Truck and Barter

Taxes on Everything

(With all due apologies to MR.)

Denmark, the land of remarkably high tax rates, has found something else on which to impose a tax.

Denmark, with the world's highest income tax levels, wants sperm donors to pay tax on the 500 crown ($84.59) reimbursement men receive for their services.

Of course, this tax won't divert activity away from the newly-taxed practice. The diversion will simply be in the location.

"It is a special kind of work and therefore the fee cannot be compared to normal working income," Cryos said in a letter to the tax authorities, adding it risked losing donors, most of whom are students.

Victim of Negative Income Tax

Because of his four young children, Lee S. Wishing has become a beneficiary victim of the defacto negative income tax:

Believe it or not, the federal government is going to give me $646 of your money.

If you feel that bad about it, Lee, you can donate the legal plunder to George Mason University's Economics Department.

Open Source Tax Software

Via Slashdot, I found a link to this OSS program for doing your taxes.

Of course, you could always try TaxFreedom.com, but I'm sufficiently skeptical about online-only services to avoid anything I can't do when I'm not hooked up to the internet.

Government Efficiency

Why do I read the Ohio State University paper, The Lantern? I am constantly met with misinformation such as this article titled Taxes needed. This anonymous editorial suggests that without the additional 1% in state sales tax that is scheduled to expire next year, Ohioans will not get college education. I am going to quickly try to examine this situation, but this is another of my pet peeve issues that I would love to have time to study in detail.

This is absurd. I know that I don't need to explain the economics of tax to you, preaching to the choir and such. In this state where people continue to plead for lower unemployment, they need to realize that taxes create unemployment! Period. A sales tax specifically taxes consumer purchases from companies typically hiring lower wage employees.

However, think about money loosely in terms of Einstein's relativity, it can be neither created nor destroyed (I realize this is a loose concept.) So the supposed $1.25 billion can either be spent by the Government or saved and spent by the citizens. Approximately $200 per citizen per year. The question is not can one do without $200, the question is who can better decide how to use the $200. This is an issue of efficiency.

Many charities are rated for their efficiency. Usually it terms of how much money ends up spent on the purpose at hand and how much is spent on bureaucracy, salaries and other extraneous expenses. The Government, like any charity, should be measured in terms of efficiency.

Does anyone have a good reference for government efficiency?

A dollar spent for a dollar worth of goods is 100% efficiency. As an individual my efficiency is 100% minus the taxes I pay. Federal income tax reduces this by 30%, state income tax extracts 8%, city income tax takes 2% and sales tax brings it down another 7%. This brings an individual's efficiency to 53%. Charity donations might bring this down another 10%, now I am less than 43% efficient.

So what happens to the 57% consumed by the government and charities? A good charity will spend 75% on the actual charitable cause, so 25% of my lost 10% is a total of 2.5% of an individual's total efficiency lost to a charity, but an individual regains 7.5%. Now the total of an individual's efficiency is about 50.5%. The only remaining question is how much of the government budget is spent efficiently and how much is wasted on salaries and other bureaucracy. I doubt the government can beat 75% efficiency. Let's give them the benefit of the doubt and assume the Government is 50% efficient. Therefore 50% of the Government's 47% is a total of 23.5% loss. Individual (100%) - Charity (2.5%) - Taxes (23.5%) = 74% total efficiency. This is probably the most generous measure I could make since it fails to account for capital gains and lots of other factors. However it is easy to see the difference between losing 2.5% of my income by allowing a charity to spend my money and losing 23.5% of my income by allowing the Government to spend my money.

The fundamental economic assumption is that the best way to make economic decisions is in a market. As a market for charity & taxes, the Government extracts HUGE portions of this market through their monopoly. In the market for charity the Government has excessive market power.

Take control of your money and donate to your favorite charity.
Reduce taxes at every opportunity.

Who knows how to best spend YOUR money? You or the Government?

Baseball in DC

I'm so happy that the Expos are moving to DC, not because I am a rabid baseball fanatic, but because the Expos are NOT moving into Northern Virginia!

Virginia Governor Warner and state Republicans get my praise for not being as fast and loose with the public purse as DC government representatives:

Washington, selected this week over Northern Virginia as the new home of the Montreal Expos, "put a lot more public money at risk than we did," Warner said.... "I am not going to put a lot of taxpayer money at risk."

He disputed claims by Bill Collins, a top booster for Virginia baseball, that the state was turned down because the governor would not support bond financing of a stadium in Loudoun County.

Warner said he wasn't the only high-level foe of bonds; that they were "strongly opposed" by House Speaker William J. Howell, R-Stafford, and Senate Finance Committee Chairman John H. Chichester, R-Stafford.

Warner said public dollars would have covered about one-third of the cost of a Virginia stadium.

In separate comments at an economic development conference in Richmond, Warner said Washington's bid for the Expos included about $100 million more in public funds than the Northern Virginia offer.

"We pursued it very aggressively," Warner said. "But I take very seriously my job as steward of the taxpayers' money."

Government bonds would have been "pledging the state's balance sheet" to the sports venture, Warner said on the radio show....

Warner said there was "no appetite" to impose additional taxes on Virginians to support professional baseball.

DC agreed to pay all the costs of a brand new stadium. Suckers.

UPDATE: Max Sawicky is all over this one.