Imagine for a moment that Mitt Romney had spent 2o years of his life attending the sermons of a right-wing zealot who claimed it was America’s fault it was attacked on 9/11 and that America should be damned. Further imagine that Romney was on record as saying that this man was a mentor and a close friend. Do you think Democrat super-PACS would refrain from exploiting Romney’s association with this man? I don’t either.
But the fact that the Democrats would exploit Romney’s association with a right-wing flame thrower has not stopped them from feigning outrage at the mere suggestion that a conservative super-PAC is considering airing ads that link President Obama with Mr. Wright?
Top Democratic strategists have reacted quickly to stop a proposed $10 million advertising campaign that would highlight the relationship between President Barack Obama and his old Chicago pastor, Rev. Jeremiah Wright.
Plans for the potential ad campaign were revealed this morning by the New York Times.
“Stunning! Will Mitt stand up, as [Sen.] John McCain did? Or allow the purveyors of slime to operate on his behalf?” claimed a 5.42 a.m. tweet from David Axelrod, the senior strategic at Obama’s campaign headquarters in Chicago.
Oh, waaah! Check out this spot a Democrat super-PAC aired a couple of years ago portraying Republican Paul Ryan dumping an elderly lady in a wheelchair over a cliff and then tell me that associating President Obama with his vile, race-baiting, America-hating mentor of 20 years is out of bounds?
Doug Powers of Michelle Malkin’s blog writes that actor Will Smith supports President Obama’s call for America’s top earners to pay more taxes but thinks France’s 75% top tax rate is too high:
Here’s a brief transcript from an interview with Smith that ran on French television. Video via Real Clear Politics:
Will Smith: I have no issue with paying taxes and whatever needs to be done for my country to grow. I believe very firmly that my ability to sit here—I’m a black man who didn’t go to college, yet I get to travel around the world and sell my movies, and I believe very firmly that America is the only place on Earth that I could exist. So I will pay anything that I need to pay to keep my country growing. . . .
Interviewer: Do you know how much in France you would have to pay on earnings above one million euros [under new French President Francois Hollande's proposal]? Not 30%. 75%.
Smith: 75?! Yeah, that’s different, that’s different. Yeah, 75. Well, you know, God bless America.
Why is that “different”? Doesn’t he want his country to be able to continue to grow?
It’s great that Smith appreciates the opportunities America has provided him, but a shame he believes the reason for it has anything to do with a patriotic willingness to fund Washington’s out-of-control spending addictions.
Mr. Smith’s position on tax increases proves the shallowness of the left-wing argument that Republicans who think taxes should not be raised are selfish. No matter how high the top tax rate is, the left will always be able to accuse rich people who don’t want it to go higher of being greedy.
If the current top tax rate were 50% rather than 35.9%, they would be spouting the same vile, class warfare propaganda. Pitting the lower and middle classes against the rich is what they do. Without class warfare, Democrats couldn’t get elected to the boards of their homeowner’s associations.
Theories abound as to why the disparity between executive and worker pay has grown so dramatically and whether that growth is justified. But Americans of all stripes have called for Congress to address the disparities between executive and worker pay.
In 1993, Congress partly addressed this issue by enacting a tax provision, § 162(m), that limits to $1 million the tax deductions that publicly-traded companies can get when they pay certain executives. This was not Congress’s first, or last, word on the subject. In fact, Congress enacted new restrictions in response to the more recent financial and healthcare crises. But § 162(m) has been Congress’s clearest effort to actually cap executive compensation using the Internal Revenue Code.
Sixteen years after its enactment, can we say that the $1 million deduction limitation works and that the Code is the best vehicle for Congress’s efforts to control executive pay? Drawing from a wide range of sources, this paper examines the § 162(m) limitation and explore whether the law achieves its intended result …. Upon closer examination, it becomes clear that § 162(m) is less effective than letting shareholders have a binding say over how much companies pay their executives.
I have written about the silliness of the left’s attack on executive pay. Here’s an excerpt of what I wrote in April of 2010 in The Executive Pay Strawman:
Workers who make $15 bucks an hour don’t give a flying rats’ tookus how much the CEO of their company gets paid and, for that matter, they don’t care that Lebron James makes 300 times what his towel boy makes.
That’s because … these common folk are smart enough to realize that wholesale reductions in CEO pay won’t change their lives a brass farthing.
Now, let’s say Mr. Immelt cut his salary in half in 2010 and redistributed the wealth in the form of a raise to GE’s rank and file employees.
General Electric employed 300,000 non-management level people in 2009. Divvying up Immelt’s pay cut of $6,300,000 among these workers gives each rank and file worker an additional $21 a year ($6,300,000 divided by 300,000 = $21).
The work year consists of 2080 hours (260 work days x 8 = 2080). The additional $21 freed up for employees as a result of Immelt’s pay cut gives each rank and file GE employee a whopping 1 penny an hour raise ($21 divided by 2080 = 1 cent).
Pay inequity is an issue that has been trumped up by radical idealogues to attack big business. Their goal is to convince middle-class workers to scapegoat their wealthy employers as the cause of their financial woes.
The attack on excecutive pay is a way for class warriors to appear that they are doing something about the economic plight of the middle class without actually doing something about it. As my Immelt example shows, it is purely symbolic.
Tax Policy Blog reports that the Maryland legislature is considering whether to pass a law that would raise tax rates on wealthy individuals. And what is considered wealthy in Maryland? $100,000.00 of annual income:
Maryland’s tax special session began today; expect more analysis on it from us tomorrow. However, we just received detail on S.B. 1302, the “State and Local Revenue and Financing Act of 2012.” The bill would raise income tax rates for high-income earners, defined as those making at least $100,000. The proposal also more aggressively phases out exemptions for those filers.
The rate changes:
Singles
Bracket
Current Rate
Proposed Rate
>$0
2%
2%
>$1,000
3%
3%
>$2,000
4%
4%
>$3,000
4.75%
4.75%
>$100,000
4.75%
5%
>$125,000
4.75%
5.25%
>$150,000
5%
5.5%
>$250,000
5%
5.75%
>$300,000
5.25%
5.75%
>$500,000
5.5%
5.75%
Married Filing Jointly, Head of Household
Bracket
Current Rate
Proposed Rate
>$0
2%
2%
>$1,000
3%
3%
>$2,000
4%
4%
>$3,000
4.75%
4.75%
>$150,000
4.75%
5%
>$175,000
4.75%
5.25%
>$200,000
5%
5.5%
>$225,000
5%
5.75%
>$350,000
5.25%
5.75%
>$500,000
5.5%
5.75%
Our back-of-the-envelope state income tax calculation for a dual-earner, two child family with $250,000 in federal adjusted gross income:
State
Currently
Under Maryland Proposal
Maryland
$16,786
$17,775
District of Columbia
$16,612
$16,612
Virginia
$11,651
$11,651
I am quite sure that many Marylanders who earn more than $100,000 per year are small business owners. I invite them to relocate their businesses and their jobs to Florida where the income tax rate on their annual earnings will be 0%.
Roger Russell of WebCPA reports that Eduardo Saverin, a co-founder of Facebook, has renounced his U.S. citizenship prior to the company going public in a move apparently designed to limit his U.S tax liabilities:
The Brazilian-born resident of Singapore took the action last year, and his name appears on an IRS list of people who have renounced their citizenship as of April 30, 2012, according to Bloomberg.com.
The move was made well ahead of the announcement for an initial public offering for Facebook that will net Saverin hundreds of millions of dollars.
Saverin’s stake in Facebook, once 34 percent, is now approximately 4 percent. The IPO is predicted to raise $11.8 billion.
Some Americans are not happy about Saverin’s move says CBS News’ Bill Whitaker:
When Facebook begins selling its stock, several people who own part of the company will become billionaires.
One of them is getting a lot of flack, because he’s giving up his U.S. citizenship right before Facebook goes public. That will save Eduardo Saverin a fortune in taxes.
“The openness of our economy,” says Edward Kleinbard, a professor at the USC Gould School of Law, “the willingness to encourage and incubate start-up businesses, made Facebook worth what it is today and made him the extraordinarily wealthy man he is today.”
The news sparked outrage across social networks. Billionaire businessman Mark Cuban tweeted, “This pisses me off.” Journalist James Fallows tweets, “New candidate for most unlikable Facebook founder.”
Regardless of what you think about the ethics of Saverin’s move, what it proves is that when tax rates are high, rich people and job creators may decide to live and spend their money elsewhere. This fact of life should be taken into account in setting U.S. tax policy. Soak-the-richers should be careful what they wish for. They might soak the rich all the way to Singapore.
Q: Does the IRS pay billions in tax refunds to workers who are in the U.S. illegally?
A: Yes. The Treasury Department’s Inspector General determined that $4.2 billion was paid in 2010, up from less than $1 billion in 2005. Leading Democrats are resisting a bill that would stop future payments.
This is a rare case of an Internet rumor with some substance to it. In fact, it’s shaping up as a major dogfight in Congress. At issue here are the federal child tax credits that can be claimed by persons with dependent children under age 17. Some Democrats are already defending these child tax credit payments that have gone to those without a valid Social Security number, accusing Republicans who want to end them of a heartless attack on children.
The credits currently amount to $1,000 per child, and they are “refundable,” meaning that parents may receive refunds even when they do not owe any tax.
The IG report stated that more than 2.3 million persons who did not have Social Security numbers valid for working in the U.S. got an average of roughly $1,800 each in 2010 in child tax credit refunds. That included 9,000 illegal immigrants who each got a total of $10,000 or more by retroactively claiming credits for tax years prior to 2010.
The $4.2 billion paid to these illegal immigrants was paid by the 50% of Americans who actually pay federal income taxes.
26 USC § 6103 – Confidentiality and disclosure of returns and return information – provides that a taxpayer’s tax return information shall be confidential:
a) General rule
Returns and return information shall be confidential, and except as authorized by this title —
(1) no officer or employee of the United States,
(2) no officer or employee of any State, any local law enforcement agency receiving information under subsection (i)(7)(A), any local child support enforcement agency, or any local agency administering a program listed in subsection (l)(7)(D) who has or had access to returns or return information under this section or section 6104(c), and
(3) no other person (or officer or employee thereof) who has or had access to returns or return information under subsection (e)(1)(D)(iii), paragraph (6), (10), (12), (16), (19), (20), or (21) of subsection (l), paragraph (2) or (4)(B) of subsection (m), orsubsection (n),
shall disclose any return or return information obtained by him in any manner in connection with his service as such an officer or an employee or otherwise or under the provisions of this section. For purposes of this subsection, the term “officer or employee” includes a former officer or employee.
Fox News reports that Senator Orin Hatch (R-UT) has called for an investigation of the IRS’s disclosure of Mitt Romney’s donation to a pro-traditional marriage group called the National Organization for Marriage:
Sen. Orrin Hatch is calling on the IRS to investigate whether someone on the inside could have leaked the private tax files of a prominent anti-gay marriage group.
Hatch, in a letter Tuesday to IRS Commissioner Douglas Shulman, said, “evidence suggests that the IRS may have been the source of the unauthorized disclosure of donor information.”
The Republican Utah senator was referring to the recent publication of documents listing 2008 contributors to the National Organization for Marriage. Among those contributors was Mitt Romney.
Both the gay advocacy group the Human Rights Campaign and the Huffington Post posted the documents — the National Organization for Marriage has claimed it appears someone in the IRS fed the documents to the Human Rights Campaign.
That possibility “is a matter that I take with the utmost seriousness,” Hatch wrote, calling the allegation “disturbing.”
“Our political history shows the absolute necessity of maintaining the nonpartisan integrity of the IRS,” Hatch wrote, calling for an investigation.
The IRS has not said whether a probe is underway. Spokesman Dean Patterson told FoxNews.com last month that the “IRS takes this confidentiality of return information very seriously” and said “any allegations of improper disclosures of taxpayer information are investigated by the Treasury Inspector General.”
The Human Rights Campaign, in disclosing the information, used it to claim Romney was “essentially funding NOM’s strategy of using racial division and unfounded scare tactics to attack LGBT equality.”
The donation came as the National Organization for Marriage and other groups were fighting for the Proposition 8 measure banning gay marriage in California.
But the Human Rights Campaign adamantly rejected the accusations from the National Organization for Marriage.
“NOM’s charges of illegal conduct by HRC are absolutely false,” the group said in an earlier statement.
The information on the Romney donation was actually available elsewhere – including in a filing for Romney PAC’s Alabama chapter — before the Human Rights Campaign posting.
National Organization for Marriage President Brian Brown said his group was never trying to “hide” the information about Romney. But he said the tax form, listing donations of at least $5,000, is supposed to be private and said the other donors on the list could be subject to intimidation.
The IRS goes to great lengths to prevent the wrongful disclosure of confidential tax return information. In my experience the IRS rarely, if ever, accidentally discloses confidential tax information. But it can’t prevent a rogue employee from violating the confidentiality rules. It’s likely that Romney’s donor information was revealed intentionally, either by a rogue rank and file employee or by someone higher up. And Hatch is right. An investigation is warranted.
