Tax Roundup, 8/23/2012: Can tax breaks go to the poor when only the rich are taxed? Plus IRS agent as video game hero!

August 23rd, 2012 by Joe Kristan

William McBride has sound thoughts on tax policy with Stuck in Neutral on Tax Reform (Tax Policy Blog):

But more importantly, it makes little sense to pursue distributional neutrality when we have the most progressive income tax system in the industrialized world.  The top 20 percent of households pay 94 percent of federal income taxes.  The bottom 40 percent have a negative income tax rate, and the middle quintile pays close to zero.  Negative tax rates are the result of refundable tax credits, such as the earned income tax credit and the child credit, which have grown 10 fold since 1990, from $12 billion in 1990 to $120 billion in 2010 (see chart below).

Constantly pursuing distributional neutrality, we have achieved record high levels of progressivity.  And there are reasons to think it has constrained economic growth.  It is time to aim for something more tangible: a competitive tax system with low rates and a broad tax base.

For this to happen, politicians have to stop giving away tax credits to buy votes (wind energy, anyone?) like they were Tootsie Rolls.  In Iowa, it would look something like The Quick and Dirty Iowa Tax Reform Plan.

 

Russ Fox questions the fiscal wisdom of a proposed mandatory state-run pension system for private employers: Sheer Stupidity in the Bronze State

TaxGrrrl, You’ve Got Mail: E-Bills for Taxes Could Be Headed Your Way

Kay Bell, Writing off home refinancing points

Brian Strahle, The State and Local Tax Burden of Inc. 500 Companies

Farm Tax Blogger Paul Neiffer hits Iowa on his corn and bean sightseeing: The International Flavor of the Crop Tour

Dan Shaviro, Did Romney engage in abusive foreign tax credit-generating transactions?  I don’t know.  Did Harry Reid?

What time is it? It’s Time to Get Your EFIN (Trish McIntire)

Anthony Nitti provides Six Reasons My Kid is Better Than Your Kid.  Oh, yeah?

 

Screen shot from “Alligators on a Bridge”

The first video game where nobody has even tried to reach the second level.  Via Going Concern comes news of a video game where the player tries to get an IRS agent safely through peril:

It’s April 15th and Tim the IRS Agent is nearly finished checking the tax forms he’s been assigned. Tim has had to deal with reading multiple languages (such as Spanish, French, and American), terrible hand writing, and paper cuts, in addition to a missing a tax form (which he has to venture deep within the Vermont Jungle to retrieve). As if his day couldn’t be worse, while crossing a log bridge in the Vermont Jungle Tim looks down to see an army of zombies, green starfish, and self aware Vermontese Alligators advancing towards him. Now Tim has to defeat the waves of enemies so that he can continue his journey to collect the missing tax form. And guess what, all that he has to stop them is rocks!

What, no permanent injunctions?  No accuracy-related penalties to smite the taxpaying trolls?  No identity theives to subsidize?  Lame.

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