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Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts
"France's proposed tax hikes spark 'exodus' of wealthy"

"France's proposed tax hikes spark 'exodus' of wealthy"

So how short will France's tax revenues be From the UK Telegraph:
The latest estate agency figures have shown large numbers of France's most well-heeled families selling up and moving to neighbouring countries.Many are fleeing a proposed new higher tax rate of 75 per cent on all earnings over one million euros. (£780,000) The previous top tax bracket of 41 per cent on earnings over 72,000 euros is also set to increase to 45 per cent. Sotheby's Realty, the estate agent arm of the British auction house, said its French offices sold more than 100 properties over 1.7 million euros between April and June this year - a marked increase on the same period in 2011. Alexander Kraft, head of Sotheby's Realty, France, said: "The result of the presidential election has had a real impact on our sales. "Now a large number of wealthy French families are leaving the country as a direct result of the proposals of the new government. . . . Gilles Martin, a Swiss tax consultant, reported the same trend. "Since the socialists came to power in France, I have been deluged with inquiries from rich French people who would rather pay their tax in Switzerland," he told Switzerland's 20 Minutes newspaper. . . .
Do Democrats really want to play this game of chicken?

Do Democrats really want to play this game of chicken?

Presidents are usually blamed more than others for other the economy is going. In this case, I think that it is more than fair. But what impact will the big expected tax increases and spending changes have on the economy? There are two effects from the taxes. Higher marginal tax rates on labor next year will actually increase work effort now and decrease it in the future. But the higher taxes on individual owned businesses will reduce their investments now. They will try to get more out of their employees now, but they will not make as much new capital investments as they otherwise would have. My guess is that firms will be less likely hire new workers at this point because that will be viewed as an investment. The changes in government spending may also create chaos in the economy, though I am not sure how much defense contractors, for example, will believe that those cuts will actually occur. From the Washington Post:
Democrats are making increasingly explicit threats about their willingness to let nearly $600 billion worth of tax hikes and spending cuts take effect in January unless Republicans drop their opposition to higher taxes for the nation’s wealthiest households.

Emboldened by signs that GOP resistance to new taxes may be weakening, senior Democrats say they are prepared to weather a fiscal event that could plunge the nation back into recession if the new year arrives without an acceptable compromise.

In a speech Monday, Sen. Patty Murray (Wash.), the Senate’s No. 4 Democrat and the leader of the caucus’s campaign arm, plans to make the clearest case yet for going over what some have called the “fiscal cliff.”

“If we can’t get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013,” Murray plans to say, according to excerpts of the speech provided to The Washington Post. . . .

"Mechanics of President Obama's Proposal to Raise Taxes on the 'Rich'"

"Mechanics of President Obama's Proposal to Raise Taxes on the 'Rich'"

TaxProf has a nice collection of links on Obama's tax the rich proposals available here.

Possibly one of the more interesting points that he links to is from the Tax Foundation:

The president and his economic team tend to dismiss the impact that such as tax hike will have on business activity because only 2 or 3 percent of taxpayers with business income are taxed at the highest rates.

While this statistic is true, the more economically meaningful statistic is how much overall business income will be taxed at the highest rates. For example, Treasury data for 2007 indicates that 50 percent of all pass-through income is earned by taxpayers subject to the top two tax brackets of 33 percent and 35 percent. . . .

No matter how you cut the data, the fact is that hiking the top individual income tax rates would amount to one of the largest single tax increases on individually owned businesses in modern history and a threat to the long-term economic health of the nation.

Cost of Government Day: Now July 15th?

Cost of Government Day: Now July 15th?

A new report from Americans for Tax Reform:
This year, Cost of Government Day (COGD), the day of the calendar year on which the average American has earned enough income to pay for the burdens imposed by government spending and regulation at the federal, state and local levels, falls on July 15.

This marks the second consecutive year in which COGD has fallen slightly earlier than the previous year. It is true that 2012 was not without victories for taxpayers—the 2010 elections ushered new advocates of limited government into Congress and statehouses across the country who quickly championed budget and spending reforms. However, the threat of bigger government is far from ameliorated; this year’s earlier COGD may be the last if policymakers don’t take seriously the lessons of the past year.

The 2012 Fiscal Year was remarkable in several ways. First, a protracted battle over spending levels resulted in the first net spending cut from previous year appropriations for the first time this decade. After three years of explosive discretionary spending baselines, this signaled a major shift in Washington’s spending-as-usual. . . .

Senate passes on chance to vote on Obama's tax plan

Senate passes on chance to vote on Obama's tax plan

The Senate has previously voted down President Obama's tax proposals. Given that, it isn't surprising that Senate Democrats want to put off consideration of that again. From the WSJ:
“My recommendation is we give the president what he asked for,” Mr. McConnell said. “He wants to have a vote on raising taxes on individuals making over $250,000…That’s a vote we welcome.” Mr. Reid called this an obstructionist stunt, saying that he would be happy to debate the tax issue once the small business jobs bill is done. “The American people should see this,” Mr. Reid said. “Again, again, and again and again—scores of times during the last 18 months—we’re engaged in a filibuster…why shouldn’t we pass the bill that’s before the body today?” This led to a heated back-and-forth between the two leaders. Mr. McConnell professed surprise that Democratic leaders would not vote on Mr. Obama’s proposal. “I’m a little surprised that we’re not willing to give the president what he asked for,” Mr. McConnell said. . . .

Newest Fox News piece: The truth about Obama's tax cut extension plan

My newest piece starts this way:
Politics, not economics, is driving President Obama's election year strategy to force a battle over his efforts to raise income taxes. So much of Obama's speech Monday focused on his political opponents and the difference between those whom he claims support the middle class and those who support what Obama continually called "the wealthy."
For an administration that last week blamed Fox News for the class warfare rhetoric, Obama's talk today sure contained a lot of such rhetoric.
But contrast Obama's position with that of other prominent Democrats. Just last month, his former chief economic advisor Larry Summers told MSNBC: "The real risk to this economy is on the side of slow down, certainly not on the side of overheating, and that means we've got to make sure that we don't take gasoline out of the tank at the end of this year that's gotta be the top priority." Former Democratic President Bill Clinton made a similar claim warning against tax increases because it is better to "avoid doing anything that would contract the economy now." Under Obama administration pressure both quickly retracted their statements.
Obama seem oblivious to Summers' and Clinton's concerns about the poorly performing economy. . . . .
Brit Hume has an excellent response here.
Any bets that the French will get a lot less than the amount of money they think that they are going to raise from taxes?

Any bets that the French will get a lot less than the amount of money they think that they are going to raise from taxes?

Tax competition means that some people will be leaving France.
David Cameron infuriated the French last month by promising Britain would "roll out the red carpet" to wealthy French citizens and companies who wanted to emigrate and pay their taxes in Britain. . . .
A 75 percent income rate and higher wealth and inheritance taxes will have consequences.

“I’m very happy in Paris. My wife and I love Paris. We came here by choice. But I’m reconsidering our situation given the changes in the pipeline,” says Roger, who declined to be identified by his real name.
More than the 75 per cent rate, it is a move to higher wealth and inheritance taxes that worries him – and what he perceives as a cultural hostility to the rich. “The anti-wealth rhetoric is just not encouraging. I’d rather be in a country where I don’t have to deal with that,” he says. . . .
“The question is how to achieve these goals? There is no example, in modern economic history, of a country that has succeeded in reducing its deficits by bringing taxes to a confiscatory level. On the contrary, it leads to a decline in activity, and an increase in the deficits.” . . .
“France is not isolated from the rest of the world and Paris needs to be competitive,” says Guillaume Poitrinal, chief executive of Unibail-Rodamco, the European shopping mall group based in Paris. “[Our] large companies provide business to small and medium-sized enterprises and are France’s best asset – they provide a large part of what’s left of economic growth today.
“I am sure that the government realises that if they are weakened vis a vis their competitors abroad, this would be a negative for employment, tax resources and economic growth.” . . . .

At least Hollande isn't a complete idiot.  Note how he is retroactively heavily taxing property owned by foreigners, that is at least if he can get away with it given the EU single market laws.  If he can get away with it, foreigners don't vote.
On Wednesday (July 4th), the French government announced it was to increase taxes on foreign-owned second homes. Tax on rental income would rise from 20 per cent to 35.5 per cent, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent. The extra in each case is being labelled a "social charge".
A Treasury source said on Wednesday night: "We will need to study the details. But we will of course challenge any proposal which breaches European single market laws and anti-discrimination rules." . . . 
The rise in tax on rental income will be retrospective, from Jan 1 this year. . . .
Voting with their feet to avoid taxes: How much money do you think that the Federal Government lost by this person renouncing his US citizenship?

Voting with their feet to avoid taxes: How much money do you think that the Federal Government lost by this person renouncing his US citizenship?

The US will still force him to pay some taxes (a so-called exit tax), but even with that tax it still pays him to give up his US citizenship.  Is this what you want?  The brightest, wealthiest people to leave the country?  From Bloomberg:

Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.
Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for anInternet company. Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.
Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in this country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world’s largest social network holds its IPO. . . .
Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin renounced his U.S. citizenship “around September” of last year, according to his spokesman.
Singapore doesn’t have a capital gains tax. It does tax income earned in that nation, as well as “certain foreign- sourced income,” according to a government website on tax policies there. . . .
European Central Bank warns against higher taxes

European Central Bank warns against higher taxes

With the leading French presidential candidate calling for higher taxes, this warning is unlikely to be heard. From the NY Times:

Ahead of crucial elections in France and Greece, Mario Draghi, the president of the European Central Bank, warned governments on Thursday that opting for the “easier road” of raising taxes to fill public coffers would not solve Europe’s problems.
Mr. Draghi said it was understandable that governments would be tempted to raise taxes “under extreme urgency,” but he emphasized that “past the urgency, this should be corrected,” especially in a European environment with “a high level of taxation.” . . . 
New York taxing both unhealthy and healthy activities

New York taxing both unhealthy and healthy activities

Well, if the government is going to put a heavy tax on healthy activities, this must justify them putting a really heavy tax on unhealthy ones.  From the WSJ:


The New York Department of Taxation and Finance decided that yoga studios fall into a category of businesses -- specifically weight control or health salons -- that must pay the city's levy, officials said.
The decision was revealed last April in a bulletin from the department and now is sinking in as yoga studios across the city prepare their taxes.
The state -- which collects the city's sales tax -- already began auditing yoga studios, presenting them in some cases with bills for back sales taxes for the past three years.
"We do see this as a fairness issue," according to Edward Walsh, a spokesman for the Department of Taxation and Finance, noting that Pilates studios have to pay sales tax. "Businesses that provide similar services should be subject to the same taxes in the city." . . .
Big tax increases in a few states doesn't seem to have closed deficits

Big tax increases in a few states doesn't seem to have closed deficits

The six states with the biggest increases in taxes in 2009 were Delaware, California, Illinois, New York, Rhode Island, and West Virginia.  From Fox Business:

In 2010, California, Illinois, New York and Rhode Island, all of which increased revenue from taxes by over 9%, had among the highest deficits, exceeding 30% of general funds. California faced a gap of more than 50%, second only to Arizona. Despite cutting spending and increasing tax revenue, many of these states have continued to experience major shortfalls. Projected budget deficits for California, New York and Illinois remain among the highest in the country. . . . .

California for 2012
The State ended last fiscal year with a cash deficit of $8.2 billion. The combined current-year cash deficit stands at $21.6 billion.  Those deficits are being covered with $15.2 billion of internal borrowing (temporary loans from special funds) and $6.4 billion of external borrowing. 

Illinois for 2012
The Institute for Illinois’ Fiscal Sustainability at the Civic Federation released its analysis of the enacted FY2012 State budget today. The report found that the spending plan will increase Illinois’ total general operating deficit to $5.0 billion by June 2012. . . .

New York was expected to still have a large deficit, but it had to raise yet more taxes.
The budget closes what was once a $3.5 billion deficit, a process made easier when lawmakers in December approved a Cuomo- backed tax increase on joint earners making at least $2 million annually. That lowered the gap to $2 billion. The remaining savings were reached mostly by consolidating agencies. . . . 
Rhode Island
Although Rhode Island’s economy is beginning to recover after multiple years of economic distress the House Fiscal Staff estimate a FY 2012 budget shortfall of roughly $300 million, which is projected to grow to approximately $375 million by FY 2016. . . . 

Gas taxes by state


Drivers in California, Illinois, and New York aren't going to get much sympathy for high gas prices given the taxes that they place on gasoline.  On top of that, you have to add additional local environmental regulations.
The coming tax increase on dividends

The coming tax increase on dividends

From Smart Money:

Unless Congress takes action, the top tax rate for the highest earners on most dividends, currently 15%, is set to jump to a whopping 43.4% next year. That is a maximum income-tax rate of 39.6% -- since dividends will once again be taxed as regular income -- plus a 3.8% tax on investment income as part of the health-care overhaul passed in 2009. . . .
More on Warren Buffett's delinquent taxes

More on Warren Buffett's delinquent taxes

From Bloomberg:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.
NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.
Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax -- an excise tax on payments made in exchange for air transportation -- to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.
The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.
NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed. . . .

About Half of All Americans Don’t Pay Income Taxes

Rich Need to pay Higher Taxes for "privilege of being an American"


Geithner: "That’s the kind of balance you need. Why is that the case? Because if you don't try to generate more revenues through tax reform, if you don't ask, you know, the most fortunate Americans to bear a slightly larger burden of the privilege of being an American, then you have to -- the only way to achieve fiscal sustainability is through unacceptably deep cuts in benefits for middle class seniors, or unacceptably deep cuts in national security."
Obama's tax hikes on investments

Obama's tax hikes on investments

The WSJ has this analysis of Obama's dividend tax rate increase.

President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.

Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%. . . .

Americans are already facing higher capital gains tax rates?: The question is actually how much higher are they going


Start with the fact that Obamacare will be imposing a 3.8 percentage point increase in capital gains taxes next year. Next comes the question of whether the Bush tax cuts will expire. If they do expire, the base capital gains tax rate goes up to 20%. In addition, there will be another 1.2 percentage points added for high income earners. Altogether, if the Bush tax cuts expire, the total capital gains tax will rise to 25%.
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