There are Lots of Factors Contributing to the Stench, But High Property Taxes is Certainly One

Stephen Walters and Steve Hanke in the WSJ on Baltimore:

If you've seen HBO's "The Wire," you know why those of us who live in Baltimore are often asked whether our city really is the hellhole it is portrayed to be on TV.

Our answer is, well, yes. Baltimore deserves the Third-World profile it has developed because it has expanses of crumbling, crime-riddled neighborhoods populated by low-income renters, an absent middle class, and just a few enclaves of high-income gentry near the Inner Harbor or in suburbs. [...]

How did this happen?

Most people think of cities as dense concentrations of people. They are that, of course. But they are also dense concentrations of capital – homes, offices, factories, theaters and roads. All of these assets are attractive to people because, when they are in close proximity to each other, they offer the chance of a more prosperous life.

The problem is that once capital is built, it can become a target for tax-and-spend politicians who bank on the fact that physical capital will continue to draw people, even as it is taxed more heavily. This is what has happened in Baltimore. The city has waged a war on capital for more than 50 years, raising property taxes an astonishing 21 times from 1950 to 1985.

I don't own in this city, I rent (mostly to allow for a quick escape when the restless natives completely take over), but if I did own this would be my number one complaint with Baltimore. Even before high crime, lackluster public services, non-existent public transportation and high income tax. I'm always surprised at the number of people who live outside of the city that think property taxes within Baltimore are low. Only because in their mind they would have to be; otherwise why would anyone live in Baltimore? It's a good questionm that the political leadership in the city might want to ask themselves.

A Tax on Carpal Tunnel Syndrome Might Do the Same Thing

A California state legislator is calling for a tax on porn:

Democratic Assemblyman Charles Calderon proposed a 25% tax hike on adult entertainment such as strip clubs, DVD's and pay-per-view movies. He says it would help pay for programs related to the effects of the industry like drug use and sexually transmitted diseases.

Yeah, I'm sure none of estimated $700 million the tax will bring in will be diverted to something else. That never happens in politics.

Should the tax actually be enacted, adult entertainment industry spokeswoman Diane Duke (presumably her stage name) says they'll pack up and move:

"Make no mistake. Our industry will leave the state. A 25% multi-use tax on our industry would just be destructive."

Can they do that? Is this the kind of industry that can be done anyplace, without even leaving the hotel room? Help me here people.

Limousine Liberals

There is a segment of society that makes so much money they don't care about marginal tax rates and they tend to advocate confiscatory taxes on those who make $150K or more, which in high-cost locations like NYC make those earners middle-class. The Clintons are part of that elite, as they reported income for the years 2000 to 2006 of $109 million. If you make that much money, then tax rates are irrelevant.

Then there are the rest of us, including small business owners and those of us who live on the Coasts, where expenses are really high and $150K does not deem one "rich."

The Clintons paid about 31% in taxes. The top federal rate is 35% and self-employed people like me pay an additiona 6.5%. Hillary proposes to raise the top rate to 39.5%. All-in I pay about 55%. Is that good for the country? No, as I cannot afford to hire anyone as a majority of my earnings go toward paying taxes.

Hillary Clinton, who espouses socialist programs for the US and rails against the "rich," is making $20MM a year. When you make that much money you don't care about taxes as you have more money than you ever can spend, and have lifetime security. When you are a small business struggling to make it and contemplating a hire you really do care, and tax rates really do matter.

Porn Taxes For the Children

A South Carolina politician has proposed a "porn tax." The money will be used -- wait for it -- for the children, so it's all good, see?

State Senator Mike Fair wants to add a 20 percent surcharge on magazines like Playboy and Hustler that show frontal nudity. He says the tax hike would raise $385,000 dollars for the state to pay for tracking devices for sex offenders.

"Just as we're trying to do with cigarettes, we have tried to do and continue to try to do with alcohol, is lets the users of those products pay for some of the consequences that come from that," Fair explained.

It's one tax increase mom's like Virginie Sanders won't argue about.

“I agree with it. I agree with it because we need all the help we can get to keep them away from our kids. It's better than tax payers paying out of their pockets for it.”

'Cause, you know, it's not like any of the people who buy these magazines also pay taxes. It's practically found money.

Read the whole thing here.

The Fed Job Gravy Train

If you live in DC like I do you know that your friends employed by the US government unlike you leave work promptly at 5, get amazing health benefits, can have every other Friday off if they work 10-hour days and are looking forward to generous pensions and lifetime health insurance at the young age of 52.

What you might not know is that they are also earning 50% more than the average private sector worker. Traditionally, government jobs paid poorly and made up for it with benefits and security. They still have the benefits and security, but are also making a ton of money at the expense of taxpayers who foot the bill to afford government employees a lifetime of security that most taxpayers do not have plus huge annual salaries to boot.

Blade 4 Begins Filming; Snipes Battles Toughest Blood Sucking Vampires Yet

the IRS.

Snipes, the star of the "Blade" films and "White Men Can't Jump," is on trial with two tax protesters in one of the biggest criminal cases in IRS history, and the agency hopes the media attention on the matter will dissuade others in the "tax avoidance" movement from trying to outwit the government.

"People who do it openly and notoriously, you've got to go after them," said Sheldon Cohen, who was IRS commissioner and general counsel in the 1960s. "Not because he's that important or the amount of money is that important, but because there are others who may be foolish enough to follow."

Snipes, 45, could get up to 16 years in prison if convicted on all counts, although sentences that long are unusual.

Not only did Wesley Snipes stop paying taxes after 2000, he also sought to recover close to $12 million in illegal refunds for the taxes he did pay in previous years.

Snipes, who is free on $1 million bond, was paying millions in federal income taxes until 2000 when, according to prosecutors, he accepted the arguments of his two co-defendants. Snipes then allegedly began seeking nearly $12 million in illegal refunds for taxes he already paid.

Thanks to Sean Higgins for the link, who made the astute observation in an e-mail to me: "He not only stopped paying taxes in 2000, he demanded that the IRS refund $12 million back to him? It is amazing that the guy can walk given how big his balls must be." Indeed.

Full article here.

The World's Wealthiest Man Goes Warm and Fuzzy (After He Has Made Billions)

Bill Gates, is advocating for a kinder, more creative capitalism after he became the richest person in the world under the current system.

Microsoft Corp.'s chairman and co-founder, one of the world's wealthiest men, said business must work with governments and nonprofit groups to stem global poverty and spur more technological innovation for those left behind.

Let's not forget that Microsoft is the most ruthlessly capitalist company in the US. Have you upgraded to Vista? I did, and beyond my belief, my Vista documents are completely not viewable by anyone who has not upgraded. That is a new low in terms of compatability. I support the smartness of their strategy, but Bill Gates don't give me bullshit about compassionate capitalism when your company is as ruthless as it gets, knows they have a monopoly with businesses and deliberately force people to upgrade by making prior versions unviewable.

States and Cities "Cut" Budgets While Still Increasing Spending

George Orwell, in his dystopian novel 1984, created the word "doublethink." To quote Orwell, doublethink is,

To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient.

The concept of doublethink in Orwell's invention of it applied to governments and is relevant to the states and municpalities who are telling the people they are making "painful cuts" to government spending while they are actually increasing spending and the tax burden in a difficult time.

Exhibit #1 Maryland: Governor O'Malley raised taxes $1.4BN to address the "structural deficit" (another Orwellian term) and made $500MM of "cuts." Yet the MD budget is increasing 5.9% in 2008.

Exhibit #2 New York City: Mayor Bloomberg has "cut" the city budget. A NYT article headlined "Bloomberg Plans Cuts for City Agencies" reads,

With an already dim fiscal picture turning darker, Mayor Michael R. Bloomberg on Thursday proposed a budget that would increase spending by 3.7 percent but cut money from every city department, from sanitation to schools

The big conclusion here is that they are indeed cutting back every department but still are spending more money each year despite the cuts in services. The reason: out of market promises to union workers in terms of wage increases and retirement and health benefits. If you didn't like the real estate bubble, wait till this one comes home to roost.

DC Mayor Proposes $200 Million in Taxpayer Funds to Aid Waterfront Development

DC taxpayers are on the hook to pay a lot of their taxes to private developers already: $667MM for the Nationals' stadium, $50MM to fund improvements in the Verizon Center, $850MM for the flailing Convention Center and another $450MM to finance a hotel to try to make it less of a failure.

That adds up to a little over $2BN in taxpayer subsidies for "development" projects. Yet mayor Adrian Fenty wants to commit an additional $200MM in taxpayer money to redevelop the Southwest waterfront.

Developers have a profit motive. If they see an opportunity, taxpayers do not have to pay for it. If they do not see a profit, then taxpayers certainly should not be on the hook for subsidizing foolish ventures.

Clinton's $70BN Plan to Help the Economy

Hillary Clinton has a huge tax-payer funded plan to help the economy as it slides into recession. The problem with it is that it is backed by a belief that the government, and not the private sector, is the cure to what ails us. Amity Shlaes, in her brilliant book The Forgotten Man methodically takes down the myth that FDR saved the country by making much of the workforce government employees and instead argues that FDR slowed recovery by creating government competition to the more efficient private sector.

Enter Clinton. Her plan is to spend $70BN in the following ways:

Her $70 billion plan includes $30 billion for a housing-crisis fund to provide grants to states, cities and community groups. The money would assist families in danger of foreclosure and buy vacant properties to rent to needy families. Another $25 billion would aid low-income families facing increased home-heating costs; $10 billion would supplement unemployment assistance to workers out of jobs for extended periods, and $5 billion would be aimed at promoting energy efficiency while creating "green industry" jobs.

My one by one counters to her plan:

1) Allocating $30BN of taxpayers' money to delinquent mortgage payers is extremely unfair to property owners who are responsible and to renters, who already get screwed in the tax code. Most if not all of the delinquent payers put no money down.

2) $25BN for home heating costs. They are indeed skyrocketing, at least for Americans, as the dollar is in a death spiral. But do we need to subsidize energy costs when we are trying to to go green (see #4)? If you really want oil prices to decrease then tell the Fed to RAISE interest rates and protect the dollar.

3) Unemployment assistance, $10BN: There is no proven relationship between government assistance and employment attainment. There are already Pell Grants for the needy to take classes.

4) Creating "green jobs." $4BN for that. What is that? I can't even criticize this point as it is so vague. Perhaps Clinton could back away from her backing of anti-green Ethanol subsidies and create a bunch of green jobs for farmers who actually grow food that can be eaten.

Welcome to the New Year and Its Higher Taxes

As a District resident I never thought that I would see the day that MD and VA raised taxes and DC did not. But that day is here. This month the biggest tax hikes in MD and VA history go into effect. Maybe I should bless the dysfunction of the DC schools as expensive families keep moving out of the city.

In Maryland:

Maryland will begin implementing the largest tax increase in state history today, when higher tobacco, vehicle titling and corporate income taxes and sweeping changes to personal income tax rates go into effect.

The overhaul of Maryland's tax structure, which became law in November after a frantic special legislative session, will generate new revenue to help solve the state government's festering budget problems. Lawmakers also passed legislation requiring about $550 million in budget cuts. The cuts and new tax revenue are expected to close a projected budget deficit of at least $1.5 billion next fiscal year.

In Virginia:

If you plan to sell a home, buy a car or get a vehicle repaired in Northern Virginia, it's going to cost a bit more starting today, because of the transportation bill passed by the General Assembly last year.

Lawmakers gave the Northern Virginia Transportation Authority the power to impose taxes and fees that are expected to raise as much as $325 million a year for road and transit improvements. About $75 million of the annual revenue will be earmarked for Metro and the Virginia Railway Express.

Are Federal Judges Underpaid?

Supreme Court Chief John Roberts, in his report on the federal judiciary, urges increases in federal judges' pay. His argument is based on the fact that judges can make more in the private sector.

U.S. District Court judges earn $165,200 a year, the same as members of Congress.

The dollar amount, Justice Roberts wrote, is about the same as, and in some cases less than, first-year lawyers at firms in major cities. Judges' pay would go up to $233,500 annually under a bill the House Judiciary Committee passed 28-5 on Dec. 12. "The cost of this long overdue legislation -- less than .004% of the annual federal budget -- is minuscule in comparison to what is at stake," said Justice Roberts...Federal appeals court judges are paid $175,100 annually, and their salaries would go up to $247,500. The eight associate justices of the Supreme Court are paid $203,000 annually and their salaries would rise to $286,900. Justice Roberts's salary would go up from $212,100 to $299,800.

I am open but not convinced of his argument. Associates at Skadden Arps in New York might make more than $165K but they also work 100 hour weeks proofreading boring documents and have no pension benefits and most of them are weeded out or quit before they make partner, so it is not comparable to being a sitting judge deciding interesting cases and getting a pension. Those guilty associates also live in New York or other expensive cities. Does the US really need to pay a federal judge in (hated) Iowa $233K just to keep him on the bench?

The normally "Two Americas" NYT op-ed page came out in support of this raise. So the NYT thinks it is okay for government employees to be "rich," but doesn't like when private sector employees achieve that same level of compensation, decrying the "income gap".

Republicans With Spines?

I missed this one last week. Maryland GOP is suing to invalidate the tax increases (set to go in effect this week) from the previous special session of the General Assembly on the basis of a procedural error. My wallet wishes them luck.

How Do Libertarians Define Freedom?

I know that most of the readers of this blog are primarily concerned with civil liberty infractions that involve drug laws, strippers, eminent domain, smoking, etc. I care passionately about those issues too. I also care about the fiscal aspect and believe in minimal government. A few months ago I had drinks with the most awesome lawyer, Dana Berliner, who works for IJ and has been the libertarian voice on eminent domain.

I was disconcerted at a cocktail party that Dana confessed that she did not sympathize with the libertarian "economic or fiscal issues." To me, economic and social liberty are inseparable. The right to work is fundamental. And I blame the IRS code for creating many problems, including the political marriage issue and the economic incentives favoring home ownership that led to the current crisis in mortgages. Any thoughts on this, you libertarians?

Fact Check: Is the Middle Class Really Getting Screwed with Taxes?

The Dem candidates have one theme in common: that the middle class, through George Bush's tax cuts, are getting screwed while "the rich" are paying next to nothing and fiddling as Rome burns. Obama has been going wild proposing tax cuts for the middle class. But the middle class pays almost no federal taxes (an average 4% rate) as a result of Clinton's and Bush's tax cuts and Congress's largesse toward child deductions.

Some facts need to be inserted into this populist debate, which is really a debate about the redistribution of wealth and not about what any taxpayer should pay the government. Number one is that the bottom 50% of taxpayers shoulder only 3% of the tax burden. Number two is that the top 1% of earners (and they are not necessarily "rich" as the cost of living in SF or NYC make the IRS rates favor those in cheap locales) paid a whopping 39% of all taxes in 2005. In terms of who is getting screwed, it is certainly not the middle class. How much less should the average earner pay, 3%, 2%, nothing? The perverse aspect of the Clinton and Bush tax cuts is that they took the skin out of the game for most of the country.

Swiss Canton Votes "No" On Roads, Sewers, Running Water, Education, Health And Civilization

Via Cato@Liberty:

Obwalden has become the first Swiss canton to adopt a flat income tax rate, with more than 90 per cent of the electorate voting in favour of the move. The decision, announced by the authorities after a vote on Sunday, comes after a court ruled the canton’s previous degressive tax model unfair. From next January Obwalden will impose a rate of 1.8 per cent on all categories. The new model also exempts the first SFr10,000 ($8,700) of income from taxation, a measure designed to benefit those on lower incomes the most.

Based on the information on this page, the Swiss tax system is still fairly complex (although apparently relatively simple). But Switzerland and much of Eastern Europe seem interested in lowering taxes and inviting investment.

Will the resulting prosperity teach the USA a lesson?

Our "Voluntary" Tax System

Charles Rangel, in explaining his "Mother of All Tax Reforms" bill, which would raise taxes by $3.5 trillion over the next ten years, says his bill would

"restore a sense of equity and fairness that is critical to the success of our voluntary tax system."

Voluntary tax system? Are we living in the same country? Federal withholding is not voluntary. The tax code has nothing voluntary about it. If you don't pay they put garnishes on your wages, then liens on your property and then you go to prison. Voluntary?

In the IRS realm, unlike the rest of the US justice system, the accused are presumed guilty until they can prove themselves innocent. And the IRS will use their full power under the law, with guns blazing, even over a minor dispute.

Today I got a letter from the IRS claiming that I owe them $766, a small sum and I think that they are wrong. But here is the "we will destroy you" content of the letter I received:

This is our notice of our intent to levy (take) any state tax refunds that you might be entitled to. In addition, we will begin to search for other assets that we might levy.

Mr. Rangel, what exactly do you mean by "voluntary?" The IRS can put a lien on my home for a $766 dispute?

DC Tax Theft Mastermind is My Neighbor

DC is not a city of tear-downs replaced by McMansions. But there was one in my neighborhood and-- surprise-- it belongs to Harriett Walters, the mastermind behind the theft of $31 million and counting from the DC Treasury.

To compound on the scandal, the assessment office is a den of favors and out of control discretion. I have a friend in Logan Circle who was unhappy with her rapidly appreciating assessment and taxes. She went through the proper channels and her appeal was rejected. Then she called the assessment office and (in a morally compromised way) affected an African American accent and decried gentrification. Lo and behold her assessment was on the spot reduced by 50% by the woman on the phone.

I can only imagine what the friends and relatives of that woman pay in property taxes.

Bilkemor LLC and the Complete Dispect of DC Taxpayer Money

Bilkemor is the audacious name that a DC employee, Harriette Walters, created for a sham corporation, one of many she created to steal more than $30 million from DC taxpayers.

It was so easy. She would submit false refunds and the only other check in this system, Diane Gustus, was also part of the fraud so she would sign off and get paid.

The only silver lining in this scandal is that DC Council members have been inundatated with outrage and hopefully will not be in the mood to pass the type of tax increase that Maryland is facing.

Reason's Radley Balko commented on the issue here.

Dems' Trillion Dollar Tax Raise Bill Has Some Good Things and a lot of Bad

My main criticism of Nancy Pelosi's reign is that she appointed people like Rangel to key chairmanships. At 76 he is close to death's door that he is trying to push a trillion dollar tax increase before he dies.

The one good element of his plan would lower the US corporate tax rate, which is currently the second highest in the industrialized world, behind Japan.

On the bad side, Rangel proposes to increase the child credit for people who do not owe tax, which turns the IRS into a welfare program as it actually pays people money to filers who owe no income tax. To pay for this, Rangel would increase the marginal tax on earners of $150K or more to 40%. To put that in perspective, the average US family pays a 4% federal tax while the top 50% of earners already pay 97% of the burden.

If you live in expensive cities like New York, San Francisco or DC, you pay through the nose to support the rest of the country and still do not feel rich at $150K. That magic earnings number is also the point at which you cannot deduct student loan expenses or health expenses. You are certainly not rich.

If Rangel would propose a higher tax on those who make a million or more, I might be game. But $150K is way too low to start to penalize people who have already lost their ability to deduct major expenses.

Americans Don't Pay Enough Taxes Because... They Pay Less Than Slovaks??

The International Herald Tribune, which is delivered to my hotel room every morning, has some pretty loony pieces in the opinion section. But this one is in a category of its own.

President George W. Bush considers himself a champion tax cutter, but all the leading Republican presidential candidates are eager to outdo him. Their zeal is misguided. This country's meager tax take puts its economic prospects at risk and leaves the government ill equipped to face the challenges from globalization. [challenges to whom? from whom?]

According to a report from the Organization of Economic Cooperation and Development, a think tank run by the industrialized countries, the taxes collected last year by federal, state and local governments in the United States amounted to 28.2 percent of gross domestic product.

Emphases and bracketed comments mine.

If almost 30% of GDP isn't enough of a take to keep the government properly "equipped," how much is enough?

The short article goes on to portray a poor understanding of economics and an unfounded faith in government to provide everything for everyone (if only it took enough money from its citizens).

NH Income Tax Protesters Arrested

US Marshals posing as sympathizers finally got the Brown family of NH that was resisting income taxes as unconsitutional. They are slated for major time in prison.

The Browns do not make a ton of money. He is a retired exterminator and she is a dentist. They sought only to not pay federal taxes as they argued that the 1913 constitutional amendment that allowed for wage taxation was never properly ratified.

I cannot imagine the Founding Fathers agreeing that people who refuse to pay income tax are jailed, as they never prescribed such a tax.

What About the Kids!?!?

Bush vetoes the SCHIP Bill, sends millions of uninsured kids to their deathbeds. Or something like that. All I care is that a $1 increase in cigarette taxes was defeated. Huzzah!!

Although, if passed SCHIP would have bolstered the credibility of my argument that I smoke for the kids. I'd still say, even right now, my argument is on pretty sturdy ground...

Two Wrongs Don't Make a Right

Mount Obey is about to blow. And not in a good way...

House Appropriations Chairman David Obey (D-Wis.) warned President Bush on Tuesday that he would bottle up a critical $190 billion war spending bill in his committee unless Bush agrees to a goal of ending combat operations in Iraq by January 2009 and other conditions.
[...]
Obey also announced his backing for a war surtax on income, ranging from 2 percent to 15 percent of every American’s tax bill, to raise about $150 billion a year to pay for the war.

“If you don’t like the cost, then shut down the war,” Obey said.

2% to 15%? Yikes. I know he's just blowing smoke by trying to raise the issue of the cost of the war, but a special tax to help finance the clusterfuck over there isn't something to joke about.

Via Roll Call. Sorry, subscription required.

The Church of High Rollaz

From the "This could only happen in Florida" files:

But mostly, folks in this picturesque Gulf Coast city have come to accept that Clearwater is to Scientologists what Salt Lake City is to Mormons, what Mecca is to Muslims. Though not everybody is happy about it.

[...]

The empire's thumbprint on the downtown corridor is considerable and conspicuous, from the uniformed church workers on the streets every day to the two dozen or so Scientology-owned buildings and other properties in the low-slung skyline, many of them fully or partially exempt from property taxes.

Emphasis mine.

Jesus Chuuurist look at that building. The article isn't clear on whether it's a church or just an administrative building. But if your "religion" has a building like that, chances are you can afford to pay property taxes. And that's true even assuming that Scientology didn't already hack the article and photoshop the top few floors off the building. Whenever I buy a house, I'm for sure going to try to get Nateism registered as an official religion.

To be fair, the article states in the final paragraph that the "church" paid about $900,000 in property taxes to the city last year, and its high rolla-ism stimulates the local economy. But still, let Travolta, Cruise and company pay the full tax rate that Joe Blow does, at least.

Rob,

I apologize in advance if this post causes TtP to be hacked by Scientology and revised to remove

the negative comments.

Top on Three More Tax Hikes

Maryland Gov. Martin O'Malley is rolling out his budget in baby steps. Even in a state like Maryland it can be tough to announce on one day that you want to raise every single tax possible. Who would've known.....The latest has him raising the gas-tax .8 cents per year (I'm assuming indefinitely), the automobile titling tax a full percentage point to 6%, and increase in the corporate income tax a full percentage point to 8%, and some nasty accounting regulations that would make doing business in Maryland even more painful.

This I love:

The governor said the state is facing a $40 billion backlog in transportation projects and that without new money, Maryland's economy would be at risk.

"Marylanders in the Washington area waste a full week of work every year sitting in bumper-to-bumper traffic," O'Malley said. "It's a different kind of tax. It's a tax by circumstance. A tax based on our failure to invest."

Different kind of tax...See, I might be old-fashion but I think the worst types of taxes are the ones where the government steals money from me. And O'Malley sure does seem to be a fan of these regressive tax increases -- sales and gas...How do poor people in Maryland feel about this? Full article here.

Is There Anything Tobacco Taxes CAN'T Do?

I suppose not..

BALTIMORE (Map, News) - Two-thirds of Maryland voters favor doubling the $1-a-pack cigarette tax to expand health insurance coverage, according to a new state poll.

Really? Wow...In a related study they found that two-thirds of Marylanders also support finding homeless people a home. Yeah, no shit most people would respond yes when asked that poll question. The sad fact is that tobacco taxes are most often very popular with the public in general. The problem of course -- even ignoring the moral issue of making a buck off of people who are "killing" themselves -- is that you can't rely on tobacco taxes as a continued source of revenue over any significant amount of time.

Governments get addicted to the tax revenue and are forced to continue to raise the tax as the revenue drops from people quitting smoking and going elsewhere to buy their smokes. As the rates raise, more people exponentially stop buying the cigarettes from the state...and so on and so on....And these groups who advocate increase tobacco taxes to help pay for education or health initiatives have to understand this, as they say these taxes will both reduce the number of smokers and provide increased revenue. They just seem not to mind the inherent contradiction.

The poll is part of a renewed push by a coalition of groups called the Maryland Citizens’ Health Initiative to raise tobacco taxes to both reduce smoking and cut the number of people without health insurance. The coalition, with AARP in the lead, is beginning a $100,000 statewide campaign of print and radio ads to drum up support for the plan.

Maryland AARP Executive Director Joe DeMattos, said the increase in the cigarette tax represents “a health care policy trifecta”: It helps cure the general budget deficit and can be used to help the uninsured; it reduces the number of teens and children who might start smoking; and it stops several thousand smokers from smoking.

The Maryland Citizens’ Health Initiative. The same folks who helped bring the "Wal-Mart Bill" to the Free State a few years back. Full article here.

The Industrious French

Recently elected French President Nicolas Sarkozy announced his plans to loosen taxes for those working over 35 hours a week reports the BBC. While no one particular enjoys working, its something one must do and for the French this change is long overdue. This is just one item on the growing list of reforms Sarkozy has initiated since entering office. Other accomplishments to motivate lazy Frenchmen include a 50% ceiling on income tax rates and abolishing the inheritance tax.

Bush: Anti-Drug War Crusader???

No. No way. Not yet anyway.

But according to an article by Don Boudreaux, the reasons for both the passage and the repeal of alcohol prohibition in the early 20th century were related to government revenues.

To summarize, it was the recent introduction of the federal income tax that made liquor taxes no longer crucial for bringing in government revenue. Subsequently, during the Depression, when incomes fell sharply and government spending exploded, the government became hungry for that revenue source once again.

So, since federal spending has again exploded under the Bush administration, could this mean that the government might realize the need for tax revenue on drugs to cover the expenses of the Iraq war and Medicare Part D (among others)?

I'm not so optimistic yet. But please excuse me for trying to find some speck of good in this disastrous administration (and disastrous Congress, too, of course).

Dem's Fiscal Plan: Raise Taxes

The Dems seem to want to go to the left and ignore libertarians. The WSJ today outlined a summary of the Dem's tax hike proposals:•

A Senate Finance Committee plan to raise the federal tobacco tax by 61 cents to a total of $1 a pack to finance the Schip health-care expansion. The Senate figures this will raise $35 billion in revenue over five years, if you choose to believe this tax increase won't produce even more tax-free cigarette sales from Indian reservations.

• The so-called "Blackstone tax" on private equity partnerships that go public, raising their 15% rate to the regular corporate tax rate of 35%. This bipartisan Senate proposal hasn't been scored yet for revenues but may well pass Congress.

• A tax increase on the "carried interest" of hedge funds and private equity to 35% from 15%. This has been introduced in the House and endorsed by Ways and Means Chairman Charles Rangel and the major Democratic Presidential candidates.

• New York Senator Chuck Schumer tells the New York Times that he'll oppose this unless the tax increase also applies to real estate and other partnerships that also now pay the 15% carried interest tax rate. To put it another way, Mr. Schumer is saying he'll only support the higher tax rate if it applies to more people. Meanwhile, by playing this "good cop" role, Mr. Schumer is raising millions of dollars in campaign contributions from hedge funds and private equity for Democratic Senate candidates running in 2008. Brilliant.

• Higher withholding taxes on the U.S. subsidiaries of foreign companies -- in essence a tax increase on foreign investment in America. This $7.5 billion tax proposal from Texas Democrat Lloyd Doggett came out of nowhere last week to appear in the House farm bill to pay for more agriculture subsidies. It passed.

• Raise the capital gains rate to 28% from the current 15%. This would repeal not only the capital gains tax cut of 2003 but also the tax cut (to 20% from 28%) that Bill Clinton signed into law in 1997. Presidential candidate John Edwards proposed this 86% increase in the capital gains tax last week, and he's been echoed in recent days by such Democratic tax sachems as Alan Blinder and Leonard Burman. Mr. Blinder thinks capital gains should be taxed no differently than regular income, which means the tax rate would rise to 39.6% if the 2003 tax cuts expire in 2010. The last time the U.S. had a capital gains rate that high was 1978 -- the Jimmy Carter era.

• Deny the domestic manufacturing deduction to oil producers. This is part of the Senate Finance Committee's energy bill and is estimated to raise $11.4 billion over 10 years. How this will increase domestic oil production amid $77 a barrel oil and widespread clamor for "energy independence" is one of those mysteries that Congress prefers not to explain.

• A levy on oil and gas produced from deep-water leases in the Gulf of Mexico. This tax on domestic energy production is also part of the subsidy-fest known as the House farm bill and would allegedly raise $6.1 billion.

• A tax surcharge of 4.3 percentage points on income of more than $500,000, which would take the top marginal rate to 39.3%. A leading tax writer on Ways and Means, Massachusetts Democrat Richard Neal, promoted this idea in June as a way to prevent this year's increase in the Alternative Minimum Tax. Mr. Neal told the Washington Post that his plan had broad support from Democratic leaders and that "Everybody's on board." Other Democrats balked after that story appeared and Mr. Rangel told us not to believe it, but something's clearly in the air because Democratic tax guru Mr. Burman is also pushing a four-percentage-point income tax surcharge to pay for AMT relief.

DC Property Taxes Threaten to Destroy Why We Live Here

The Wa Post today had an article that (for once) outlined the problems that DC businesses have in paying onerous DC property taxes.

In a storefront that once housed his great-grandfather's hardware store, Paul Ruppert and his mother, Molly, manage an art gallery, theater and music hall. Theirs is an unexpected pocket of bohemia in a District neighborhood defined by brick-faced walk-ups and the gray behemoth that is the Washington Convention Center.

After 15 years, the Rupperts are closing their music venue and a cafe, and they may shut the rest by year's end. The reason: an expected fivefold increase, from $52,000 to $269,000, in the 2008 property tax bill for the enclave's three buildings and an adjoining parking lot.

The assessments of many properties have risen incredibly. Council members are proposing a small business break or a cap in the rise, but the only fair way of dealing with this issue is to across the board lower DC commercial tax rates while not targeting any specific business, such as Ben's, with a lower tax rate than others have to pay.

Pshaw...Middle-Classers Don't Need Pleasurable Hobbies

Prepare for the price of your average smoke to shoot up....TEN DOLLARS. So, think typically a cigar goes for $5; if I'm doing my math correctly here....you are looking at $15 for a middle-of-the-road cigar. Fantastic. A 20,000% increase. Luckily we have Norm Sharp of the Cigar Association of America staying on top of the news and fighting on behalf of the American smoker..... [emphasis mine]

Newman's eyes and ears in Washington, Norm Sharp, president of the Cigar Association of America, was dumbfounded when the legislation went public Friday.

"I thought there was a typo. I thought they meant 10 cents per cigar, not $10 per cigar. I was stunned like everyone else," Sharp said.

Whew. No need to worry here folks, sounds like we have the A-Team working on this one...Full art