Posts tagged with: taxation

detroitDetroit home owners are being put out of their homes, but it’s not because of bankers. Then by who?

It’s the Detroit city government seeking to collect back real estate taxes. There are always tax foreclosures, but foreclosures are growing from 20,000 in 2012 to an expected 62,000 in 2015. Who is putting poor people on the streets in Detroit? The government.

There is a twist here based on the fact that Detroit homes have an old (and therefore way too high) assessed valuation that the taxes are based on. So for the homeowners, it’s easier to let the property go into a tax foreclosure and then buy it back at a tax sale than it is to pay the overdue taxes based on assessed property values that have fallen 70% in recent years. People follow incentives.

We have a narrative in America stating that all financial evils come from the banks. Even Scott Burns used his space to hammer the banks for the 2008 collapse. His proof: The fines that large banks have paid to the government. (more…)

parsonage (1)A federal court of appeals has rejected an atheist group’s lawsuit seeking to strike down a 60-year-old tax provision protecting ministers, notes the Becket Fund. The ruling allows ministers of all faiths to continue receiving housing allowances. “This is a great victory for separation of church and state,” said Luke Goodrich, Deputy General Counsel of the Becket Fund of Religious Liberty. “When a group of atheists tries to cajole the IRS into raising taxes on churches, it’s bound to raise some eyebrows. The court was right to send them packing.”

Aside from the question of constitutionality, the clergy exemption raises a question that many people — whether religious or not — are likely to be wondering: Why exactly do ministers receive a tax exemption for their housing allowance?

To answer the question we must first consider how taxation of church property, including clergy housing, has historically been considered.

rosie with babyOn Friday, President Obama was speaking at Rhode Island College. There was a lot of press given to his remarks about women who choose to stay at home to raise their children (it was a doofus remark), but I believe his entire speech was one in which he underestimates Americans.

I know that many of you are working while you go to school.  Some of you are helping support your parents or siblings.

Well, yes, Mr. President, that’s what we do. Many of us choose to support our families, our parents, our siblings. We choose not to rely on the government, but to work hard not only for ourselves but for those we love. We believe it is our responsibility. (more…)

Thomas-Piketty-014Thomas Piketty’s new book, Capital in the Twenty-First Century, has created quite the stir, and with its overwhelming size (700 pages) and corresponding array of commentaries and critiques, it’s tough to know where to start.

Cutting through such noise, Russ Roberts provides his usual service on EconTalk, chatting one-on-one with Piketty about the key themes, strengths, and weaknesses of the book. The interview is just over an hour, and I encourage you to listen to the whole thing.

Piketty lays out his argument quite concisely in the beginning, followed by a fruitful back-and-forth led by Roberts. For those who aren’t aware, the book chronicles a recent rise in economic inequality, wherein, by Piketty’s account, wealthy elites sit on their stashes while those at the bottom increasingly struggle to keep pace. His solution: Tax, baby, tax.

In response to such an approach, there are many areas to poke and prod, but Roberts zeroes in on one of the more fundamental and overarching questions: What about those who accumulate their wealth by helping those at “the bottom”?  (more…)

uncle-samIt’s tax day, and though I’m sure you’ve already begun your revelry, I suggest take a moment of silence to relish that warm, fuzzy feeling we get when pressured to pay up or head to the Big House.

Indeed, with all of the euphemistic Circle-of-Protection talk bouncing around evangelicalism — reminding us of our “moral obligation” to treat political planners as economic masters and the “least of these” as political pawns — we should be jumping for joy at the opportunity. Nuclear warhead funding aside, progressive Christianity has elevated Caesar’s role to a degree that surely warrants some streamers.

Yet, if you’re anything like me, you did the exact opposite, writing off purchases, deducting charitable giving, and — gasp! — trying to get some of your money back. (more…)

parsonage (1)On Friday a federal judge ruled that an IRS exemption that gives clergy tax-free housing allowances is unconstitutional. The exemption applies to an estimated 44,000 ministers, priests, rabbis, imams and others. If the ruling stands, some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.

Aside from the question of constitutionality, the clergy exemption raises a question that many people — whether religious or not — are likely to be wondering: Why exactly do ministers receive a tax exemption for their housing allowance?

At the website of the Ethics and Religious Liberty Commission, I explain the historical, legal, and ecclesiological reasons for allowing the exemption and why it’s an issue of religious freedom:

As occurrences of preventable diseases increase and the debt deepens, some look to “sin taxes” as an easy to solution to both problems. Thirty-three states have even gone as far as to implement a soda tax in an attempt to curb obesity. At first glance sin taxes seem to be a good idea, but they can actually cause more harm than good.

The Mercatus Center at George Mason University has just published a working paper on sin taxes and their negative effects. The study was conducted by Adam J. Hoffer, William F. Shughart II, and Michael D. Thomas.  They have found that taxing specific goods or services based on perceived “negative externalities their consumption generates”  is an ineffective source of revenue.

The authors summarize their findings in a recent U.S. News and World Report op-ed:

  • Lobbying: Millions of dollars have been spent to thwart taxation of the soft drink industry’s products and to prevent existing taxes from being raised. In 2009 alone, the industry spent more than $57 million on lobbying. Such lobbying expenditures are socially wasteful. How much money is now being spent attempting to block Mayor Bloomberg’s ban on 32-ounce soft drink containers?
  • Regressive taxation: Far from being income-neutral, such taxes are regressive because their burden falls most heavily on people with the fewest options—the poor. Low-income households who continue to purchase goods that are sin-taxed will have even less money left over to spend on other items.
  • Revenue not used for its intended purpose: Sin taxes raise revenue by transferring money from those who continue to buy the taxed items straight to the coffers of the public treasury. Taxing sin might be reasonable if the revenue from these taxes was used to address the underlying negative consequences of consumption. In the real world, however, money generated by the tobacco settlement financed general spending and not smoking cessation programs or treating smoking-related diseases. The social security trust fund has been replaced with treasury IOUs, and the highway trust fund filled by taxing the sin of driving will fail to meet obligations as early as 2015.

You can read the entire working paper, “Sin Taxes: Size, Growth, and the Creation of the Sindustry” here. Acton president and co-founder, Rev. Robert Sirico has also written about the consequences of sin taxes. You can read his “Hate the Sin, Tax the Sinner?” here.