Congress’s Joint Committee on Taxation recently dropped a study claiming that millionaires will pay $31 billion of the $36 billion in revenue that it expects will be raised next year if tax rates rise as scheduled on January 1. …If you believe that, you probably also believed Joint Tax when it predicted that the rich would gain a huge tax windfall when tax rates were cut in 2003. Let’s go to the videotape. According to the most recent IRS data on actual tax payments, total revenues collected over the period 2003-07 were about $350 billion higher than Joint Tax and the Congressional Budget Office predicted when the 2003 tax cuts were enacted. Moreover, the wealthiest taxpayers paid a larger share of all income taxes from the beginning to the end of this period. The IRS data show that in 2003 those with incomes above $200,000 paid $313 billion in income tax. By 2007 they paid $610 billion. …Guess what income group paid the most in higher taxes after tax rates were cut? Millionaires. From 2003 to 2008, millionaires increased their tax payments to $249 billion from $132 billion. One reason for the big increase in payments: the number of returns declaring $1 million or more in income increased 76% to 319,000 from 181,000 as the economy expanded. The IRS data are a useful reminder of how dependent Uncle Sam is on the rich to pay the government’s bills. …We’re not saying that tax cuts “pay for themselves.” What we are saying is that the 2003 tax cuts proved again, as we should have learned in the 1960s and 1980s, that rich people are the most responsive to changes in tax rates. When tax rates are high, the wealthy invest less, hire accountants to protect more of their income from the IRS, and park more of their money in tax shelters, such as municipal bonds. …That’s why it’s a fantasy to think that raising income and capital gains and dividend tax rates on the rich is going to pry $31 billion out of millionaire households. History teaches that the best way to soak the rich and reduce the deficit is to promote rapid economic growth. But that’s less likely to happen in 2011 if the economy is rear-ended with the biggest tax increase in at least 16 years.
Archive for August 28th, 2010
Higher Tax Rates on the Rich Will Backfire
Posted in Economics, Fiscal Policy, JCT, Joint Committee on Taxation, Laffer Curve, Obama, Tax avoidance, Tax Compliance, Tax evasion, Tax Increase, Taxation, tagged Dynamic Scoring, Higher Taxes, JCT, Joint Committee on Taxation, Laffer Curve, Static Scoring, Supply-side economics, Tax avoidance, Tax Complance, Tax Increases, Taxation on August 28, 2010| 29 Comments »
I’m More Important than Paul Krugman and George Soros
Posted in Economics, European Commission, Global Taxation, Harmonization, International bureaucracy, International Taxation, Jurisdictional Competition, OECD, Organization for Economic Cooperation and Development, Tax avoidance, Tax Competition, Tax evasion, Tax Harmonization, Taxation, United Nations, tagged George Soros, OECD, Organization for Economic Cooperation and Development, Paul Krugman, Tax Competition, Tax Haven on August 28, 2010| 10 Comments »
Actually, I wish that were true. But I’m slightly amused to see that I’m ranked as the 244th most-influential person in the world of global finance according to the FCI500 Index put together by Financial Centres International. George Soros ranks 262 and Paul Krugman is way down at 407. I don’t actually deal with money, of course. My role in this field is to fight for tax competition, largely by seeking to derail the tax harmonization schemes of international bureaucracies such as the Organization for Economic Cooperation and Development, European Commission, and United Nations. Here are the top 10 and three other people you will recognize.
1 Mario Draghi – Governor Banca d’Italia
2 Timothy Geithner – Secretary of the Treasury US Department of the Treasury
3 Barney Frank – Congressman United States House of Representatives
4 Dominique Strauss-Kahn – Managing Director International Monetary Fund
5 Josef Ackermann – Chairman of the Management Board and the Group Executive Committee Deutsche Bank AG
6 Nout Wellink – President De Nederlandsche Bank
7 Zhou Xiaochuan- Governor People’s Bank of China
8 Michel Barnier – Commissioner for the Internal Market and Services European Commission
9 Jean-Claude Trichet – President European Central Bank
10 Stefan Walter – Secretary General Basel Committee on Banking Supervision
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244 Daniel J. Mitchell – Senior Fellow The Cato Institute
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262 George Soros – Hedge Fund Manager Quantum Mutual Funds.
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407 Paul Krugman – Columnist and Economist New York Times
Fighting Class Warfare in a Debate with a CAP Statist
Posted in Uncategorized on August 28, 2010| 5 Comments »
Two things struck me about this debate. First, the guy from the Center for American Progress was either clueless or dishonest about double taxation. Second, nobody seems to understand that balancing the budget is a simple matter of restraining the growth of government spending. I want deep cuts, but that’s not even necessary.