Remember, 95 Percent of Americans Will See a Tax Cut!

That is, if you narrow the definition of "tax" to "federal income tax" (as opposed to, say, federal cigarette taxes or carbon surchages), change the definition of "Americans" to "American households," and "95 percent" to "75.5 percent." And it's better to just ignore the tax-cranking going on at the state and local level:

A free fall in tax revenue is driving more state lawmakers to turn to broad-based tax increases in a bid to close widening budget gaps.

At least 10 states are considering some kind of major increase in sales or income taxes: Arizona, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Washington and Wisconsin. California and New York lawmakers already have agreed on multibillion-dollar tax increases that went into effect earlier this year.

This is inevitably being spun as the sad-but-unavaoidable byproduct of the crashing economy. But as Michael Flynn and Adam B. Summers detailed in our bookmarkable May cover story, if states had simply kept their budget growth pegged to GDP growth plus inflation growth (nevermind actually cutting anything) during the comparative good times of 2002-2007, instead of embarking on a spending binge, they would have enough money to cover their current budget "shortfalls."

In a California minute, total U.S. tax rates are jerking northward toward 1970s levels, all at a time when the president and his economic advisers talk about kick-starting consumer spending. It's curious.

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  • Kyle Jordan||

    "In a California minute, total U.S. tax rates are jerking northward toward 1970s levels, all at a time when the president and his economic advisers talk about kick-starting consumer spending. It's curious."

    C'mon Matt. Good, logical thinking and reasoning is the very antithesis of Hope and Change. Chocolate Jesus is Magic!

  • High Every Body||

    Remember, 95 Percent of Americans Will See a Tax Cut!"

    A less wordy version of the explaination could be that 95% of Americans will see somebody get a tax cut.

    :)

  • ||

    What's worse is that while the federal government jacks up taxes, the states are likely to follow suit. Expect that e-commerce/mail order exception for sales taxes to get slammed shut, for example.

  • ||

    Protecting you from yourself ain't FREE, you know.

  • JC||

    The Lord giveth, and the Lords helpers take away.

  • ||

    Expect that e-commerce/mail order exception for sales taxes to get slammed shut, for example.



    It's my understanding that it already is closed in some states, Pro L.

    And some of the talk coming out out of Tallahassee lately makes me suspect it won't be long before Fla follows.

    It's going to be tough going for the state and a lot of cities and counties after the spending binge they went on as the various bubbles inflated.

    A lot of promises were made and there's going to be some seriously aggrieved parties when they're not kept.

    I'm waiting for Orlando to cancel the center for the arts. I'm really looking forward to seeing the opera and ballet lovers rioting in the streets.

  • robc||

    At least 10 states are considering some kind of major increase in sales or income taxes

    KY wasnt on the list but ours went into effect April 1. An increase from 0% to 6% sales tax on booze.

    They tried to raise the excise tax but instead ended up applying the general sales tax to liquor instead.

  • ||

    New York has adopted a nexus viewpoint that hits on-line affiliate marketers (like Amazon.com and its affiliate program), but I think even that law leaves out pure e-commerce sales into the state if there's no other point of nexus (e.g., offices or stores in the state). The New York strategy is spreading, with California likely to be the next major state to adopt that kind of law. There's some question as to the constitutionality of such laws, but hey, no court is likely to deny the government access to revenues.

    There was a federal bill intended to simplify collection of sales tax, so that retailers could manage national sales without getting all twisted up into how to comply with each state's tax laws. I'll be surprised if that doesn't come back to life.

  • ||

    I'm half-expecting the feds to pull a smoke-and-mirrors move and stop collecting income taxes since they can just rob us by inflating the currency.

    -jcr

  • guy in the back row||

    California and New York lawmakers already have agreed on multibillion-dollar tax increases that went into effect earlier this year.

    One great thing about Spitser's dalliance (besides the jokes and photoshopped pics) is that we got David Patterson as gov. He's asking union members to ignore their leaders and push for wage cuts to avoid layoffs. He's asking for increase (not the base, just increases) to be cut from the bloated hospital budgets. He seems like an upright guy who is trying to at least control spending.

    Of course, everyone and their mother are giving him hell, showing commercials that he will personally kill millions of New York children and disabled people with these cuts.

  • Nick||

    I also enjoy how the "tax cut" is being referred to as a tax credit. That way it makes the Libs look generous, because they are giving us money! Even if it was ours to being with.

  • ||

    "...total U.S. tax rates are jerking northward toward 1970s levels, all at a time when the president and his economic advisers talk about kick-starting consumer spending. It's curious."

    Curious? It's stupid.

    Raising taxes during recessions is stupid.

    Our leaders have no idea what they're doing.

  • ||

    In theory, I believe, you are already obligated to declare your out-of-state purchases and cough up a "use tax" equal to the sales tax which would have been charged, had you bought the item locally.

    *outright, prolonged laughter*

  • ||

    My NY tax return required me to declare how much I paid for out of state goods to be shipped to me in NY so they could calculate sales tax for my income tax filing liability. I said $0.00. I don't know anyone who would say otherwise. If they want to collect taxes on that stuff they'll need to implement it at the point of purchase because no one is going to keep track of that stuff. Even if they audited me, how would they prove I bought anything from out of state. I didn't make a lot of online purchases in 2008. I don't know if any of them were from out of state, nor do I care. USPS and FedEx didn't care and they were potentially transporting my stuff across state lines.

  • creech||

    Once a state program is enacted, there seems to be no way to cut the program out. So where are states going to get the money to continue programs without raising taxes? Gutless pols won't act until they know a majority will support cutting any particular program. And, unfortunately, people respond to the spin that compassion demands x,y & z programs continue to there will be riots, kids starving, cars crashing, and vital services disrupted by unions striking. Libertarians can be outspoken because we have nothing to lose. The other parties won't because they do.

  • ||

    I'll be surprised if that doesn't come back to life.



    Yeah, the same thing occurs to me.

  • ||

    Paterson is good? WTF? I missed that memo. He's trying to implement all sorts of new taxes. This is one guy I don't need to be ninja to attack. Grillmaster Nick can walk up to him and smack him in the face with a spatula. He's horrible.

  • ||

    P Brooks,

    The thing is, sales tax is collected by retailers, so the states aren't going to try to start some popular outrage by prosecuting some people who didn't voluntarily pay sales tax on some Amazon.com books.

    Interestingly, some brick-and-mortar businesses are pushing this sort of reform to cut back the competitive advantage than pure on-line/catalog businesses have.

  • ||

    The annual increases in the payroll tax ceiling are rarely talked about even though the increases in this tax have really dwarfed the changes in income tax rate changes over the past 8 years. Overall, Bush raised taxes.

    The AMT hit also gets worse every year, not doing anything about it is the same as raising taxes on a big group of people, including me. Fuck Obama

  • T||

    In theory, I believe, you are already obligated to declare your out-of-state purchases and cough up a "use tax" equal to the sales tax which would have been charged, had you bought the item locally.

    Didn't some of the states start going after online cigarette buyers for this very reason?

  • ||

    "
    I'm half-expecting the feds to pull a smoke-and-mirrors move and stop collecting income taxes since they can just rob us by inflating the currency.

    -jcr
    "

    You seem to be forgetting the real purpose of the income tax. To force you to submit to your rulers. Spend at least a few hours every year answering detailed questions about every aspect/penny of your financial life...with a total deletion of your rights to plead the 5th. To assert the fact that under this tyranny you are guilty until you can prove your innocence. To justify the maintenence of a spying/wiretapping/brutal force of thugs who have the ability to crush anyone in this country at anytime.

  • Naga Sadow||

    Suck it, EVERYONE!!!! Bartender, bitches! My income is more or less off the books! Boo-yah!!!

  • robc||

    Law-breaker Nick

    I do the same on my personal taxes but my business pays our use tax. Much easier audit situation and something the state will actually go after if they happen to be auditing.

  • ||

    Actually, I foresee state governments trying to arm-twist the credit card companies into collecting their taxes for them, on on-line purchases. That's probably where they have leverage.

  • Jerry||

    I wonder what Krugman has to say about this, raising taxes isn't exactly Keynesian, as it is a form of forced saving.

  • robc||

    Naga,

    Do you not use a SQUIRREL or equivalent POS type system?

    Places with those have caused waiters/bartenders to be reasonably legal from what I understand.

  • ||

    Ya I'm pretty sure they will not give up the income tax unless they have too. It's like think Hitler was about to just decide that burning jews was too much trouble with all the fre firewood available in the forests. You are being extremely naive by assuming the people running this country are as lazy and benevolent as us.

  • ||

    Naga-

    They'll "calculate" your tips based on the register receipts; unless you're working out of a cigar box, which probably wouldn't thrill your employer.

    Personal anecdote alert:

    Many years ago, I frequented a cool little bar in Colorado Springs. Every evening, at about ten-thirty, the owner would come in and change the tape in the register. It didn't take me long to figure out why.

  • Naga Sadow||

    robc,

    Foolish talk! I use stupid infoGenesis. Fucking IBM sucks! They tip allocate me as if I make about $70 bucks in tips a night. My paycheck after 401k contributions and insurance is about 27 dollars. Add to that the fact that I don't even own a credit card,rarely use my debit card, and don't have lots of flashy hi-tech items in my home and the ability to track my actual income is almost impossible.

  • krugman is an idiot||

    "I wonder what Krugman has to say about this, raising taxes isn't exactly Keynesian, as it is a form of forced saving."

    Oh, he'll like it for sure, he thinks the spending multiplier is 5x or something like that...

    (Plus our wise overlords will spend it better than us peasants for sure... way to escape the paradox of thrift!)

  • ||

    That is, if you narrow the definition of "tax" to "federal income tax" (as opposed to, say, federal cigarette taxes or carbon surchages)


    Not to mention, the inflation tax.

  • Naga Sadow||

    P Brooks,

    Most places, yes. I've worked in several of them. Casinos apparently don't work that way. To much cash flowing around. The IRS makes me sign a tip agreement. I have to claim that amount regardless of whether I make it or not. IRS clowns figured a cash bar in an Asian restaurant would be dead. They are completely wrong.

  • ||

    What makes this even worse is that the money is going to do nothing but pay off bureaucracies and political chronies. It would be one thing if they were taking the money and using it for the less fortuneate. But that is not what they are doing. If I hear one more Dem talk about how we are going to have a European style social welfare state, I am going to vomit.

    A European style social welfare state? Really? Ok, in Europe you have great unemployment benefits and mandated vacation and paid maternity leave and every other imaginable goody. A middle class job in Europe is good work if you can get it, which is really hard but that is another point.

    I fully understand the destructive nature of the policies I list above. But for all of their faults they do offer some benefits. But we won't be getting any of those. Instead, we are going to get all of the high taxes, job killing regulation, high unemployment and economic stagnation of Europe, but get none of the social program benefits. Basically, BO is going to take the money and give it to the bankers and his political chronies. If liberals had any values or beliefs in anything beyond power, they would be sickened by Obama.

  • squarooticus||

    "
    I'm half-expecting the feds to pull a smoke-and-mirrors move and stop collecting income taxes since they can just rob us by inflating the currency.

    -jcr
    "

    You seem to be forgetting the real purpose of the income tax. To force you to submit to your rulers.


    Agreed.

    The other issue, of course, is that if the Feds replaced taxation with inflation, the value of US Treasury bonds would drop to zero overnight, taking the dollar with them, which would destroy the ability of the US to engage in international trade.

    The only reason our bonds have any value is that there is an expectation that they will be worth more in terms of real purchasing power at maturity than the buyer pays for them. If inflation is made to explicitly replace taxation, there is no way this can be true over the long term.

  • phalkor||

    When I was wheeling pizzas around for a summer I was advised to report 50 cents to 2 dollars in tips each night. Roughly 1% of the total income for the night. That money, brought home in cash, never made it to a bank or anything. Being cash, it felt very much like "my money" and I'll be damned if I'm going to submit it to taxes.

    When (if? it happens doesn't it?) the federal government starts harassing delivery drivers, waiters, and bartenders I am saddened.

    The research and force to find out how much is owed probably is more than the tax in the first place.

  • ||

    God damn it phalkor, people have to pay their taxes. What you did was a crime. You un-patriotic little bastard. Don't think we are not going to go after you and every other bartender, waitress and delivery person who doesn't pay their taxes. Tax fraud is not something we can ever tolerate.

  • Naga Sadow||

    Yo! Fuck Geithner!

    Inspired by Xeones

  • ||

    Naga,

    Little people pay their taxes or they get crushed. Don't you ever forget that. The piss ants of this world aren't getting out of anything, period.

  • Warty||

    You took X's meme to a whole 'nother level there, Naga.

    Shut the fuck up, Timothy Geithner.

  • ||

    Just because I mistakenly didn't pay $40,000 in taxes over three years doesn't mean that I can't squash cheats like Phalkor. I am an important person. I worked for the IMF for God's sake. I am allowed to make the occasional mistakes. People who can find nothing better to do than tend bar or deliver pizza, aren't.

  • ||

    Show of hands kiddies.

    How many here advocate for a flat tax?

    How many here think that the financial crowd ripped US off?

    How many here think they too deserve special exemption and treatment, well, just because they're special?

    How many here think "Chocolate Jesus is Magic" is cute and funny?

    Booyah! boys, the level of psuedotestoserone around here is thick enough to choke a chicken, quite a few it seems. How will the circle be broken. Tug on that a while.

  • ||

    There's a really interesting court case that could set a huge tax precedent between MA and NH - MA sent revenue agents to Town Fair Tires stores and they audited them. MA claims that Town Fair Tires didn't require its customers from MA to pay a "dues tax" because they would be transporting their goods back to MA.

    MA believes that the solution for this is for all NH retailers to ask for ID from every customer to see what state they're from, for those from MA assess and charge extra for the dues tax, and then give that dues tax to the MA government.

    Or, since that's too hard, MA might just come up with an arbitrary fee to cover dues tax that they will attempt to levy on NH retailers.


    MASSSSSSSSSHHHHHHOOOOOOOOLLLLLLLLLLLLLLLEEESSSS!!!!

  • Naga Sadow||

    Warty,

    I'm in it to win, motherfuckers!

  • Naga Sadow||

    OH!!!! Fuck you joe and your law!

    I'm in it to win it! In it to win it! Damn joe and his legacy!!!

  • ||

    Naga, what is/was joez law? I never did get that...

  • Warty||

    Booyah! boys, the level of psuedotestoserone around here is thick enough to choke a chicken, quite a few it seems. How will the circle be broken. Tug on that a while.

    The cult punctures a rip. Into the clipped patient prevails the supernatural signal. Does your bowl initialize the widespread algorithm?

    The ghost strains the anger.

  • ||

    The further moron stirs without the irony razor.

    cool site

  • Naga Sadow||

    Domo,

    As I understand it, basically if you're trying to make a snarky reply, you will foul it up and make yourself look stupid. I usually accomplish this without having spelling errors but nobody's perfect.

  • ||

    "An insidious piece pulps the subroutine."

  • Warty||

    domo,

    Will the senior cheer rattle the packaged screen?

  • Warty||

    The arrested highway maps the scholar. A distinctive developer dines Mexico. Lonewacko breaks a vanishing shareholder under the monarch stuff. Lonewacko locates the promised tourist. Lonewacko ruins Mexico.

  • Warty||

    This is the greatest site in the history of the world.

    Mexico stones the holder beneath a grouped surplus. The lawyer swallows Mexico inside the strategic shareholder. The boot buggers Mexico inside a wrecker. When can Mexico tower in Lonewacko? Lonewacko queries the expired sentence.

  • Menstrual Retardation||

    "Naga, what is/was joez law? I never did get that..."

    When the going gets rough, RUN!!!

  • ||

    Bwahahaha:

    A flexible leadership acts outside fisting. Why can't the pragmatic combat bake the automobile? Does this smoking shed oblige domoarrigato? Why can't fisting snack across a culprit? Domoarrigato flutes any bright emulator. Domoarrigato balls the prophet after a latter consent.

  • Menstrual Retardation||

    "The anatomy talks."

  • ||

    "The exotic pleasure fells the tried saga."

  • ||

    Naga - is it joe's law because it happens to people when they were responding to joe, or because joe did it all the time?

  • Naga Sadow||

    You're a genius, Domo! I'm gonna use that phrase! "Ball the prophet"? Teh AWESome!!!

  • ||

    everyone just remember that when they feel temped to fuck with me: I ball the prophet...

  • ||

    What the fuck?

    Have you all been possessed by Condi Rice?

  • Warty||

    P Brooks sighs beside the taint. P Brooks pays the taint. The reject surnames the mediaeval mirror after the bus. The light wings P Brooks. The garbled wonder expands on top of the taint. The identical backspace ascends with the vinyl.

  • ||

    Beneath the automobile strays dwarf porn. Naga Sadow pieces this neighborhood. The ashamed shutdown decays. Naga Sadow messes with an interview. Naga Sadow degenerates across the obstruction. Naga Sadow arms dwarf porn below the faithful highway.

  • Naga Sadow||

    Domo,

    I can't remember exactly. I rarely argue directly with people here. I even give MNG a wide berth. Joe was a special case in that he wouldn't argue your facts but the details of your facts the way a good lawyer will bullshit a police officer in a courtroom over a DUI.

    "I'm gonna need to see your dash cam tapes again. Cuz just from the looks of it . . . why did you pull him over and not this guy here, here, here, and here? Was there something special about why you pulled him over? Suspcicious behavior? Your definition makes me wonder why you don't pull over everyone. Speeding? So was this car, and this car, and this one, etc. Weaving in and out of traffic? So was this guy, and this guy, and this guy is speeding, on his cell phone, and weaving? Why my client? Why did you pull him over?"

    Note: This is how my lawyer talks to police in a courtroom. Cops HATE him. His problem is if he thinks your guilty. He won't really try unless he KNOWS you're innocent.

  • Naga Sadow||

    What the fuck? My eyes are rebelling against this nonsense!

  • ||

    Naga - sounds like you need a hookup for some iron ball paint for your car...

  • ||

    This site is great. Here's one for the Urkobold:

    A mandatory lesson precedes Urkobold beneath a trapped forum. Taint graduates near Urkobold. Taint gloves the bicycle. When will the saved neighborhood finance an overpriced diet? The drill refreshes taint.

    The drill refreshes taint, indeed.

  • JB||

    It's not curious, it's retarded. All these stupid socialists are ruining the economic engine of the planet. When the real crisis comes, they will be remembered and they will get theirs.

  • ||

    The drill refreshes taint

    surely reversing a withered taint is a breakthrough of monumental proportions!

  • Warty||

    It's quite a taint that can glove a bicycle.

  • JB||

    Can a rectified rail jail the triangle?

  • T||

    "The lively intellect seasons the board."

    Not so much around here today.

  • ||

    "The fame chews."

  • phalkor||

    To Mr. Timothy Geithner I have only one question:

    When will the outgoing circle fork an ass?

  • ||

    "The unusual interior listens."

  • ||

    Can withering exemplify taint? Every voice coins a fairy. Withering cures taint beneath a quarter offender. Against taint struggles withering.

  • ||

    "When will the virus decay after the electoral heart?"

  • ||

    *Bronwyn enters, only to quickly retreat again, shutting the door behind her and hoping no one noticed her entry.*

    *pops head back in to say...*

    The bugs diameter sprays a contempt below the thin infant.

  • Ska||

    I said $0.00. I don't know anyone who would say otherwise.

    The reason NY started with this in the early part of the decade was because they were seeing really expensive art show up as gifts on gift tax returns, as charitable donations or capital gains on personal returns, and as assets on estate returns, but never seeing sales tax because the item was bought out of state or overseas. Customs forms filled out at airports and sales tax audits of vendors from other states will also clue NY in on any of these types of large purchases. Now, 8.375% of, say, $500,000 is something worth getting your hands on. And there are serious penalties for the taxpayers and prepares for not reporting this.

    If you're a rich dude buying expensive shit out of town, you would strongly consider paying the use tax.


    As for PL's point upthread, physical presence is taking a back seat to economic performance as the test of state nexus. That's where most states are headed.

  • ||

    Nexus is created by you having money and some state wanting that money.

  • John Ashbery||

    STOP MAKING FUN OF ME

  • High Every Body||

    STOP MAKING FUN OF ME

    Can I make fun of Rick Astley instead?

  • ||

    The taint spreads new meaning to screen saver.

    As a reformed soda jerk ... no make that pizza delivery entrepmanure I was always so randy after not paying for all the damned roads I used. I tell ya the fucking stop signs and tri-color Gov obedience controls stole money from every time I went out. Bastards.

  • Paul||

    And that doesn't include tax increases that occur without legislative interference, at all. Take property taxes. The county or state can merely reassess your house at a much higher value, therefore increasing your tax burden without any law being passed, any tweak to regulation, anything. *Poof* your taxes just went up because now your house is worth $450,000. All of this despite a real market price decline of your property value.

  • ||

    As bad as the income tax is, property taxes are worse. I should be able to own a home without paying rent to the government. Jesus.

  • T||

    As bad as the income tax is, property taxes are worse. I should be able to own a home without paying rent to the government. Jesus.

    Yup. You own something, so pay us money. WTF? At least Texas doesn't tax my dog, like North Carolina did.

  • engineer||

    Actually, I wouldn't mind if they replaced the income tax with a site rental value tax (SRVT), which has the advantage of not creating deadweight economic losses and being non-punitive towards success and efficiency.

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