Congress is discussing yet another tax increase. This one would be a tax on stock transactions and could fund a new jobs bill since it has become apparent to everyone that the stimulus failed to create any jobs on net. This was underscored again when the Labor Department reported Friday another 11,000 job loss for November. The job-destroying stock transactions tax gained traction this week when House Speaker Nancy Pelosi said she “believe(s) the transaction tax still has a great deal of merit.” Improving business confidence is the great missing …
Leaders in the House of Representatives recently discussed the possibility of extending the death tax at its current rate and exemption levels for one year through 2010. If this proposal becomes law it would be a massive tax hike. Under current law, the death tax has a top rate of 45 percent and an exemption of $3.5 million ($7 million for couples) this year. But on January 1, 2010 it expires. It only stays expired for one year, however, as it springs back to life in 2011 with a top …
Congress will take up debate on the dreaded Death Tax once again in the coming weeks. It will do so because the Death Tax expires for one year starting January 1, 2010. But like the villain in a horror movie, it will rise from the dead with its full power in tact on January 1, 2011. The one-year expiration will likely incite Congressional debate because some would like to keep it from expiring this year all together. The one year abolition of the tax is the end of a years-long …
The failure of the stimulus package to create jobs and generate economic growth becomes more apparent each day – despite preposterous claims from the White House about all the jobs they say it has created and saved. Counter intuitively (at least in the sane world outside of Washington), the stimulus’ failure increases the risk that Congress will try to pass another stimulus package based on their perceived need to “do something” to help the still-ailing economy. If Congress constructs the next stimulus the same way it did the last – …
A widely propagated myth contends that raising top tax rates doesn’t hurt small businesses because only a small percentage of them pay rates at that level. But the number of businesses that pay top rates is economically meaningless. By this more accurate measure it is obvious that raising top income tax rates would have an enormous negative impact on the most successful small businesses and the many workers they employ. According the Treasury Department and as shown in the chart below, 8 percent of small businesses pay the highest two …
On this week’s season premiere of the popular AMC show “Mad Men” viewers were reminded about the punitive high tax rates in the 1960s: [youtube]http://www.youtube.com/watch?v=tx8bQ-hqIUY[/youtube] This episode of Mad Men takes place in 1963, when the top income tax rate was 91 percent on incomes over $200,000 ($400,000 for married couples). That translates to about $1.4 million in 2009 dollars. The top rate today is 35 percent on incomes over $372,950. In 1963, by comparison, incomes over $10,000 (about $70,000 in 2009 dollars) paid 38 percent. As the scene from …
Virginians will celebrate their annual “sales tax holiday” this weekend—August 7 through August 9. On these three days, the state’s 5 percent sales tax will be exempted from school supplies, clothing, and footwear. Each eligible school supply item must be priced at $20 or less, and each eligible article of clothing and footwear must be priced at $100 or less. Many other states in addition to Virginia will also have sales tax holidays this year during the “back to school” shopping period. The idea is to lower the cost for …
The IRS released data today on the distribution of income taxes. It shows that the highest-earning taxpayers shoulder a considerable burden of the federal income tax. According to the IRS, the top 1 percent of taxpayers paid over 40 percent of all federal income taxes in 2007. That is a higher share than the bottom 95 percent of taxpayers combined! They paid just over 39 percent. The top 1 percent, those earning over $410,000, consists of 1.4 million taxpayers, while the bottom 95 percent contains 134 million. In 2000, before …
Everyone remembers President Obama’s now-infamous comment as a candidate that he thinks everyone is better when we “spread the wealth around.” Of course, we spread plenty of wealth around through the tax code before Obama became President. In 2006, the latest year of available data, the top 20 percent of earners paid over 86 percent of all income taxes. While the bottom 50 percent of earners paid almost no taxes whatsoever. To get a complete picture of government redistribution, however, we need to know who receives the spending in addition …
The Congressional Budget Office (CBO) recently released a paper: Did the 2008 Tax Rebates Stimulate Short-term Growth? The paper is a comprehensive summary of the best recent literature on the topic. CBO sorts the literature into three categories: Studies that used detailed data about individual spending to study the effects of the temporary tax rebates; Studies that used survey data of what individuals did with the money when they received it; and Studies that used national data on income and spending to measure the effects of the tax rebates.
