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26 July 2017
Morning Sedition

The Annual Mugging of Americans

IRS Form 8302: Electronic Deposit of Tax Refund of $1 Million or More

IRS Form 8302: "Electronic Deposit of Tax Refund of $1 Million or More"

We don't pay taxes. Only little people pay taxes.

— Leona Helmsley

When I were a lad — and we walked uphill to school both ways, in the snow, while dragging hundred pound cinderblocks and fending off ravenous sabre-tooth tigers and rabid voles — there were virtually no enterprising capitalists extorting money, I mean, soliciting donations from their fellow students using the threat of dire consequences if a suitable contribution was not made. Most, instead, went after the less-risky, an immensely profitable, upscale market by providing substances that were, shall we say, unavailable at Deliah's Liquors. (Deliah's was the place in town to buy if you were, ahem, underaged. I'm revealing no secrets here as they sold the business many years ago and the statute of limitations has long since run out.) But back to extortion.

Not that I'm complaining about the lack of regular muggings, of course, but the funny thing is that if more outright coercive theft had been committed in school it would have better prepared us for the joys of dealing with the IRS. For what is the IRS but a big bully that siezes our assets and puts us in jail if we don't cough up our lunch money? (Oh, wait. The breakfast, lunch, and dinner money. These days the average American works for the IRS until April 17th.)

The form above — "Electronic Deposit of Tax Refund of $1 Million or More" — is absolutely, 100% genuine, by the way. You can see it at www.irs.gov/pub/irs-pdf/f8302.pdf if you don't believe me. I'm uncertain which disturbs me more; that the Bush tax cuts have returned such vast sums or that so many are receiving them that a special form exists to receive the largess as quickly as possible.

Oh, sure, taxes are the price we pay for civilization. Except, as we know, rich people don't pay taxes. And neither do the red states; they get back vastly more than they send to Washington. The report from the National Tax Foundation has all the gory details. It seems, in short, that we in the blue states subsidize the bad behavior and fiscal irresponsibility of the red states. But isn't that what compassionate conservatism is all about?

Federally Favored States

“During fiscal 2003, taxpayers in New Mexico benefited the most from the give-and-take with Uncle Sam,” said Sagoo. New Mexico received $1.99 in federal outlays for every $1.00 the state’s taxpayers sent to Uncle Sam. Other big winners were Alaska ($1.89), Mississippi ($1.83), and West Virginia ($1.82). (See tables below).

The District of Columbia’s Special Status

Though not comparable as a state, the District of Columbia is by far the biggest beneficiary of federal spending: In 2003 it received $6.59 in federal outlays for every dollar its taxpayers sent to the U.S. Treasury.

“The District’s share of federal largesse amounted to $60,109 for every man, woman and child,” said Sagoo. “That’s more than ten times the national average.”

States That Help Others

If some states are beneficiaries, then naturally some must be benefactors—those states where so much is collected in federal taxes that any federal spending they receive is overwhelmed.

New York has often been the biggest payer in the Tax Foundation’s annual comparison of taxes to spending, which inspired Daniel Patrick Moynihan and the Kennedy School of Government to launch their annual reference book comparing state taxes with spending (www.ksg.harvard.edu/fisc99) more than 25 years ago. In recent years, however, other states have eclipsed New York for the “blessing” of being the state that gives far more than it receives.

Combining the third highest tax burden per capita with the ninth lowest federal spending, New Jersey had the lowest federal spending-to-tax ratio (57¢). Other states that had low federal spending-to-tax ratios in FY 2003 are New Hampshire (64¢), Connecticut (65¢), Minnesota (70¢), Nevada (70¢), and Illinois (73¢).

"Federal Tax Burdens and Expenditures by State", National Tax Foundation, Report No. 132, December 2004

Hard to believe it was forty years ago that the Beatles complained about the 95% marginal rate — no kidding! — that forced many successful people into tax exile. That's the meaning of the line "There's one for you, nineteen for me." in Taxman — the Beatles were able to keep only five percent (one part in twenty) of their income above a certain level. Revolver was the Beatles' seventh album, so they were, by this point, rolling in filthy lucre. The "Mr. Wilson" and "Mr. Heath" in the song refer to Harold Wilson, the British Prime Minister (Labour Party) and the opposition leader Edward Heath (Conservative). The Labour Party had just won the 1966 election; the mess they made of the country would later lead to Margaret Thatcher's election.

Taxman

One, two, three, four...
Hrmm!
One, two, (one, two, three, four!)

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

if you drive a car, car;
I’ll tax the street;
if you try to sit, sit;
I’ll tax your seat;
if you get too cold, cold;
I’ll tax the heat;
if you take a walk, walk;
I'll tax your feet.

Taxman!

'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for,
(ah-ah, Mister Wilson)
If you don't want to pay some more.
(ah-ah, Mister Heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die,
(taxman)
Declare the pennies on your eyes.
(taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.

Taxman!

"Taxman" by George Harrison, Revolver, The Beatles, 1966

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