Tag: Taxes

Privatization Of Government Services

When government services are privatized, why are the functions not turned over to a not-for-profit company? The government provides services that shouldn’t be run for profit. Services that create a conflict of interest when profit is involved (the major component of my argument for single payer health care). The ideal scenario for the prison system is no “customers” — no one is breaking the law. That’s terrible for a company’s bottom line. To sustain profits, prisons need more prisoners … and retention, they need those prisoners to stay longer. There’s a civic disinterest in the conditions that lead to increased profits.

Hell, cut taxes in half and spin half the government into non-profits charities. Private contributions are tax deductible, and you just saved 5k on taxes … donate some of that to NASA, NEA, etc.

Negative Tax Rate

I’ve just about got our taxes completed for the year – we expect a huge refund because we have a tax credit that is 30% of the geothermal installation cost (the credit that made our geothermal system cost almost exactly as much as a far less efficient air exchange heat pump). What I didn’t expect was to receive a federal tax refund that exceeds our federal tax payments.

But the child tax credit is refundable – so we have a carry over for next year from the geothermal system and get a thousand bucks for having a kid. At which point, it occurred to me what Trump may be hiding in his tax returns. Not that he pays 0$ in federal taxes (yeah, I paid a whole heap of money to the state, medicare, social security, sales tax, and property tax too … doesn’t change the fact the federal government is literally giving me more money that I paid them this year) but that he finagles his adjusted income to be sufficiently low to qualify for refundable tax credits.

People get outraged when wealthy people pay a lower tax rate than the poor. Even more so when wealthy people literally pay less in taxes. But to have the federal government giving a fairly affluent individual a couple of grand extra … that would be shockingly egregious.

Personally … I didn’t try to get the money beyond including the energy efficiency tax credit in my pricing of geothermal and solar systems. I put all of my info into a tax preparation application and got an answer back. It took me a day to realize that that answer actually exceeded my payments (and that the changes I was trying to model for additional HSA contributions didn’t seem to change our refund any because our refund was maxed out and what was changing was the carry forward on form 5695. I’m also not turning it down. We have paid tens of thousands of dollars in federal taxes each year for decades – I’ll consider it getting an extra grand back from last year.

Tax and Budget Reform

I wish there was a decent way to file RFE’s (request for enhancements) with the federal government. I can’t do a thing about the complexity of the tax code or the annoyance of having to spend a weekend filling out forms just to get my money back. But there’s existing tax code for charitable deductions (although you can fall afoul of the AMT if you donate too much of your income … so that may need a little rewrite here). Create a new tax deductible donation categorization for government entities — then each department of the government not get themselves registered as a not-for-profit-goverment-entity that qualifies for tax deductible charitable donations. I would feel a LOT better about paying 10k in taxes this year if I knew the money was going toward departments I support (and not going to departments I do not support). I could literally donate every dollar I owe in taxes to specific departments – then get my payroll deduction contributions completely refunded (bonus, US government, you got the interest on my payroll deductions since you held on to them). Don’t want to bother? Then don’t – your payroll deductions will get allocated out for you through the budgeting process.

With a significant adoption rate, if no one wants to fund the Department of Whatever, then the people writing the budget could well take that as a hint. Obviously that’s not a perfect rule – no one wants to fund the IRS, but you’re still going to need someone to handle tax collection & filing (at least until you manage to sort out the tax code & processes). But someone who advocates eliminating the Department of Education may be surprised how many people voluntarily earmark their taxes for Education. Or the military industrial complex may be shocked that donations don’t approach the 60% or 16% (depending on your point of view of “all spending”) of the federal budget that goes into the military and Homeland Security.