Tag Archives: taxes

Government of the people, by the people, and incomprehensible to the people?

Posted on by Josiah Kollmeyer
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The Founders understood that the government of a Republic existed to serve its citizens, and not the other way around. In order for citizens to hold government responsible to this end, however, they must be able to actually understand what the government is doing.

Today, our government has strayed far from this path. Laws proliferate in such numbers that even lawmakers, let alone citizens, are left ignorant of legal intricacies. Bills can apparently even be passed without being read by their sponsors. Witness this exchange regarding the Patient Protection and Affordable Health Care Act (ObamaCare): http://www.youtube.com/watch?v=ITyy1-BUGu8

This week, President Obama and Speaker of the House Boehner are meeting to discuss potential action to be taken on the national debt, which currently exceeds $14 trillion, a number that few if any people can actually grasp. Looming large in their minds are questions concerning the U.S. Tax Code, arguably the most convoluted and confusing title of legislation in the country. The current code contains 11 subtitles and more than 9,800 sections. It has grown riddled with loopholes and provisos that favor special interests from every corner of society. While the much-touted exemptions from certain taxes granted to owners of corporate jets (section 4281) do provide a good example of this, they constitute only a tiny fraction of the problem.

The United States needs a tax code that its citizens can actually understand, as well as one that rewards productivity by allowing citizens of all levels of income to keep more of what they earn. A simplified tax code will benefit our country in multiple ways. It should set a principle of equality before the law by not favoring special interest groups as the current tax policy does. Businesses and individuals should not gain financial advantage based on catering to the political fads of the day, but should compete on an equal footing with consumer dollars as the reward for productivity. When interest groups spend money essentially lobbying for more money, productivity is lost. The resources invested in lobbying could both bring the company profit and increase America’s overall wealth if they were used to produce useful goods. A simplified tax code would send a clear message to special interests that money cannot buy them preferential treatment in Washington.

A popular understanding of the tax code would help to keep the government accountable, as people can quickly know how much tax they owe rather than sifting through pages of IRS regulations hoping that they didn’t miss a deduction. People deserve to know exactly how much of their money is used to finance their government, and in what ways. Businesses would also be able to make smarter decisions if they were confident of their tax burdens ahead of time. Of course, this demands a stable tax code as well as a simple one.

A flat-rate tax with fewer politics-based exemptions would empower both citizens and businesses in America while fighting the power of the IRS behemoth and special interests which seek gifts paid for by public funds. By closing loopholes and special credits, tax rates could be lowered across the system, encouraging both people and businesses to produce more. People produce more when they know that they will reap the benefits of their production, and such knowledge is only possible given a comprehensible tax code.

The State and the Superstar

Posted on by alazowski
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The shock of Lebron James leaving Cleveland has worn off by now for basketball fans. I don’t know the first thing about basketball and don’t know if in terms of the sport he made the right choice. I do, however, know a thing or two about economics and believe that he made the right choice. Economically speaking that is.

Due to Florida’s friendly tax laws, James stands to take home more of his paycheck. Even though he is earning less than what he made playing in Ohio, he will be able to keep more of what he does earn. What’s not to love about that?

James isn’t the only one moving to a state that has friendlier tax laws. Millions of average Americans are doing the same thing. Many Businesses are also doing the same thing, too. Businesses and people are going to follow the money. States like Ohio and others hit hard by the recent recession, like Michigan, could stand to learn a thing or two from James. If these states want to keep their people, businesses and possibly sport superstars, they need to lower taxes.

More Taxes

Posted on by sjcammenga
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Though the health care is yet unavailable, the first taxes of the Health Care Reform Bill are beginning to take effect. For instance, Michiganders now face a 10% tax on tanning. This will increase prices and some have worried that it will result in salons closing, leaving even more people unemployed.
The resoning behind this tanning tax is that studies seem to show that indoor tanning almost doubles the risk of melanoma, though the VP of International Smart Tan Network says that it is a gross oversimplication that tanning should be stopped because of this possibility. He also holds that one of the causes for this tax as opposed to another option of taxing botox (which would not have as much of an impact on the middle class) was lobbying done behind closed doors.
I personally do not tan, but I do enjoy having the freedom to tan at will without extra taxes because it might harm my health. It is my job to be responsible in how I treat my body and I will suffer the consequences if I abuse it. It is not the job of the government to try to limit my freedom and possibly cause negative effects on the owners and patrons of any business, including tanning salons.

Michigan Unemployment Decreases

Posted on by clint7981
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The unemployment figures for the month of May recently decreased throughout Michigan from 14% to 13.6%. The administration and michigan legislators are pointing to these numbes as proof that intense government action, in the form of stimuli and bailouts, actually improves our standards of living. But nothing could be further from the truth and it is insulting to the intelligence of every Michigander.

The truth is that the numbers are decreasing despite the harmful actions of both the federal and state government, thus illustrating the force of markets and government’s inability to contain them.

If lawmakers both state-wide and federal want to have a more significant impact in encouraging a speedy recovery they would abandon their activist efforts and embrace free market solutions, namely lower taxes, less regulations, and more economic freedom.

QED: Normal People Like Taxes

Posted on by razma766
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Kurt Bouwhuis, Mackinac Center Intern

Eric Baerren makes an interesting point in this blog post over at MichiganLiberal.

“Normal people would establish as their chief priority to make sure that schools are good and that people can access health care and that the garbage trucks operate according to a reliable schedule. Again, that’s normal people. Abnormal people first and foremost concern themselves with making sure we don’t raise taxes.” – Eric Baerren

Eric is confusing means with ends. All the services listed in the first sentence of the quote are the ends.  Most people agree that these ends are very important.  The desired means, however, vary from person to person.  The people who think more like Eric believe that government is a useful means for achieving the ends.  Those who oppose such means believe that reducing government will bring about the same ends.

The questions is not whether someone is normal or abnormal, but rather, whether or not the desired means to the end are destructive or productive.

btw – By Eric’s criteria, I am an abnormal person with normal person desires.

Hmmmmm…..

Posted on by razma766
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scratch-headKurt Bouwhuis, Mackinac Center Intern

I was recently reading the Michigan Liberal blog, and came across an interesting sentence: “I just became aware of this, but it’s worth thinking about while also remembering that the construction of the other proposed coal plants likewise will get passed right along to customers.” Eric B. at Michigan Liberal

I think Eric is on to something.  When profitable businesses incur additional expenses, the costs are passed on to the consumer.  I wonder if high taxes on businesses have the same effect?

A Good Arrrrrggguement

Posted on by razma766
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Editor, The Wall Street Journal

200 Liberty Street

New York, NY 10281


To the Editor:


Arthur Bowring is correct that pirates raise costs to consumers (“The Price of Piracy,” November 25). Having to confront predators possessing the brute force to seize their cargoes and persons, merchants naturally cut back on their commercial activities and demand premium payments for whatever services they continue to perform.


But it’s no stretch to arrrggggue that pirates share much in common with the stationary bandits we call “governments.” Governments, too, routinely threaten to seize persons’ assets and persons if those persons don’t pay the ransom called “taxes.” And like pirate activity, government regulations and taxes increase the risks and costs of doing business – expenses ultimately passed on to consumers.


The chief difference between the two sorts of bandits is that, unlike governments, pirates don’t insult the intelligence of their victims with assurances that the pirates’ predations are for the victims’ own good.

Sincerely,

Donald J. Boudreaux

Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.

Granholm and MEGA Announce 9,495 New Michigan Jobs

Posted on by razma766
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Kurt Bouwhuis, Mackinac Center Intern

Yesterday, I came across this headline while reading a blog. The author of the blog post was so proud of the Gov. Jennifer Granholm for bringing all these great jobs to Michigan. I have no problem with attracting new jobs to Michigan, as long as no coercion involved. Sadly, in this instance, the government arbitrarily taxes businesses at different to create an uneven playing field.

Why allow government to decide which businesses will develop in Michigan? Why not allow the market and entrepreneurs decide? It seems odd that we accept the notion of allowing government to manipulate the business playing field, offering unfair advantages to selected businesses.
Continue reading →

Taxes and Terrorism

Posted on by rombachk
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John Hancock is perhaps best known for his bold flourish of a signature on our Declaration of Independence. But not all of his bravery was applied toward objectively noble ends.  In addition to his general refusal to pay taxes, Hancock smuggled cheap sugar and 1.5 million gallons of molasses per year from the French West Indies to his home in the North American colonies – costing the British empire more than 36,000 pounds annually.

The goods were legal, so Hancock is often fondly remembered for his fearlessness in providing these commodities at a time when a brutal monarch’s taxes rendered them so expensive. Today, cash-strapped Michigan provides job security for a new generation of smugglers by taxing the butt off cigarettes and tobacco products. But we’re not learning from history, here. What were the implications of Hancock’s audacity? His actions strengthened the nation which later took premeditated action against a country they didn’t like. What are the implications for today’s John Hancock? Who among the smugglers roaming the streets today is the strengthening another system -  who will play cat-and-mouse here in order to strengthen a nation preparing to move against us? Continue reading →

“Please, sir, may I have some more?”

Posted on by rombachk
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by Kahryn Rombach, 2008 MCPP Intern

Do you know where each of your tax dollars go? Residents of a small Northern Michigan town do, and they’re offering to pay more. After the city manager and mayor formed a caucus of fifteen citizens to review the city’s budget and suggest potential cuts, these men and women decided that their dollars were being put to good use and ultimately opted to raise their own taxes. This speaks volumes about the way interaction between citizen and government has changed since America’s founding – it would appear that either the government is now capable of providing the masses what they really want or that laziness has in fact won out and first principals have been abandoned. So when the Founders’ intent and the guiding lights they left are forsaken for easy, blind acceptance of government micromanagement, who can protect the people from themselves?

The Cost of a Movie

Posted on by jsrule
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Roll it!Grand Rapids blog Local Area Watch recently posted a story on how Michigan’s taxpayers are investing in filmmaking.  We have already posted state Representative Chuck Moss’ opinion of the film industry tax break some of Lansing’s lawmakers passed just a few months ago.  The new laws have been decried by both parties, and rightly so.  It appears that Michigan taxpayers will end up shelling out more than $125M in the next year in tax-credit subsidies to try and attract filmmakers to Michigan.  That is not a good idea. Continue reading →

Thought-Provoking

Posted on by rombachk
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Realizing that the power to tax is the power to destroy, and that the power to take a certain amount of property or income is only another way of saying that for a certain proportion of his time a citizen must work for the government, the authority to impose a tax upon the people must be carefully guarded. It condemns the citizen to servitude.

Calvin Coolidge – 1924

I stare at this quote an average of three and a half minutes each day while I wait for the microwave to nuke my lunch or coffee, and it got me thinking. Who supports taxation?

I still don’t understand – even after reading about how taxes are sexy. To make things more confusing, I’m the well-educated product of a public school system, and I really appreciate the new sidewalks and stop signs that just went up at the end of my street. But the government’s regulation of the amount of water in my toilet is unconstitutional, and even the easy-target sin taxes are indirectly causing situations beginning to resemble government-subsidized terrorism. 

Guess I’ll have to rethink those sidewalks.

Kahryn Rombach – MCPP Intern, Summer 08

Dillon Recall Dead

Posted on by jsrule
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photo from detnews.com

Michigan Liberal had a few things to say about Leon Drolet’s official close of the Michigan Taxpayer’s Alliance’s campaign to recall Andy Dillon, speaker of the Michigan House. The effort was an attempt to fight the significant tax hikes and the new Michigan Business Tax that were both enacted last year to cover a projected deficit of greater than $1.5B. Because of some admittedly unconstitutional petitioning laws, Drolet officially fell 776 signatures short, even though he had nearly 2,000 more signatures from the district than were necessary.

The defeat of the recall effort is not disappointing because a certain political party won or lost. Partisan politics are irrelevant here. Instead, it is disappointing that the recall was defeated by unconstitutional laws which never should have been enacted in the first place. It is disappointing that lawmakers in Michigan continue to spend hand-over-fist, hastily enacting taxes to try and cover potential and unconstitutional deficits. It is also disappointing that the Michigan House passed a resolution expressing their dislike for the recall effort, claiming that the increased taxes could not be interpreted as a “measure of misconduct.” These significant jumps in taxation are misconduct, though, and they need to be treated as such.

<>< Josh Rule : : 2008 MCPP Intern