Engage America

California and Washington Are Fond of Fixing Their Spending Problems by Taxing the Rich - David Morris

2012-05-23T02:45:52+00:00

As the entire country (except for that area known as Washington, D.C.) works to get out of this financial rut, we are starting to see the same economic problems on the local level as we have seen on the national level.

Last week California Gov. Jerry Brown announced that the Golden State has a projected deficit of $15.7 billion. At least it wasn’t the same as our national deficit of $1.3 trillion.

The Buffett Rule: A Tax Band-Aid for a Broken Leg - David Morris

2012-04-13T15:41:15+00:00

Ladies and Gentlemen, the Buffet Rule was back in the political spotlight this week. On April 16th the Senate will held a procedural vote on the Buffett Rule to see whether or not it would be brought up for debate. Yes, you read that correctly, the vote is only to determine if they will even discuss the rule.

As most people expected, the Buffett Rule tax didn't receive the 60 votes required to pass it. However, Democrats hope that by bringing it to a vote, they can raise public attention on the issue of tax fairness. As part of their pitch for fairness, the President pinned this infographic to illustrate their point, and boy, do we have some issues with it.

No such thing as a temporary tax break - David Morris

2012-03-14T15:18:41+00:00

Oh, temporary tax breaks, music to the ears of their beneficiaries and the bane of CBO Director Douglas Elmendorf who must make budget projections accounting for them.

If it weren’t for the recent explosion in the number of tax breaks, they wouldn’t be such pesky pieces of economic policy. In 1998, there were only nine temporary tax breaks. By 2009, there were 73; meaning that in more than 10 years the number of temporary tax breaks built into the tax code has increased by 711%.

Battle of the Tax Systems – Progressive Income Tax vs. Hall-Rabushka Flat Tax - David Morris

2011-12-07T17:51:39+00:00

I came across an interesting 1996 annual report from the Council of Economic Advisers to then President Clinton. It included a section, titled “Characteristics of a Well-Designed Tax System,” qualifying a well-designed tax system on the basis of three main qualities: fairness, efficiency, and simplicity.

Considering the litany of flat tax proposals floating around Capitol Hill and the differences between them, I thought it would be a good idea to compare their progenitor, the Hall-Rabushka flat tax, with the current progressive income tax.

Cain’s 9-9-9 Tax Plan – A Tax Plan That’s Not Fully Cooked - David Morris

2011-10-20T18:43:21+00:00

Before delving into Herman Cain’s 9-9-9 tax plan, I want to give the presidential candidate some credit. It’s not easy for a politician to come out and propose a radical overhaul of the tax code, especially not in this political climate.

The main reason it’s received a lot of attention is due to its simplicity and easily digestible numbers. Every time someone says we should implement 9-9-9, it’s hard not to feel like it‘s as easy as ordering a pizza. However, what sounds simple turns out to have many complicated details that need to be better understood. And while it seems like lower taxes for everyone, early analysis declares the plan will mean higher taxes for many in the middle and lower classes.

Payroll Tax Cut Will Not Lead to Increased Payrolls - David Morris

2011-09-23T19:07:53+00:00

It’s been more than a week since President Obama made his big ~~plea~~ speech to Congress on how he wants the government to help create jobs. As one would expect, the announcement of the President’s “American Jobs Act” has been met with a mix of opinions.

While there are many proposed policies in the jobs act, the $240 billion payroll tax cut is the biggest component and deserves a deeper look.

U.S. Income Taxes: Save Money, Live Better - David Morris

2011-08-24T16:26:19+00:00

Many economists agree that in order to get America back on the horse, both parties must be willing to share the sacrifices necessary to successfully transform the U.S. Income Tax System.

The most sensible compromise to reform the income tax removes deductions and lowers the tax rate.

To better understand why Congress should make these changes, think of the government as a supermarket.

Perception vs. Reality of Corporate Taxes, Why is There a Difference? - David Morris

2011-06-27T17:54:00+00:00

Debt, Deficit, Taxes are the talk of the town right now. Whether government spending and taxes are too high or too low is a confounding issue. Right now there is a consensus that the current corporate tax rates scare away foreign business and push U.S. companies into investing abroad. Neither of these actions helps the U.S. get out from under its mound of debt. In all of the confusion, there is a solution that helps both businesses and the U.S.

The U.S. Loses When States Wage Battle Against Each Other to Bring in Business - David Morris

2011-06-21T21:17:29+00:00

In times of trouble, Americans should work together to solve our problems; fighting amongst each other just creates more troubles. While the U.S. has been brought to its knees by the worst economic period since the Great Depression, states continue to fight with each other to attract businesses. Their weapon of choice, the state-level corporate income tax rate.

Only an Irrational Company Would Put Itself at a 13% Disadvantage to Choose to Add Jobs in America - David Morris

2011-06-21T21:07:52+00:00

Look at the graph below and it is easy to see what is wrong with that picture.

Combined Corporate Tax Rate

The US government is signaling to business that if they have a choice there are better places than the U.S. to invest new jobs and grow. Any first year financial analyst would recognize that the return on investment needed to invest in America must be at least 13% better than other OECD (Organization of Economic Co-Operation and Development made up of countries with established, emerging, and developed economies committed to global development) countries in order to make sense.