Archive for category Taxes

Denver Mayor Michael Hancock’s Lack of Vision

The following is a Guest Commentary published this morning in the Denver Post.  For the uninitiated, since 1992, Colorado has had a law on the books called TABOR, or the “Taxpayers Bill of Rights.”  The bane of tax-raising legislators statewide, it limits revenue growth to inflation + population, year over year.  In the case of cities, this means that a city  may only be entitled to keep a portion of the mill levy on a property’s assessed value, returning the rest to taxpayers. TABOR includes a provision known as “De-Brucing,” after TABOR author Douglas Bruce, whereby the residents of a district may opt out of those limitations, and allow the city to keep the full mill levy on the entire assessed value of a piece of property.  To date, Denver has not done so, and this year, Mayor Michael Hancock is proposing that the City Council approve a referendum for Denver citizens to do just that.

At the invitation of the Independence Institute, I wrote the following piece, opposing the proposed tax measure:

UPDATE: The Post edited the piece somewhat for space.  An earlier version of this post just used what they printed.  I’m replacing it here with the slightly longer version that was submitted to them.

Denver’s a big city, a major element of Colorado’s economy, and of the Rocky Mountain West. And its governance is not for the faint of heart. But the Hancock Administration is not asking the hard questions, Instead the administration is seeking the easy way out of a budget deficit through a proposed permanent property tax increase for the November ballot.

Instead of proposing bold changes to Denver’s fiscal structure, Mayor Hancock has opted to tinker around the edges of city finances, and stick Denver homeowners with the bill for his lack of vision.

Denver is just beginning to recover some of its housing value.  Yet, only a month ago, the Denver Post reported that “another wave of foreclosures appears to be looming.”  A sudden increase in property taxes strikes at the heart of households’ precarious financial stability, even as government take a bigger bite of homeowners’ slowly increasing equity.  Renters would also be affected, as property owners pass along the increased expense.

The mayor’s proposal assumes that rising home values necessarily mean rising incomes.  But the Bureau of Labor Statistics reports Denver’s weekly income fell nearly 5% in 2011, 305th out of 323 major counties surveyed.  The mayor’s mill levy override scheme would mean an immediate property tax increase of 20% for households who are still finding it difficult to make ends meet.

Denver’s unemployment rate remains stubbornly high, at 8.7%.  The Mayor’s Structural Financial Task Force cites a failure to create jobs as one reason for lower revenues.  That’s hardly a reason to penalize the employed and unemployed alike.

Another of the mayor’s proposals, eliminating the business personal property tax for new purchases, is a smart and welcome revenue enhancing move, but merely shifting the tax burden from struggling business owners to struggling families – often the same people – will leave us no better off.

When the government proposes a tax increase, it’s claiming that the least important thing it can do with that money is more important than the most important thing you can do with it.

Many households’ finances are just beginning to stabilize after years of uncertain employment.  People have savings to rebuild, retirements to plan for, and children to feed, clothe, and put through school.  Maybe even take the odd vacation they’ve been putting off for years.

The government has a moral obligation to exhaust all reasonable efforts at cost savings before asking taxpayers for more.  But the mayor hasn’t just “gone small” on savings, he’s also “gone vague.”  With the exception of specific personnel moves, the overwhelming proportion of savings includes studies and promises to find cost savings, rather than actual cost savings.

The mayor’s proposals to increase retail sales and identify unused parcels of land assume that private developers are incapable of doing this themselves.  At a recent hearing on the redevelopment of the old Health Care District near 9th Ave. & Colorado Blvd., the developers identified that parcel as one of the most desirable retail spaces in Colorado.

The mayor’s rejection of specific fees for libraries and trash collection may avoid taxpayer ire, but it’s hard to escape the feeling that the decision had more to do with avoiding the accountability imposed by earmarked revenues.

Genuinely bold proposals would include privatizing or outsourcing such city services as vehicle fleet maintenance, building and road maintenance, and park maintenance and rec centers.

Big city Democrat mayors have championed similar moves across the country, including Rahm Emanual in Chicago, Antonio Villaraigosa in Los Angeles and Alvin Brown in Jacksonville.  Newark Mayor Cory Booker has been at the helm of an astonishing and ongoing turnaround of that troubled city.  Facing a fiscal crisis during his first term, Mayor Hickenlooper made ends meet without resorting to tax increases.  One reason he became governor was his understanding that Colorado has “no appetite” for tax increases.

In California, where cities like Stockton and San Bernardino have declared bankruptcy due in part to crushing public pension obligations, voters in San Diego and San Jose voted overwhelmingly to significantly reform public employee pension and health plans.

Earlier this year Newark’s Mayor Booker was the featured speaker at the Colorado Democrats’ Jefferson-Jackson Day Dinner.  While he spoke largely about his personal story, he no doubt talked city business with Mayor Hancock privately during his visit.

Unfortunately for the citizens of Denver, Mayor Hancock’s proposed permanent property tax increase for the November ballot shows that he wasn’t listening.

Denver voters should recognize this proposal for the lost opportunity that it is, and instruct their leaders to try again.

No Comments

Olympian Taxes

On this (imaginary) episode of Pawn Stars:

Customer outside of store: My name’s Michael, and I’m here at the Pawn Shop to sell my Olympic bronze medal. I’m hoping to get enough to pay the back taxes on the 15 gold medals that I won, and maybe have a little left over to have some fun at the tables before I go home.

Rick (to camera, in warehouse): I’m really excited to see this come in here.  Olympic medals don’t just walk into the store all the time.  I mean, this is a piece of history, and Olympic memorabilia is highly collectible.  But I don’t care how good it’ll look sitting in my store, it has to be for the right price.

Rick (back at counter, to Michael): The US is one of the only countries to assess a prize tax on its athletes who win Olympic medals.  Sen. Marco Rubio of Florida is supposedly introducing a bill that’ll change that, but right now, winners have to pay about $9000 per medal.  Although there’s no truth to the rumor that the tax was instituted because it was a windfall, since, “they didn’t really win” the medals.

Chumlee: Yeah, isn’t that the real reason that the ’72 US basketball team didn’t pick up their silver medals?  They’re all amateurs, and they couldn’t afford the taxes.

Rick: Shut up, Chum.

No Comments

A New Form of Revenue

Just as physicists long ago realized that light is neither a particle nor a wave, the Democrats have now, evidently, discovered a form of revenue that is neither a penalty nor a tax:

President Obama:

David Axelrod.

Deputy Campaign Manager Stephanie Cutter:

Austan Goolsbee:

HHS Secretary Sebelius:

, , ,

No Comments

Bridge Over Troubled Financial Waters

Transportation funding in Colorado has been a problem for, like, ever. Typically, capital spending is funded by what’s left over after the general fund expenses have been taken care of, but in recent years, to quote Geoffrey Rush from Shakespeare In Love, “There’s never any profits.” Which means that highway maintenance has been suffering. In 2005, the voters adopted Referendum C, but rejected Referendum D, which would have put a substantial pot of money at the disposal of the government for unspecified road projects.

So in 2009, the legislature passed FASTER. FASTER did a number of things, but primarily is raised vehicle fees in order to pay for bridge repair. Much of the debate at the time centered around the claim that fees are not taxes, and that this was simply a re-interpretation to get around TABOR’s requirement that tax increases be subject to a vote of the people.

The reality is a little more subtle than that, and it shows that when the state is bound and determined to get its hands on your money, there are almost no lengths to which it will not go, no manipulations in which it will not engage. (Just consider Obamacare’s fluctuating claims that the money you’ll have to pay is either a tax or a penalty, depending on the legal theory it happens to be operating under at the time.)

In fact, what the state did was to create a TABOR Enterprise, the Colorado Bridge Enterprise, which is exempt from a number of TABOR restrictions. It can, for instance, issue revenue bonds. Enterprises can also raise their fees-for-service without TABOR limits, but they can’t collect generalized taxes. They also must get less than 10% of their annual revenue from the state. This is how, for instance, the University of Colorado can continue to raise tuition year after year. So while the argument rested on a fee not being a tax, that was mostly because Enterprises can only collect fees, not taxes, and it was essential that the bridges be transferred to the Enterprise.

That 10% revenue limitation was also a problem, since in the first year, the bridges themselves would be the bulk of the Enterprise’s income. So the state depreciated all the bridges to $0. No salvage value, no remaining years of useful life, nothing. A claim that’s risible on the face of it, one that would get a private company and its auditors clapped in irons, but a dodge that the state felt perfectly comfortable resorting to.

The other details are equally unsavory. While the assets are supposed to be owned by the state, there is supposed to be an arms-length relationship between the state and the Enterprise. The members of the Enterprise Board are the members of the Colorado Transportation Commission. The fee itself is collected not by the Colorado Bridge Enterprise, but by the state Department of Revenue, which charges no fee for this service. And the revenue bonds are the Stimulus’s Build America Bonds, whose interest is subsidized by you, the federal taxpayer.

The difficulty is that since the Enterprise owns only bridges, the only fee that it can reasonably assess is for the use of those bridges. But since it’s not a toll, out-of-staters, and most trucks don’t pay the fee. And the fee is assessed as part of the vehicle registration, whether or not your vehicle is road-worthy and anywhere near any of the bridges in question. Suddenly this fee begins to look an awful lot like a tax, or at least a fee that the Bridge Enterprise doesn’t have the power to collect, since it’s not on bridge use, but on auto use.

That’s the basis for the lawsuit against FASTER. The plaintiffs are rural farmers who have vehicles that don’t go far from home, or even off the farm, and yet are charged a usage “fee” for a bridge they can’t even see, never mind drive over.

“How many legs does Cobalt have, if you call the tail a leg?”

“Four. Doesn’t matter what you call the tail, it’s not a leg.”

There’s a legitimate discussion to be had – and a vast literature – about the best way to fund roads. They do constitute a “system” from which all of us benefit. They’re the paradigm of platforms that government ought to be building, rather than products that try to dictate end results. As Rep. McNulty pointed out in the debate, roads lower the cost of commerce for everyone, save lives, and enhance freedom. To that extent, general fund money, or a vehicle fee, a gas tax, a mileage fee, a usage fee, a toll, or peak usage tolling – in order of increasing specificity – are all reasonable means. The economic effects of each are different, and they each make sense for different kinds of roads.

If the legislature had gone to the people and asked them for $31 a year, hell, even index it for inflation, in order to repair bridges that could become homicidal, they might well have voted for it. (Although the 2004 incident resulted from workers’ error, not the age of the bridge).

What’s clearly unfair is to creatively interpret the rules in order not to have to ask.


No Comments

Amazon Tax Bites The Dust

In 2010, the Democrats in Colorado, in violation of the state Taxpayers Bill of Rights, passed a variety of tax increases known as the Dirty Dozen.  The state’s highly politicized Supreme Court gave the tax increases a pass around TABOR’s requirement for a citizen vote, but the federal courts are frequently a different matter, and so it has proved with one of the measures, the so-called, “Amazon Tax.”  That tax applied the state sales tax to sales by Amazon affiliates in the state, on the dubious proposition that the presence of a person who either owns a website (which could be hosted anywhere in the world) or who sells web ads constitutes a significant physical presence in the state.

Now, a federal court has decided that the tax violates the US Constitution:

On Friday, the federal court in Denver declared the 2.9 percent tax on purchases unconstitutional on the ground it was tilted unfairly against out-of-state retailers, and that it put an undue burden on retailers to either collect the tax owed by consumers or report consumer purchases to the state.

Judge Robert Blackburn’s ruling noted the legal language of the tax didn’t distinguish between in-state and out-of-state businesses, but the practical effect of the tax did.

“I conclude that the veil provided by the words … is too thin to support the conclusion that the Act and the Regulations regulate in-state and out-of-state retailers even-handedly,” Blackburn wrote.

The court applied what is known as the “negative Commerce Clause,” the notion that if regulation of interstate commerce is explicitly delegated to the Federal government, then it cannot be exercised by state governments.  As Ramesh Ponnuru says in his review of Michael Greve’s The Upside-Down Constitution

Chief among the Court’s stratagems was its deployment of what has come to be known as the “dormant” or “negative” commerce clause: the inference that since the Constitution vests Congress with the power to regulate commerce among the states, it denies that power to states. That inference has long been controversial, not least among originalists, but Greve points out that without it the states would have at hand a ready means to circumvent the specific prohibitions on them that the Constitution spells out.

Ponnuru also notes that, “Several provisions of the Constitution block state governments from taxing economic activity outside their borders.”  Greve makes the case that since the 30s, courts have increasingly presumed that states can regulation out-of-state commerce, rather than placing the burden of proof on the states.  Today’s ruling is a small step back in the other direction.

Now, it remains to be seen if Amazon will restore its Colorado affiliates.

UPDATE: On the likelihood of an appeal, someone involved in the fight against the original measure comments:

The judge ruled that the state had violated the US constitution in two seperate and distinct ways- by violating the dormant commerce clause in discriminating against out of state retailers, and in imposing an undue burden on out of state retailers with the reporting requirements in the bill. Highly unlikely the state would appeal, as they would have to overcome both violations.

Attorney General John Suthers declined to defend the State on this case (which is his prerogative) and the Department of Revenue had to hire their own legal counsel. As such, it would have to be the Governor/ED of the Dept of Revenue that would decide to appeal. Hickenlooper was almost convinced last year to support the repeal bill after the judge had granted a temporary injunction. That failed when the State Senate killed off a bunch of Republican bills in the last few days of the session. Just don’t see Hick taking up this fight – remember this all happened under former Governor Bill Ritter, mainly as a ploy to raise a few dollars to ballance the budget. With the preliminary injunction, the state has never collected a dime on this law. The permanent injunction doesnt mean the state will lose any revenue they counted on-they just simply won’t be able to gain revenue they didnt plan on.

, ,

No Comments

Inverting the State/Civil Society Relationship

That to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical. – Thomas Jefferson, Virginia Status for Religious Freedom

You can quote Jefferson like scripture.  But this is one of the three acts he had put on his tombstone, so I’d wager that he would stand by it, if pressed.

The President’s attempt to force Catholic hospitals to provide services forbidden by their religious beliefs have been roundly – and rightly – attacked as an assault on religious freedom of conscience.  Over-fond of the non-establishment clause, many on the left have forgotten the free exercise clause.

But combine this power grab with an earlier money grab, and a darker pattern emerges.  Remember, early in his administration, Obama floated a proposal to limit the tax-deductability of charitable contributions for high-earners.  (This proposal has recently been revived at the state level in Maryland.)  After all, the government needs the money.  Needs the money more than any private charitable organization needs it.

The safety net has always been sold – an accepted – as programs of last resort, intended for those for whom private organizations would not or could not care.  But by taking money away from charitable organizations for itself, Obama is reversing that equation.  To him, these services should be provided first by the government, and then civil society can fill in whatever it can with whatever the government decides to let it keep.  Moreover, it can’t even really decide what services to provide in accordance with the dictates of it conscience, but needs to provide what the government requires or permits it to.

When viewed as a package, the HHS regulations and the proposed tax law changes constitute less an attack on religion per se, and more an assault on the primacy of civil society.  Not content with filling in the gaps, the government has moved from that to competition with private charities, and any competition involving the government is inherently unequal.  This is exactly the sort of thing he has in mind for a second term, when he’ll be testing and often exceeding the limits of executive authority to enact his agenda, with or without Congress.

No wonder he doesn’t care if the Senate ever passes another budget.

, ,

No Comments

Individuals Pay Corporate Taxes – Just Not Always The Consumer

Right now, our corporate tax structure makes no sense.  It not only plays favorites, it drives many of the unfavored abroad.  We have the highest corporate tax rate in the world, and the code is so riddled with exceptions, subsidies, and loopholes, disguised as “incentives,” that, as Megan McArdle put it, large companies basically have branch offices of the IRS on site to negotiate their tax bills.

So it makes sense that we should lower the corporate tax rate in exchange for cleaning the thing up.

It makes sense for all sorts of reasons, but not for one reason you often hear mentioned: that corporations just pass the increase along to consumers.  They don’t.  At least not always, because they can’t.

Who pays the tax is known as, “tax incidence,” and it depends on who has the fewest options.  Economics recognizes something called, “elasticity.” Supply Elasticity is how much the supply changes depending on the price, and if you’ve been following along, you’ll know that Demand Elasticity is how much demand changes in response to price changes.  Vacation rentals have a pretty high demand elasticity.  Gasoline, on the other hand, has a fairly low demand elasticity: the price goes up, but you still have to get to work.

On the supply side, airline seats have a fairly low supply elasticity; once an airline has planes in inventory, they’re not likely to mothball them, at least not in the short run.  Tobacco, on the other hand, has a pretty high supply elasticity: when the price falls, supply falls quickly to match.

(A word for the pedantic: elasticity is not constant.  At very high or low price levels, we as consumers or producers may behave differently.  You can only drive so much, even at $1 a gallon, lowering demand elasticity.  Of course, at that price, there won’t be any refineries operating, either.  Also, there’s the economist’s eternal escape hatch – the long-run and the short-run.  It may be expensive for me to increase or limit supply, but give me enough time, and I’ll find a way.)

So what does this have to do with the tax on eggs in China?

If I’m the one with fewer choices, I’ll probably have to eat most of the tax.  Suppose, for example, I make the Indispensible Widget.  It’s easy for me to ramp up and ramp down production, but it’s a commodity you have to have, every day, all the time.  This gives me, as a producer, pricing power, and it means that when our taxes get raised, we can pretty much – up to a point – pass that expense along to you.   (Remember, even monopolies don’t have infinite pricing power, and even commodities producers have competition.)  So in that case, yes, it’s the consumer who gets shafted.

Now, suppose I sell something else, something where the industry can’t readily reduce supply, but you have a lot a choice in whether or not buy.  High-end vacation hotel rooms, for instance.  I may be able to reduce some operating costs, but those costs are what make them luxury.  And vacations are very price-sensitive.  There may be some times when I can just tack on the tax, but if I’m trying to compete with your staycation, I probably won’t.  My shareholders and employees will eat it.

Note that there’s a similar relationship at work with how shareholders and employees split their end of the deal, too.  Labor, too, has supply and demand price elasticity.  If your labor is a commodity, you may not get that raise this year, or may even get a pay cut or fired.  If you have specialized skills, ownership may not be able to pass the tax along to you, either.

The point here is that while individuals always pay corporate taxes, those individuals may be consumers, employees, or owners, depending on the business.  It’s not as simple as businesses just passing the cost on to their customers.

Why is this an argument for tax reform?  Hayek’s Pretense of Knowledge.  The government can’t really know, except in the coarsest way, what the tax incidence for the corporate income tax will be on a given industry.  Subsidies may end up going to industries that don’t need them, or that can’t find a good place to invest them.  They may reward employees, or not; they may help subsidize demand, or not.  And what was true yesterday may well not be true tomorrow.

Ideally, we would simply ditch the corporate income tax altogether.  Salaries and employment would rise, as would consumption, dividends, and investment, so the government would see a lot of that revenue come back immediately, and much more from growth.

But barring that, a flat rate, which instead of aiming for universal “fairness” accepts the fact that industries and businesses differ from one another, is the wisest course.

No Comments

Moody Blues

The credit rating agency Moody’s told the US government that it was running out of love, and issued a warning today about the need for the US to get its fiscal house in order, and to seize the pre-election moment to deal with the long-term structural deficit.

Oh? That’s not how you heard it? You probably heard that they would downgrade the US credit rating only because the government had defaulted.

That’s sort of what they said, but it helps if, unlike most of the mainstream media, you actually read the press release instead of cribbing from each other’s notes. The key paragraphs:

Moody’s had previously indicated that its stable outlook on the Aaa rating was based on the assumption that meaningful progress would be made within the next eighteen months in adopting measures to reverse the country’s upward debt trajectory. The debt limit negotiations represent a real near-term opportunity for agreement on a plan for fiscal consolidation. If this current opportunity passes, Moody’s believes that the likelihood of anything significant being accomplished before the next presidential election is reduced, in part because the two parties each hopes to capture both a congressional majority and the presidency in the 2012 election, after which the winning party could achieve its own agenda. Therefore, failure to reach an agreement as part of the current negotiations would increase the likelihood of a negative outlook in the near term, because the upward debt trajectory would still be in place. At present, this appears the most likely outcome, in Moody’s opinion.

If a debt-ceiling-related default were to occur, Moody’s would likely downgrade the rating shortly thereafter. The extent of and length of time before a downgrade would depend on how factors surrounding the default affect the government’s fundamental creditworthiness, including (a) the speed at which the default were cured, (b) an assessment of the effect of the default on long-term Treasury borrowing costs, and (c) measures put in place to prevent a recurrence. However, a rating in the Aa range would be the most likely outcome. Any loss to bondholders would likely be minimal or non-existent, as Moody’s anticipates that a default would be cured quickly.

The default would be a catalyst not because the government was late by a couple of days on an interest payment that everyone knew was coming anyway. It would be a catalyst because it had failed to prod the parties into addressing the long-term structural deficit and debt problems. In other words, it’s not the default itself, it’s the lack of seriousness that the default represents.  If it’s not solved now, it’ll be another two years before anyone looks seriously at it again.

The press would love to make this into a bipartisan problem – I don’t know if it’s me/I don’t know if it’s you/I don’t know if it’s both of us/Not knowing what to do. But of course, it’s not. It’s a White House and Democrat refusal to take the problem seriously that has caused this impasse. A Treasury Secretary who is more interested in using the deadline as a bludgeon; a White House whose fiscal credibility is shredded so badly that even its own party deserted it twice on key votes this week; and a Democrat Senate leadership who is so fresh out of ideas they haven’t even bothered to propose a budget, much less pass one. For two years.

Simpson and Bowles have an article in today’s Washington Post arguing that both sides have to sacrifice their sacred cows. That approach permanently locks in supposed “temporary” stimulus spending, and kills growth by raising taxes to pay for them.

As for a solution, we know you’re out there somewhere.  But when the party in power has decided to precipitate a crisis and then claim that they’re the only ones who know how to handle it, we’ll get there in your wildest dreams.

, , ,

No Comments

Some Tax Day Thoughts on the Tax Code

As Americans, for the third year running, hold Tax Day Tea Parties, it’s worth setting down a few thoughts on the tax code itself.

1) It’s too progressive

The US has the most progressive tax structure in the developed world. More progressive than the Japan, more progressive than the UK, more progressive than Sweden, for crying out loud. You make it big with Ikea, you’re better off going back to HQ than staying here.

This is a result of generations of structuring the code based on “who can afford” rather than “who has a stake.” Well, of course if you make more you can afford more. But it also means you can afford more shoes, maybe a nicer car, possibly a boat. It also means you can afford – if you choose – to indulge in hobbies or possibly lead charitable efforts.

The question “who can afford” answers itself, but it notably fails to ask, “afford what?” Pretty much every activity except stuffing cash under the mattress helps create more wealth, and in a society with a rule of law and secure property rights, even – perhaps especially – the poor get to participate in that wealth, too. So when the government says that it “needs” more of your money, it really “needs” to be sure that the least important thing it’s going to do with that dollar is more important than the most important thing its owner can do with it. That’s a high bar to get over. As it should be.

2) It picks favorites

Any tax system is going to do this sort of thing. Sales taxes will exempt food or clothing. But the possibilities for rent-seeking seem almost endless with out current tax system. Regulations may raise barriers to entry, but the Aristocrats of Pull are really made through the tax code, rewarding political allies and misdirecting massive amounts of resources in the process.

The income tax, since it’s stated as a percentage of some known amount – what you made last year – also encourages the government’s delusion that it’s really all their money, except for what they let you keep. It’s only with a tax code susceptible to endless manipulation that a President could talk about “reducing spending in the tax code.” When it gets to that point, there’s really nowhere left to go.

3) It encourages debt

This used to be worse. It used to be that all interest was deductible, but that was phased out a couple of decades ago, so now for individuals, we’re down to the mortgage interest deduction. But for businesses, most interest is still deductible, and while this encourages capital formation, it also leads to a debt-heavy capital structure. We’ve all seen what excess leverage can do, but other decisions get distorted as well. Successful mergers tend not to be financed with debt, but with cash, and it’s likely that a whole lot of bad M&A activity – doomed deals – wouldn’t happen if that interest weren’t deductible.

4) It can’t be complied with

Not, “it’s hard to comply with.” It can’t be complied with. We all know about the NTU studies asking IRS employees to work a difficult tax question, and having each of them come up with a different answer. The fact that an average citizen has to spend hundreds of dollars to file taxes every year, and still could end up getting hauled into tax court because he got the wrong one of twenty different right answers is an offense against everything we expect from the rule of law.

5) Business taxes are too high

Right now, the US not only has the most progressive tax system in the western world, we also have the highest business taxes in the industrialized world. Inidividually, either of these would be enough to start chasing wealth production out of the country. Together, they virtually guarantee it, particularly because we also tax dividend income. Dividends, of course, are just a distribution of profits to the owners. Profits which have already been taxed. Not all countries do this. Some allow a tax credit against dividends, and some just don’t tax them at all.

So as we go to our Tax Day Tea Parties, remember, it’s not just how much they’re taking. It’s the way they’re taking it.

No Comments

The Denver City Council Wants Your Money

Well, that shouldn’t be any surprise to anyone living in Denver over the last few years.  But usually they have the decency to pretend that it’s for someone else.  This time, the Denver City Council wants your money for themselves and the office some of them hope to occupy come May.

At last night’s City Council meeting, they voted themselves (10-3, the Denver Post article neglects to mention who the three were) a 6.6% pay raise, starting two years from now:

Denver is the only large city in Colorado that pays its council members a living wage — $78,173 a year, plus about $30,000 in benefits.

The raise would give the council members an annual salary of $83,332 by July 2014. The council president makes about $10,000 more.

The mayor’s salary will grow to $155,211 from its current $145,601. The salaries of both the clerk and recorder and the auditor would be $134,235, up from their current $125,924.

Right now, the seasonally unadjusted unemployment rate for Denver is 10.9%; a seasonal adjustment might bring that down to 10.4% or so.  This is the highest that it’s been going all the way back to 1994, when the CDLE numbers begin.

In addition, Denver is looking at a $100,000,000 budget gap this year, slated to get worse over the next decade.  To City Council chairman Chris Nevitt, this may only be “symbolic,” but it’s pretty clear what it’s symbolic of.

No Comments