The 10 Worst Tax Ideas of 2009

Via Instapundit and TaxProfBlog comes this list of The 10 Worst Tax Ideas of 2009.

Among the contenders: tax-free health insurance (compensation is compensation and should be taxed as such), tax breaks for first-time homebuyers (who were going to buy anyway), and The HAPPY Act (which gives tax breaks to pet owners).

Comments

[Jeff P]

I walked by a mall pet store yesterday that had a big sign on the window saying they offered financing.

For puppies.

[Pro Libertate]

What kind of puppies? Cyborg puppies? Sweater puppies? How much can a dog cost, anyway?

[FrBunny]

Hush.

[Pro Libertate]

Hush puppies? The shoes or the yummy fried treat?

[R C Dean]

Pedigreed dogs from good breeders can easily cost $800 - 1,000 (and, I'm sure, more).

Given what the damn thing is going to cost you in chow and vet bills over its lifetime, the initial outlay is the least of your financial problems. Trust me on this one.

[Pro Libertate]

Sounds like a scam to me.

[wylie]

Considering how many free dogs that are available at any moment, i have to agree. Not just talking about messed-up pound puppies either.

[Goldman-Sachs]

We got our Golden puppy almost nine years ago for $400, a sum I balked at but was outvoted on. The same mutts are going for $1,200 today. Ridiculous.

[Pro Libertate]

For a Golden Retriever? WTF? How common are they? Half the dog owners I know have one, usually of the pure-breed variety.

[CTHORM@IBIS]

Nine years ago, Gold was at $400. Today, Gold is near $1,200. He said "golden puppy" not necessarily "retriever."

[sage]

Don't buy pure breed dogs. There's way too fucking much of the retard gene in there. How smart can they be if they come from a long line of sister-humpers?

[MS]

Pure breeds can be really smart but rescue dogs are the best way to go. I needed a hypoallergenic dog so I have a Bichon Frise.

[R C Dean]

I've got a couple of rescue dogs right now (a full-on pit rescued from a crack house when the SWATties shot her mother, and a pit mix with some kind of bird dog, probably (believe it or not) Viszla.

A rescue dog tends to be a kind of a blind date. There is something to be said for meeting the parents, seeing the litter, and all that.

[MS]

...but rescue dogs are the best way to go except for Rottweilers and Pit Bulls and I never liked Doberman Pinschers either but that is because I don't like the look. I think a few of the dogs considered dangerous are highly trainable but sorry the pit is just crazy.

[Pro Libertate]

Dogs plated with gold? Genius!

[Old Mexican]

4. California. It claims to be the fifth largest economy in the world but can't pass a serious budget, and can't govern itself. It is the poster child for dysfunctional state governments and fiscal crises everywhere.

Oh, we can govern ourselves - it is the government that cannot govern itself. It just takes.

[affenkopf]

Any tax cut is a good tax cut.

[Old Mexican]

"Any tax cut, THAT INCLUDES A SPENDING CUT, is a good tax cut."

There. Fixed it.

🙂

[dfd]

Tax "breaks" are not tax cuts. Allowing government to hand out tax breaks for this or that special interest, or to encourage or discourage an activity, only increases government's power and role in the economy.

[CTHORM@IBIS]

Ding! Any tax cut which does not discriminate across its base - and includes a similarly sized spending cut - is a good tax cut.

[Brandybuck]

I still refuse to feel guilty about getting a tax break. It was my money before the government took it, and I'm not going to shed any tears when they get around to returning it.

Tax cuts and breaks, regardless of spending, is a GOOD THING. They need to be followed up by spending cuts as well, but the gub'ment doesn't do a lot of things it should.

[Brandybuck]

To follow up, any libertarian who bitches about tax cuts needs to be slapped upside the head. Tell me to my face that liberty is about the government keeping my money, and I'll stuff your libertarian membership card down your throat.

[Pro Libertate]

This was the most unkindest cut of all.

[CTHORM@IBIS]

I don't think anyone is saying anything like that. The point is that tax breaks are tax cuts granted to a 'deserving' constituent (the net result is a tax increase on everyone else); tax breaks are essentially opportunities for gov't to pick winners and losers, concentrating power in Washington.

By all means, don't feel 'guilty' about accepting gov't money. Your guilt isn't stopping anyone else from doing so.

[Pro Libertate]

Sounds like a scam to me.

[CTHORM@IBIS]

A scummy scam, at that. But we wouldn't want to insult pond scum now, would we?

[SIV]

So are farm subsidies OK as long as they don't exceed your total tax burden?

[Pro Libertate]

That's why we need limited government. Like really limited government. Otherwise, people who get money or other rewards will, naturally, want to keep accepting them.

[Sean W. Malone]

Or none at all!

[Pro Libertate]

I wish the two parties were the No Governmenters and the Minarchists so we could have the debate there, rather than in Statist Authoritarianville.

[Episiarch]

Yesssssss...

[The Libertarian Guy]

We could have really limited government, and to make sure pols stayed in line, take the first one to go outside of Constitutionally-mandated boundaries and shoot the bastard dead on the spot.

[crayon]

YOU HATE POOR PEOPLE!!! THAT'S OUR JOB!!!

[Tony]

Why do you hate the poor?

[Just Sayin']

The morons have returned.

[The Libertarian Guy]

Tax AND spending cuts must go hand-in-hand. Period.

Any idiot who says "the national economy can't be run like a household economy" should be open-handed slapped. Repeatedly.

[miklen]

Be careful, shit splatters

[Old Mexican]

How about Cash for Clunkers? That was also a) a BAD idea and b) a TAX idea.

[P Brooks]

I would put the "job creation" tax credit in there, along with every other, "Once we raise this tax, we'll have to figure out how to let some "deserving" people get out of actually paying it" proposal.

[John Tagliaferro]

I like the HAPPY act. Someone was telling me a great scheme. You get peets that are food, like chickens. Deduct the cost of caring for them, then eat them! Tax deductable food!

[Death Panelist]

...a Republican congressman named Thaddeus McCotter wants a $3,500 deduction for the cost of caring for our pets. Why? Because we love them.

I love my money. Can I get a tax deduction for that?

[Frito Pendejo]

I like money.

[Old Mexican]

Ha! Who doesn't, pu?etas?

[Frito Pendejo]

Not the way I do. Man, if I had a wad a' money right here, I'd be batin' with it, like huh! Huh! Huh!

[Nick]

Worst taxes 1 through 10 = my income tax for the years 2000 through 2009.

[DanD]

Great list but they totally forgot Cash 4 Clunkers.

I don't know what to make of the methodology that Google employs in their Google Trends webapp, but I found this hilarious:

http://www.google.com/finance?q=GOOGLEINDEX_US:AUTOBY

[Old Mexican]

That's what I said - that they forgot Cash for Clunkers.

[DanD]

You're right, I should have caught that. Nevertheless, check out that Google Trends link!

[Fist of Etiquette]

I can't believe no one mentioned Cash for Clunkers yet.

[Old Mexican]

Is there an Abbot and Costello routine here I have not been privy to?

[Pro Libertate]

Threaded Comments are on first.

[sage]

DRINK! on second.

[The Art-P.O.G.]

Virginia Postrel's on third.

[Kolohe]

I don't know.

[A Different Bill]

I'll break your arm if you say third base!

[BeesInTheBrain]

Well it is a Republican that wants the HAPPY pet deduction, the Democrats are liable to want to pursue a CO2 tax for Earth destroying buggers.

[brec]

GILLESPIE FAVORS COMPENSATION TAXES!!1!11

[R C Dean]

Totally lame list. No cash for clunkers?

[Attorney]

I was wondering when some smart person was going to point that out.

[Attorney]

As a libertarian, should one be opposed to or in favor of taxing employer-provided health benefits? Because failure to tax them has mucked up the healthcare & insurance markets but good.

[Some Guy]

Above all, a libertarian should want tax consistency. Even if a tax on X isn't desirable, a tax on X when sold by one entity and not another is far worse.

[P Brooks]

"WHADDAYA ASKIN' ME FOR?"

[Some Guy]

If health insurance was tax-free regardless of where you got it from, (and the same for health savings accounts, or just paying out of pocket, etc) that would be an infinite improvement over where we are now. Giving tax-free status to basic necessities isn't bad until "basic necessities" are defined by campaign contributions.

Now the $8k house buyer's bribe? I got that and I'd happily do the jail time for assault if I ever got to have a conversation with anyone who voted for it. At least buying health insurance leads to generally positive outcomes. The buyer's bribe was specifically designed to prevent housing prices from becoming affordable and getting us to where we can start an actual recovery.

[P Brooks]

As a libertarian, should one be opposed to or in favor of taxing employer-provided health benefits? Because failure to tax them has mucked up the healthcare & insurance markets but good.

As a libertarian, I am opposed to using the tax code as a means of social engineering.

[CTHORM@IBIS]

As a libertarian, I am opposed to a tax code.

If you can't file your taxes on a postcard, its too complicated. If we're going to have government services, they should be funded in the least-damaging way possible. That means either a land-value tax or a national sales tax.

[PapayaSF]

As a libertarian, I am opposed to using the tax code as a means of social engineering.

Is that really always a bad idea? Assuming some taxes are necessary, and since we know that when you tax something you get less of it, doesn't it make more sense to not tax the things libertarians want to encourage (savings, investment, employment, etc.), and instead tax things that even some libertarians might see as undesirable (drinking, smoking, crime, etc.)? In other words, is it really most desirable from a libertarian point of view to have the negative effects of taxation apply largely to what we see as positive social behaviors?

[OMG]

Who says libertarians want "savings, investment, employment" and don't want "drinking, smoking, crime"? First of all, on what planet would raising a tax be able to discourage crime? You obviously don't get libertarian theory - (absent some market externality) people making their free choices will arrive at optimal results, without "engineering". Maybe some like to drink and it brings them happiness (in fact, you might read this comment and reasonably conclude that is the case) - who are you to discourage it. By "engineering" savings, you may cause an oversupply that could lead to asset bubbles and under consumption (hell, look at China - their policies have always favored savings and as a result, their money is in primarily locked into the world's worst investment, US Treasuries).

[PapayaSF]

I was thinking of penalty fines as, in essence, a tax on crime. And of course, anything can be taken to an extreme. You're somewhat evading my point, though. You don't think it's non-optimum that libertarian tax proposals often seem to consist of a broad-based flat tax on sales or income or land ownership or some other thing usually considered a positive good? Obviously broad-based and flat are good, but they're still taxes on things most people want to encourage.

[Death Panelist]

Am I really the only one who noticed that Cash 4 Clunkers isn't on the list and should be?

[The Chad]

good grief, it's a running gag

[BeesInTheBrain]

Have you tried Hare Krishna?

[PapayaSF]

Dave Barry sums it up well:

In government news, top Washington thinkers, looking for a way to goose the economy along, come up with the "Cash for Clunkers'' program, under which the federal government provides a financial inducement for people to take functional cars, which are mostly American-made, to car dealers, who deliberately destroy these cars and sell the people new replacement cars, which are mostly foreign-made. This program, which was budgeted for $1 billion, ends up costing $3 billion and is halted after a month. The administration declares that it has been a huge success, which everybody understands to mean that it will never, ever be repeated. With this mission accomplished, the top Washington thinkers are free to train all of their brainpower on the nation's health-care system.

[SIV]

The VAT sure had a lot of buzz this year.
I hope it's absence from the list is only because the tax wasn't introduced in Congress.

[OMG]

It's absence (at least) from the headlines is attributable to a desire to hold it in reserve and pull it out of the hat when the dems all of a sudden become deficit hawks in time for the next elections

[SIV]

I don't think they want to run on instituting a VAT.

[P Brooks]

they should be funded in the least-damaging way possible.

Fee-for-service would be nice.

[CTHORM@IBIS]

You know, I actually included that at first, but thought better because it's difficult to implement in practice. I'd give Congress juice boxes instead of Caprisuns, just to keep it at their level of understanding.

[Pro Libertate]

I think you're elevating Congress too far. I'd give them mammary glands or umbilical cords.

[wylie]

Not even. Just nutrients in a petri dish, that's the most they deserve, if that.

[Pro Libertate]

Maybe just a bacterium to feed off of? Or sunlight?

[P Brooks]

This is a full service blog; we have hot and cold running gags.

[DMXRoid]

The HAPPY act is the bomb. For too long, the Federal government has rigged the tax code in favor of people who breed, giving away thousands of dollars every year for every future criminal that shoots out the gully hole of some trailer trash skank. Fuck that. I'm responsible, and have replaced children with pets. Gimme some money!!!!

[Pope Albert]

Pets cause global warming. Except for ManBearPig.

[misanthrope]

+1

[Old Mexican]

Ok, what about Cash for Caulkers?

Well, it was conceived in 2009 . . . that counts for something, at least.

[Who's Sean Hannity]

It's like watching a libertarian shism, good thing nothing ever gets done, or someone might get hurt.

[Old Mexican]

Did you mean "schism"?

[Old Mexican]

Because we have not settled the issue of Jesus being the son of god or god himself...

[Who's Sean Hannity]

yes i did, thanks. (waves)-

[Snoop Dogg]

He meant shizzle.

[Who's Sean Hannity]

FO shizzle

[Lewis Black]

Allow me to explain how our federal government works. To begin with, by the federal government I mean Democrats ad Republicans working together. And the only thing dumber than a Democrat and a Republican is when those pricks work together. You see, in our two-party system, the Democrats are the party of no ideas and the Republicans are the party of bad ideas. It usually goes something like this. A Republican will stand up in Congress and say, "I've got a really bad idea." And a Democrat will immediately jump to his feet and declare, "And I'm gonna make it shittier."

[Riffin' on Jack Benny]

* Thug: This is a stickup! Now come on. Your money or your rights.

[long pause]

* Thug: [repeating] Look, bud, I said 'Your money or your rights.'

* Jack Benny: I'm thinking it over!

[Mr. ?]

Trouble is, sometimes, when things DO get done, that's when things start going horribly wrong.

[Tman]

Friedman broke down the "any tax cut is a good tax cut" quite well in this editorial about Bush's tax cuts.

http://www.opinionjournal.com/.....=110002933

"I have long said, "I never met a tax cut I didn't like"--though I would go on to say that I like some better than others. The reason for my flat, unhedged statement is neither the Keynesian attribution of an economic stimulus to a tax cut, which I believe is generally wrong, nor the supply-side attribution of favorable incentive effects to a tax cut, which I believe is generally correct. It is, rather, the effect of tax cuts on government spending."

[Some Guy]

I wonder if in his final years he realized how wrong he was about reduced revenue meaning reduced spending.

I greatly respect Milton Friedman, but the only thing that grew faster than the size of government since the Bush tax cuts is the national debt that paid for them.

[NAL]

I'm not sure he was wrong. It's just that the public tolerance for deficits was probably higher than he (or anyone) thought.

Even still, the horrendous GOP losses of 2006 and 2008 were the result of public outrage (or at least conservative's and independent's outrage) against Republican spending. Unfortunately, in their zeal, they threw out the bums and put the sharks in charge.

Now, after the on-going wars, stimulus 1, TARP, stimulus 2, and most recently, the healthcare bill, the public is outraged even more as evidenced by the teaparties and Obama's plummeting approval rating.

I believe that that outrage was the one thing that prevented the public option from staying in the healthcare bill (it also resulted in Obama pledging to keep the bill's cost under a trillion $). If Obama's approval were still in the sixties or seventies, the blue-dog Dem senators (and a few of the Republicans) would have easily voted for the full House bill (Or worse).

[Some Guy]

I'm not sure he was wrong. It's just that the public tolerance for deficits was probably higher than he (or anyone) thought.

How is that different from being wrong?

Even still, the horrendous GOP losses of 2006 and 2008 were the result of public outrage (or at least conservative's and independent's outrage) against Republican spending.

I'd love to believe that, but you're giving the public entirely too much credit. 2006 was due to Iraq and 2008 was due to people believing that Bush's "free market policies" ruined the economy. Projecting your own opinion of why they should have thrown the bums out doesn't make it true.

Now, after the on-going wars, stimulus 1, TARP, stimulus 2, and most recently, the healthcare bill, the public is outraged even more as evidenced by the teaparties and Obama's plummeting approval rating.

Most of it seems to be outrage that he hasn't been more socialist. And do you actually think that more than 10-20% of people at the Tea Parties would "care about the deficit" if the guy doing it had an R next to his name? How much more empirical evidence do you need?

I believe that that outrage was the one thing that prevented the public option from staying in the healthcare bill

Then why does it poll twice as popular as the bill they actually passed?

it also resulted in Obama pledging to keep the bill's cost under a trillion $

Yeah, that makes me feel so much better that he's had to spend time coming up with funny accounting to pretend the bill will cost under a trillion.

[P Brooks]

Did you mean "schism"?

[insert Judean People's Front reference]

[heller]

People's Front of Judea

[John Tagliaferro]

Piss off was omitted for evolving modern taste in media.

[SIV]

David Weigel is drunk...on Obama's semen

[Old Mexican]

The very worst tax idea of all time:

Having them.

[R C Dean]

We should probably make a distinction between tax cuts (broadly applicable cuts in, say, the tax rate) and tax favors (narrow tax bennies handed out to favored causes/constituencies).

Tax cuts = good policy.

Tax favors = bad policy.

[The Libertarian Guy]

+1

[Mauther]

If I run a dog fighting ring, can I double dip under HAPPY?