Economist Mark J. Perry makes this point about Black Friday retail sales:
On Black Friday, avg retailer will make $3.30 in profits per $100 of sales, but the average state/local government’s take will be almost $7
Tag / Taxes
MLB Player Change Teams Because of Taxes?
Pablo Sandoval few days ago signed with the Boston Red Sox in a free agent deal for five years and worth $100 Million. Kurt Badenhausen of Forbes wrote why Pablo left San Francisco:
Massachusetts has a flat personal income tax rate of 5.2%. California uses a progressive rate topping out at 13.3% at and above $1 million of income. In other words, 95% of Sandoval’s income would be taxed at this 13.3% rate if he re-signed with the Giants.
The Giants play in the National League West, which boasts three teams from California, including the Giants. This means that in addition to the Giants’ 81 home games, the team plays another 18 road games in California. The Giants also play three road games against their cross-bay rival A’s, bringing their total California games to 103.While Boston has to play ten games next year at the New York Yankees, it also has division opponents in Florida and Canada, where the players will pay no state income taxes (and no federal taxes in Canada).
Baseball players living in no-tax states have about 18.4% of their 2015 salaries sheltered from state taxes due to Spring Training taking place in tax-free states (Arizona does not tax Spring Training days). The Red Sox enjoy an additional 14.3% of tax-sheltered income from road games, while the Giants only get to shelter another 5.8%.
Read the rest here
Gasoline Taxes Paid by Consumers
Consumers of gasoline pay state/federal taxes when they purchase gas. The tax is per gallon. The federal tax on gasoline is 18.4 cents/gallon. State taxes vary greatly. The map below shows both state/federal. Just deduct the federal to see what you pay in each state.
Map courtesy of the American Petroleum Institute. Click here for their interactive map.
Michael Jackson Still Owes Taxes
The King of Pop may be gone but his estate is still being hounded by the IRS. According to Forbes, they are going for more blood:
In a previously unreported court filing, the government says that IRS auditors originally thought the King of Pop owned only 50% of certain master recordings at his death in June 2009, when he really owned 100% of them. That 100% interest was worth $91 million by the IRS’ figuring, compared to the $11 million reported on the Jackson estate tax return.
The change brings the IRS’ valuation of Jackson’s estate and lifetime taxable gifts up to $1.178 billion, compared to the $7 million the estate reported. The IRS now wants a total of $525.6 million in tax and $205.1 million in gross valuation misstatement and negligence penalties. (Any interest owed will be on top of that.) Of course both the IRS and the estate’s values are best regarded as opening bids in what could be a long negotiation. A trial, if there is one, is far off.
Majority of $159 Billion of Owed IRS Taxes Will Go Unpaid
JustFactsDaily.com released some new IRS data showing in 2013 there was $159 Billion in unpaid federal taxes. Here is what they found:
Per the IRS’s Fiscal Year 2013 Financial Statement, 78% of unpaid taxes that taxpayers have agreed they owe or courts have ruled they owe are “estimated to be uncollectible due primarily because of the economic situations of the taxpayers.”
IRS Now Taxing Business Meals
The government is broke and with that the IRS will go searching for any revenue possible. Unfortunately it will probably cost more then what it actually brings in. This will stretch out to many industries and not just tech firms listed in the article. The first people to lose any benefits should be the politicians and government employees who are allowed up to $20/day bought for them.
Here is the tax news out of Silicon Valley Business Journal:
The Internal Revenue Service wants to tax the free food that tech companies like Facebook and Google give to employees, potentially putting one of Silicon Valley’s most famous perks in jeopardy.
The IRS argues that the employer-provided food is a taxable fringe benefit and has sought back taxes that may amount to a third of the meals’ fair-market value
In another move that shows more focus on complimentary fare, the IRS and U.S. Treasury Department said their top tax priorities list for the current tax year that ends next June will include taxing “employer-provided meals,” the Journal reported. The agencies plan to issue new instructions on the matter as well, though specifics and details were not provided.
Cost Breakdown of Craft Beer
Colorado Pot Tax Revenue Prediction Goes Up In Smoke
Colorado government tax revenue prediction was off for the first six months of legalized pot sales. They were only off by about 70%.
When voters approved recreational marijuana sales the state predicted it would pull in more than $33 million in new taxes in the first six months. The actual revenue came up more than $21 million short.
Social Security Disability Insurance Fund Will Be Depleted in 2016
Charles Blahous of the Manhattan Institutue recently reported on some findings from the July 28th Social Security Trustees annual report. Social Security and Medicare are two government programs that have been long embedded in government spending. These programs are political hot topics whenever they are suggested to be “reformed” or made more efficient, political dogma ensues. Changes for the most part of these programs are made to give MORE benefits to people and not a regression. I will take some information from Mr. Blahous write up which he did testify in front of Congress about and then turn to two other sources for completion of this summary.
The public must understand the breakdown of how Social Security functions when pertaining to funds
Social Security has two trust funds. Payments for retired workers as well as spouses, children and survivors are made from the Old-Age and Survivors (OASI) trust fund. Payments for disabled workers and their dependents are made from the Disability Insurance (DI) trust fund. It has become commonplace to refer to the two trust funds’ combined operations as though they were one fund. This nomenclature is convenient but not truly accurate. By law each of the two trust funds must separately have a positive balance to allow them to make benefit payments.
Here is big point for people to grasp about this trust fund. Many people who support Social Security at any cost claim the program has too by “law” go on forever no matter what funding issues arise. That is true to a point and here is that BIG point. Once funding for the SS Disability Insurance fund starts going in the red, payments can be greatly reduced “BY LAW”.
The trustees have been warning for several years (long before I became one) that Social Security is on an unsustainable financial trajectory. We have now moved from a long-term problem to an immediate one. The DI trust fund is currently projected to be depleted in two years, in the fourth quarter of 2016. At that point, unless the law is changed disability payments will drop suddenly by 19 percent.
I would suggest reading Charles Blahous article (A Guide to the 2014 Social Security Trustees Report) a few times and even take some time to ponder it. It is a very nice write up and one to keep on file for further events.
Social Security and Medicare produce reports and the federal government then puts together a summary(Status of the Social Security and Medicare Programs) of these two reports. Here are some highlights of the summary pertaining to just Social Security.
Neither Medicare nor Social Security can sustain projected long-run pro- gram costs in full under currently scheduled financing
Social Security and Medicare together accounted for 41 percent of Federal expenditures in fiscal year 2013
The Trustees project that this annual cash-flow deficit will average about $77 billion between 2014 and 2018 before rising steeply as income growth slows to its sustainable trend rate after the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.
In October 2013, “60 Minutes” reporter Steve Kroft did a segment called “Disability, USA”. If you have not seen it, I suggest you take a look at the SS disability situation happening in America.
Final summation: For years many Austrian Economic students have talked about the Social Security situation. They are usually met with resistance by economic pundits who produce wild and complicated graphs that say everything is o.k. Problem with this belief is it defies reality. Real money is being given to real people. This program has real issues that cannot be delayed as the physics of debt take over.
Indiana 2012 IRS Data by Zip Code/County
IRS released data tax filings for 2012 from across the United States and showed the breakdown by both zipcode and county for states. The IRS does produce good data reports throughout the years that shows how people move and in out of income brackets. In reality, this usually debunks a lot of political talking points like “the poor” and “income inequality”. Many data numbers the IRS have garnished from people filing taxes is the movement of incomes and tax brackets that are achieved.
I looked at the tax filings by zip code only so far. Found some interesting stats for the state of Indiana. Here is what I found for the year 2012:
– 2,992,840 returns filed
– The top 3 returns filed by zip code were 1) 46143(Greenwood) 24,340 2) 46227(Marion County/Perry Township) 26,280 3)46307(Crown Point) 30,070
– State wide returns filed by salary:
58k returns were $200k or more
261k returns were $100-$200K
240k returns were $75-$100K
373k returns were $50-$75k
1.59 million returns were $50k or less
– 49,000 farms were filed on tax returns
– Just over 1 Million of the returns showed payments from either Social Security benefits or Annuities/Pensions.
Like I said, many more numbers were in the data and the county breakdown I didn’t even research…..yet. But enjoy the digging in.
Hoosier Econ 