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According to an economist at the Congressional Budget Office (CBO), the federal government should examine the question of taxing drivers by the mile as a means of raising higher revenue for highway programs.
According to the Washington Examiner, “Chad Shirley, CBO’s deputy assistant director for microeconomic studies, gave a presentation that says federal gas tax revenues are falling short of federal spending on highway programs. But to resolve that problem, Shirley didn’t propose less federal spending, and instead offered three suggestions.”
1) Charge drivers more through the implementation of a “vehicle-miles traveled charges.”
2) Charging them more when traffic is bad. Shirley calls that “congestion pricing.”
3) Charging tolls on “additional existing interstates.”
The idea of a “vehicle miles traveled tax,” or a “VMT” tax, was considered in 2011 in a bill that never came to fruition. That plan “foresaw the installation of equipment on people’s cars and trucks that would measure how far they drive, and the collection of taxes electronically through a reading of those devices at gas stations.”
Whether or not these new suggestions will be considered again remains to be seen. The CBO says that its three suggestions are not higher taxes or fees, but as an attempt to “make federal highway spending more productive for the economy.”
Such proposals are invasive of people’s privacy, and represent another ridiculous attempt at trying to regulate the behaviors of people.
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Interest Rates Remain the Same for the Second Quarter of 2016
WASHINGTON – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning April 1, 2016. The rates will be:
- three (3) percent for overpayments [two (2) percent in the case of a corporation];
- one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.
- three (3) percent for underpayments; and
- five (5) percent for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate determined during Jan. 2016 to take effect Feb. 1, 2016, based on daily compounding.
Revenue Ruling 2016-06, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2016-13, dated March 28, 2016.
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The great Don Boudreaux a friend of mine, made mention of this picture last week over on his superb blog, Cafe Hayek. The picture is apparently a favorite among Trump supporters.
“What to say? Perry Potts Eidelbus, a Facebook friend, describes it as “a distillation of economic ignorance into pure form.” Indeed. It’s much like Trump himself: the very image of economic ignorance.
Trump is doing now from the political right what Paul Krugman has done so successfully over the past decade and a half from the political left, which is the following: boisterously assuring people that their untutored instincts about the economy are indeed accurate – telling people that what they immediately see in economic affairs and policies is all that there is to see in economic affairs and policies (that is, that there is no ‘unseen’ whose reality can be perceived and understood only by looking beyond that which is immediately obvious). According to this bastardized, pandering version of economics, actual consumable goods (such as are pictured here) are reckoned to be costs, while toil is reckoned to be a benefit. The economic problem is not rooted in scarcity, it is rooted in abundance. Social benefactors, therefore, are those who promise to deny to us the fruits of the economy’s abundance (along with, by the way, our economic freedoms) as they bestow upon us ever-greater scarcity that will bless us with the need for more toil.
The photo shown here is, in short, itself an intellectual cargo ship loaded down with countless tons of economic ignorance.”
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Obama weighed in on the current Apple-government dispute, saying that access should be made necessary.
From Reuters:
U.S. President Barack Obama on Friday made a passionate case for mobile devices to be built in such a way as to allow government to gain access to personal data if needed to prevent a terrorist attack or enforce tax laws.
Speaking at the South by Southwest festival in Texas, Obama said he could not comment on the legal case in which the FBI is trying to force Apple Inc. to allow access to an iPhone linked to San Bernardino, California, shooter Rizwan Farook.
But he made clear that, despite his commitment to Americans’ privacy and civil liberties, a balance was needed to allow some intrusion when needed.
“The question we now have to ask is: If technologically it is possible to make an impenetrable device or system where the encryption is so strong that there is no key, there’s no door at all, then how do we apprehend the child pornographer, how do we solve or disrupt a terrorist plot?” he said.
“What mechanisms do we have available to even do simple things like tax enforcement because if in fact you can’t crack that at all, government can’t get in, then everybody is walking around with a Swiss bank account in their pocket.”
The Justice Department has sought to frame the Apple case as one not about undermining encryption. A U.S. Federal Bureau of Investigation court order issued to Apple targets a non-encryption barrier on one iPhone.
The FBI says Farook and his wife were inspired by Islamist militants when they shot and killed 14 people on Dec. 2 at a holiday party in California. The couple later died in a shootout with police.
“Setting aside the specific case between the FBI and Apple, … we’re going to have to make some decisions about how do we balance these respective risks,” Obama said.
“My conclusion so far is you cannot take an absolutist view.”
Obama was speaking at the South by Southwest festival in Austin about how government and technology companies can work together to solve problems including making it easier for people to vote.
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CNSNews remains a go-to source for analyzing information on the U.S. Treasury, tax revenue, and such. Here they are again, scrutinizing tax receipts for FY2016 through the end of February. In a nutshell, the U.S. government continues to run a deficit, and the amount of taxpayer responsibility continues to increase. From CNSNEWS:
The U.S. Treasury hauled in a record of approximately $1,248,371,000,000 in tax revenues in the first five months of fiscal 2016 (Oct. 1, 2015 through Feb. 29, 2016), according to the Monthly Treasury Statement released today.
Despite these record tax revenues in the first five months of the fiscal year, the federal government nonetheless ran a deficit of approximately $353,005,000,000 during the same period.
In February alone, the Treasury ran a deficit of $192,614,000,000.
The record five-month tax haul of $1,248,371,000,000 equaled approximately $8,263 for each of the 151,074,000 people in the country who had either a full or part-time job in February.
The record taxes in the first five months of this fiscal year exceed by about $63,263,220,000 in constant 2016 dollars the then-record $1,185,107,780,000 in tax revenues (in constant 2016 dollars) that the Treasury took in during the first five months of fiscal 2015.
However, even while taking in a record $1,248,371,000,000 in tax revenues from October through February, the Treasury was spending $1,601,375,000,000, according to the Monthly Treasury Statement. Thus, so far this fiscal year, the Treasury has run a deficit of $353,005,000,000.
The largest source of revenue in the first five months of this fiscal year was the individual income tax, which brought the Treasury $597,524,000,000. The second largest source was Social Security and other payroll taxes, which brought in $428,181,000,000.
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Based on data from H&R Block as we are halfway through filing season, it is apparent that compliance with the Obamacare penalty is still a difficult task.
This is the second year that the penalty has been levied; for 2014 taxes, the fee was $95 or 1 percent of qualified income — whichever was greater — and for 2015 taxes it is $325 or 2 percent of income, whichever is greater. The average penalty is $383, while last year it was $172, which corresponds roughly to the rise in penalty costs.
However, about 3/5, or 60% of filers “who received advanced tax credits to help them buy private plans on Obamacare’s web-based exchanges must pay a portion back to the IRS because they underestimated their actual income for 2015.” Interestingly, this is an increase from last year’s figure of 52% who had to repay a portion of their advanced subsidy. Thus, compliance and income estimation is getting worse, not better, after two tax seasons.
The average subsidy amount of that Obamacare enrollees must pay back has also increased slightly this year — $579, up from $530 last year.
In contrast, about 33% of taxpayers overstated their income and received additional subsidy funds from the IRS; the average amount was $450. Those that got the number correct and saw no adjustments was a paltry 3%.
The confusion is sure to continue with next year’s filing season. The minimum penalty for no insurance will double again to $695 or 2.5% of income, whichever is higher. H&R Block calculations show that for an average family of four earning $60,000 would pay $975 this tax season (2015), compared to about $400 last year (2014), while next year the penalty would rise to $2,000 (2016).
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Every year, the various tax agencies calculate how many Americans do not pay a federal income tax. The 2015 tax year number estimates that 77.5 million households, which is 45.3%, according to the research Tax Policy Center. This number is only for federal taxes and does not include state income taxes.
There are two main reasons for the lack of federal taxes: either the household has no taxable income, or their tax liability is reduced and offset by tax breaks.
The research also calculated the various income levels from the richest and the poorest.
“The top 1 percent of taxpayers pay a higher effective income tax rate than any other group (around 23 percent, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50 percent.
On average, those in the bottom 40 percent of the income spectrum end up getting money from the government. Meanwhile, the richest 20 percent of Americans, by far, pay the most in income taxes, forking over nearly 87 percent of all the income tax collected by Uncle Sam.
The top 1 percent of Americans, who have an average income of more than $2.1 million, pay 43.6 percent of all the federal individual income tax in the US; the top 0.1 percent — just 115,000 households, whose average income is more than $9.4 million — pay more than 20 percent of it.”
Federal taxes are not the only taxes that Americans pay. Income, payroll, corporate income, state, local, property taxes, estate taxes, and excise taxes (which include taxes on gasoline, alcohol and cigarettes), are all various forms of taxation that are spread out and paid by households daily.
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Capital Gains and Losses – 10 Helpful Facts to Know
When you sell a capital asset, the sale normally results in a capital gain or loss. A capital asset includes most property you own for personal use or own as an investment. Here are 10 facts that you should know about capital gains and losses:
1. Capital Assets. Capital assets include property such as your home or car, as well as investment property, such as stocks and bonds.
2. Gains and Losses. A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.
3. Net Investment Income Tax. You must include all capital gains in your income and you may be subject to the Net Investment Income Tax if your income is above certain amounts. The rate of this tax is 3.8 percent. For details, visit IRS.gov.
4. Deductible Losses. You can deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of property that you hold for personal use.
5. Limit on Losses. If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.
6. Carryover Losses. If your total net capital loss is more than the limit you can deduct, you can carry it over to next year’s tax return.
7. Long and Short Term. Capital gains and losses are treated as either long-term or short-term, depending on how long you held the property. If you held it for one year or less, the gain or loss is short-term.
8. Net Capital Gain. If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain.
9. Tax Rate. The tax rate on a net capital gain usually depends on your income. The maximum tax rate on a net capital gain is 20 percent. However, for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gain.
10. Forms to File. You often will need to file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses. You also need to file Schedule D, Capital Gains and Losses, with your tax return.
For more information about this topic, see the Schedule D instructions and Publication 550, Investment Income and Expenses. You can visit IRS.gov to view, download or print any tax product you need right away.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:
Form 8960, Net Investment Income Tax— Individuals, Estates, and Trusts
Capital Gains and Losses
