Tag Archives: taxation

How will expanded use of 529 accounts affect Missouri’s budget?

Source: Show-Me Institute
by Joseph Haslag & Susan Pendergrass

“The federal tax reform bill is likely to have many consequences, intended and unintended. One intended consequence is that it expands the use of funds in 529 education savings accounts beyond college expenses to K-12 expenses. If parents open these accounts for their children and add money to them, they can withdraw those funds when needed for education expenses without paying taxes on what the savings have earned. In addition, in states that allow it, deposits to these accounts can be deducted from income on state forms, thereby lowering the tax bills of savers.” (01/19/18)

https://showmeinstitute.org/blog/taxes-income-earnings/how-will-expanded-use-529-accounts-affect-missouris-budget

The GOP’s tax reform offers no relief from the inflation tax

Source: Ludwig von Mises Institute
by Brendan Brown

“The Tax Cuts and Jobs Act (TCJA) signed into law on December 22, 2017 promises no relief from one big tax on income — the inflation tax. Quite the contrary, there are strong grounds to expect this burden to increase as new and unannounced methods of collection evolve further. In recent years, the Fed’s commitment to the two-percent inflation standard, buttressed by radical experimentation in interest rate manipulation, has created a famine of interest income from which Uncle Sam has been a main gainer. Just look at the dwindling interest bill on government debt. As the Federal deficit to GDP ratio now climbs to a new peacetime record for the US economy in a late boom phase of its business cycle, this partly hidden and widely underestimated form of inflation tax alongside its older forms loom large as potential expedients to tackle crumbling public finances.” (01/10/18)

https://mises.org/wire/gops-tax-reform-offers-no-relief-inflation-tax

Tax cut doomsayers need a history (and economics) lesson

Source: Independent Institute
by Mary Theroux

“The recent federal tax cut is creating a lot of fear and angst that a quick historical survey would go far to allay.” [editor’s note: Since spending isn’t being cut, neither are taxes. They’re just being deferred (with interest) – TLK] (01/09/18)

http://blog.independent.org/2018/01/09/tax-cut-doomsayers-need-a-history-and-economics-lesson/

The Great Depression tax revolts revisited

Source: Ludwig von Mises Institute
by Mark Thornton & Chetley Weise

“David Beito did a great service for the scholarship of liberty and American history with his rediscovery of the Great Depression-era tax resistance movement. He uncovered evidence of widespread opposition to property taxes across America. However, the anti-tax rebellion declined as quickly as it started, a demise that he attributes to a lack of a ‘focused ideological program’ that could capture the popular anti-tax sentiment of the time. Thus, Beito concludes, this tax resistance movement was a failure. While his contribution has been praised, questions have been raised concerning Beito’s explanation for the demise of the tax revolt. In this paper, we argue that the anti-tax movement was a genuine success, and that this success is the reason the revolt ended.” (01/08/18)

https://mises.org/library/great-depression-tax-revolts-revisited-1

Economic growth does not pay for tax cuts, and tax cuts do not increase wages

Source: Mises Canada
by Kel Kelly

“With President Trump’s proposed tax cuts on the table, the conservatives are making their traditional argument that increased government revenues from increased economic growth will offset reduced tax receipts from lower tax rates, and will prevent the budget deficit from increasing. Tax cuts pay for themselves, they argue. Tax cuts do grow the economy, but they do not pay for themselves.” (01/08/18)

https://www.mises.ca/economic-growth-does-not-pay-for-tax-cuts-and-tax-cuts-do-not-increase-wages/

Paying more at the pump will not fix California’s roads if politicians keep raiding the gas tax fund

Source: Independent Institute
by William F Shughart II & Kristian Fors

“From the beginning in 1923, the stated purpose of the gasoline tax was to build and maintain roads. The revenue, along with a ‘transportation improvement fee’ and taxes on diesel fuel, is earmarked for California’s Road Maintenance and Rehabilitation Program, which is equivalent to the highway trust funds of other states and the federal government. For this reason, the tax on gasoline is called a user fee. It is justified as a way of forcing drivers to pay for the wear and tear they impose on public roads. The more miles people drive, the more gasoline they burn, and the more tax revenue flows into the fund.
But the user-fee justification breaks down for drivers of electric vehicles, who do not pay gas taxes at all, and for the owners of hybrid and other highly fuel-efficient cars and trucks.” [editor’s note: It also breaks down as a massive subsidy of 18-wheelers by passenger automobile drivers, as the former put far more wear and tear on the roads in proportion to the fuel they use – TLK] (01/05/18)

http://www.independent.org/newsroom/article.asp?id=9230

Fed officials expect economic boost from tax cuts

Source: US News & World Report

“Federal Reserve policymakers largely agreed last month that the U.S. tax overhaul would likely benefit the economy, but they were split on whether the resulting growth would warrant a faster pace of rate hikes this year. Minutes of the Fed’s Dec. 12-13 meeting released Wednesday show that officials believed the tax cuts would drive consumer spending and increased business investment, though they expressed uncertainty over the magnitude of the boost. The minutes indicate disagreement among Fed officials over how many times the Fed should raise its benchmark interest rate in 2018.” (01/03/18)

https://www.usnews.com/news/business/articles/2018-01-03/fed-officials-hopeful-for-economic-boost-from-tax-cuts

Democratic rhetoric on GOP tax law is just silly

Source: Reason
by Steven Greenhut

“An acquaintance who owns a large California business likes to talk about the negligible impact of the tax code on his personal life. As he puts it, well-off folks can afford the homes, cars and vacations they enjoy. Their lifestyle is static. When the government taxes them at a higher rate, that simply means they have less money to expand their business. It won’t force them to subsist on macaroni and cheese, sell the Tesla or feel any personal discomfort. That’s a key point to consider when you listen to the rhetoric from Democratic leaders about the supposed evils of the recently passed Republican tax plan. The left [sic] wants to punish the rich, but defending higher taxes mainly punishes everyone else.” (12/29/17)

http://reason.com/archives/2017/12/29/democratic-rhetoric-on-gop-tax-law-is-ju

How the GOP tax bill bails out ObamaCare

Eric Schuler

Source: Libertarian Institute
by Eric Schuler

“The GOP Tax Bill has been passed by Congress and signed by President Trump, proving that Republicans are indeed capable of passing more than month-long spending extensions (if only just). The Tax Cuts and Jobs Act makes several big changes to the US tax code–some good, others less so. The bill also has major implications for the US healthcare system because it repeals the individual mandate of Obamacare. In the short-run, this repeal will provide limited tax relief for healthy individuals that would prefer to go without health insurance. Unfortunately, it will make things much worse for sicker Americans and give a political bailout to Democrats who want to blame Republicans for Obamacare’s failures. Up until now, the claim that the GOP is destroying Obamacare has been largely fictional. Obamacare has been collapsing based on its own flaws. But by repealing the individual mandate, the GOP has volunteered itself as a scapegoat, and the repercussions do not bode well for liberty or for healthcare.” (12/28/17)

https://www.libertarianinstitute.org/economics/gop-tax-bill-bails-obamacare/

Barclays takes $1.3 billion one-time hit from US tax bill

Source: Bloomberg

“Barclays Plc will take a charge of about 1 billion pounds ($1.3 billion) this year as a result of the recent U.S. corporate tax overhaul driven by President Donald Trump. However, the British lender expects its future U.S. after tax earnings to be positively impacted by the changes, it said in a statement on Wednesday. … The lowering of the U.S. corporate tax rate from 35 percent to 21 percent will benefit most companies but it also requires them to recalculate deferred tax assets that have accumulated on their balance sheets. Bank of America Corp. will take a $3 billion charge, while Credit Suisse Group AG is at risk of posting a third consecutive annual loss after predicting it will take a 2.3 billion-francs ($2.33 billion) hit.” (12/27/17)

https://www.bloomberg.com/news/articles/2017-12-27/barclays-takes-1-3-billion-one-time-charge-from-u-s-tax-bill