Taxation

Dan Mitchell of the Center for Freedom and Prosperity writes: A column in the Wall Street Journal explains how certain tax cuts generate additional growth and thus lead to some degree of revenue feedback to the Treasury. The authors point out that higher taxes, by contrast, would impose harsh costs on the economy for every dollar collected by the IRS: ...a recent study by Gregory Mankiw, an economist at Harvard...concluded that a $1 tax cut on dividends would reduce government revenue collections by about 50 cents, after taking into account taxes on $2 of additional economic growth induced by the…

Pay As You Go? By Karl Peterjohn, Kansas Taxpayers Network On the rare occasions the mainstream national news media bothers to cover federal spending and taxes you are sure to hear the phrase, “pay as you go,” as the primary talking point of the new congressional Democratic majority. This phrase is supposed to reassure us now that the profligate “Bridge to Nowhere,” free spending Republicans have been relegated into the minority. New York City Congressman Charlie Rangel, who now heads the powerful tax writing house ways and means committee, wants to dismantle the most successful legacy of George W. Bush’s…

As the annual tax deadline is upon us, we should take a moment to examine our level of awareness of the taxes we pay. Many families don't pay any federal income tax. According to a study by the Tax Foundation (link: http://www.taxfoundation.org/ff/zerotaxfilers.html) 58 million households, representing some 122 million people, or 44 percent of the U.S. population, pay no federal income tax. I made a few calculations, and Kiplinger's TaxCut software for 2004 shows that a family with two children and $40,000 income (that's approximately the median household income in Wichita), taking the standard deductions, pays $0 federal income tax.…

The recent news that Warren Buffet is giving away the bulk of his fortune to charity is good news to me, as I greatly prefer private charity to government spending of taxes. That's true for me even if Mr. Buffet were to use his philanthropy to support causes that I might not agree with. But there is an irony here. Mr. Buffet is a vocal supporter of the inheritance tax (or estate tax or death tax). By giving away much of his wealth, he escapes paying the tax he wants others to pay. Mr. Buffet is wealthy enough that he…

Commentary surrounding two recent tax cuts reveals the backwards thinking about taxes that is common. A New York Times editorial from May 11, 2006 asks this question: "Whose taxes will be raised in the future to pay for today's tax giveaways?" A question like this reveals several prevalent lines of thinking: First, that the government has a legitimate claim on a large part of our incomes, and that if the government "gives" any of that claim back to us, it somehow has to be paid for. Second, it's the people who "give" tax money to the government, not the government…

Writing from Miami, Florida As the annual tax deadline is upon us, we should take a moment to examine our level of awareness of the taxes we pay. Many families don't pay any federal income tax. According to a study by the Tax Foundation (link: http://www.taxfoundation.org/ff/zerotaxfilers.html) 58 million households, representing some 122 million people, of 44 percent of the U.S. population, pay no federal income tax. I made a few calculations, and Kiplinger's TaxCut software for 2004 shows that a family with two children and $40,000 income (that's approximately the median household income in Wichita), taking the standard deductions, pays…

Writing from Orlando, Florida Two recent Wall Street Journal articles ("A Golden Opportunity" in the November 1, 2005 issue, and "Triple Jeopardy" in the November 2, 2005 issue) make the case for simplification and reform of our current income tax system. In these articles we learn these things: "... true reform -- changing to a broad-based income or consumption levy that taxes income only once -- could yield once-and-for-all annual household income gains of 9%." Our tax system has a bias against saving and investment. That slows capital formation and wage growth. "It is the marginal tax rate -- the…