Death and Taxes and Eric Garner

The death of Eric Garner has struck a chord in a way that Michael Brown's did not.  For one thing, there is video evidence lacking in the Michael Brown.



The outrage over the tactics used to arrest a man for selling untaxed cigarettes has provoked outrage.  Further outrage ensued when a Grand Jury failed to indict, just as in the Michael Brown case.  But there are some big differences in these two cases.  Michael Brown credibly committed a crime against persons before his encounter with the police.  Further, there is evidence that Brown put the life of officer Wilson in danger.  From this video, we see that Garner was no such threat to the police.

We also have to ask why the police feel that they have to enforce tax policy?  Even if Garner was in fact selling smokes illegally, why can't you give him a ticket and a fine?  Why the arrest?  What the hell is going on that the police have literally become the health police in New York.

The answer is that this the ultimate enforcement power of government.  We should be careful about what we make illegal, because government has the force of arms to kill us to comply.  This is why the individual mandate in Obamacare is so pernicious.  I can easily imagine a scenario where someone dies as federal agents attempt to seize assets for non-payment of the health care penalty.  Gives new meaning to the term "Death Panels."

About That Tax Promise

Hows' that working out for you America?

1. Senate Dems plan to raise taxes on seniors depending on dividend checks for their income. (Actually on everyone, but I can outdo lefty dufus' with heart-wrenching headlines.) With the expiration of the Bush tax cuts in 2011, the tax rate on dividends for middle class Americans in the 28% marginal bracket is set to increase from 15% to 28% and all the way to 39.6% for those in the highest bracket. Not only is this a broken promise, what a way to encourage investment in the economy.

2. Dems now calling federal ObamaCare mandate a “tax”. Admittedly, this is so that the Obamacare mandate can pass constitutional muster in the Supreme Court, but hey, if they're going to call it a tax....

3. Dems to Allow Millions of Middle Class to Drift into Alternative Minimum Tax bracket, as previously reported in these pages. By not indexing the Alternative Minimum Tax for inflation millions of middle income Americans will be subject to the AMT. This happens when you have many otherwise legitimate deductions, such as charitable giving, that reduce your tax bill, but Uncle Sam wants his cut anyway. In years past, Congress has shielded middle class from these effects by raising the income level at which the tax kicks in. Their failure to do so now is surely a tax increase, because ordinary folks like myself will be paying more in taxes.

4. Obama Signs Federal Cigarette Tax Hike. Who do you think is paying this tax?

And what's on the horizon? The number of hints from the administration that they will propose a Value Added Tax are overwhelming. And will it come with the elimination of the income tax? (Don't forget to take my poll at right.) And what is cap and trade but a new tax on every American.

I'll close with this video about all the new taxes on Obamacare impact not just small businesses (most of whose proprietors make much less than $250,000) but how we are all hit with higher taxes.



So that's my answer to the left, when they ask how my taxes have increased under Obama as they sling epithets my way. That civil enough for you coffee partyers?

New Poll - VAT

I have put a poll about the Value Added Tax, since this will be on Obama's agenda in the future. B-Daddy's very short take on the idea of a new tax. Hell No. Now what if we threw in the same bill, the total elimination of the income tax? Now you're talking. Unfortunately, that is unlikely to happen, but I want to hear from the readers anyway. The other drawback of the VAT is that it is even less visible than the income tax and payroll tax, at least I can look at my pay stub and see what those are costing me. The VAT is so well hidden it really allows government to grow, but only when the private sector grows. Since it is simple, it will distort the economy far less than the income tax. Regardless, please take our poll. I'd like to hear from the Coffee Party on this issue, especially in the comment.

Latest Sarah Palin Lies

I subscribe to a Democrat email newsletter from barackobama.com. Yesterday Mitch Stewart alerted me to the "dangerous" activities of Sarah Palin. He also said this:

On Tuesday, Palin went on Rush Limbaugh's radio show where she outrageously -- and falsely -- suggested that Americans could "face jail time as punishment" if they don't buy insurance.

So here is what does Nancy Pelosi say about the matter, certainly she is rebutting this outrageous lie. Judge for yourself:



Also, from an ABC News article:

Under the House bill those who can afford to buy insurance and don’t’ pay a fine. If they refuse to pay that fine there’s a threat – as with a lot of tax fines – of jail time. The Senate removed that provision in the Senate Finance Committee.

And from the House bill itself:

(1) IN GENERAL. If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a penalty with respect to the individual in the amount determined under subsection (c). (2) INCLUSION WITH RETURN. Any penalty imposed by this section with respect to any month shall be included with a taxpayers return under chapter 1 for the taxable year which includes such month.

Note the that the penalty is imposed as part of the individual's tax return, and guess what happens if you don't pay your income taxes?

Actor Wesley Snipes, center, leaves the federal courthouse in Ocala after posting a $1 million bond Dec. 8 in his federal tax fraud case.

Fighting Back on the California Budget Mess

I don't normally give financial advice in this column, but California's budget mess provides a perfect opportunity to take personal action to protect your finances in a way that also sends a political message. As you may be aware, the State of California is actually bankrupt, and has started issuing IOUs, except that they are called "registered warrants." Here is a little Q&A from my financial institution:

Q. What is a state-registered warrant? How is it different from other warrants or checks issued by the State of California?

A. State-registered warrants are essentially IOUs that are serialized and distributed to customers in lieu of actual payment. They can be deposited only at financial institutions who agree to receive them. California-registered warrants will be identified with "REGISTERED" printed on the face of the warrant and a special endorsement stamp on the reverse side. Both the issue and the maturity date will appear on the warrant. Registered warrants bear interest and are redeemable by the State Treasury only when the General Fund has sufficient money.

Q. Who is impacted by State of California's registered warrants?

A. At this time, the state has indicated it will issue registered warrants to state business vendors, local governments, for tax refunds and certain others. We understand that state employees will not receive registered warrants at this time. For more specific details about the state's plans, please visit the state treasurer's Web site (www.treasurer.ca.gov) or call the treasurer's registered warrants hotline at 1-888-864-2762

Here is where the personal collides with the political. Note that not all banks are accepting these IOUs. Note also, that tax refunds are among the categories of checks that are no longer being issued by the state. So even though a taxpayer has overpaid the state, he or she won't get a refund. In response, I have significantly changed my state withholding and urge everyone I know to do the same. This way, you won't lose out next year when the state is unable to pay you the refund you are owed. Further, this will starve the state government of cash now, putting more pressure on them to solve this budget crisis. I count on the Republicans to hold steady against new taxes (I could get burned, I know) so this is an opportunity to force spending cuts on our bloated state government. If you are nervous about having to pay a big tax bill next April or you count on that refund, I suggest that you increase you federal withholding by the amount you decreased your state withholding. The Feds will just print enough cash to cover your refund, so no worries there. The other worry is that you might underpay by too much and incur a penalty. Since I don't know your personal tax situation, you'll have to work that one out on your own. I have typically overpaid every year, so my course of action was an easy decision to make.

Hope my readers find this advice helpful. It is an easy quick way to fight back, that might save you some grief down the road.

Try Not Paying THEM

So, my state is broke. The controller, John Chiang, announced today he would stop paying tax refunds on February 1. I guess that's what bankrupt firms do, stop paying their just debts. I just wonder what would happen if I stopped paying taxes.

However, this situation reminds of the advice that every tax professional has ever given me, don't over-pay your taxes just to get a fat refund, your just giving the government an interest free loan. Now I've got another reason to follow that advice. Hopefully, I was smart enough to owe a few bucks this year. More likely, I was not.

Meanwhile, the state failed to run a surplus and save for a rainy day when the revenue was pouring into the treasury. I pray the Republicans keep up the good fight and force steep spending cuts during this crisis. Rahm Emmanuel is reputed to have said, "We can't let a good crisis go to waste..." That can cut both ways.

Of course the usual suspects are crying about how their interest group can't stand to give up any of their government funding. For example:

"Cutting crucial health and human services for the poor while demand for those services skyrockets during this recession is simply the wrong approach to solving the financial crisis," Jeffrey Luther, president of the California Academy of Family Physicians, said in a statement.

Meanwhile in Texas, where the legislature meets for about five months, every other year, (H/T Dean), a state almost as big and with as many difficulties as California, their budget problem is vastly less. They are facing a $9.1 billion shortfall compared to California's $41 billion. The California budget gap is actually bigger than every state's budget except New York's, (H/T San Jose Mercury News.)