An excellent Washington Post oped by Sally Pipes ("Brave New Diet") warns the public against scaremongering about our weight. She shines a light on the faults of the government's BMI Index by pointing out that Kobe Bryant, Tom Brady and other superfit athletes are overweight according to their BMIs. Oh, to be overweight like Kobe!!
And even if the BMI Index (ratio of height to weight) were an accurate measure of healthy weight, what was the validity of the 1998 government decision to lower the definition of overweight from a BMI of 27 to 25, making 25 million Americans suddenly "overweight"?
It might be partly to justify new taxes. Proposals for so-called fat taxes on soda and snacks are all the rage now, and the higher those obesity numbers are, the more likely we might be to relent and start letting legislators count our calories. We've written about such proposals in New Mexico and Colorado and more generally nationwide. Here was a fat tax lesson from Australia, and here's a humorous commentary from England.
Pipes is worried about the "nanny state" in general, that is, a government that conceives of its role as telling everyone what to do, supposedly for their own good. That's something Harvard scholar Kip Viscusi is also concerned with.
Press release from the Internal Revenue Service today on the delay in refunds caused by Congress's procrastination on passing a patch for AMT:
The Internal Revenue Service announced today that the upcoming tax season is expected to start on time for everyone except certain taxpayers potentially affected by late enactment of the Alternative Minimum Tax "patch."
Following extensive work in recent weeks, the IRS expects to be able to begin processing returns for the vast majority of taxpayers in mid-January. However, as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law.
The IRS has targeted Feb. 11, as the potential starting date for taxpayers to begin submitting the five AMT-related returns affected by the legislation. The February date allows the IRS enough time to update and test its systems to accommodate the AMT changes without major disruptions to other operations related to the tax season. As the IRS has said previously, it will take approximately seven weeks after the AMT patch was approved to update IRS processing systems completely.
Although as many as 13.5 million taxpayers will not be able to file their returns until Feb. 11, the effect of the delay may be lessened by the fact that under previous filing patterns only between 3 million to 4 million taxpayers file returns with the five affected forms during these early weeks in the filing season.
In an odd way, it will not affect all of those filing Form 6251, which is the AMT form. It will affect those who file for other credits whose structure within the 1040 and the AMT was set to revert to 1993 law unless a patch was passed. (Structure refers to whether credits are pre-or-post AMT.) These changes, according to the IRS, take longer for the IRS to reprogram their computers compared to the mere change in exemption levels. Specifically, here are the forms that could cause delays:
Form 8863, Education Credits.
Form 5695, Residential Energy Credits.
Form 1040A’s Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers.
Form 8396, Mortgage Interest Credit.
Form 8859, District of Columbia First-Time Homebuyer Credit.
Now that all the presents have been unwrapped and the holiday festivities are over, people's thoughts will soon turn to New Year's resolutions. Even those who don't make resolutions probably have some ideas about things they would like to do differently in the New Year.
We at the Tax Foundation have some thoughts about an area in which federal and state policymakers could use some improvement in 2008: tax policy. With this in mind, we have compiled a wish list for tax policy in the new year. This list can be viewed here and below.
Since 2008 is an election year in which a predicted economic slowdown could put pressure on some government budgets, reporters and politicians are likely to give the public a double dose of tax policy.
Special interests will, as always, push tax policies that favor themselves at the expense of other taxpayers. Social engineers will continue pushing tax policies that redistribute money based upon health, age, income, and other demographics. And finally, gimmicks like tax holidays and tiny, overhyped tax cuts will be featured in legislatures and political campaigns. Champions of sound tax policy like yours truly at the Tax Foundation will view all these policies with a skeptical eye.
Our Wish List for Tax Policy in 2008
1. Politicians will stop playing word games, and call taxes "taxes" and not "fees," "surcharges," or "profits." Any assessment that raises money in excess of what is needed to defray costs is a tax.
2. Politicians will stop using the tax code to give even more preferential treatment to sectors like housing and healthcare that are already tax-pampered. This includes using the tax code as a bailout for homeowners.
3. Elected officials in state governments seeking to give property tax relief to homeowners will not do so merely by shifting to some other source of tax revenue like sales or income (which usually ends up as a tax increase) or by shifting it all to commercial property owners.
4. Members of Congress will finally realize that two oceans can't protect us from the tax competition sweeping the rest of the world. China is now the latest country to cut its corporate tax rate.
5. Politicians will stop raising taxes on arbitrarily targeted items like cigarettes, alcohol, bottled water, soda, tasty food, adult entertainment, gambling, etc. just because they want to raise revenue for some government program that is supposed to provide broad public benefits.
6. State officials will stop obstructing our national market by attempting to export taxes to "out-of-staters." States should attract investment with pro-growth policies, not by protectionist penalties on the productive.
7. At least one of the states that have recently considered lottery privatization will go through with a sale (not a lease!). That will reverse the domino effect of state governments going into the business of promoting gambling.
8. States will eliminate gimmicks like sales tax holidays and instead lower sales tax rates for the entire year.
9. TaxReformPanel.gov and TaxFoundation.org will be the most visited web sites of 2008, and our ultimate wish...
10. Congress will avoid another AMT ping-pong match in late 2008, instead acting in the public interest by passing fundamental tax reform that merges the good features of the AMT (a broader tax base and lower tax rates) into the regular tax code.
I hope Santa Claus brought you exactly what you wanted this morning. Oregon residents might have us beat, though, in that the state refunded part of their income tax payments just before the holiday:
Checks have arrived in mailboxes all over the state, thanks to an only-in-Oregon law that requires rebates to taxpayers when income tax collections top projections by more than 2 percent.
All told, the state has doled out $1.1 billion in rebates.[...]
"It is pretty well spent," said Portland resident Linda Stockton, who got a check for about $600. "And I bought $100 worth of canned goods, and gave it to the food bank. I bought about 20 pairs of mittens for foster kids."
The rest, she said, was spent on "clothes for me."[...]
"I don't trust (government) to spend our money wisely," said Paul Hansen of Portland, whose family got a check for $1,161. "The private sector is smart enough to spend the money more wisely and more efficiently."
Hansen said about 20 percent of his check will go to charity, and the rest is earmarked for his daughter's private school tuition.
Charities could be particular beneficiaries of the kicker, since many families are accustomed to making their donations at Christmas time. Greg Chaille, president of the Oregon Community Foundation, which tracks charitable giving in the state, said the rebate checks could increase donations by $100 million or so this year.
Oregon's tax refund rebate system has been around since 1979, and is similar to Alaska's Permanent Fund dividends and Colorado's TABOR refunds (which was suspended in 2005):
The Oregon rebate, known locally as the "kicker," also is written into the state constitution.
In the national consciousness, Oregon is firmly classified as a liberal state, whose residents were among the first in the nation to approve medical marijuana, and support strict environmental policies.
But when it comes to taxes, the state's residents are decidedly libertarian. Voters have shot down just about every proposal for a new tax in the last decade, from sales to gas to cigarettes.
That predisposition has made the "kicker" an untouchable sacred cow, especially because its backers timed the rebate to appear in mailboxes at Christmas, when bills are pilling up.
The refunds have their opponents, of course, in this case interestingly from the same person who sent her overcollected income taxes to charity and clothes for herself::
"As a former teacher, I don't get why the money isn't just reallocated to an area that has a tremendous need," Stockton said. "There are cheerleaders out in front of the supermarket begging for money to keep their sports program alive."
Oregon residents have that option, too. According to the AP, 12,000 residents sent $6.7 million in rebate checks to the state schools fund. It's a choice left to each taxpayer to decide the best use of their refund check.
Today's Wall Street Journal has an editorial piece discussing the Quill physical presence rule. That's the constitutional bar which prevents states from forcing out-of-state businesses to collect each state's sales tax on purchases. Overturning Quill would mean that retailers would have to collect taxes based on where the seller lives (not where the business is), an obligation that would next extend to brick-and-mortar businesses. The editorial recognizes this:
[S]mall merchants could potentially have to keep track of 86,000 different tax rates, depending on what they sell and to whom. But what about nine-digit zip codes? Could governments create different rates within each one? Yes indeed.
Believe it or not, it gets worse. The board of state and local tax collectors that administers the "streamlined" plan recently amended the agreement. Now the plan would allow some states to choose whether to tax online purchases at the seller's address or the buyer's, depending on whether they're in the same state. The end result will be different tax rates for in-state and out-of-state vendors—a clear Constitutional violation.
As I explained in Why the Quill Physical Presence Rule Shouldn't Go The Way of Personal Jurisdiction and in a recent commentary, overturning Quill will create uncertainty and discrimination:
While some constitutional principles surely must be revisited to apply them to new circumstances, the idea that parochial state interests cannot burden interstate commerce remains a timeless principle regardless how sophisticated technology may be.
The effort to kill Quill is nothing more than states attempting to boost their tax revenues at the expense of the national economy.
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