so what is it?

I may have stumbled on the answer …

(more…)

Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

March 3, 2015

Since it’s tax time, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

image_thumb.png

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

(more…)

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

March 2, 2015

Since, I started preparing my taxes this weekend, I got curious …

Pew Research says that overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

image

Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Hacked: File early to beat crooks to your tax refund …

February 11, 2015

A couple of years ago I jumped on the bandwagon and e-filed my first ever tax return.

 

clip_image001

A couple of weeks later I was an identity theft victim.

Coincidence?

I can’t prove the connection … I also can’t shake the suspicion.

Now, crooks have a new online hack: filing online returns that claim other folks refunds.

Here’s what’s going on …

(more…)

Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

January 21, 2015

Since yesterday Obama was pitching tax increases in the SOTU, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

image_thumb.png

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

(more…)

Flashback: Buffett says”increase taxes on estates” (since mine is sheltered).

August 28, 2014

OK, he really didn’t say the last part., I made that up.

Since Buffett shed his hypocritical “please tax us more” sham and hopped on the BK inversion deal, I thought it was fair to flashback to some of Buffett’s pro-tax rants and our proposed “Buffett Rule”

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According to CNBC, Warren Buffett is one of several dozen wealthy people who have signed a statement calling for a “strong tax on large estates.”

Buffett & friends say:

  1. “Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward a plutocracy.”
  2. We (the wealthy) have “benefited significantly” by government investments in schools, infrastructure. and public safety, among other things, so it is “right morally and economically” to have a “significant” tax on large estates because it “promotes democracy by slowing the concentration of wealth and power.”
  3. “It is right to have a significant tax on large estates when they are passed on to the next generation …  it is right morally and economically, since an estate tax promotes democracy by slowing the concentration of wealth and power.”

OK, so what constitutes a sizable estate and how much of it should the government take?

(more…)

Is that Warren Buffett driving BK’s getaway car?

August 27, 2014

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This one is too good to be true.

Burger King is planning to buy Tim Hortons – a Canadian coffee-and-doughnut chain.

Forget for a second that this is 2014 and doughnuts are, shall we say, a bit out of fashion,

Conventional wisdom is that BK isn’t strategically driving thru the doughnut hole left by Krispy Kreme’s woes.

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Though the company denies it, BK seems aimed at turning things upside down tax=wise.

You know, “invert” itself into a Canadian company so that it doesn’t have to pay U.S. taxes on money it earns outside the boundaries of the U.S.

Here’s where things start to get interesting ….

(more…)

Fed are raking in the dough … and still spending more than they get.

July 25, 2014

The WH-OMB estimates that, in FY 2014, the federal government will collect a record amount in inflation-adjusted tax revenues (i.e. taxes) while still running a deficit,


Source: CNS; See the Monthly Treasury Statement. for details

 

More specifically …

(more…)

Nums: Who pays taxes? Who benefits?

April 17, 2014

Since it’s tax week, I thought I’d flashback to a drill down I did on the tax system —  who pays in, where does it go and who benefits …

In a prior post, we drilled down on taxes … or, as my Dem friends would say government “revenues”.

We posted that in 2012 Americans paid a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively. Note that the Federal portion is just under $2.5 trillion.

image

* * * * *
If these are “revenues” there must be matching services provided, right?

I found a study by the non-partisan Tax Foundation that analyzes taxes paid and benefits received.

The study is old – using 2004 data – but, in my opinion is a good starting point to calibrate the answer.

(more…)

Taxes: The only thing to love about the AMT …

March 5, 2014

Just finished this year’s taxes.

One interesting twist ….

In 2012, like a lot of folks, I sold a bunch of stocks to beat Obama’s hike in the capital gains tax …  from 15% to 23.8% (including the 3.8% ObamaCare surcharge)

As a result, my state tax bill paid in 2013 was higher than usual … Virginia’s share of the capital gains.

At first I was delighted this year.

Why?

Because, on my Federal return,  I could deduct the higher-than-normal taxes that I paid to Virginia.

Unfortunately, the thrill was short-lived.

I’d forgotten about the AMT … you know, the Alternative Minimum Tax.

I’d forgotten, but TurboTax hadn’t.

Bottom line: My VA tax deduction got wiped away by the AMT calculation.

Like many folks, I had internalized that state income taxes are annoying, but no big deal since they get written off at the Federal level.

Not so if you’re among the millions of Americans who get snared in the AMT trap.

Oh, well.

At least there is one small delight I get from the AMT …

(more…)

Who to trust: TurboTax or Revenooers?

December 9, 2013

From the “you can’t make this stuff up” file …

Last year a fried filed his NJ income tax return using Turbo Tax,

Based on the TurboTax calculations, he filed for a refund of $2,582.

A few weeks later, the State sent him a refund check for $3,556.

Not quite Power Ball, but a nice surprise.

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Now, a few months later, the story takes an odd twist …

(more…)

Tax havens … and tax hells.

July 18, 2013

According to a  Cato Institute recap

A couple of economists at a German think tank put together a “tax attractiveness” ranking based on 16 different variables.

They looked at the statutory tax rate  … and, they also considered policies such as “the taxation of dividends and capital gains, withholding taxes, the existence of a group taxation regime, loss offset provision, the double tax treaty network, thin capitalization rules, and controlled foreign company (CFC) rules.”

Drum roll …

Out of 100 nations, the German economists rated the U.S. #96 … in the pack with Indonesia, Philippines,  Zimbabwe, Japan and Egypt.

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Here are the rankings for all nations assessed …

(more…)

Nums: When is $87.6 million greater than $118 million?

July 9, 2013

Short answer: After-taxes … if you’re talking no income Red state (think Texas) and a high tax Blue state (think California).

Just ask former Laker Dwight Howard as he packs to head to the Houston Rockets.

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 Here’s the skinny and some nums

(more…)

Basic Econ: Red beats Blue …

June 4, 2013

Last week, the American Legislative Exchange Council (ALEC) – a right-leaning economic analysis group – released its 6th annual report on state economic performance.

 

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= = = = =

The 10 states that had the best economic performance over the decade 2000 to 2010 were …

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Notice anything common across those states?

Here’s the code-breaker …

(more…)

Apple’s taxes: Why the Fed’s argument is simply silly …

May 23, 2013

This week, Apple CEO Tim Cook was hauled in to DC to testify about Apple’s low corporate tax rate …

Cook explained that Apple makes a lot of money outside the U.S. … selling products that are made outside the U.S. under licenses held by foreign subsidiaries and sold in non-U.S. countries.

Said simply, no part of that income is earned in the U.S. either thru the development, manufacture, sales, or distribution of the products.

None.

But, our wise Senators think that Apple should pay U.S. corporate income taxes on that money any way.

Why?

Because Apple was legally formed in the U.S. and has it’s Corporate headquarters in the U.S.

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Here’s the code-breaking question to ask …

(more…)

Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

April 16, 2013

Since yesterday was tax day, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

(more…)

Taxes: How about an Alternative MAXIMUM tax ?

April 15, 2013

Interesting idea in today’s WSJ …  introduce an alternative maximum tax.

Here’s the gyst of the idea:

We need an alternative maximum tax as a simple, rough-and-ready way to limit the economic damage of increasing taxes. 

How much is the most anyone should have to pay? When do taxes indisputably start to harm the economy and produce less revenue — when government takes 50% of people’s income? 60%? 70%?

I like half, but the principle matters more than the number.

Once the country settles on a number, each of us gets to add up everything we pay to government at every level: federal income taxes, yes, but also payroll (Social Security, Medicare, etc.) taxes, state, city and county taxes, estate taxes, property taxes, sales taxes, payroll taxes and unemployment insurance for nannies, household workers, or other employees, excise taxes, real-estate transfer taxes, and so on and on, right down to your vehicle stickers and those annoying extra taxes on your airline tickets.

Once this total hits the alternative maximum tax, you’ve done your bit and federal income taxes can take no more.

You compute federal income taxes as usual, but then you get to reduce the “tax due” that the total is less than the alternative maximum.

For the dude’s supporting argument, see the the article America Needs an Alternative Maximum Tax

The plan has some holes, but it has potential …

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Follow on Twitter @KenHoma            >> Latest Posts

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

April 12, 2013

According to Pew Research

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

image

Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Taxes: Did you hear me screaming yesterday?

April 11, 2013

Timing is everything, right?

Yesterday, like many – err, make that some Americans, I was putting the finishing touches on my 2012 tax returns (which are due in a couple of days).

Like some – err, make that a few Americans, I have to pay income taxes.

Yesterday morning I swallowed hard and wrote out the check … the big check.

Lots of money … at least half of it will be out-and-out wasted by a cost-bloated government machine,

Most of the rest will be spent on stuff that I don’t agree with or support.

OK, it’s still my civic duty, right?

Tried to put taxes out of my mind.

Then, President Obama unveils his new budget.

The chart below tells the story.

Lots of taxes and some phony “savings” against grossly escalating budgets.

image
Source

Bottom line: those who already paying all the taxes should pay even more …

Couldn’t the President at least had the courtesy of waiting for the ink to dry on my check before calling me out as a piker and saying I wasn’t paying my fair share.

Gimme a break, man.

You’re making ME want to stop working …

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Follow on Twitter @KenHoma                         >> Latest Posts

Nums: Did Clinton really end welfare as we know it?

March 29, 2013

Surprised me, but the answer is yes.

But, there’s more to the story.

Clinton’s (and Gingrich’s) initiative to pare the welfare rolls cut the number of people on welfare from about 5 million to under 2 million.

Surprising to me, the number has held pretty constant for the past 15 years or so.

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As I said, there’s more to the story …

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What’s so shocking about Cyprus’ tax on bank accounts?

March 26, 2013

OK, Cyprus is going to slap a tax on bank accounts over $100,000.

The world is aghast.  The end of financial systems as we know them is in the balance.

Say, what?

It’s not the first time that a government – think, U.S. government — has seized (oops, I meant “taxed”) private assets

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Here are a couple of examples from close to home …

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How the Fed is fueling the stock market … and feeding Obama’s spending.

March 14, 2013

First, a couple of disclaimers …

1) At heart, I relish conspiracy theories.

2) You probably know this already

But … the obvious has suddenly became clear to me.

Ben is in cahoots with Barack.

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Here’s how and why it matters.

As loyal readers know, I’m bearish on the stock market.

Most companies have done a monumental job deleveraging and boosting profits by restructuring … i.e. jettisoning under-performing assets and employees.

Add QE1, QE2, QE3 … and you’ve got yourself a stock market rally.

What perplexed me  is why Obama would tolerate monetary policy that makes the rich richer (way richer) and keeps the poor poor.

Didn’t make sense to me.

Until the light bulb finally illuminated.

Here’s what’s going on … (more…)

Taxes: Ravens’ Flacco moving to Puerto Rico?

March 12, 2013

Oops.  Got the stories crossed.

It’s John Paulson moving to PR.

Flaaco just signed a contract making him the highest paid NFL player ever.

Well, kinda  … more on that below.

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It’s being reported that hedge fund legend John Paulson is considering leaving New York to go to Puerto Rico, where a tax loophole would let him reduce taxes on the $9.5 billion he has in his own hedge fund.

Bloomberg reports that several wealthy Americans have already taken advantage of the year-old Puerto Rican law that lets new residents pay no local or U.S. federal taxes on capital gains.

Note: The marginal tax rate for affluent New Yorkers can exceed 50 percent.

Back to the Flacco story … (more…)

Outta Here: Tina Turner bolts for Switzerland.

January 26, 2013

Last week it was Phil Mickelson … the pro golfer said he was considering relocation options to mitigate high tax rates.

Phil – a white, conservative, male – got blasted by the liberal press for his apparent unwillingness to be patriotic and pay his fair share.

Yesterday, the story got more interesting.

Rock icon Tina Turner announced that she’s renouncing her U.S. citizenship to become a Swiss-miss.

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As you may know – or can see above – Tina is not a white, conservative, male.

So the press coverage has been, shall we say, “gentle”.

To that point …

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Warning: Before you click the 1040 eFile button …

January 14, 2013

This one strikes close to home.

Article in this morning’s WSJ E-Filing and the Explosion in Tax-Return Fraud

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Over 80% of individual returns were e-filed last year.

As a direct result:

  • Tax fraud is now the third-largest theft of federal funds after Medicare/Medicaid and unemployment-insurance fraud.
  • Tax-identity theft exploded to more than 1.1 million cases from 51,700 in 2008.
  • Last summer, the Treasury “discovered” an additional 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion.
  • The IRS has a backlog of 650,000 identity theft cases, and it usually takes over a year to resolve each of them

Here’s why I don’t just shrug off those stats.

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My imagination, or did my middle class paycheck get smaller?

January 14, 2013

Even the lowest information voters should have realized by now that their paychecks have shrunk by 2% …  since the Feds didn’t renew the 2% payroll tax holiday.

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The big question for the economy as 2013 gets underway is how America will react to their smaller paychecks.

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Gotcha: Here are the nasty 13 tax increases …

January 9, 2013

Here’s a great recap prepped by the Heritage Foundation with links to deeper details …

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Key takeaways:

  • Everybody is getting nicked … either directly or indirectly … not just the wealth-mongering 2%.
  • Biggest impact is elimination of the payroll tax holiday … which hurts the middle class the most

Read ‘em and weep …

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Financial math: Capital gains tax rates are going up 8.8% … So, how much will after-tax capital gains go down?

January 8, 2013

This is a relatively simple financial math question that most people I’ve asked have gotten wrong.

Answers have ranged from less than 8.8% – since only capital gains are being taxed (huh?) … 8.8% – because that’s how much the marginal rate is going up … to more than 8.8% – “otherwise you wouldn’t be asking the question”.

First, what’s magic about 8.8%?

Well, Obama did what he promised and jacked capital gains tax rates from 15% to 20% … and, don’t forget ObamaCare has a 3.8% non-payroll payroll tax on investment income starting in 2013.

So,  the effective capital gains tax rate is going from 15% to 23.8% … a delta of 8.8%.

That 8.8% increase will cut after-tax capital gains by 10.35% !

If you don’t believe me, here’s he math …

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HOT Encore: If capital gains tax rates go up 8.8%, how much will after-tax capital gains ROIs go down?

January 5, 2013

Here’s an encore presentation of a HOT: Homa Online Tutorial originally posted before the election.

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Well,  Obama got his dream to come true — capital gains rates have been jacked from 15% to 23.8% ….  the basic capital gains tax rate went  from 15% to 20% … and ObamaCare has a 3.8 non-payroll payroll tax on investment income starting in 2013.

So, the effective capital gains tax rate goes from 15% to 23.8% … a delta of 8.8%.

That 8.8% tax rate increase will cut after-tax capital gains ROIs.

By how much?

Answer: The pre-tax ROI times 8.8%.

Here’s the math …

(more…)

Hosed: CEO’s lined up, now …

January 2, 2013

Back in early December, Obama reeled in corporate CEOs.

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He insinuated that corporate rates would be coming down next year if the CEOs would just get in line and back his current round of individual tax increases.

The CEOs bought it line hook, line & sinker.

Now, Obama says he’s coming at their companies for tax revenue.

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After the House the acted on the Fiscal Cliff by passing the Deficit Increase Act of 2013, President Obama warned Republicans:

“The deficit is still too high and I’ll stick with my demands for a “balanced” approach blending spending cuts with revenue increases, notably from the rich and wealthy corporations.”

Surprise, surprise, surprise.

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Follow on Twitter @KenHoma         >> Latest Posts

Happy New Year … Your taxes went up at midnight.

January 1, 2013

Partially obscured by the hoopla on Times Square and the bizarre Fiscal Cliff legislative process, is a simple fact: Your taxes have gone up … even if you’re not a millionaire or billionaire making more than $200,000 (oops, I meant $400,000)..

There are 2 big ones: elimination of the 2% payroll tax “holiday” … and the ObamaCare tax on “unearned income”

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Payroll Tax

For the past 2 years, payroll taxes – you know, the automatic deductions for Social Security and Medicare – were reduced by 2% to stimulate the economy.

The so-called “2% tax holiday” ends on December 31 and there are no apparent moves to renew it.

According to USA Today:

A temporary reduction in Social Security payroll taxes expires at the end of the year and hardly anyone in Washington is pushing to extend it. Obama hasn’t proposed an extension, and it probably wouldn’t get through Congress anyway, with lawmakers in both parties down on the idea.

Even Republicans who have sworn off tax increases have little appetite to prevent this one .

Bottom line: The expiration will cost a typical worker about $1,000 a year, and two-earner family with six-figure incomes as much as $4,500.

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ObamaCare Tax …

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Ouch: America’s disability epidemic.

December 31, 2012

According to the Social Security Administration, the number of (former) workers collecting disability benefits hit a record 8,827,795 in December.

I’ll stipulate that the vast majority of the 8.8 million are honest folks who really can’t work because they’re disabled … and, I realize that an aging work force has a higher propensity for disablement.

But c’mon, man … this is starting to smell pretty fishy..

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The Feds are dishing out over $135 billion annually in disability payments.

How much of the $135 billion do you imagine is going to the folks that Dateline keeps exposing as frauds?

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Here are some more interesting Social Security factoids …

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