Category Archives: taxes

Laboratories Of Democracy

If the states are, as Justice Louis Brandeis famously once said, “laboratories of democracy,” then Kansas has just proven that “trickle down economics” doesn’t work. Like other forms of snake oil and quackery, it should be banished from any serious discussion about the economic remedies we need to fix whatever ails us.

In case you missed it, Kansas’ Republican-dominated legislature has just handed Gov. Sam Brownnback a huge defeat, overriding his veto of a bill that would finally raise taxes after years of starvation budgets that resulted in Kansas schools running on shortened schedules and crumbling infrastructure going unfixed. (Let me add: Tennessee just did a similar thing with the official passage of Gov. Haslam’s IMPROVE Act, our first gas tax increase in almost 30 years. It appears Republicans have finally gotten the message that stuff needs to be paid for, and cutting taxes isn’t the way to raise money. I know, weird, right?)

Unlike Tennessee, however, Kansas’ governor remained stubbornly attached to the idea that cutting taxes has some miraculous stimulus effect on a state’s economy. Kansas citizens were willing to give Brownback the benefit of the doubt until they had finally had enough, and let their frustrations be known in the last election. Now, moderate Republicans could join forces with their Democratic colleagues to make a veto override happen:

The legislation undoes the essential components of Brownback’s reforms, which he famously described as part of a “real-live experiment” in conservative governance.

Brownback had reduced the number of brackets for the state’s marginal rates on income from three to two. The legislature will restore the third bracket, increasing taxes on the state’s wealthiest residents from 4.6 percent to 5.2 percent this year and 5.7 percent next year.

Marginal rates on less affluent Kansan households will increase as well, from 4.6 percent to 5.25 percent by next year for married taxpayers making between $30,000 and $60,000 a year and from 2.7 percent to 3.1 percent for those earning less than that.

The legislation also scraps a plan to bring those rates down even further in future years, one of Brownback’s promises to conservative supporters.

Finally, the legislature eliminated a cut Brownback had put in place to help small businesses. Analysts said that the provision had become a loophole, as many Kansans were able to avoid paying taxes entirely by pretending to be small businesses.

Initially, the state forecast that about 200,000 small businesses would take advantage of the break. As it turned out, about 330,000 entities would use Kansas’s new rule. That discrepancy suggests that tens of thousands of workers claimed that their incomes were from businesses they owned rather than from salaries.

“What we were able to do in the last 24 hours can allow us to start down that road, to begin repairing all the damage done after living with Gov. Brownback’s failed tax experiment for five years,” said Annie McKay, who is the president of Kansas Action for Children, an advocacy group in Topeka.

Tuesday’s vote was a rebuke not only for Brownback, but also for Republicans in Washington who have advocated similar cuts in taxes at the national level — including President Trump.

This should forever end the discussion about tax cuts being some magical tonic to lure businesses and increase revenue. Trickle down economics is a fairy tale. Or, for people like our president who prefer a visual representation, let me offer this:


Filed under budget, economy, taxes

Why The GOP Should Hate Donald Trump’s Economic Plan


His one good idea is surrounded by a whole bunch of really bad ideas.


Donald Trump finally has a good idea:

Donald Trump will announce in a major economic speech on Monday that childcare payments will be fully tax deductible under a Trump administration, a senior aide told The Hill on Sunday night.

“We’re going to help working parents by making childcare payments fully tax deductible.
“That’s new policy,” the aide added.

Mind you, we don’t know how he plans to pay for this, or any other details. But on the face of it, a tax deduction for child care is something Democrats have been pushing for since forever. It’s a good idea, but one which is completely at odds with the Tea Nut rhetoric about “simplifying our tax code” and all that.

One of the most reliable complaints from conservatives has always been how complicated our tax code is. They bring it up every April: the moaning and rending of garments over how hard it all is, wouldn’t it be easier to just have everyone play 10% and be done with it?

The problem with that argument, as I wrote back in October, is that the hard part isn’t figuring out what you owe, it’s figuring out what you earn. And that’s because of all of the various deductions which lower one’s taxable income. Deductions for state and local taxes, mortgage interest, medical expenses, IRA contributions, charitable donations, etc. There are an awful lot of those, and as former Federal Reserve vice chairman Alan Blinder wrote:

Every tax “gimmick” has an ingrained constituency. I shake my head in disbelief when I hear politicians claim to be able to raise huge amounts of revenue by closing loopholes. Arithmetically, that’s easy. Politically, it’s almost impossible.

So here comes Donald Trump to give us yet another “gimmick” with a very large ingrained constituency: families with children. I happen to think it’s a good idea, but I’m not the one complaining about how hard everything is and how we need to simplify everything by reducing the number of allowed deductions.

And as it happens, Republicans have been working very hard to do just that these past few years. In 2014, Republicans tried to repeal a host of popular tax breaks, including the existing Child Tax Credit. The Tax Reform Act of 2014 died a quick death, but the new GOP tax reform plan, unveiled just about a month ago, goes even further than the last reform effort: it eliminates all itemized deductions save mortgage interest and charitable contributions.

It appears Trump’s plan to add a new itemized deduction would be killed by the Republican’s own tax reform plan. How is it possible that the Republican presidential candidate is proposing a tax gimmick completely at odds with the GOP’s tax reform plan released just last month? And would he sign the GOP’s tax reform plan if it didn’t include his child care tax credit? Dying to know.


Filed under 2016 Presidential Election, taxes

Taxes & Presidential Candidates

It’s that time of year again when we all must render unto Caesar, so this seems like a good time to compare the candidates’ tax plans.

Not too long ago Vox and the Tax Policy Center teamed up to provide this handy tool where you can calculate how much tax you’d pay under each candidate’s plan.

Keeping in mind that these are estimates, I used the calculator and found that the Beale household would pay $270 more a year under a President Hillary Clinton and … wait for it … a whopping $16,000 a year more under a President Bernie Sanders.

(In the interest of fairness, let me point out that we’d evidently pay $14,340 less under a President Cruz, but in no way would I ever vote for Ted Cruz. The entire nation would pay in so many other ways, for a generation or more. It hardly seems worth it to give up the Supreme Court for that.)

The upshot is, we simply could not afford Bernie Sanders’ tax plan. When I mentioned this a while back, a Bernie supporter told me that we’d actually come out even or maybe even a little ahead because universal healthcare would magically happen somehow, and we’d save money in the long run because we wouldn’t have to pay monthly health insurance premiums.

Ignoring all of the very real questions about how universal healthcare could happen with a gerrymandered Republican House and recalcitrant Republicans in the Senate, I have another question nobody has asked. Let’s pretend for a second that Bernie gets his “revolution” and universal healthcare happens. Could someone explain to me how people such as myself realize this insurance premium savings in the real world? Our family, like most American households, gets its health insurance through an employer. We don’t pay out of pocket for it: it’s an earned benefit.

So for people like us, who represent more than half of insured Americans, how do we realize this supposed health insurance premium savings? Is the Sanders camp assuming that employers will just raise everyone’s salaries, dollar-for-dollar, the same amount they’re paying on employee healthcare? Does anyone seriously think this would happen? Are they expecting this to happen voluntarily, or is there some legislative hammer they would enforce implement, forcing private employers to pay their employees the cash amount of this earned benefit? And does anyone think this would pass a Supreme Court challenge?

It just seems to me that the more you unpack Bernie’s pretty little packages, the more you find they’re filled with sawdust.

I don’t mind paying $270 more a year in tax so that low-income families have Head Start classes and all the rest. But paying $16,000 a year on some unrealistic promise of universal healthcare which doesn’t seem possible, let alone reasonable, strikes me as a stretch.

What am I missing here?


Filed under 2016 Election, 2016 Presidential Election, healthcare, taxes

The Flat Tax Is Simpler And Other Stupid RW Ideas

The GOP debates have brought one of Republicans’ treasured ideas back into the forefront: the so-called “Flat Tax.” This happens every presidential election cycle and it takes up a lot of oxygen because, let’s face it, everyone hates filing their taxes. I get it, it’s a hassle, hell I don’t like devoting a couple days of my spring to the unpleasant task, but like death and stupid Republican ideas, it’s a fact of life in America, so I just suck it up and do it.

We all know that the Flat Tax is a dumb idea from a revenue perspective, that it ends up being a huge tax hike on the middle class and a tax cut on the wealthy. I don’t think Republicans care about that, they’ve been selling “trickle down” snake oil for decades. I think Fundiegelicals like the idea because it mirrors a tithe, and Fundiegelicals love to codify their religion in U.S. law as a way of maintaining some modicum of relevance for their dying brand.

But I think what really appeals to rank and file conservatives is this idea that when implemented, the Flat Tax will somehow be simpler. This is another piece of right-wing spin that has zero basis in reality. But it’s an attractive piece of propaganda, so it’s repeated ad nauseum. Republicans love to tell people what they want to hear, don’t they?

Here is why that’s utter bullshit. From the 2011 Memory Hole, I bring you former Federal Reserve vice chairman Alan Blinder:

Many useful steps could be taken to simplify the personal income tax. But, contrary to much misleading rhetoric, flattening the rate structure isn’t one of them. The truth is that 100% of the complexity inheres in the definition of taxable income, which takes up millions of words in the tax laws. None inheres in the progressive rate structure. If you don’t believe that, consider the fact that the corporate income tax is virtually flat once a corporation passes a paltry $75,000 in taxable income. Is it simple?

Back to the personal tax. Figuring out your taxable income can be quite an effort. But once that is done, most taxpayers just look up their tax bill on an IRS-provided table. Those with incomes above $100,000 must perform a simple calculation that involves multiplying two numbers together and adding a third. A flat tax with an exemption would require precisely the same sort of calculation. The net reduction in complexity? Zero.

Got that? The complexity comes from the multitude of deductions codified in the tax code, not the tax rate itself. And as Blinder points out, every single deduction is there because Congress voted for it. Every single deduction is there because some group lobbied for it. I wonder if right-wingers clamoring for the Flat Tax would be willing to give up their home mortgage interest deduction, their charitable giving deductions (including what they give their churches!), their deductions for their kids? Would they give up their deductions for property taxes, state and local taxes — or, as is the case here in Tennessee, sales taxes? As Blinder noted,

Every tax “gimmick” has an ingrained constituency. I shake my head in disbelief when I hear politicians claim to be able to raise huge amounts of revenue by closing loopholes. Arithmetically, that’s easy. Politically, it’s almost impossible.

Blinder goes on to make the mathematical case, showing that the Flat Tax is really a huge tax hike on the middle class and tax cut for the wealthy. Go to the link and read if you wish; I maintain nobody gives a shit about the math, the selling point is the simplicity. And it’s just not gonna happen. What you’re going to end up with is a tax cut for bazillionaires and tax increase for those who can least afford it.

Same as it ever was.


Filed under 2016 Presidential Election, taxes

Do You Believe In Magic?


As goes Kansas, so goes Louisiana.


Republican magical thinking on taxes has smacked up against the cold hard windshield of reality in Kansas, and now the unthinkable has happened: taxes will have to be raised to fill the state’s gaping budget hole caused by Republican tax cuts. Hate to say we told ya so but ….

Mr. Donovan said the results of the tax law were “never as good as we hoped.”

“We hoped they would just be a magic lantern and everybody would react to it,” he said. “But, eh, it’s hard to get a company to uproot their business when they’re established and move to another place just because of this difference in tax policy.”

Oh noes. You mean taxes aren’t the one and only driver of business decisions? Say it ain’t so! I love it when Republicans face the growing realization that their cherished ideas are built on bullshit. Still denial ain’t just a river in Egypt, folks:

Still, supporters of the tax bills are not necessarily willing to concede that the cuts were the reason for the state’s fiscal problems.

Senator Terry Bruce, the Republican majority leader, said that when the cuts were passed, the Department of Revenue gave estimates of how much the changes would cost that ended up being inaccurate.

While initial estimates, for instance, were that the small business tax exemption would affect about 191,000 entities and cost about $160 million, for the 2013 tax year, 333,000 filers took advantage of the exemption at a cost of $206.8 million, according to the Revenue Department.

“I don’t know if it was a mistake and the intention was wrong or the effect is wrong,” Mr. Bruce said of the tax law. “It was very aggressive, very quick.”

So more people took advantage of your tax cuts than you expected, and the resulting “magic lantern” of jobs jobs jobs and growth growth growth and revenue revenue revenue never happened and yet your policy still isn’t wrong? How on earth do you figure that? Tax cuts either create jobs and prosperity or they don’t.

Kansas was supposed to be a petri dish of Reaganomics. Gov. Brownback was committed to proving that cutting taxes would increase revenue because magic! Instead, Kansas is a fiscal mess. Yet the power of wishful thinking remains strong. Oh, Kansas. You can’t just click your heels three times and wish your way out of this.

Yes, I really want to believe that I can lose 15 pounds on a diet of beer, guacamole & chips and chocolate ice cream, but I don’t, because I’m a grown-up. Republicans are children who want to have their cake and their ice cream. Grow the fuck up, people.


Filed under Republicans, taxes

It’s The Infrastructure, Stupid

Pardon me while I get hyper-local for a bit. But to the current crop of candidates running for Mayor of Nashville and Metro Council, please take note of the following:

Nashville has had yet another water main break this morning. The temperatures have been in the low- to mid-60s for the past week so this is not due to cold weather and freezing pipes.

This is the eighth water main break I’ve counted in the past six months. To recap the other seven:

• January 9, 2015: Natchez Trace/Blair Blvd.

• January 8, 2015: Two water main breaks, one on Harding Place at I-24 and one on McMurray Road in South Nashville.

• November 20, 2014: Harding Place at Jonquil Drive.

• September 25, 2014: Two in Green Hills/Oak Hill area: one on Lealand Lane and one on Harding Place.

• July 31 2014: 100 Oaks/Home Depot. This was the big one that shut off water to thousands of residents for days. The Mall at Green Hills was forced to close. Restaurants closed. It was a mess.

Having said all that, let me add: Clearly I’m waaay underestimating the water main issue because according to this story,

Metro has responded to an average of 450 water main breaks each year. Last January alone there were 168.

Obviously, most of those have been small enough so as to not be newsworthy.

Regardless, as Nashville seems hell-bent on investing tax money on stupid projects like the Gulch-SoBro Pedestrian Bridge, a new baseball stadium, and the new Music City Center which continues to underperform in the convention booking department, I’m wondering if anyone would mind reinvesting back in our existing communities and neighborhoods? Just a bit? Pretty please? I get that tourists are important and all, but honestly, that $16 million you just took out of the general fund to build a bridge to nowhere when there’s already a bridge a block away was just stupid. We need that money so we can get some dang water to our homes and businesses (and hospitals, and schools).

I find it deliciously ironic that today’s water main break has forced the headquarters of Bridgestone America to close. This is the same Bridgestone America that was just handed $52 million in tax incentives (including paying zero property taxes) by our Metro Council so they’d build a new skyscraper downtown. Bridgestone is currently headquartered out by the airport, a part of town that is presently without water. Ha ha ha ha ha ha ha. Serves you right. Can you say, karma?

That’s a few million dollars in revenue that we just threw away that could have gone toward things like, I dunno, rebuilding our ancient water infrastructure. Bridgestone threatened to leave Nashville though — something I find highly unlikely, since they were already here. Now they’ve lost at least one day’s worth of productivity.

Nashville has always been an incredibly short-sighted town where planning is concerned. We’re the geniuses who tore down the governor’s mansion for a Popeye’s chicken franchise. We’re the ones who built a performing arts center without considering the need for parking, because I guess families coming in for a matinee of “Wicked” will just magically teleport themselves downtown.

You could take a band of monkeys from the Nashville Zoo and throw them into our planning department and I daresay they’d do as good a job as our esteemed pencil-necked “planners” who have destroyed our neighborhoods, increased traffic gridlock, stressed our city’s infrastructure, and overseen the bulldozing of historic landmarks.

But it’s always been that way. Nashville has never cared about its history. It would rather build an ersatz Antebellum hotel/theme park and charge you $10 for parking than protect the real treasures in its midst.

But God, at least pay some dang attention to infrastructure, people. How can you call yourself an “it city” when businesses are forced to close because of busted water mains? When people can’t navigate the overwhelmed roads and say screw it, I’ll shop at home?

Stuff needs to be paid for. The people who actually live here need services. It can’t always be all about the tourists, okay?


Filed under Nashville, taxes, Tennessee

Fuck You, Internet

Today marks the internet’s 25th birthday. And here is today’s internet-delivered contribution to the national discourse:


Spreading ignorance and hate for 25 years. Thanks for nothing, internet!

Honestly I sometimes wonder if we wouldn’t have been better off without it. This is the kind of ignorant BS your crazy uncle used to spew at the dinner table and everyone would sorta roll their eyes and pretend they weren’t related. Now it’s a meme seen by millions, perpetuating the kind of BS stereotypes people like Paul Ryan use as their basis for their economic policy.

Cripes. I’ve got to unfriend me some folks.

(By the way, that same photo was used on a “humor” site under the headline, “What a Country Girl Looks Like.”)


Filed under internet, poverty, sexism, taxes, women's rights

Told Ya So

Stories like this have me playing the world’s tiniest violin for the short-sighted idiots who bow and scrape before anti-tax zealots without thinking about the long term consequences:

Spring Hill regrets 3-year property tax elimination
City needed years to pull out of financial trouble caused by elimination of property tax

SPRING HILL — Hindsight is 20/20, and Spring Hill officials now look back on the three-year elimination of the city’s property tax as the greatest contributor to the financial trouble from which the city only recently emerged.

Alderman Eliot Mitchell, who was on the board that unanimously voted in 2005 to eliminate the property tax, now calls it his “worst decision” since first being elected in 2003.

It wasn’t until subsequent years that Spring Hill officials say they realized how detrimental the vote was, when the city became financially restrained by a burdensome internal debt and inability to build infrastructure and road projects to keep up with its rapid growth.

“That one decision, eliminating the property tax, affected us all the way from 2005 to 2013, even though they reinstated it in 2008,” City Administrator Victor Lay said. “When you eliminate property taxes, there are some benefits. A lot of folks will move to your town, but not having adequate revenue creates a lot of other problems.”

Ah yes, I remember this story. I remember we all told them this was a stupid idea but no, they had drunk the anti-tax Kool-Aid. Everything was booming back then, and of course no boom ever goes bust, does it? In the land of Conservative Magical Thinking, everything is shinier, sparklier and more wonderful when you eliminate taxes. The pies are made higher and rainbows trickle down on us all. Except that it doesn’t work that way. Shit needs to be paid for, people.

Give Vice Mayor Bruce Hull some props for this candid admission:

“I was as excited as anybody else when they eliminated the property taxes,” said Hull, who first became an alderman in 2007. “But I didn’t know anything at the time about how the city government operated.”

No, of course not. You don’t need to know anything about how government works to get elected, you just need to spout ignorant nonsense about Big Government and Low Taxes and Freedom. The Tea Party has proved that!

I’ve been very amused to watch what’s happening in the Nashville suburb of Oak Hill, a completely residential city with no property tax. It’s funded completely by the Hall Tax, Tennessee’s income tax on interest and dividends. As soon as the Republicans took over the state legislature they began the process of eliminating the Hall Tax, which is the sole source of funding for a city like Oak Hill. The tax has been chipped away at for years but it will be completely eliminated soon, leaving some cities with no other source of revenue looking for ways to finance their operations. In Oak Hill the solution has been to build a commercial district, but the push-back from residents has been strong.

I just love the Conservative Magical Thinking at work here. The citizens of Oak Hill are by and large quite wealthy, and they’re also overwhelmingly Republican. I’m sure most of these folks have embraced the anti-tax Kool-Aid the Republicans have been selling. They voted for the Hall Tax elimination, and now their choice is to either initiate a property tax or build a commercial district and bring in some sales tax. Sales tax is of course the most regressive tax there is, so it’s no surprise that this is the direction city leaders have gone. But residents are up in arms. They want their cake and they want to eat it, too.

It’s an interesting conundrum, one I predicted a mere two years ago. Republicans in the legislature start playing the “pity the poor retirees suffering under the burdensome Hall Tax” card every time this issue comes up, but let’s be real, people: this is a policy that favors the state’s wealthiest. The people “suffering” under the Hall Tax are not retired teachers counting their nickels and dimes to pay the electric bill every month. It’s rich assholes like Lee Beaman who have massive stock and investment portfolios. And those are the very people who will profit off of turning Oak Hill’s 95 residential acres into a commercial strip.

Wake up and smell the bullshit propaganda, folks. It’s all about funneling more wealth to those at the tippy-top, while the poor retirees our Republicans claim to care so much about have fewer pennies to pay the light bill because our state has the highest sales taxes in the country. Stuff needs to be paid for. The question is: who does the paying? The people with the huge stock portfolios, or the people buying bulk toilet paper because they can save five cents?

Remember: you don’t need to know anything about how government works to get elected, and by all means let’s not discuss the difference between sales tax and a tax on investment income, or who pays these taxes. That requires some critical thinking, which as the bumper sticker says is our other national deficit.

All you need to do is repeat “taxes bad!” and let the Lee Beamans take home more money because it all trickles down to us eventually, right? Er, maybe not.


Filed under taxes, Tennessee

This Is What Passes For A Scandal?



There was a commissioner, Douglas Shulman, who was appointed by the Bush/Cheney administration five years ago, and who was in charge when the agency began treating conservative groups seeking tax-exempt status unfairly. It’s unlikely that a Republican deliberately targeted groups on the right for extra scrutiny.

But more to the point, Rubio’s demand is problematic given the fact that Shulman has already resigned, leaving the IRS last November. It’s tough for a guy to fall on his sword after he’s already packed up his stuff and gone home.

So the guy in charge of the IRS when conservative groups say they were unfairly targeted was a Bush appointee, and he’s been gone for six months.

I’d say the Teanuts have been played.

Help me out here, people. Other than massive butthurt and shrill whining, skills which the Tea Party employ with surgical precision, I don’t get what this supposed “scandal” involving the IRS is all about.

Tea Party groups were applying for 501(c)4 status. Political groups can’t be 501(c)4s. They can’t be involved directly in politics, raise money for candidates, launch primary challenges, run for office, etc. But groups calling themselves “Tea Party” and “Patriots” had been in the news for months doing exactly that! So why is it a big deal that the IRS was looking into the activities of groups calling themselves “Tea Party” before granting them non-profit status?

What am I missing here?

Also, many on the left have mentioned the numerous ways the Bush Administration did the same and even worse, without so much as a tear from conservatives or a front page headline from the mainstream media. Remember All Saints Church in Pasadena, California? Following a 2004 anti-war sermon which went viral, the IRS investigated the church for two years and threatened its non-profit status. At the same time, conservative “Patriot pastors” telling their congregations how to vote were ignored.

Remember when the FBI infiltrated anti-war groups as they planned protests ahead of the 2008 Republican National Convention in Minneapolis? Probably not — there’s little mention of this in the corporate media.

Or what about this one:

The FBI improperly targeted Greenpeace, People for the Ethical Treatment of Animals (PETA) and two antiwar groups in domestic terrorism investigations between 2001 and 2006, the Inspector General of the Department of Justice said in a report released today.

The IG found there was “little or no basis” for the terror investigations, and that they were “unreasonable and inconsistent with FBI policy.”

At least two of the investigations resulted in innocent people being placed on the domestic terror watch list for years, and one resulted in FBI Director Robert Mueller providing Congress with “inaccurate and misleading information,” according to the report.

Remember the Pentagon’s TALON data base, which targeted anti-war Quakers and Don’t Ask Don’t Tell protestors? Doubtful: most people have probably never heard of it. Outside the lefty press, it got little attention on cable and network news.

Remember back in 2003 when the Tennessee Bureau of Investigation took down names of anti-war protestors at an MTSU peace rally? More recently, remember when the FBI targeted Occupy Wall Street?

Imagine the Tea Party hysterics if the FBI put their leaders on the terror watch list. But you don’t see Morning Joe booking the head of PETA to discuss the ways they were targeted; today he did book Newt Gingrich. And the Wall Street Journal is calling this “Nixonian.” Seriously? So you had to wait a little longer for your tax exempt status to clear on account of your politicking. Cry me a damn river, you big babies. Call me when your name is placed on a secret domestic terror watch list.

This is one giant nothingburger, another chance for the Tea Party to whine and call for the fainting couches about how unfair everyone always is to them. Seriously? The media is playing along with this? After ignoring the far worse ways liberal groups have been targeted by different government agencies — including the IRS?

Just further proof that the media is not liberal and its infatuation with all things Tea Party has continued.

You know what I think? I think the news media are desperate for a political scandal. We had so many of them during the Bush years, and then there was Clinton’s blow job and Gennifer Flowers and TravelGate and all the other Clinton-era scandals, phony and otherwise. Obama is just too boring.


Filed under FBI, Media, taxes, Tea Party

Taxes, Texas-Style

Texas has to be the only state where they allow a company to collect taxes and then keep the money instead of turning it over to the government:

CBS 11’s I-Team has obtained a study that says Oncor, the giant electric utility company in North Texas, is collecting hundreds of millions of dollars from customers for federal taxes that don’t exist.

“Since 2008, they have collected $500 million for the purpose of paying taxes on their income,” said Randy Moravec, executive director of the Texas Coalition for Affordable Power, a coalition of member cities – including Arlington, Plano and Frisco – that works toward finding the lowest rates for residents.

Asked how much of that money has actually reached the Internal Revenue Services, Moravec said: “None … not a penny.”

Gee, where I’m from that’s called theft. But in Texas, it’s all perfectly legal:

Although Oncor collects for federal taxes, it actually does not owe the IRS anything because its majority owner, Dallas-based Energy Future Holdings, has been operating in the red for years.

“In the state of Texas, it’s perfectly legal for Oncor to do what they’re doing right now,” said state Sen. Wendy Davis, D-Fort Worth, who is a critic of the utility company’s collection for federal taxes.


Sen. Davis said there should be a law against charging consumers for taxes that are never levied.

“Unfortunately, rather than moving in that direction, the state is actually trying to move in the opposite direction,” she said, referring to a bill that has already passed the senate and is still pending in the Texas House.

If the bill becomes law, the senator said, “It would remove the Public Utility Commission’s authority to regulate utility companies in this particular arena.”

See, you thought they hated taxes in Texas, right? Nope. Not as long as they’re another angle that can be played in the state’s culture of grift.

Reason #10,981 why I will never, ever live in Texas. Ever. Rick Perry can take his bogus campaign and shove it.


Filed under taxes, Texas