Rebekah Diller from the Brennan Center notes Florida's new court charges in a USA Today op-ed:
Consider Florida's new court fees, which went in effect July 1. Faced with a budget crisis, Florida has raised its filing fees to among the highest in the country: $300 for most civil cases, $397.50 for divorce and $270 for eviction actions. Florida does not, as do other states, waive civil filing fees for indigent litigants. Instead, court clerks negotiate payment plans with those unable to pay up front - and add a surcharge for paying over time.
Florida is also putting the squeeze on criminal defendants, most of whom are indigent. Those who cannot afford their own lawyer must pay $50 to apply for a constitutionally mandated public defender. If convicted, they face assessments for the costs of prosecution and defense regardless of their ability to pay. These charges are added to other assessments.[...]
Perhaps the worst feature of Florida's court fees is the fact that only 61% of the new fee collections will go toward funding courts, prosecutors and public defenders, according to a recent news report. The rest will go to the state's general revenue fund.
When determining whether something is a tax or a fee, the primary consideration is the purpose of the revenue. Fee revenue is used to recoup the cost of providing a service to a group of users (such as getting a divorce or an eviction notice, or driving a toll road, or using a sewer system). The purpose of fees is not to raise revenue, but to fund a service. If they raise general revenues, it has to be a small incidental amount, subordinate to the greater function of regulating or providing a service.
Taxes, by contrast, are all about raising revenue. If the revenue is spent on broadly available public benefits, and it is not an incidental amount, it's a tax. And that's the case no matter what politicians call it. See our Heatherly v. North Carolina brief for more information.
Here, according to Diller, 39% of the new assessments on justice-related activities are non-incidental amounts of revenue going to the state's general fund. These are taxes. Hefty taxes. Taxes on justice.
Back in April, the Louisiana Supreme Court called a $5 judicial charge imposed on speeders a tax, because the assessment had no logical connection to the administration of justice. Because courts cannot impose taxes in Louisiana, the charge was struck down. I wonder if Florida's Constitution allows for justice to be taxed.
The IRS has shed some new light on the high-income Californians who are the targets of the state legislature's tax-raising approach to budget balancing (IRS spreadsheet or Tax Foundation tabular summary).
By breaking out state-by-state its popular analysis of income and tax data, the IRS shows us that the top one percent of California taxpayers (150,000 people)—the same people who would pay the new, higher state tax rates of 10 percent, 11 percent and 12 percent —are already paying more in total federal income taxes than the 66 million people nationwide who make up the lower-earning half of US taxpayers.
California Republicans reject the tax-hike approach to budget balancing, and Governor Schwarzenegger has just thrown down the spending-cut gauntlet. He signed an order laying off temporary workers and withholding a portion of many other state employees' salaries, starting at the end of the month unless the legislature sends him an already overdue budget.
A humorous new Tax Foundation YouTube video titled "Dream Job" addresses the problem of the United States' high corporate tax rate.
While Americans pay close attention to individual tax rates, many tune out when the conversation turns to business taxes. This is a mistake. The tax climate for business should be important to all Americans, regardless of whether they actually own businesses themselves. Businesses pass their tax burdens on to their customers, employees, and shareholders. In fact, Tax Foundation research shows that in 2005 the average household paid $2,757 in business taxes.
Anybody who owns stock in a company stands to lose if higher tax rates reduce that company's earnings growth. Additionally, basic economics tells us that a corporation forced to pay high taxes must offset that cost by taking one of three courses of action. Charge higher prices, although competitive pressures can limit this option. Pay less in profit to investors, but investors' funds are nimbly re-invested elsewhere when profits dip. Finally, the company can pay lower salaries, give less generous employee benefits, or hire fewer people. In the increasingly dynamic economy, it could also mean that businesses relocate to places where the tax climate is more inviting.
Click here or below to watch the video. Click here for the Tax Freedom Day song and video and here for more on corporate taxes.
There isn't much honesty in this presidential campaign from two candidates who supposedly were of a new type of politics. Earlier this week, Sen. McCain distorted Obama's position on energy taxes in a recent advertisement (the one that featured Britney Spears and Paris Hilton). And today, Sen. Obama made misleading statements saying that McCain wants to cut taxes on oil companies by $4 billion. But what Obama didn't say is that McCain's corporate tax cut would apply to all corporations, whether they produce oil, wind energy, or cookies. (That's kind of like saying that Sen. Obama favors government paying for Warren Buffett's prescription drugs since he supports Medicare Part D. Of course, everybody gets it.)
What's also funny is that when the vote in the Senate came up for a specific piece of legislation that did give special tax favors to oil companies and other energy producers (green as well as "dirty"), Obama voted for it and McCain voted against it. It was the Energy Policy Act of 2005, which was a pathetic piece of legislation. McCain, along with many environmentally-friendly Democrats, as well as a few fiscal conservatives, voted against the measure. (It passed 74-26 and was signed by Pres. Bush who of course never had the guts to veto anything on principle.). Obama likely voted for it merely because his home state's corn producers stood to benefit from the ethanol mandates and subsidies that were included in the bill.
In his speech on Thursday, Obama also criticized McCain's gas tax holiday (rightly so), and then implied to voters that the oil company profits are merely at the expense of consumers, which is baloney and shows of economic ignorance of the fact that the purpose of prices is to allocate resources. Even if oil companies gave every dollar of profit to charity (and investment in the firm remained the same), the price would still have to be high given the huge worldwide demand for oil, or else there would be a shortage. Obama said, "But while Big Oil is making record profits, you are paying record prices at the pump and our economy is leaving working people behind."
Speaking of oil company profits, there is also the nonsense in a letter written by Democrats in Congress telling the oil companies that they should invest in alternative energies instead of buy back their stock. Essentially, they are telling the oil company executives that they should diversify the portfolio of their shareholders (corporate diversification) for them. But that leads to the obvious question: why not let investors diversify themselves if they think alternative energy is such a great investment? There are plenty of firms in that business. Suppose, on the other hand that there exist economies of scale (or scope) and thereby benefits in having the existing oil companies diversify themselves into green alternatives. Wouldn't you expect them to be doing just that right now in order to maximize the return to shareholders? After all, you imply that by buying back their stock, all they care about is their shareholders. If it's such a great investment, then their shareholders shouldn't mind. In fact, their stock should rise.
With gas prices on the rise, some states have considered providing relief to their citizens by suspending their state gas taxes. However, many states are also faced with budget shortfalls which make it difficult to forgo any tax revenue. Not so in Alaska, where Gov. Sarah Palin has proposed suspending the state’s gas tax and sending a sizable “resource rebate” check to every resident. Bob Tkacz from Tax Analysts (subscription required) writes:
Recent record oil prices are flooding Alaska's treasury with huge royalty and tax profits, but the state's residents and businesses are struggling to pay for gasoline that has long cost more than $5 or $6 per gallon in the most remote communities. Depending on the average price of crude oil over the state fiscal year that began July 1, the Department of Revenue is projecting a revenue surplus, beyond the state's roughly $4 billion operating budget, in the range of $8 billion to $10 billion, or more.[...]
The [gas tax] suspension would cost the state treasury an estimated $39.9 million for a year. It is one of four measures under consideration to help Alaskans cope with energy costs. Palin has also proposed HB 4002, which would provide a special "resource rebate" payment of $1,200 to every Alaska resident as a broad assistance measure that directly shares the state's windfall profits.
But not all Alaskans are lining up to board the gravy train. Some point out that residents already benefit from the state’s oil resources through annual payments from the Alaska Permanent Fund. From the Anchorage Daily News:
Alaskans are already counting on Permanent Fund dividend checks this fall of almost $2,000 each. Every man, woman and child who's a bona fide resident will get the payment.
In any other state, residents would faint with joy if their politicians handed out that kind of money. An Alaska family of four is going to collect $8,000. That's not enough to help Alaskans cope with the spike in energy prices?
