Write-Off: The Tax Blog

Playing Games with the IRS

Jeff Hoopes, UNC
September 20, 2019

I recently acquired, as part of The Tax Museum (http://www.thetaxmuseum.org), a game named “Screw the I.R.S.”.  I have added it to the other tax games I have: “Stick the IRS” and “Beat the Reaper: The game of Creating Tax Evasion Planning”.  There are more IRS/Tax games available I have yet to acquired. There is “Audit: The Tax Game”, “Challenge the IRS”, “Taxdodger”, “Ax Your Tax”, “Tax Evasion”, “The IRS Game”, “IRS”, and even the Atari game, “Tax Avoiders” (which looks amazing, you jump over literal red tape in one level).

So what is it about our annual interaction with the government that is so prone to be gamified?

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Getting Paid Under the Table

Jeff Hoopes, UNC
September 17, 2019

I recently finished the book “Maid: Hard Work, Low Pay, and a Mother's Will to Survive”.  The book was a New York Times Bestseller, on Barack Obama’s 2019 summer reading list, etc., and details how the author, Stephanie Land, goes from a homeless single mother struggling with a long bout of poverty to starting a college degree, which was the entre to being the author of a bestselling book. Along the way, she worked as a maid for some time (thus the title). One interesting tidbit from the book: Several times in the book Ms. Land highlights a benefit of a particular job was that pay was received “under the table.” Since I often see the world through the lens of taxation, I assumed the main benefit was avoiding taxes, likely payroll taxes (as taxpayers at her level of income would rarely face income taxes). I was wrong.

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How Well Can Companies Predict Their Tax Future?

Jeff Hoopes, UNC
September 12, 2019

I get an email from Seeking Alpha pretty frequently with links to the text to earnings announcement calls.  Sometimes I like to click on a few, and do a control+f for the word (of course) “tax”.  I like to see what companies are saying about this most important of subjects.  On my most recent iteration of this exercise, I noticed something interesting.  Dell notes in their recent earnings announcement conference call that “We expect our non-GAAP tax rate to be 16% plus or minus 100 basis points.” Abercrombie & Fitch notes “Third quarter adjusted operating expenses of $493 million and an effective tax rate in the mid- to upper 20s.”  In just casually listening to this, which company seems more sure about their tax future?

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Tax Reform and the National Debt

Jeff Hoopes, UNC
September 11, 2019

During the (brief) discussion prior to the passage of tax reform in December, 2017, there was some concern that a tax reform which lowered corporate tax rates would substantially increase the US deficit, and contribute too much to the national debt.  Many reasonable people had this concern, and it is something real to be concerned about. For as much as policy-wonk-types were worried about the deficit or debt, how much were ordinary people worried about it?

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A Republican Wealth Tax?

Jeff Hoopes, UNC
September 09, 2019

While Elizabeth Warren is intent upon having a wealth tax, there is a candidate on the other side of the political aisle who has also proposed a wealth tax—a very prominent republican candidate for President proposed a wealth tax. While the Warren wealth tax would be a 2% tax, annually, on taxpayers with net wealth above $50 million, this proposal would tax taxpayers with wealth above $10 million, once, at a rate of 14.25%. While the Warren plan would generally fund new proposals envisioned by Warren, this proposed plan would use the proceeds to pay down the national debt, among other things.

So who is this prominent republican that has proposed a wealth tax?

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Is a Wealth Tax Constitutional, or Can We Even Know?

Jeff Hoopes, UNC
September 06, 2019

I am highly interested in Elizabeth Warren’s proposed wealth tax.  Whether you like it or not, looming in the background of whether we should do such a thing is the constitutional question of whether we can do such a thing. Is a wealth tax, as proposed by Elizabeth Warren, constitutional? I am not a constitutional lawyer, and so as I tried to figure out the answer to this question by diving into what others had written, I got slightly confused. As I investigated, most confusing to me was that I found several scholars on both sides of the debate, all arguing vehemently that the tax is either so obviously constitutional that all arguments to the contrary are frivolous, or that it is so obviously unconstitutional as to be laughable. Even worse, it was pretty clearly split along partisan lines—generally those in favor of more taxes on a more encompassing base thought the tax was constitutional, and those who were generally not in favor of more taxes thought it unconstitutional.

What’s a person to do, especially a person whose formal constitutional training ended with introductory political science as an undergraduate?  My perception was that the people most vocal about the tax were those that may have strong opinions on taxation in general, and who had decided the question before seriously investigating it.  I had the idea to simply reach out to constitutional scholars and ask them what they thought about the tax, and especially how they thought it would fare in a Supreme Court challenge.

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Debating Tax Incentives

Jeff Hoopes, UNC
September 03, 2019

I was recently chatting with the child of a friend about how school was going. I learned this young person was in the debate club, which excited me.  I debated in high school, and enjoyed it a lot. I asked what the current debate topic is, and was interested to find what was being debated:

Resolved: The state of North Carolina should offer targeted tax incentives to businesses that relocate major parts of their operations to North Carolina.

I was, of course, happy to see such a topic (whereas my friend’s child was not terribly excited, but thought the question was boring). It has made me think not only about this particular question, but about why it is a good debate question.

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If the Shoe (Tariff) Fits, then Wear It

Jeff Hoopes, UNC
August 30, 2019

I wrote a few weeks ago how those opposed to tariffs should universally call tariffs taxes.  Two days ago, the Footwear Distributors and Retailers of America sent a letter, signed by more than 200 of its members, doing exactly this. The likes of Adidas, Converse, Dexter Bowling Footwear, Footlocker, Fleet Feet, NIKE, Sketchers, and Ugg signed the letter. Several times in the letter the FDRA references “tax increases”, as well they should, as tariffs are taxes, and increasing them will very likely increasing the cost of shoes for every footed person residing in the U.S.

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A Giant Tax Break (The Tax Benefits of Giant Slaying)

Jeff Hoopes, UNC
August 28, 2019

I am often looking for interesting events or phenomena where the cause is, unexpectedly, taxes. Why is Bolivia landlocked?  Why did prohibition get overthrownWhy do they rip windows out of brand new vans? Why can you buy stacks of losing lottery tickets on eBay?  Etc.  Here is one I recently discovered, and love: In the Bible, why did David kill Goliath, the giant? Forget everything you knew in the past–the answer is, of course, taxes.

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Which taxes do people worry about?

Jeff Hoopes, UNC
August 27, 2019

I recently posted about how much people care about corporate taxes—as far as feeling upset about their perceived unfairness, the answer is a lot. There are a lot of different types of taxes people pay.  Which do people worry the most about?

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