Tag: taxes

Death , Taxes, and Ice Cream

Ben and Jerry, of Ben and Jerry’s Ice Cream, have a petition from Moveon.org that they want me to sign.

Dear MoveOn member,

It’s Ben and Jerry—the co-founders of Ben & Jerry’s Ice Cream—and we need your help.

We want to pay our fair share of taxes, but Republicans in Congress are trying to pass an unnecessary tax giveaway to America’s wealthiest citizens. We don’t want, need, or deserve this tax cut—which is why we’re asking you to sign

our petition to Senate Democrats that states:

If Senate and House Republicans have their way, they will eliminate the estate tax, which affects only the wealthiest 0.2% of taxpayers. Repealing the estate tax would hurt our economy and be fundamentally unfair. Senate Democrats: Stand with us—and stay united against the repeal.Sign Ben & Jerry’s petition

Here’s the truth: We don’t need this stupid tax cut.

As we recently wrote in an op-ed in USA Today, we’re wealthy thanks to the good fortune of our efforts—but also because of many other societal factors that contributed to our wealth.1 The estate tax is one of the ways that the wealthy pay forward so the next generation has the opportunities we had.

The estate tax, which the U.S. has had for more than a century, currently affects Americans with estates worth at least $5.4 million, or $10.8 million for a couple—only 1 out of every 500 taxpayers.2 And yet, it’s been a target of right-wing lawmakers, working on behalf of their wealthy donors. 

Click here to sign our petition calling on Senate Democrats to stand united and stop this Republican giveaway to the superrich.

Congress has shrunk the estate tax in recent years—and now the Senate and House, in advisory votes largely along party lines, have voted to repeal it entirely.3 The votes are only advisory, for now, but when the Republicans press this issue again, Senate Democrats will need to be ready to beat back the repeal and block this latest Republican giveaway to the superrich.

We know this may not be as fun as helping us choose names for ice cream flavors—but it’s critical to send a message that Congress shouldn’t be working on behalf of only the wealthiest Americans but should get back to the people’s business. Wages have been stagnant for decades.4 Young people are carrying around anvils on their backs called student debt.5 Our public infrastructure is falling apart.6

Good grief, Congress. With all this going on, are you really going to give another tax break to those of us who need it least?

Sign our petition—tell Senate Democrats to stand united and ensure that Republicans don’t give multimillionaires and billionaires even more tax breaks.

Thanks for all you do.

–Ben and Jerry

I always find it fascinating when millionaires and billionaires write editorial pieces demanding higher taxes for themselves because it is such an obvious exercise in hypocrisy. They want to get credit for a generosity and benevolence they do not really have. If Ben and Jerry think that they are not contributing enough with the taxes they pay, they are perfectly capable of writing a check for any amount they want. If they sincerely believe the the federal government can make better use of their money than they can, they can give away their entire fortune. It’s their money that they have earned. They can do what they want with it. It may be that other people who have been successful might believe that they have contributed quite enough already and that they can do better things with their money than give it to the federal government. Ben and Jerry don’t seem to want to give them that option. Seen that way, Ben and Jerry’s offer to pay higher taxes shows not a generous giving of their own substance, but a desire to impose their own priorities on others.

An estate or inheritance tax is simply a tax levied on wealth that is transferred by inheritance. This tax is assessed when the owner of the property to be transferred dies and his will takes effect, hence the estate tax is often called the death tax, especially by those opposed to it. The estate tax levied by the U.S. government does not affect many, only 0.2 percent of the population and it is not a major source of revenue for the government. The receipts from the estate tax makes up less than one percent of the total revenue collected by the government. It isn’t likely that repealing the estate tax will cause a fiscal crisis. In fact, it is possible that the estate tax, as it is currently configured is not worth the effort of collecting it. It may be that if the heirs to an estate were permitted to keep the entire estate, the wealth they would generate through investments, etc word yield more tax revenue for the government through the income and capital gains taxes than the revenue from the estate tax. I imagine that is the thinking behind the efforts to repeal the estate tax.

I do not know if this argument is valid, since I am not any sort of expert on tax policy. Even if the analysis is true, it does not necessarily mean the estate tax should be ended. The current estate tax in the U.S. was enacted in 1916 not so much to generate more revenue for the federal government as to prevent the emergence of a hereditary class of the super rich who would pass down an ever increasing share of the nation’s wealth from generation to generation. Oddly, even many of the wealthiest men in the country supported the idea of an inheritance tax at the time it was enacted. Andrew Carnegie argued against rich men leaving large fortunes to their children on the grounds that it was doing them no favor to allow them to coast through life as the idle rich on their father’s inheritance. Carnegie and others of his class had worked their way up from the bottom and they believed that their children should have the same opportunity to work to get ahead.

I am not sure that the estate tax, as it is currently configured really accomplishes this goal. As Ben and Jerry pointed out, only amounts above a certain limit, $5,430,000 in 2015, are subject to the estate tax which is assessed at a progressive rate from 18% to 40%. If I were to die and leave an estate worth $100,000,000 to my heirs, they would still get roughly half of the estate after taxation In fact, the administration of the estate tax seems to be very complicated, if the Wikipedia page is any indication, and it is possible for a clever person to arrange his finances in such a way as to pay little or no estate tax. If we really wanted to discourage large inheritances, the estate tax ought to be raised, perhaps to confiscatory rates above a certain level of wealth and we would tighten up the rules regarding gifts given before death and trusts.

There is a persistent myth in politics that the problems of this country have simple, commonsense solutions that everyone would agree to if it were not for the selfishness and greed of special interests. In fact, even people with the best will can disagree over policies. I think the debate over the estate tax proves the lie to this myth, since there are very good arguments both for and against it. Any issue can be debated over matters of fact, whether or not repealing the estate tax will improve the public finances, and matters of values, which is more important, economic growth or economic equality. Matters of fact can be resolved fairly easily but arguments over values tend to be intractable. If you believe the government should promote equality, you will probably favor keeping the estate tax. If you believe economic growth is more important and can be promoted by lowering taxes, you might favor repealing it. Both sides have different opinions on what is important or desirable and both sides may well be trying to do what is best for everyone. One need not assume that they only want to give away money to the wealthy, as Ben and Jerry do, or have nefarious plans to redistribute all the wealth in this country, as some of  President Obama’s critics seem to believe.

As I said, there are good arguments on both sides and I do not know enough about tax policy to really have a strong opinion on the estate tax. I do think that Ben and Jerry should stick to making ice cream.

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Auditing the Tea Party

It’s not paranoia if they really are out to get you. During the last election cycle some Tea Party and conservative groups noticed that the IRS was unusually curious about their tax exempt status. This might be dismissed as anti-government paranoia, except that last Friday an official from the IRS admitted to doing just that.

An IRS official apologized on Friday to tea party organizations and other conservative groups for inappropriately targeting them during the 2012 election, the Associated Press reports.

The groups, which enjoyed tax-exempt status under the internal revenue code, were singled out for additional scrutiny of their tax exemption if their names included the words “tea party” or “patriot.” In several cases, the groups were asked to provide a list of donors for review, usually a violation of IRS policy.

“That was wrong. That was absolutely incorrect, it was insensitive, and it was inappropriate. That’s not how we go about selecting cases,” said Lois Lerner, the head of the IRS division that oversees tax-exempt groups. “The IRS would like to apologize for that.”

Lerner said the additional scrutiny was initiated by lower-level employees working out of Cincinnati, and that the practice was not a product of political bias. She told the Associated Press that high-level officials were not informed of the practice. On a conference call on Friday, IRS officials said they did not know whether any administration officials at the White House or Treasury Department were aware of the practice.

During the election, several conservative groups cried foul over what they saw as undue pressure justify their tax-exempt status, accusing the IRS of sending arduous questionnaires seeking information about their members’ political activities.

The story that it was just a few low level employees didn’t last long.

Higher-level Internal Revenue Service officials took part in discussions as far back as August 2011 about targeting by lower-level tax agents of “Tea Party” and other conservative groups, according to documents reviewed by Reuters on Monday.

The documents show the offices of the IRS’s chief counsel and deputy commissioner for services and enforcement communicated about the targeting with lower-level officials on August 4, 2011, and March 8, 2012, respectively.

The two communications occurred weeks and months before Doug Shulman, then the commissioner of the IRS, told congressional panels in late March 2012 that no groups were being targeted for extra scrutiny by the tax agency.

The IRS has maintained that its senior leadership did not know for some time that lower-level agents were applying extra scrutiny to applications for tax-exempt status from groups with key words in their names, such as “Tea Party” and “Patriot.

The agency said in a statement on Monday that Steven Miller, who is now acting IRS commissioner, was first informed in early May 2012 that some groups seeking tax-exempt status had been “improperly identified by name” and subjected to extra scrutiny.

Late on Monday, Senate Finance Committee Republicans said Shulman was briefed on the targeting in May 2012, a date not previously disclosed. An aide said committee staff learned this on Monday from the Treasury Inspector General for Tax Administration (TIGTA), an independent IRS watchdog.

It keeps getting worse and worse. The Tea Party weren’t the only ones selected for special attention by the IRS.

The Internal Revenue Service’s scrutiny of conservative groups went beyond those with “tea party” or “patriot” in their names—as the agency admitted Friday—to also include ones worried about government spending, debt or taxes, and even ones that lobbied to “make America a better place to live,” according to new details of a government probe.

The investigation also revealed that a high-ranking IRS official knew as early as mid-2011 that conservative groups were being inappropriately targeted—nearly a year before then-IRS Commissioner Douglas Shulman told a congressional committee the agency wasn’t targeting conservative groups.

The new disclosures are likely to inflame a widening controversy over IRS handling of dozens of applications by tea-party, patriot and other conservative groups for tax-exempt status.

The details emerged from disclosures to congressional investigators by the Treasury Inspector General for Tax Administration. The findings, which were reviewed by The Wall Street Journal, don’t make clear who came up with the idea to give extra scrutiny to the conservative groups.

The inspector general’s office has been conducting an audit of the IRS’s handling of the applications process and is expected to release a report this week. The audit follows complaints last year by numerous tea-party and other conservative groups that they had been singled out and subjected to excessive and inappropriate questioning. Many groups say they were asked for lists of their donors and other sensitive information.

On Sunday, a government official said the report will note that IRS officials told investigators that no one outside the IRS was involved in developing the criteria the agency now acknowledges were flawed.

In my opinion this is worse than the scandal regarding the Benghazi attacks last September 11. It is regrettable and unfortunate that four Americans lost their lives and an investigation is in order to determine what went wrong, but the worst that the Obama administration can be charged with there, is gross incompetence and negligence, and a coverup to ensure that the narrative that al-Qaeda was in retreat not be challenged. The issue with the IRS is the deliberate use of the federal government’s power to harass people and organizations opposed to the administration.

Is President Obama responsible for the questionable activities of the IRS? Probably not directly. Richard Nixon almost certainly neither knew of or authorized the break in at Watergate. He was still responsible for the scandal because the President sets the tone for his administration. The Nixon administration became one in which the suggestion that someone break into the Democratic National Committee headquarters and install listening devices was not instantly dismissed as illegal and insane, but was approved and acted upon. President Obama probably never suggested that the IRS should investigate Tea Party organizations, but the employees at the IRS must have suspected that such activity would be condoned by President, “If they bring a knife to the fight, we bring a gun” and “punish our enemies in the voting booth“. Barack Obama has never seemed to be especially interested in getting along with his opponents. Perhaps it is a legacy of his days as a community organizer, but Obama seems to be more interested in destroying those who oppose his policies, which makes this whole affair all the more chilling.

 

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Jon Lovitz Rants

Jon Lovitz
Jon Lovitz (Photo credit: Wikipedia)

I saw this on Yahoo News, though I gather it has gotten all over the Internet.

The former “Saturday Night Live” star delivered some choice words for the president on his podcast, “The ABCs of SNL.” The show is co-hosted by Kevin Smith and calls itself “Live from the Jon Lovitz Podcast Theater.”

The actor said he’s a Democrat and voted for Obama, but now he’s mad as hell at the president’s plan to raise taxes on the rich — and his rant has the Web buzzing.

The comic called Obama a “[bleep]ing a-hole… for saying the rich don’t pay their taxes.” Lovitz delivered his invective after assuring the audience “I voted for the guy” and even expressed admiration for Obama’s rise from “nothing.” “He had no father — he is mixed-race, which is a burden… and the guy ends up going to Harvard, and he’s the president of the United States.”

Lovitz gave Obama no slack for turning against his fellow millionaires, however. “This whole thing with Obama saying the rich don’t pay their taxes is f—ing bulls—,” he said. “First they say to you… ‘The United States of America, you can do anything you want — go for it! So then you go for it and you make it and everyone’s like, ‘[Bleep] you!’”

Well, I agree with Lovitz about Obama, but I have to wonder just what he thought he was voting for in 2008. For those of us who paid attention to what Barack Obama was actually saying, and who took the trouble to learn something about his background, there really have been no surprises regarding Obama’s actual policies. The only thing that took me by surprise has been just how incompetent a president Obama actually is.

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Our Leader Speaks

USA Today ran a piece by President Obama today titled “Go ‘big’ on debt deal”, in which he discusses our fiscal situation. I just want to say that I am beginning to fear for his mental health. I honestly think he has lost touch with reality.

He begins well enough,

For years now, America has been spending more money than we take in. The result is that we have too much debt on our nation’s credit card — debt that will ultimately weaken our economy, lead to higher interest rates for all Americans, and leave us unable to invest in things like education, or protect vital programs like Medicare.

Neither party is blameless for the decisions that led to this debt, but both parties have a responsibility to come together and solve the problem. That’s what the American people expect of us. Every day, families are figuring out how to stretch their paychecks a little further, sacrifice what they can’t afford, and budget only for what’s truly important. It’s time for Washington to do the same.

Both parties are, of course, to blame. Both Democrats and Republicans have been spending our money like so many drunken sailors. But I really wish that Mr. Obama would take the blame for the unprecedented amount of “stimulus spending” that his administration has been responsible for these last two years

But over the last few months, I’ve also said that I’m willing to cut historic amounts of spending in order to reduce our long-term deficits. I’m willing to cut spending on domestic programs to the lowest level in half a century. I’m willing to cut defense spending by hundreds of billions of dollars. I’m willing to take on the rising costs of health care programs like Medicare and Medicaid, so we can meet our obligations to an aging population.

Some of these cuts would eliminate wasteful spending, weapons we don’t need, or fraud and abuse in our health care system. Still, some of the cuts would target worthwhile programs that do a lot of good for our country. They’re cuts that some people in my own party aren’t too happy about, and frankly, I wouldn’t make them if we didn’t have so much debt.

But the American people deserve the truth from their leaders. And the truth is, you can’t get rid of the deficit by simply eliminating waste and fraud, or getting rid of pet projects and foreign aid, like some have suggested. Those things represent only a tiny fraction of what we spend our money on.

But he doesn’t give any specifics on what he thinks we should cut. So far, I have not heard him even consider cutting spending on any of his pet projects like Obamacare, or all of that stimulus. But next he get what he’s really after.

At the same time, it’s also true that if we tackle our deficit with spending cuts alone, it will likely end up costing seniors and middle-class families a great deal. Retired Americans will have to pay a lot more for their health care. Students will have to pay a lot more for college. A worker who gets laid off might not have any temporary help or job training to fall back on. At a time of high gas prices, we’ll have to stop much of the clean energy research that will help free us from our dependence on oil.

That’s why people in both parties have suggested that the best way to take on our deficit is with a more balanced approach. Yes, we should make serious spending cuts. But we should also ask the wealthiest individuals and biggest corporations to pay their fair share through fundamental tax reform. Before we stop funding clean energy research, we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don’t get. Before we ask college students to pay more, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries. Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks they don’t need and never asked for.

The middle class hasn’t just borne the brunt of this recession; they’ve been dealing with higher costs and stagnant wages for more than a decade now. It’s just not right to ask them to pay the whole tab — especially when they’re not the ones who caused this mess in the first place.

That’s right. Raise the taxes on those evil rich who caused the mess we are in. He doesn’t want to cut any of his projects like “clean energy research” that is going nowhere. Of course he has to throw that bit in about corporate jets. That facts of the matter are that eliminating tax breaks for oil companies and corporate jets wouldn’t even begin to pay for the increased spending that has occurred on his watch. Confiscating the wealth of every millionaire wouldn’t make a dent on our national debt. Our problems come not because the government is not getting enough revenue but because our leaders can’t stop spending, even if their lives depended on it. Either Obama knows this and is the biggest liar we have ever had in the White House, or he believes what he is saying and has lost it.

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