Category: Taxation

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IRS Expansion Was Never about Reducing the Deficit

First, the Biden administration wanted to raise $400 billion over the next ten years with greater tax enforcement. Some Democrats in the press were talking about up to $1 trillion. The Congressional Budget Office has evaluated proposals for greater tax enforcement for over a decade and never found an estimate greater than $120 billion. Now it’s supposed to be some great victory that, over a year after the IRS expansion was passed into law, they’ve raised $500 million.

https://www.nationalreview.com/corner/irs-expansion-was-never-about-reducing-the-deficit/

IRS Expansion Was Never about Reducing the Deficit

The Coolidge Curve

Harding blasted a federal “financial orgy” but struggled to restrain it. Coolidge set about the task with relish. With his budget director, Herbert Lord, he set targets for spending cuts, and he developed tax cuts with Treasury secretary Andrew Mellon. He announced his tax reforms in December; tax exempt securities would lose their special status and tax rates would be cut. Coolidge, who had a moral aversion to high taxes, echoed Mellon’s argument that lower rates “will not greatly reduce the revenue from that source, and may in the future actually increase it” by stimulating economic growth.

https://www.econlib.org/the-coolidge-curve/

Tax Exiles

In 1973, Pink Floyd released The Dark Side of the Moon which included the single ‘Money,’ on which Roger Waters snarled: 

Money

Get back

I’m alright, Jack, keep your hands off of my stack

‘Money,’ according to one critic, “deals with crass materialism.” But by the time Pink Floyd recorded The Wall in 1979, they did so in France and the United States because remaining in Britain would have incurred a massive tax bill. 

Tax Exiles

Norway’s Wealth Tax Is Backfiring. Are Americans Paying Attention?

Norwegian lawmakers forgot this simple lesson, and now they can do little but watch as the wealth creators in their country depart, taking with them their capital, ingenuity, and taxable income.

Norway’s Wealth Tax Is Backfiring. Are Americans Paying Attention?

Justice Gorsuch’s Dissent from Denial of Review in an Excessive Fines Clause Case

We have held that “[p]rotection against excessive punitive economic sanctions” is “‘fundamental'” and “‘deeply rooted in this Nation’s history and tradition.'” And all that would mean little if the government could evade constitutional scrutiny under the Clause’s terms by the simple expedient of fixing a “civil” label on the fines it imposes and declining to pursue any related “criminal” case.

https://reason.com/volokh/2023/01/23/justice-gorsuchs-dissent-from-denial-of-review-in-an-excessive-fines-clause-case/

Baseball, Taxes, and Apple Pie

What economists call the “tax wedge” is the gap between what an employer pays for an employee’s services and what the employee receives after taxes. It causes some jobs to disappear entirely, as employees and employers may not be able to agree on a wage once taxes are taken out of the paycheck. It causes some employees to flee to lower‐​tax countries, states, or cities.

https://www.cato.org/blog/baseball-taxes-apple-pie

Tax Increases and the Great Depression

Did tax increases deepen and extend the Great Depression?

Laffer and coauthors argue that the “chief cause of the Great Depression was taxation.” That is a bold claim because policymakers made many mistakes during the 1930s. Aside from adverse monetary and tax policies, the government undermined the economy with regulatory interventions, labor union laws, and a general antagonism toward businesses and high earners.

https://www.cato.org/blog/tax-increases-great-depression

New Analysis Finds Expanded Child Tax Credit Reduces Work and Growth

As policymakers continue to look for ways to make family life easier, more convenient, and more affordable, it is key that they avoid reforms that inadvertently undermine families or reduce the size of the economy and associated opportunities for workers.

https://www.cato.org/blog/new-analysis-finds-expanded-child-tax-credit-reduces-work-growth