Lottery Jackpot Represents 73 Minutes of Federal Spending

PowerballThe largest lottery jackpot in US history headlines as a princely sum of $1.5 billion.

But if you’re the lucky winner – overcoming the astronomical odds of 1 in 292 million – and managing to not split the pot with other lucky individuals who also managed to overcome the same astronomical odds….you’ll never see that much thanks to your long lost friends in the Internal Revenue Service and state departments of revenue.

That’s right, not only will you have to fight off droves of never before seen “cousins,” long lost friends, acquaintances, that guy who held the door open for you that one time when you went to buy a lottery ticket…you’ll have to fight off scores of government bureaucrats looking to feast on your winnings in exchange for all the value the government provides to you for the roads they haven’t been building or maintaining.

First, the cash option drops “Billion” from the figure – presently standing at $930 million.

The federal government stands to collect 39.6% in federal income taxes: $368.2 Million

Next, most Americans will face a state tax bite – which varies by state (0% in some states all the way up to a top rate of 12.3% in California. Really California?! No wonder people are packing up and leaving you…), but we’ll estimate state taxes at 5% : $46.5 million

Some will also face city or local income taxes – but we’ll disregard those for now.

Your net winnings will be approximately $515 million.

Federal spending in 2015 was $3.687 trillion (about $421 million per hour).

Meaning the amount of money you’d expect to see from winning the largest lottery jackpot recorded in US history will net you…..73 minutes worth of federal spending.

May the odds be ever in your favor…

Lottery Jackpot
Photo Credit:

“Money” by Pictures of Money

Feed the Beast (a Tax Day poem)

Get your taxes done on time? Here’s a little something we whipped up in honor of tax day:

Feed the Beast

Val Muller

 

They pointed a gun at my head.

“Pay your taxes,” the tax man said.

We know better than you,

So pay your due

And go back to your circus and bread.

 

We stick riders in our laws,

Placing power in cronies’ paws,

And if you object

We’ll keep you in check—

And we certainly can because

 

We’re the government, big government,

And we build the roads.

We’re with you from birth,

When you buy food and clothes.

We’re with you at work,

And we’re there when you die,

And we’re there and we’re there,

Washington’s Great Seeing Eye.

 

We can tell you who you marry.

We decide which drugs are scary.

You pay for us to

Tell you what to do,

And we won’t hear the contrary.

 

We’re the government, big government,

And we build the roads.

We’re with you from birth,

When you buy food and clothes.

We’re with you at work,

And we’re there when you die,

And we’re there and we’re there,

Washington’s Great Seeing Eye.

 

We are the glutton you feed.

We have an endless need

For your money and power;

We grow by the hour

With thoughtless, brainless speed.

 

But you have fed us so,

Whether or not you know,

So before you complain,

Use your brain

To limit our gluttonous reign.

US Senate Says “Presto” And Free Money Appears!

Senate Proposed Marketplace “Fairness” Act Limits Personal Freedom, Choice

Freedom Forge Press

Yesterday the US Senate approved its version of the “Marketplace Fairness Act.” The proposed law seeks to require online retailers to collect and pay sales taxes to state and local jurisdictions. On the face of it, it seems like a good idea. After all, shouldn’t individuals buying goods across state lines have to pay sales tax? It’s only fair because if they went to their local store they would have to pay sales tax. Right? People who rudely seek a deal across state lines rob schools, police, and firefighters of their state and local tax funding.

Enter Senators Mike Enzi (R-Wyoming), Lamar Alexander (R-Tennessee), Dick Durban (D-Illinois), and Heidi Heitkamp (D-North Dakota) with the “Marketplace Fairness Act,” which should be renamed the “Free Money from Thin Air Act.”

In the world before the bill, retailers did not have to collect and pay sales taxes on goods sold online to out of state customers. That is, unless, and we are over simplifying here, a) the seller had a physical location in the same state as the buyer; or b) the seller’s state had an agreement with the buyer’s state that would require sales taxes to be collected and paid to the buyer’s state.

The National Conference of State Legislatures (NCSL) is one group lobbying Congress in favor of the law.  According to the NCSL, states lost an estimated $23.3 billion in 2012 alone from their inability to collect taxes on online and out-of-state purchases. $11.4 billion of that figure is estimated to be lost from an inability to tax online sales. To make up for lost revenue, many states passed “sales and use” tax filing requirements. When filing state tax returns, residents would have to report on the amount of goods and services they purchased from outside their home state and pay their state’s sales tax. That attempt was about as successful as starting a fire with two wet sticks.

As a solution, states could opt to step up enforcement on their own residents who were not paying the sales and use taxes.  But we can only imagine how well the voting public would reward their politicians for dumping this increased tax bill on their laps. Plan B would be to impose the tax collection requirements on the seller of the goods and services. This is a more attractive option for politicians because the out of state sellers often have no local representation and no ability to hold politicians accountable for their actions. The only problem to date has been that if the seller resides in another state it is well outside the reach of the clutches of the home state’s taxing agency thanks a Supreme Court ruling that said such taxation was not constitutional unless authorized by Congress,

Enter the Senate with its “Free Money from Thin Air Act,” which if passed by the House of Representatives and signed by the president would provide the very authorization needed to overrule the Supreme Court and permit states to levy taxes on out of state businesses.

And it is only out of fairness (the bill’s name is the Marketplace FairnessAct didn’t you know?!) that states are requiring out of state Internet sellers collect and pay the same taxes as their in-state competitors. The politicians say it’s very unfair for the “bricks and mortar” store to have to inconvenience their customers by collecting taxes when the buyer can order the same item from an out of state online seller and avoid the sales tax. This argument completely overlooks the problem of shipping costs from the out of state seller’s point of view. Many customers have come to expect free shipping from online retailers. So adding a local sales tax on top of a shipping cost will place the online out of state store at a disadvantage. Where is the “fairness” now?

More than once, advocates of the law say, it’s not a new tax, it’s a “due” tax. But if the tax bill hasn’t been collected in the past, it seems like the Senate is expecting the $23 billion to materialize out of thin air–with no impact to consumers. If the issue is state budget pressures, one solution could be to stop dumping unfunded mandates (e.g., Obamacare) onto state budgets. This would relieve the pressure from state budgets without expecting consumers to fork over another $23 billion in “taxes due.”

Of course there’s no reasonable way to comply with the law without some complex tax accounting software. This may explain why Amazon.com made a sudden U-turn from its vigorous opposition to applying state and local taxes to its sales and now supports the law. Trying to find the answer to this reversal and new found friend for politicians doesn’t require much sleuthing. Amazon isn’t looking for tax fairness, it’s looking for customers. Amazon’s convenient new Tax Collection Services offers online merchants a convenient 3% fee for figuring out all that tax mess.  Three percent of $11.4 billion is likely a rich enough potential customer base to come out in support of the new taxing measure.

As usual, Congress, and in this case Democrats and several Republicans in the Senate show an abysmal intelligence of how commerce works outside of their DC dreamland. A few oversights that the Senate made:

1. Complexity. Suddenly, online retailers would be required to have a working knowledge of nearly 9,600 state and local tax laws and regulations affecting everything from different tax rates for different goods and whether certain items are exempted from sales taxes.

2. Enforcement. The bill authorizes state taxing authorities to target online retailers with audits to verify compliance. Businesses simply do not have the financial resources to put into defending and answering auditor’s questions from a variety of taxing authorities.  Not to mention that responding to audits takes them away from much more efficient uses of their time, like running their businesses. The Senate was generous to limit the audits to one from each state. (The Government speak looks like this: “single audit of a remote seller for all State and local taxing jurisdictions within that State”)

3. Ambiguity over what a “State” means. Most people grew up (at least those who were in school since 1959) understanding there are 50 states. This bill extends the “state” definition to include the District of Columbia, Puerto Rico, Guam, American Samoa, US Virgin Islands, Northern Mariana Islands, and “and any other territory or possession of the United States.”

4. Native American Tribes recognized as state taxing authorities. “And any tribal organization (as defined in 18 section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)).” There are 566 such tribal organizations.

5. What does an “audit” mean. State taxing authorities–to include the 550 new states the Senate found–can engage in all kinds of harassment of businesses without initiating a formal audit.

The bill introduced by Sen. Enzi was supposed to limit a small business’s risk of visits from state tax auditors to one per state. But with final bill markup, a small business is potentially at risk of more than 600 audits with the expanded definition of what a “state taxing authority” means.

The Wall Street Journal reports asking Senator Enzi’s office for clarification on the above issue. When the answer (today!) was that the Senator was still trying to figure out the answer when the bill was passed last night reminds us of the “have to pass the bill in order to find out what’s in it” stupidity started by then Speaker of the House Nancy Pelosi when referring to ambiguity in the Affordable Care Act.

The proposed law serves as another example of Washington ignorance of the private economy. It also illustrates the politicians’ ongoing search for free money at the expense of the freedom of small business owners who operate across state lines. While the search goes ever on and on, 69 Senators waved a magic wand and expected “free money” to come flying out of a magician’s hat. Sixty-nine Senators want you the taxpayer to believe their illusion that they’ve found a cost-free way to fund state and local budgets without harming consumers–ignoring the fact that the money will come from somewhere.

These politicians think they’ve done their part to spread the pain of state and local sales tax in a way that makes the process “more fair” for brick and mortar and online retailers. But they’ve failed to consider a more reasonable alternative–that instead of simply spreading around the tax pain, they could have acted to reduce or eliminate the tax pain by eliminating wasteful spending, ending duplicate government programs, and pretending that unfunded federal mandates such as education, Obamacare, and environmental regulations magically fund themselves

Atlas Shrugged II Premieres Friday 10/12

Whether you believe Atlas Shrugged is hyperbolic, cautionary, or even prophetic, it’s an important story to read to remind us of the freedom America offers—and to remind us how quickly that freedom can be taken.

Since Ayn Rand is not the most concise author, we’re fortunate that the book is being made into a film. Part One of the trilogy was released on tax day last year, and Part Two will be released on Friday.

To understand the genius of Rand’s work, it’s important to understand a bit about her life. Born in Russia in 1905, Ayn Rand was subjected to the culture of collectivism in Russia. Almost immediately after teaching herself to read, Rand discovered European fiction, which introduced her to the idea of the hero—the individual—something lacking in Russian culture. She saw two revolutions, and a resulting Communist victory forced her father’s pharmacy to be confiscated, causing her family to nearly starve to death. It wasn’t until her last year of high school that she was introduced to American history. The principles she learned led her to hold America as the paragon of freedom.

She continued her studies through college in Russia, but communists continued to take away students’ rights to freedom of thought. Rand took solace in Western films, once again holding Western culture as the paragon of free men. In 1926, she arrived in New York after telling Soviet authorities she planned only a short visit to America to visit family. Her intention was never to return, and indeed she remained in the United States for the rest of her life.

She moved to Hollywood to become a screenwriter, meeting Cecil B. DeMille and Frank O’Connor, her future husband and Hollywood actor, during her first two weeks there. She continued her writing career, creating characters and stories that illustrate the potential of the ideal man. Atlas Shrugged pits the government collective against individual businessmen.

Here is a synopsis from the producers—hope to “see” you at the show!

In Atlas Shrugged II, the global economy is on the brink of collapse. Unemployment has risen to 24%. Gas is now $42 per gallon. Brilliant creators, from artists to industrialists, continue to mysteriously disappear at the hands of the unknown.

Dagny Taggart, Vice President in Charge of Operations for Taggart Transcontinental, has discovered what may very well be the answer to a mounting energy crisis – found abandoned amongst the ruins of a once productive factory, a revolutionary motor that could seemingly power the World.But, the motor is dead… there is no one left to decipher its secret… and, someone is watching.

But, the motor is dead… there is no one left to decipher its secret… and, someone is watching.

It’s a race against the clock to find the inventor before the motor of the World is stopped for good.

Who is John Galt?

 

Convention Chaos, Funded by You!

As the 2012 political conventions come to a close, we reflect on the great moments of shady vote results and multi-day infomercials, all partially funded at tax payer expense.

We saw Republican party bosses disenfranchise the duly elected delegates of a candidate from taking their seats at the convention and centralize authority in the central committee–something that doesn’t seem in keeping with general Republican principles of small government and states’ rights.

We saw a Democratic party convention chair call for a voice vote three times as he stood in disbelief of the vote result–then call the vote for the outcome that was assuredly per-determined by party bosses before consulting with…you know, the actual party delegates.

Republicans adopted a platform which seems to support an outright ban on abortion, not providing for the usual exceptions from pregnancies resulting from incest, rape, or where the mother’s life is endangered.

Democrats played a video suggesting that Americans all “belong” to the government.

We’re frankly sickened by such displays on both sides. It’s a sharp contrast for the party of the current president, who compares himself to Abraham Lincoln, to be stating that it’s the American people who belong to government. Lincoln wrote famously that government was “of the people, by the people, and for the people.” In our Declaration of Independence, Thomas Jefferson wrote that people are endowed by their Creator with inalienable rights and that government’s purpose is to secure these rightsand to derive its just power from the consent of the governed. In short, the American people lend government its power–it is not for the government to determine what freedoms to permit its people to enjoy.

Both parties received approximately $18 million taxpayer dollars to pay for convention expenses. In a time when the national debt tops $16 trillion and our national checkbook has nothing but red ink in it, this is a slap in the face to Americans who work and pay taxes.  Both major parties are fully capable of raising funds to pay for their convention events, the fact that they don’t have to disadvantages smaller parties who aren’t able to qualify for tax payer funds.

Our suggestion? Next April when you file your taxes, don’t check off the boxes to contribute to the Presidential Campaign Fund. If the two major parties want to host circuses of conventions, free of sensible and meaningful policy debate, then they should raise their own funds instead of relying on taxpayer contributions.  While the Presidential Election Campaign fund is a voluntary contribution on your tax forms, its time for our political parties to stand on their own, raise their own funds for conventions, and publicly disclose the source of the funds they raise.

Note: Freedom Forge Press does not endorse either party or candidate. But from the tone of this article, you probably knew that already!