The IRS Raids a Car Wash

The Sacramento Bee reports on an IRS raid on a local car wash in an attempt to recover the massive sum of ... four cents.

Actually, that's four cents, plus interest and penalties since 2006 totaling $202.35.

The owner claims he didn't even know he owed the four cents.

Just wait 'til the IRS gets to police the new health insurance mandate. Then we'll see some real fun!

Or had you forgotten about that little detail of ObamaCare?

500 Cigar Jobs Weren't Created or Saved

"We can't afford to make these cigars in the U.S. anymore."

That sums up the plight of Tampa, Florida, based Hav-a-Tampa Cigars, a firm in production since 1902 is preparing to lay off nearly 500 workers and move its production runs to Puerto Rico.

Cause of death: higher federal taxes brought about by SCHIP.

Altadis tried to keep the plant open by closing it for a week or two at a time and furloughing workers. Eventually, though, the company couldn't cope with a steep drop in consumer demand, brought on by the recession and a large new tax on tobacco products, McKenzie said.

Work that had been done in Tampa will now be performed in an Altadis plant in Puerto Rico, where it has extra manufacturing capacity, McKenzie said. The company is not closing its nearby distribution center off U.S. 301, where it employs about 150 people.

Employees on Tuesday were digesting how they would find work in an economy where more than one in 10 people in the area already are unemployed.

[SNIP]

Several things conspired to hurt Altadis' sales, McKenzie said, including the recession and the growth of indoor smoking bans. The bans have especially hurt sales in cold-weather states, where it's impractical to smoke a cigar outdoors in the winter, he said.

However, the company attributed much of its trouble to the State Children's Health Insurance Program, or SCHIP, a federal program that provides health insurance to low-income children. It is funded, in part, by a new federal tax on cigars and cigarettes. McKenzie couldn't say how much sales of Hav-A-Tampa cigars had fallen off, but the numbers have dropped significantly, he said.

Previously, federal excise taxes on cigars were limited to no more than a nickel, said Norman Sharp, president of the Cigar Association of America trade group. The tax increase, which took effect April 1, raises the maximum tax on cigars to about 40 cents, Sharp said.

The "logic" -- a word our president likes to use -- of financing a health insurance program for "children" using taxes on vice has never been real clear.

But that's logic of progressives who once upon a time brought us Prohibition. That went over real well too.

Are You Ready for the Value Added Tax?

Forget the Fair Tax and tax reform in general.

Here comes the VAT -- the Value Added Tax. Economist Larry Kudlow responds to today's Washington Post report:

Everyone should closely read today’s Washington Post story on the value-added tax, or VAT. The cat is now out of the bag. For months I have argued that Team Obama and the Democratic Congress were going to be forced to consider a VAT in order to pay for their extravagant spending. Now borrowing almost 50 cents on every new dollar spent, the Democrats will at some point begin to deal with the politics of deficit reduction as a way of countering Republican criticisms about deficit expansion. And the VAT’s part of their answer.

Senate Budget Committee chair Kent Conrad calls the VAT “fundamental tax reform,” and he argues for a VAT plus high-end income-tax hikes. The WaPo story talks about a White House conference earlier in the year where “a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT.”

Kudlow notes that Obama "blew a big budget hole" in their plans with a cap-and-trade proposal that won't raise enough money for the federal government. Still, if we were talking the elimination of the income tax, a VAT might be a consideration. But that is definitely not what is being discussed here.

... this VAT tax would come on top of existing income, payroll, and business taxes. This is how the European countries and many others do it. And the VAT is a tax imposed throughout the economic food chain, at all levels of production, finally ending up inside the consumer pocketbook.

The VAT is a sure way to permanently depress economic growth. It’s also a sure way to Europeanize the American economy. But at some point, after the economy gains at least some cyclical economic-recovery traction, the Obama Democrats will want to re-label themselves as deficit-reduction fiscal hawks. Hence the VAT, a real bad idea.

He gets an "amen" from me.

What ever happened to that promise that 95 percent of the American people would not see their taxes raised?

Taxing Health Benefits: A Pocketful of Mumbles

This is related to my last post on health care.

ABC News is reporting that Congress may tax your employer-provided health care benefits whereas now they are not taxed.

President Obama, in his campaign against John McCain, made a big deal about how they should not be taxed.

That was then. "He knows what the math is," said "health care economist" Len Nichols of the centrist New America Foundation. (Centrist according to ABC's standards, anyway.) Nichols believes Obama could be persuaded because there isn't enough money available.

Baucus wants to finance health-care reform by making the U.S. system more efficient, reducing waste, and focusing on prevention. But those savings are not expected to cover the full cost of covering the nation's estimated 50 million uninsured.

That's why Baucus told ABC News that "if we need to look at other revenue options, we will." "Everything is on the table, including the tax treatment of health care plans," said Baucus. Limiting the tax exclusion for health benefits would be a ready source of revenue. The current exclusion costs the federal government $150 billion per year in revenue and more than $200 billion per year if payroll taxes are included in the calculation.

The current tax-free treatment of health benefits has also been blamed by Jason Furman, another Obama adviser, for making the health care system both "unfair and inefficient."

Beware when government experts start wailing about "unfairness" and "inefficiency." You are about to get fleeced. There is an underlying assumption among all of them that the money you earn, paid by your employer, somehow originated with the federal government and belongs to the federal government.

Don't you realize that you have the moral obligation to pay for your neighbors' health care out of your wages?

Once again, we have to point out, if this happens, then we have to sing along with Simon:

"I've squandered my resistance, on a pocketful of mumbles,

"Such are promises: All lies and jest.

"Still a man hears what he wants to hear and disregards the rest."

Obama's Tax Solution: Let Big Brother Do It for You

American taxpayers, The Obama has heard your cries of pain.

And if you think things are bad now, just listen to how he is going to solve it for you. From the Wall Street Journal:

"I want every American to know that we will rewrite the tax code so that it puts your interests over any special interests," Mr. Obama said. "And we'll make it easier, quicker and less expensive for you to file a return, so that April 15th is not a date that is approached with dread every year."

What's the plan?

The IRS will do your taxes for you.

If you have a refund, they'll automatically put it into your bank account.

If you owe more, they'll automatically take it out of your bank account.

What could be simpler, and less private, than that?

Under the "Simple Return" plan, the Internal Revenue Service would complete tax returns for taxpayers whose sole income comes from one employer and whose interest income comes from one bank. The IRS would then send a copy of the return to the taxpayer. If the first wave of the program worked well, it could be expanded to other taxpayers.

Mr. Goolsbee has estimated the plan would save as many as 225 million hours of tax-preparation time and more than $2 billion a year in tax-preparation fees. White House spokeswoman Jen Psaki said the White House is "studying the implementation" of the campaign proposal.

Most Americans do not want the IRS having any more control of our lives than it does already. This would eliminate what little vestige of the term "voluntary" still remains with our tax code. (Nevermind what this would do to people who make their livings as accountants, tax preparers, TurboTax, etc.)

If ever the time had come for a particular idea, it is now: the Fair Tax proposal that would eliminate income and corporate taxes and tax consumption instead.

Coupled with that should be a call that all deficit spending cease. The government should live within its means, just as should all Americans. The big problem today isn't the rate of taxation, it's the rate of out of control spending that will eventually lead either to greater taxation or the total collapse of the American dollar.

Wouldn't you know that an administration that believes in Big Government solutions to all problems would figure that our tax protests are an opportunity to let Big Brother take complete control of our lives!

Comrades, We Have Found the Other Shoe!

Where's that other shoe? We've got one, where's the other?

Oh, there it is, from the White House closet, dropping right now ...

The Washington Post confirms this morning that the Obama Budget will include tax hikes for businesses and "the rich," so that they may more patriotically fight for their country, I presume.

According to the WaPo, "the rich" is defined as anyone making over $250,000 -- whew, what a relief! I was afraid those "bastards" might be defined downward a bit further. That's right, Mr. President! Give 'em what for! No one ever cured a sick child without taxing the rich! No one ever fed a homeless mother without first taking the wallet from the Fat Cat! No one ever created a job without first soaking the undeserving rich and providing the unemployed with government-issue shovels for "ready" ditch projects.

More good news, comrades! Taxes on the evil businesses will be rising 33% as the capital gains rate is proposed to rise from 15% to 20%. That will teach those greedy rich people to be more patriotic and hire more folks and give them big raises!

And if that weren't enough to get you excited enough to march on a Sunday morning, the WaPo reports that

Obama's budget request would create "running room for health reform," the official said, by reducing spending on some health programs so the administration would have money to devote to initiatives to expand coverage. The biggest target is bonus payments to insurance companies that run managed-care programs under Medicare, known as Medicare Advantage. [SNIP]

Officials also are debating whether to permit people as young as 55 to purchase coverage through Medicare. That age group is particularly vulnerable in today's weakened economy, as many have lost jobs or seen insurance premiums rise rapidly. The cost would depend on whether recipients received a discount or were required to pay the full price.

By lowering Medicare age and raising the SCHIP age to 26, that leaves only 29 years that an American would have to be worried about actually holding a job and paying their own damn health insurance premiums!

Hurrah! It won't be anytime at all before the economy turns around and we all reap the benefits of enlightened government planning. Let's not wear these shoes! Let's throw 'em!