Posts Tagged With: revenue

Record $3 trillion in tax revenue – and it’s still not enough? ….


Written by Allen West on November 16, 2013

The Office and Management and Budget (OMB) is expecting record Fiscal Year 2014 tax revenues of $3 trillion, the highest in our history. So, why is it that Democrats continue to talk about raising taxes for more revenue?

Government spending is increasing and our debt has breached $17 trillion, with close to $7 trillion in new debt over the past five years. The only reason our deficits are declining is because of the sequester cuts — which President Obama claimed would bring forth Armageddon. Of course he takes credit for the smaller deficits.

Just consider what would happen for economic growth if we reduced the tax burden on Americans. The choice for our elected officials is whether they covet more of our resources for their wasteful government spending or would prefer to create a free market economic boom.

Right now, our economy is dependent upon government largesse, and we still have a record government spending to gross domestic product (GDP) ratio of over 24 percent. Our debt to GDP ratio is inverted to the tune of America owing more than it produces.

There has to be a point when Mr. Obama, someone, anyone, finally says the debt clock must stop and reverse. However, that is not going to happen when our mandatory spending programs — Medicare, Medicaid and Social Security — continue to grow. Insolvency is a real issue.

We must grow our economy and get more Americans off Medicaid, not surrender and expand this program. We need to get more people back to work in order to sustain Social Security and truly put it back into an untouchable lock box, as the ravenous appetite for spending in our federal government has raided it.

Lastly, we need to focus Medicare on those who truly need it. We must understand our actual debt when unfunded liabilities are included is closer to $90 trillion.

Finally, if we continue to believe that the Federal Reserve, through its quantitative easing, can keep interest rates at this rock bottom rate, we are setting ourselves up for a REALLY big wake up call. Eventually Moose and Rocco will call in their chips.

The bottom line is that we do not have a revenue problem in America. We have an incessant spending disease. This is the 100th year of the personal income tax, established in 1913. At that time, the top marginal tax rate was seven percent. Today it is 39.6 percent. This is why I am a proponent of ending the progressive tax system, which punishes productivity. And just in case you missed it, a progressive tax was one of the ten planks outlined by Karl Marx in his Communist Manifesto.

President Obama is the Chief Executive Officer of the United States, but when have you heard him address economic growth by way of tax relief? Instead, we hear more talk about more subsidies for a bloated new entitlement program called Obamacare, which originally cost the taxpayers $940 billion, but is now estimated to cost $1.7 trillion. Now I know where the new tax revenues are going.

Categories: Politics, Uncategorized | Tags: , , , , , , , , , | 1 Comment

Obama’s budget includes some surprising taxes


President Obama has plenty of big taxes in his budget proposal.
To achieve $1.8 trillion in new revenue, the president suggested a few of the policies he’s raised while battling Republicans over the past four years: taxing higher incomes by capping itemized tax deductions, rolling back domestic-production credits for oil companies, instituting the “Buffett Rule” of a 30 percent minimum tax rate for people making over $1 million in a year, and taxing investment managers’ “carried interest” profits as regular income top the list.
But the tax code is a jungle of odd rules, and the penny-pinching side of Obama’s budget raises some new taxes (or closes some “loopholes”) that might not readily occur to most taxpayers filling out run-of-the-mill 1040s this weekend.
As laid out this week by the Treasury Department in its “green book,” a massive spiral-bound document that explains tax changes in the White House budget proposal – it is pale green, and 246 pages – here are some quirky maneuvers the president suggests to offset spending and keep the deficit just a bit lower:
1. A Tax on Flavored Vodka
President Obama wants to tax your Stoli Razberi.
Distilled spirits currently get a tax break if they include flavors, but the president’s budget proposal does away with that. Spirits are taxed at $13.50 per proof-gallon (a gallon of 100-proof liquor), but if distillers add flavorings, they can roll back some of that tax: Up to 2.5 percent of the alcohol in those flavoring mixtures is exempt from the spirits tax.
It doesn’t sound like much, but the Treasury claims this tax break gives an unfair advantage to flavored liquors, particularly foreign producers whose flavor quotients aren’t restricted, as they are for U.S. producers. Heavily-flavored, foreign-made spirits can be sold cheaper, and consumers might be more likely to buy them than they otherwise would, Treasury argues.
The new rule would be good for Jack Daniel’s, bad for Absolut Citron.
2. Golf Courses Are No Longer Tax Havens
In a creative tax maneuver, an Alabama land developer was able to deduct part of his golf course.
E.A. Drummond bought real estate on a Gulf Coast peninsula in the 1990s, created a business to build a golf course on it, and developed the land around the golf course. In 2002, he had the business place a conservation easement – a partial restriction of what can be done with a piece of land, for the purpose of conserving it or preserving “recreational amenities,” golf among them as the tax code is written – donated that easement to a conservation land trust, and claimed the value of the easement as a charitable-giving tax deduction.
Under Obama’s budget proposal, that couldn’t be done.
In explaining the proposed change, Treasury protests that such moves have “raised concerns” that the deductions, often claimed by the developers of homes around golf courses, “are excessive,” and that they mainly advance “the private interests of donors” not “bona fide conservation activities.”
3. A Higher Tax on Cigarettes
President Obama smokes from time to time, but he proposes hiking the tax on cigarettes to pay for early-childhood education.
Cigarettes have been taxed at just under $1.01 per pack, to help pay for the 2009 expansion of the Children’s Health Insurance Program (CHIP). In his budget proposal, Obama suggests raising that to $1.95 per pack.
The administration’s rationale is, essentially, that cigarettes are harmful.
Citing statistics on smoking-related deaths, Treasury writes, “Excise taxes, levied on manufacturers and importers of tobacco products, are one of the main ways that policymakers can affect tobacco production and consumption.”
4. Corporate Jets
Perhaps a dead horse by now, Obama is still beating it.
The so-called “loophole for corporate jets” works like this: Companies can write off the value of their equipment as it depreciates – to encourage investment, the government lets businesses recoup some cost of buying equipment by letting them count its depreciation against their income. The IRS has a schedule for how fast different kinds of equipment “depreciate,” and how much of their value can be written off when.
When it comes to airplanes owned by businesses, commercial and freight-carrying planes can be written off in full after seven years. Planes that aren’t used for those purposes – corporate jets, crop-dusters, and planes used for firefighting, for instance – can be written off after five years.
Under Obama’s budget proposal, noncommercial passenger aircraft are lumped in with commercial and freight planes, meaning businesses can deduct the value of their corporate jets after seven years, not five.
5. Businesses Can’t Deduct Punitive Damages
Say you’re a business, someone wins a lawsuit against you, and you’re required to pay damages. You can write them off.
Not so, under Obama’s budget proposal.
The White House plan would not only prevent businesses from deducting punitive damages from their taxable income, it would tax damages paid out by insurers, too: If a business takes out an insurance policy for some kind of liability, and that insurer ends up paying out damages on behalf of the company under its policy, those damages would be added to the business’s taxable income.

Categories: Politics | Tags: , , , , , , , , | Leave a comment

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