Editorial: Democrats flunk math with false claims about refunds

The Associated Press reported recently that Democrats have seized on the fact that the average income tax refund is smaller this year “as proof that the Republican-written tax law hurts the middle class.”

Noting the smaller refund checks, House Speaker Nancy Pelosi wrote on her blog, “People have already taken to social media, using the hashtag #GOPTaxScam, to vent their anger. Many blame President Trump and the Republicans for shrinking refunds. Some on Twitter even said they wouldn’t vote for Trump again after seeing their refunds slashed.”

By this past weekend the hashtag #GOPTaxScam had shown up online 100,000 times. 

In fact Democratic presidential candidate Kamala Harris, a U.S. senator from California, tweeted, “The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.”

The liberal website Huffington Post reported, “The average refund check paid out so far has been $1,865, down from $2,035 at the same point in 2018, according to IRS data. Low-income taxpayers often file early to pocket the money as soon as possible. Many taxpayers count on the refunds to make important payments, or spend the money on things like home repairs, a vacation or a car.”

The story noted in passing that the tax code changes meant that in some cases not enough money was withheld by employers. But nowhere did it note that in the vast majority of these cases the total tax bill for 2018 is less than the prior year. People just got to kept it with each paycheck and did not make interest-free loans to the federal government.

Democrats are seizing on something all right, but it is misdirection and bad math.

Though refunds are about 8 percent lower than a year ago, the Tax Policy Center reports income tax payments are being reduced $1,600 on average, thus increasing after-tax income by 2.2 percent. The center noted that about 65 percent of households will get tax cuts averaging $2,180, while about 6 percent will see a tax increase averaging $2,760.

Since people were paying less in taxes, less was withheld.

Nicole Kaeding, director of federal projects at the Tax Foundation, was quoted by National Public Radio as saying, “Don’t judge your taxes by your refund. That’s only one part of the conversation,” adding, “Ideally, you don’t actually want to receive a large refund. Because what you’ve done is given the federal government an interest-free loan. Instead, what would be better is to adjust your withholdings so you get more take-home pay in every paycheck.”

But never let the facts get in the way of a Democrat trying pick your pocket. 

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Editorial: Keeping taxes low will keep Nevada prosperous

Welcome to Nevada

It is called voting with your feet.

From July 1, 2017, to July 1, 2018, Nevada’s population grew by 62,000 people to more than 3 million — a growth rate of 2.09 percent, the fastest in the nation. This included a net migration of 48,000 people 

Many of them came from neighboring California, with its high taxes, high housing costs and burdensome regulations.

So, let that be a lessen to our newly elected Democratic Gov. Steve Sisolak and the Democratic majorities in the state Senate and Assembly, which will be in session in a matter of weeks. 

According to The Wall Street Journal, the eight fastest-growing states by population last year were Nevada, Idaho, Utah, Arizona, Florida, Washington, Colorado and Texas. What do these states have in common? Relatively low taxes and business friendly government policies, a Journal editorial noted. Nevada, Texas, Washington and Florida have no income tax, for example. 

Then there is California. Since 2010, a net 710,000 people have left California for other states.

High-tax states Illinois and Connecticut have actually lost population as people flee.

According to the Tax Foundation’s latest figures, California has the 10th highest state and local tax burden in the nation at $5,842 per capita. This compares to Nevada’s rank of 29nd at $4,099 per capita. It should be noted that three years earlier, prior to some recent Republican-backed tax hikes, Nevada ranked 43rd lowest. 

In an article in The Wall Street Journal in 2009 under the headline, “Soak the Rich, Lose the Rich,” economist Arthur Laffer and WSJ economics writer Stephen Moore updated previous studies and found that from 1998 to 2007, more than 1,100 people every day of the year relocated from the nine highest income-tax states — such as California, New Jersey, New York and Ohio — mostly to the nine tax-haven states with no income tax — including Florida, Nevada, New Hampshire and Texas.

Laffer and Moore determined that over that period of time the no-income tax states created 89 percent more jobs and had 32 percent faster personal income growth than the high-tax states.

“Dozens of academic studies — old and new — have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses,” Laffer and Moore concluded.

Federalism allows the states to compete for prosperity. Let’s hope our lawmakers take heed and act accordingly.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Newspaper column: Why Nevada must hit the brakes on taxes

WSJ illustration

It’s called voting with your feet.

A remarkable number of well-heeled Americans are doing just that, and it should serve as a warning to Nevada voters and candidates as we enter an election year. Though Republican governors in recent years have shepherded through the Legislature record-high tax increases, Nevada still fares fairly well in comparison to other states when it comes to the tax burden borne by citizens of the Silver State.

According to the Tax Foundation’s analysis of state and local tax burdens per capita for fiscal year 2012 — which is after Gov. Kenny Guinn’s billion-dollar tax hike but before the $1.5 billion tax hike pushed by Gov. Brian Sandoval — Nevada ranked 43rd lowest in the nation, while neighboring Taxafornia ranked sixth highest.

Nevada tax collectors grabbed 8.1 percent of the state income through state and local taxes or $3,349 per capita. Meanwhile, California snatched 11 percent of state income or $5,237 per capita.

Perhaps that explains why, according to Internal Revenue Service data on taxpayer migration, from 2014 to 2015 about 10,500 Nevada taxpayers moved to California, while 17,700 California taxpayers moved to Nevada. Even more telling is the fact that the Californians fleeing to lower-taxed Nevada averaged $91,000 in gross adjusted income, while the Nevadans heading to California averaged only $47,400 in adjusted gross income.

It seems people with higher income have a tendency to find ways to keep more of it for themselves.

From 2014 to 2015 Nevada netted an increase in total adjusted gross income reported to the IRS of $1.43 billion. Of that, $1.1 billion came due to the influx of Californians changing residencies.

An analysis of a sampling of that IRS data shows the California-Nevada migration pattern is no anomaly.

In that one year, the state of New York, which has the highest state and local tax burden of any state at 12.7 percent of income and $6,993 per capita, lost $4.4 billion in income.

No. 2 highest Connecticut lost $1.3 billion in income. No. 3 highest New Jersey lost $2.46 billion. No. 5 Illinois lost $3.47 billion. No. 6 California lost $2.09 billion.

Meanwhile, state income tax-free Texas, ranked 46th lowest, added $3.61 billion, and state income tax-free Florida, though only 34th lowest, added $11.65 billion. The latter might have something to do with weather as well, since $2.62 billion of that came in from former New Yorkers, $1.49 billion from former New Jersey residents and $1.47 billion from former Illinoisans.

The New Jersey residents who moved to Florida had an average income of $121,000, while Floridians moving to New Jersey averaged $72,500.

This is hardly surprising nor a new phenomenon. In an article in The Wall Street Journal in 2009 under the headline, “Soak the Rich, Lose the Rich,” economist Arthur Laffer and WSJ economics writer Stephen Moore updated previous studies and found that from 1998 to 2007, more than 1,100 people every day of the year relocated from the nine highest income-tax states — such as California, New Jersey, New York and Ohio — mostly to the nine tax-haven states with no income tax — including Florida, Nevada, New Hampshire and Texas.

Laffer and Moore determined that over that period of time the no-income tax states created 89 percent more jobs and had 32 percent faster personal income growth than the high-tax states.

“Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair?” they asked. “No. Dozens of academic studies — old and new — have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.”

A recent WSJ editorial noted that billions in income are still flowing out of New York, New Jersey and Connecticut and into Florida.

“As these state laboratories of Democratic governance show, dunning the rich ultimately hurts people of all incomes by repressing the growth needed to create jobs, boost wages and raise government revenues that fund public services,” the editorial concluded.

Voting with the feet is sure to increase since the recent tax reform limits federal income tax deductions for state and local taxes.

Let this be a lesson for Nevada. Chase the rich, they’ll run away.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Newspaper column: Tax reform debate falls down a rabbit hole

If you are trying to follow the debate in Washington about tax reform in its various and evolving iterations, you are likely to come away muttering: Figures don’t lie, but liars can figure.

This past week the House passed its version of tax reform by a vote of 227-205 with not a single Democrat voting aye. The 13 Republicans who voted nay on the Tax Cuts and Jobs Act are mostly from high tax states such as California, New York and New Jersey, where constituents would no longer be able to deduct high state and local income and sales taxes.

Also this past week and on a party line vote of 14-12, the Senate Finance Committee, where Nevada Republican Sen. Dean Heller is a member, passed a slightly different tax reform bill with the same name.

Nevada’s Democratic delegates to D.C. were all singing from the same hymnal.

Democrat Rep. Ruben Kihuen, who represents northern Clark County and the southern portion of rural Nevada, declared the House bill “nothing more than a handout to big corporations and the wealthiest Americans that unfairly sticks working and middle-class families with the bill.”

Kihuen said the bill also will increase taxes by an average of $680 for 113,000 middle- and low-income Nevada families.

This figure apparently comes from the left-leaning Institute on Taxation and Economic Policy (ITEP), which calculated that in 2027 about 11 percent of Nevadans in the lowest 60 percent of earners would see taxes increase by $680. Kihuen neglected to mention that in that year 89 percent of those Nevadans in that earning range would still have a tax cut of $490, according to ITEP.

Nor does he mention that ITEP calculates that in 2018 only 3 percent of those lower tier earners would have a tax hike of $460, while 79 percent would see a tax cut of $610. How these number were derived is not explained.

The average tax cut for 84 percent of all Nevadans in 2018 would be $2,670, according to ITEP. Yes, the tax cut for the richest 1 percent would amount to more than $100,000. The poorest 20 percent would only save $270.

Democrat Sen. Catherine Cortez Masto chimed in by claiming the House bill would raise taxes on 36 million working and middle class families, without bothering to mention that in 2017 there were more than 145 million IRS tax returns filed.

Democrat Rep. Dina Titus of Las Vegas lamented, “Of the 50,000 constituents in my district who itemize their taxes, the majority earns less than $75,000 per year.” She failed to note that the standard deduction is being doubled and thus eliminates the need for itemizing for many of them. Nor did she mention that only 25 percent of Nevadans’ tax returns are itemized.

First-term Democrat Rep. Jacky Rosen of Henderson, who has already announced she is a candidate for Heller’s Senate seat, wailed, “This partisan plan adds $1.5 trillion to our deficit and could trigger a $25 billion cut from Medicare as well as further cuts to other programs, unfairly shifting costs onto Nevadans who rely on commonsense tax reliefs policies that help those saddled with high-cost medical expenses, students struggling to pay off their college loans, and teachers trying to buy basic supplies for their classrooms.”

But Republican Rep. Mark Amodei, who represents Northern Nevada, counters that such deficit claims fail to take into account the anticipated growth in GDP that should increase wages and jobs and actually grow federal tax revenue.

“Even a 1% increase in GDP generates about $3 trillion in revenue over 10 years — more than covering the anticipated $1.5 trillion deficit,” Amodei reported in an email. “The accuracy of this projection can be further evidenced by going back to the Clinton Administration where GDP growth was at 3.9% – the highest it’s ever been under the last five administrations – and the government was operating under a surplus.”

The congressman also pointed out that for those in his district with an annual income of around $64,000 the federal tax cut effect is more than $1,200 a year with the new brackets and increased standard deductions.

Amodei and Sen. Heller both cited the calculations by the Tax Foundation which estimates that both the House and Senate bills could bring 8,000 additional jobs to Nevada and boost middle-class income by $2,500 a year.

What are you going to believe? Historic precedence or cherry-picked examples of a handful of outliers?

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Nevada losing ground compared to rest of nation in reaching Tax Freedom Day

 

Tax Foundation map showing Tax Freedom Day in each state.

As Andy Koenig, senior policy advisor at Freedom Partners Chamber of Commerce, recounts today on the editorial page of the morning newspaper, your IRS taxes may be due today but you won’t be free from paying taxes until April 21 in Nevada.

That’s because, as the Tax Foundation calculates, until then, on average, every dime you earn goes to pay federal, state and local taxes.

“In calculating Tax Freedom Day for each state, we look at taxes borne by residents of that state, whether paid to the federal government, their own state or local governments, or governments of other states,” Tax Foundation’s methodology statement reads. “Where possible, we allocate tax burdens to each taxpayer’s state of residence.”

Nationally, tax Freedom Day falls on April 24, a full 15 days later than in 2010.

Nevada’s Tax Freedom Day is a full 19 days later than in 2010 — must have been something our elected officials did. And that doesn’t yet take into account the $1.4 billion Nevada lawmakers jacked up taxes in the 2015 Legislature that are just now taking effect.

Koenig relates the federal bite being taken out of our income:

Tax Freedom Day keeps getting pushed back because the government keeps taking more of our money. This year, Washington, D.C., is expected to rake in a record-breaking $3.36 trillion in tax revenue, $115 billion more than it did last year.

That still won’t be enough to satisfy D.C.’s spending addiction. Washington will once again spend more than it brings in this fiscal year, adding $534 billion to the already massive federal debt. Over the past two decades, both Republicans and Democrats have made countless promises while leaving you and me with the bill. The result has been out-of-control federal spending, which has fueled an unprecedented rise in the national debt from just over $5 trillion in 1996 to nearly $20 trillion today.

The wasteful spending is getting worse, too. Last month, the federal government’s fiscal watchdog — the Congressional Budget Office — estimated that D.C. deficits will grow every year for the foreseeable future. The annual shortfall will surpass $1 trillion within six years.

Tax Foundation calculates we pay more in the taxes than for food, housing and clothing combined.

If you don’t pay your taxes, you will be jailed and provided food, housing and clothing.

 

 

Thankful you live in low-tax Nevada? Not so fast, chief

Tell me again why Nevada needs to increase state spending by $1.3 billion and increase taxes to pay for it.

We’re just not taxed enough, our Republican Gov. Brian Sandoval insists, along with a majority of the state Senate, including all but four Republicans.

The Tax Foundation has come out with its 2015 Tax Freedom Day stats, and it turns out Nevada’s tax burden in federal, state and local taxes as a percent of total income ranks 26th in the nation — right in the middle. That means it takes Nevadans until April 20 this year — 110 days into the year — to start earning money we can keep, instead of paying taxes. Nationally, Tax Freedom Day is April 24.

“Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31 percent of the nation’s income,” the Tax Foundation calculates, noting that the tax burden in 1900 was 5.9 percent of income.

Americans will spend more on taxes in this year than on food, clothing, and housing combined. If federal borrowing were included it would take another 14 days to cover the government tab.