Category Archives: The IRS

The Tool of Taxation

Old hammer during reconstruction of the buildi...

Old hammer during reconstruction of the building in Pleszew. (Photo credit: Wikipedia)

In graduate school a professor of mine often referred to the “toolbox of government.”  The characterization must have resonated with me because I still use it in my own classes almost fifteen years later.  Of course he was referring to the variety of actions that governments at all levels have at their disposal to implement and otherwise enforce public policy.  For our purposes we can narrow the contents of the “toolbox” down to the bare minimum:

  • The power of government to deprive a person of liberty (think incarceration and in the most extreme form, the death penalty)—the hammer.
  • The power of government to deprive a person of property (think real property and money)—the hammer.

Confused?  Don’t be.  Chief Justice John Marshall (1801-1835) is credited with expressing the position that the power to tax is the power to destroy.  In this regard the power to tax is the power to punish those who violate the law, ignore regulations, or otherwise challenge the general welfare—the hammer.  The power to tax citizens and residents, businesses, corporations, is generally available to most governments—from Congress to your local water district.  Check your text books, one of the first concurrent or shared powers listed is the power to tax.  Moreover, taxes are ubiquitous—fees: taxes; assessments: taxes; dues: taxes; levies: taxes; taxes: taxes.  The power to tax is the power of government to deprive.

In the months following the Supreme Court’s decision on the Affordable Care Act (Obama-care) , much will be made of the taxation aspect of the now upheld health care reform package—especially the individual mandate, which requires people capable of paying for health insurance to do so or risk a penalty (tax).  What do you think, is it the most intrusive tax ever devised by government (in this case by democrats)?  Is it a new tax?  Is it a tax increase (even though it only applies to people who don’t buy their own health insurance—and wouldn’t we otherwise call these people free-riders or equate them to people who don’t buy car insurance and drive up all of our rates)?  With all the hammers we get hit with every day, is this the one we’re really going to object to?  Ouch!  I know how to fix it; where’s my hammer?!

–DENNIS FALCON

Weekly Poll: Your Opinion on the Buffett Rule

President Obama continues to push for Congress to pass a new tax law, based on the so called Buffett rule, which would require households earning $1 million a year or more to pay a minimum of 30% tax rate. What do you think?

Tinkering With Social Security

President Barack Obama’s plan to cut payroll taxes for a year would provide big savings for many workers, but makes Social Security advocates nervous that it could jeopardize the retirement program’s finances. This article provides an analysis of the plan to give workers a break from social security taxes for one year. (12/12/10 Associated Press in ABCNews, Stephen Ohlemacher) … Read Article

1. On the social security tax cut proposal, compare the opinion of Earl Pomeroy and Obama administration officials. What effect does the social security tax cut have on opinion of the solvency of the social security trust fund?

2. Compare the benefits to workers from Obama’s Making Work Pay tax cut and the proposed social security tax cut. Which one pays more?

What You Should Know About Deficit, Debt and Taxes

“It’s a mess!” says attorney Barbara Weltman. Uncertainty about Americans’ tax future reigns in Washington: Will Bush-era tax cuts be allowed by Congress to expire Jan. 1 or will they be extended? And if extended, how long and for whom? A meeting yesterday between the president and Republican leaders did little to clarify what taxpayers can expect in 2011. (12/1/10 ABC News, Alan Farnham) … Read Article

1. According to Clint Stretch, managing principal for tax policy at Deloitte Tax LLP, what is the dilemma for the middle class when it comes to dealing with the tax issues?

2. If the tax cuts expire what are the changes workers should expect, according to Barbara Weltman?

(Poll)Polisci Students’ Opinion on Tax Cuts

In one of our recent polls we asked MPSL students if the tax cuts should be extended to all Americans. The result: about 31% strongly agree that the tax cuts should be extended to all Americans; about 29% agree; about 26% disagree; while about 14% strongly disagree that the tax cuts should be extended to all American’s.  In a similar nationwide poll by CNN/Opinion Research Poll Corporation, 35% of Americans said the tax cuts should continue for all; 49% said the tax cuts should continue for families making under $250,000; 15% said taxes should rise to previous level for all; while 2% said they are unsure.

After the election President Obama signaled a willingness to compromise with Republicans who want the tax cuts extended for all Americans. What do you think?

Pastors to Defy IRS on ‘Pulpit Sunday’

Is it a violation of the separation of church and state for Pastors to endorse a candidate from the pulpit, or is it a violation of a Pastor’s freedom of speech for the IRS to prohibit him from been able to endorse a candidate from the pulpit? You be the judge as you read this article about Pastors across the nation who have vowed to defy the IRS on a day they have dubbed ‘Pulpit Sunday.’ (9/25/10  ABC News, Kevin Dolak) … Read Article

1. What do the Pastors intend to achieve by the defiant act on ‘Pulpit Sunday’? What specific tax law are they opposing?

2. What is the stated mission of Alliance Defense Fund (ADF)? What two First Amendment rights are in conflict in the events portrayed in the article?

(Video)President Obama On the Benefits of Democratic Policies

President Barack Obama says the policies his administration has put in place have helped move the country forward.  How has Democratic policies improved the economy? What proposal is the president offering to foster economic growth? This video reveals the President’s plan to improve the economy and campaign for the Democratic Party in the November election(9/10/10 Associated Press)

1. What specific plan does the President propose to provide tax relief for middle-class Americans?

2. What does the President criticize the Republicans of doing to hinder economic growth?