The View from Right Field

Are You Surprised Rich People Try to Pay as Little Tax as Possible?

The media has reported the shocking news that: (i) if you’re not vaccinated, you’re more likely to get Covid-19 than if you are vaccinated: and (ii) rich people don’t pay more taxes that they have to under the law.  Let me address the second.¹

The ProPublica website has published information about how much taxes people like Jeff Bezos, Michael Bloomberg, Warren Buffet,² etc., pay, information they got from IRS data that was leaked to them.  According to ProPublica, the information included more than fifteen years of tax data on thousands of people.  ProPublica says that it does not know where the information came from or who sent it to them, but they published it anyway.  Even though this information is supposed to be confidential and secret, not that many people seem upset about the disclosure.  The information is too much fun to care about confidentiality

House Values in Illinois

One of the problems with living in Illinois is that house prices values aren’t going up like they are in some other parts of the country.  But then, with so many people leaving Illinois (Illinois is one of the few states losing people each year), it’s logical.¹  With fewer people in Illinois, there are fewer people looking to buy houses; i.e., demand is lower.  With demand lower and supply staying the same (the houses aren’t leaving, just the people), it’s logical that prices aren’t going up as much as places where population is growing and people want to move.

One of the reasons people are leaving Illinois (and why others aren’t coming or returning) is our lousy state government.  As I have said elsewhere, Illinois has the worst credit rating of any state and has hundreds of billions of dollars of unfunded pension liability, not to mention billions of dollars of unpaid bills.  Why wouldn’t people want to leave – or not come?  Why not get away from that debt?  Why move to that debt?

Should Illinois Should Be Proud That Washington Is Following in Its Footsteps?

Being from Illinois it’s sometimes hard to proud of our government.  Illinois has the worst state credit rating in the nation and the highest unfunded pension liability, things you do not want to be number one in.

Still, Illinois may be serving as a model for the federal government.  In Thursday’s Wall Street Journal, Greg Ip asked:

“How is it possible for presidents to keep cutting most Americans’ taxes while expanding the safety net?  In great part, by borrowing.”

Honesty In Taxes: We All Have to Pay

There is a trend in tax increase proposals around the world.  Voters in Illinois this November will vote on a “Fair Tax,” i.e., a constitutional amendment to allow the Illinois legislature to pass a progressive income tax.  The key selling point in the campaign for the amendment, other than the name that the PR people gave to it is that only 3% of the people in Illinois will pay a higher tax.  Everybody else will pay less.

In New Zealand, which had an election last weekend, the Green Party proposed a wealth tax, but said it would only apply to the top 6% of people.  The center-left Labour Party rejected the wealth tax idea, but they did propose increasing the tax on income above NZ$180,000, which includes about 2% of taxpayers, from 33% to 39%.

Donald Trump’s Federal Income Taxes

Media reports are that Donald Trump, in spite of supposedly having a net worth in the billions, paid no federal income taxes in ten of the last fifteen years and paid only $750 in federal income taxes in 2016 and the same amount in 2017.  Two comments:

First, if President Trump has followed the tax laws and has not engaged in any scams or lies in order to reduce his federal income taxes,¹ then I have no problem with what he paid.  In that case, the problem is with the Internal Revenue Code, not President Trump’s individual returns.  Democrats who are appalled that President Trump paid no taxes should be telling us how the tax code should be changed.  And I am not talking about some campaign press release or position paper.  I’m talking about detailed legislation.  They should propose a bill.  They should vote on the bill and pass it.  They should tell us what they want to do by actually doing it.  The House of Representatives would be a great place to do this.

Bailouts, Turnabouts, Fair Play – And a Progressive State Income Tax

In today’s Chicago Tribune, Eric Zorn supports Illinois Governor J.B. Pritzker’s argument that Illinois should get a bail out from the federal government because, in Governor Pritzker’s words, “we pay more in federal taxes in Illinois than we get back from the federal government.”  Mr. Zorn acknowledges that federal spending is affected by things like higher poverty rates in other states, but eventually he comes back to the view that other states should bail out Illinois “[b]ecause we’ve been bailing them out for years.”

I wonder, though, why we should be looking at this on the basis of state boundaries.  Perhaps we should look at it on a county basis.  Maybe Cook County should get back from the federal government what it pays in. 

Solving the Covid-19 Crisis with Proposals You Would Have Made Anyway

As our leaders suggest solutions for the problems caused by Covid-19, it is fascinating how many of the proposals are ideas those leaders would have suggested without Covid-19.  Texas is saying abortion clinics aren’t essential businesses, while New Jersey says that gun shops aren’t essential.  And House Speaker Nancy Pelosi has suggested retroactively repealing the SALT deductibility limit for 2018 and 2019 as a way to get more disposable income to people.¹

Overall, I think the proposals you might want to give the most thought to are ones made by people who would not have suggested those ideas before Covid-19 but who think they may be appropriate now.
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¹ I suppose it would give money to people, though almost of it to rich people.
UPDATE (3/31/20 12:24 am): I deleted footnote 2, which I decided was not in keeping with the spirit of my post of March 23, 2020.

Sanders’s and Warren’s Wealth Taxes Aren’t Going to Just Cost the Super-Rich

I had been planning on writing about Elizabeth Warren’s tax-a-mega-millionaire program (actually, an annual 2% tax on net worths above $50 million and an additional 1% on amounts above $1 billion), but Bernie Sanders has come along with a bigger (and better-?) tax of his own.  Senator Sanders’s plan needs a chart (as with Senator Warren’s tax, Senator Sanders’s tax is assessed annually):

1% tax on wealth above $32 million;
2% tax on wealth between $50 to $250 million;
3% tax from $250 to $500 million;
4% tax from $500 million to $1 billion;
5% tax from $1 to $2.5 billion;
6% tax from $2.5 to $5 billion;
7% tax from $5 to $10 billion; and
8% tax above $10 billion.

Climate Change: A Bonus Question

This is to follow up on Tuesday’s post, “Climate Change Is a Two-Part Question.”  In June, The Economist wrote about “Green New Democrats” and in particular about Joe Biden’s and Elizabeth Warren’s plans for climate change.  While neither of them has endorsed the “Green New Deal,” they both have big dollar/big concept environmental plans. 

After reading the article, however, my question is this: How can you seriously claim to have a plan for climate change and not address a carbon tax or some kind of a plan for carbon pricing?  I know that cap-and-trade couldn’t pass the Democratic Congress of 2009-10, that the Liberal/National Coalition (i.e., center right) in Australia won re-election twice after repealing Australia’s carbon tax (here and here), and that the "yellow vests" in France were protesting a gasoline tax increase that was part of a climate change program. 

Cutting Taxes and Raising Spending Is Amazing – Until It Isn’t

What the United States is doing is amazing.  We are both cutting taxes and raising spending while the economy is growing and the federal deficit is already $500 billion.  This will raise the deficit to more than $1 trillion a year (did I say, “while the economy is growing”?).  And it looks like we might get away with it.  It’s amazing.

Other countries couldn’t do this.¹  But when you are big enough and you can print your own money,² you can get away with things little countries can’t.  If other countries tried to do what we are doing, they would soon find that nobody would lend them money and that, if they tried to just print more money, people would refuse to accept their money to pay for things (see, for example, Zimbabwe and, now, Venezuela).