Write-Off: The Tax Blog

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What are people buying with their stimulus money?

Jeff Hoopes, UNC
April 20, 2020

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Presidential Campaigns, Now Half Off

Jeff Hoopes, UNC
April 14, 2020

Biden has now basically secured the democratic nomination, which has me think about the end of all the other campaigns. Michael Bloomberg didn’t quite, as his ads promised, “get it done.”  His campaign, which started with a flash, ended up a mere flash in the pan. After some disappointing losses, Bloomberg dropped out of the U.S. presidential race, which suggests that money alone can’t buy votes, at least on a grand scale. As was widely circulated, Bloomberg tried to “get it done” by spending unprecedented amounts of his own money on his campaign. By my rough calculation, Bloomberg’s campaign cost him about $260 million, after tax.

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Tax Breaks for the Rich

Jeff Hoopes, UNC
April 08, 2020

I recently had someone reach out to me by email and ask an amazingly insightful question: “Do you understand why Nancy Pelosi (a democrat) is pushing for the removal of the cap for the SALT deduction? … this would almost exclusively benefit the rich. I'm confused.” The SALT deduction (state and local tax), as a reminder, is the ability include as an itemized deduction the state and local income and property taxes you pay. Tax reform in 2017 limited the amount of this deduction to $10,000. The person who emailed me knew that claiming itemized deductions is rare, and that post tax reform, only about 10% of taxpayers itemize. Itemizing is very strongly correlated with overall income, so, this is a tax break that Speaker Pelosi is demanding for those at the very top of the income distribution, who are paying a lot of state and local taxes (meaning they earn a lot in state and local income, or have high-valued houses). This is generally an income group that Speaker Pelosi does not publicly try to support.

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The Guillotine Tax

Jeff Hoopes, UNC
February 29, 2020

For most of human history, when there were rich and powerful people that were broadly believed to be hurting society, murder was the solution, whether done by rival powerful people, revolutions of the common folks, or whoever felt in the mood for some good old fashioned bloodshed. These rich people would be shot, stabbed, poisoned, or, taken care of in the more sophisticated French manner, decapitated with the guillotine.

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Voter, Voter, Large and Small, Who’s the Poorest of Them All?

Jeff Hoopes, UNC
February 29, 2020

What skill, ability, or attribute do you want in a president? If you could choose one thing, what would it be? Disregard height as a requirement, which President Trump appears to believe is a necessary qualification. Do you want a president who is smart?  Has some kind of experience that makes you believe they would succeed in policy-making? Do you want someone who has some kind of experience that makes you think they could run a large, complex organization? All of these seems like plausible reasons to support a candidate. As I have watched the 2020 democratic debates between the many potential nominees, one issue has stood out to me that these politicians apparently believe voters care about, and therefore highlight as one of their main qualifications. What is this personal attribute?

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Opportunities for Tony

Jeff Hoopes, UNC
February 29, 2020

Meet Tony. Tony is a U.S. Army veteran, having served in Afghanistan. But, as sometimes happens, when Tony was done serving, he fell on hard times. He was estranged from his family. He became addicted to drugs—addiction that controlled his life. He was unemployed. And, this heinous concoction of unemployment, family problems, and drug addiction, left Tony out on the street, living in his car, and homeless. Luckily for Tony, a recently implemented government policy saved him from the hopeless situation he was in. What is this “silver-bullet” policy that can reunite families, end homelessness, resolve drug addiction, and get people working again?  Some sort of welfare to work program? A drug addiction recovery program? Low income cash grants, or affordable housing? No. No. And no. The government program that was able to save Tony was one in which wealthy taxpayers are relieved of the burden of paying capital gains taxes, which, logically follows, will solve all our most acute problems.

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“You don’t even know what a write-off is”

Jeff Hoopes, UNC
February 21, 2020

There is an amazing Seinfeld scene where Kramer asserts that it is fine to file a false insurance claim because the company can just “write it off”. Jerry counters, correctly, that Kramer does not even know what a write-off is. Kramer is not alone. I was listening to NPR on the way to work a few days ago, when they reported on a study on how the Tax Cuts and Jobs Act affected charitable giving. Recall that the standard deduction was doubled, meaning that far fewer people will itemize their deductions, instead claiming the much more generous standard deduction. This resulted in far fewer taxpayers being able to itemize their charitable contributions. The program said something like taxpayers “no longer have incentives to give to charity.” This is crazy, and to me, suggests these people “don’t even know what a write-off is”.

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The minimum wage as a tax

Jeff Hoopes, UNC
February 18, 2020

Bernie Sanders is now leading in many polls to be the democratic nominee for President in 2020. Considering this fact, I pondered what I knew about Bernie’s tax plan. Some, but, not enough. So, I started searching. I searched for “Bernie Sanders tax plan” (yes, I omit apostrophes when I search on Google). The first link was the detail-less plan that highlights, as I have written about before, how if you are sick enough, Bernie Sanders favors redistribution that favors millionaires. The second link was a page entitled “Income Inequality Tax Plan - Bernie Sanders”. I clicked on the link, recalling Bernie has proposals for levying taxes on companies that pay their CEOs much more than their workers. But the image the Sanders campaign decided to pair with this article was the one to the left—of Sanders with a group that favored a $15 minimum wage in front of a McDonalds. What does this have to do with taxes?

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Luck and Redistribution

Jeff Hoopes, UNC
February 04, 2020

I recently listened to a great audiobook by a UNC professor, Keith Payne, called The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die. Rather than merely highlight, as much of the economics literature does, that income/wealth inequality is bad (if indeed the problem exists), this book goes into great depth into the precise psychological mechanism that might make inequality have the outcomes it may have. I found one study the book mentions particularly interesting.

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Tax Dial-turning

Jeff Hoopes, UNC
February 03, 2020

Many of the democratic presidential candidates have proposed new tax plans. They are proposing completely new taxes, which would be written from scratch, tested and tried, with all the complication and administrative trouble that entails. But, one candidate recently came out with a plan that really has nothing dramatically new Michael Bloomberg recently announced the kind of tax plans he would stand by, and, most of it is dial-turning. He wants to change many rates, and turn off entirely several benefits that cost a lot of money, and mainly benefit wealthy taxpayers.

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