Tax Policy Matters

Via the TaxProf comes the story of Filipino boxer Manny Pacquiao declining to have his next fight be in the United States.

Manny Pacquiao's chief adviser insisted Monday that the Filipino superstar's preference is for his next bout – a fifth fight against Juan Manuel Marquez – to take place away from Las Vegas, with the off-shore Chinese gambling resort of Macau emerging as the "favorite."

Michael Koncz told Yahoo! Sports that the 39.6 percent tax rate Pacquiao would face if he were to fight again in the U.S. makes a fall bout in Las Vegas "a no go."

On a related note, State Farm Insurance may be getting ready to leave uber-taxing Illinois for the comparatively lower taxing Texas.

Insurance chain State Farm is reportedly buying up substantial workspace in Texas, which may signal a coming exodus from the company's home state of Illinois. ...

At the end of 2010, in a special session, the Illinois Legislature passed a 67% hike in its corporate and personal income tax. The state is struggling with a structural deficit and its credit rating was recently lowered. The state now has the worst credit rating in the country. A number of businesses have floated the idea of leaving the state. A move by State Farm, however, would devastate the downstate economy.

California is suffering from a similar trend...for similar reasons.

Tax policies do matter.  Higher tax rates will drive the wealthy into different areas.  They....like most of us....don't mind paying their fair share to support legitimate government activities.  But an unfair share will cause them to react accordingly.

85% Tax Rate On The Poor?

I read an awful lot of things while putting together the recent post about Phil Mickelson and tax rates, I came across this specious bit of reasoning that attempts to argue that people making US$18,000 per year end up paying an 85% tax rate.

Yes: On net, average federal income tax rates are negative -- post-tax income exceeds pretax income -- for the two lowest income quintiles. But that's not the same as marginal tax rates, which measure the amount of money taken out of each additional dollar earned. It's the marginal rate, most importantly, that creates the disincentive to work.

So how does they come up with that astronomical value?  They include social program benefits as "income" and calculate an effective "next dollar" rate based on lost social spending benefits due to increasing incomes.

The argument is that as income earned via legitimate employment increases, social program benefits decrease.  This decrease is then considered....by some...to be an effective "tax".

While I have long been aware of this sort of "welfare trap", I think it is fundamentally dishonest to suggest that the proper reduction of benefits to be anything like a tax.

The Straw

...that broke the camel's back.

Professional golfer Phil Mickelson has recently taken a little flak for indicating that he plans on leaving California in the wake of his announced plans to relocate to a state with lower tax rates.  Specifically, California has recently increased their income tax rates by roughly 3 percent for the next seven years.  The sales tax was also increased.  These changes were made in an attempt to close the current sizable annual budget deficit being run by the state of California.

My sympathies lie primarily with Phil.  We aren't even close to being in the same income range, but as a matter of principle, I believe that a person has a right to the income they earn that should not be cavalierly set aside.  However, there are a couple of issues that have been studiously ignored in this discussion.

The first is the matter of comparing apples to apples.

According to Mr. Mickelson, his future total tax rate will be a little north of 60% of his income.  This includes federal income taxes, federal FICA taxes, federal Medicare taxes, state income taxes, and one presumes that local income taxes are included if appropriate.  Some of his critics have compared that tax rate with the 14% income tax rate paid by Mitt Romney and his wife.  That is an incomplete comparison designed to confuse the issue.

The Romney's most certainly paid payroll and appropriate income taxes for any wages they may have received.  Of course, if they did not receive any wages, then they didn't pay payroll or income taxes at those rates.

Under the area of comparable tax rates, the double taxation of dividends is also studiously ignored in these discussions.  Dividends are paid out of after tax profits by corporations.  When a further tax is then levied on the individual receiving those dividends, then the money is effectively taxed at the cumulative rate of the corporate income tax and the individual investment tax.

It is partially due to this double taxation that we have elected to charge a lower tax rate on investment income.  Good, bad, or indifferent; I make no assertion as to whether or not this is good public policy.

The second issue is the relative need for government to consume Mr. Mickelson's wealth.  Back in 2009 when Arnold Schwarzenegger was governor of California, Robb Allen of Sharp as a Marble had a partial list of agencies, commissions, boards, and other state government organizations.  At the time, the suggestion was that prisons would have to close and state police would have to be laid off to balance the budget.  The point at the time is that there were a great many other state agencies that could have been down sized or perhaps even eliminated in order to minimize cuts to critical prison and law enforcement budgets.

A similar case can be made with respect to federal government spending as well.

As a former resident of California, it truly pains me to watch the current fiscal debacle unfold.  The roots of that debacle can be found in the lack of government fiscal restraint.  Poor spending priorities can never be solved by increasing taxation.

When taxation levels are high enough to represent injustice to the people earning that money, precautions to limit exposure to confiscatory taxation are more than justified.  The camel has no obligation to stand still as the last straw is dropped in place.

Who Owns You?

On the international front, socialism is on the rise in France.  Socialists recently won control of most of the government and immediate set to work solving their deficit problems by raising taxes on the rich.  Those taxes were one factor for Johnny Depp's decision to return to the U.S.  There have been other reports of France's elite moving to the U.K., Belgium, and other countries to avoid those confiscatory tax rates. 

Recently, France's Prime Minister had a hissy fit over several high profile actors, and others that took similar precautions to preserve their earnings.

I find the bureaucratic outrage to be more than a little amusing.  It is as if these socialists believe that those people are the property of the state rather than being individuals who have the freedom to choose the conditions in which they live.  Why should they be surprised when those individuals exercise that freedom in the face of an overly bureaucratic government that is imposing an intolerable level of taxation?

The exodus is predictable, as is the socialist response.  Sadly.

Spending Cuts Vs. Tax Hikes Explained

link

This pretty well encapsulates the current "negotiations" on our deficit spending problem.

It Didn't Go Far Enough

Denny's franchisee John Metz had a good idea.  Rather than raise his prices to cover the costs associated with the ACA, he was going to institute a 5% surcharge so that patrons would know why the cost of their meal had gone up.

People were outraged.  Mr.Metz's comments were misconstrued as representing Denny's policy instead of it being just his franchise locations.  Sales fell.  Denny's corporate got anxious.  Telephone calls were made.

And the makings of a great idea swiftly fell.

It would have been a better idea if Mr. Metz had created his surcharge that covered all of his tax liabilities instead of singling out the ACA.  Then he would have been doing a real public service.

We had a couple gas stations in the area that put stickers on their pumps letting people know how much they were paying in taxes as a part of every dollar spent on gas.  It was interesting and informative.  I think it would have had a more lasting impact if such information was required on every gas pump.

But y'all already know that I'm a little off on the subject of taxes....

How To Raise Revenue

End the corporate welfare that exists within the loop holes in our tax laws.  As Professor Reynolds suggests, the first to go should be the Hollywood tax cuts.  But there's more!

ALONG WITH MY PROPOSAL TO REPEAL THE HOLLYWOOD TAX CUTS and various other ideas on how the GOP can push popular ideas that will hurt Democratic constituencies, several readers have suggested that the Republicans in Congress push cable-unbundling as a cause. It will, they suggest, make consumers happy, hurt the entertainment industries and probably put MSNBC out of business since, well, how many people would actually pay to get MSNBC? . . . .

Given how infrequently the entertainment industries support my perspective, I think ending their preferential tax treatment is an excellent place to start.

Johnny Depp Is Coming Home

Apparently, he is ill inclined to pay his fair share of taxes...in France.  Now that France is governed by Socialists that really mean it, tax rates on their 1% are climbing.

The natural result?  The predictable result?  The rich are looking for other places to live.

One illustrative example would be Johnny Depp.  He is apparently headed back to the U.S. in order to avoid paying higher taxes in France.

The more pedestrian sorts of top earners (captains of industry and finance) are also looking for the exits for similar reasons.

Attempting to punish success causes successful people to leave?  Who knew!

Don't Ask, Don't Tell

Powerline has a great follow up to my recent post about Warren Buffett's tax-paying habits.

Mr. Buffett's rejoinder? Shut up.

Apparently, when a successful billionaire investor like Warren Buffett demands changes to the tax code, the rest of us are expected to bow, scrape, and make the usual subservient intonations.  We aren't supposed to ask questions about the purported facts in support of those proposed changes.  We are supposed to defer to our "betters".

Screw that!

First Mr. Buffett and his secretary can release all of the tax information that supports...or not...the current rhetoric.  Then we can have a discussion about how whether the facts support...or not...the proposed policy.  Then we can have a discussion of how that policy change would affect the rest of the country.

If Mr. Buffett wants to be a personal example for policy change, then he can accept all of responsibility that goes along with being such an example.  And that does include more than a modest amount of scrutiny regarding his personal life.

The other option is that he could pay the $1,000,000,000 he currently owes the federal government.  He could write an additional check because he thinks he should be taxed more.  And he could write a bigger check for his secretary so that she isn't one of those "people who got the short straw in life" in his eyes.

Until that comes to pass, I have some advice for Mr. Buffett. He should be familiar with it.

Shut up.

The Myth Of A Free Buffet

Or a free Buffett...one of the two.

After months of the seemingly fallacious assertion that Warren Buffet pays a lower tax rate than his secretary, we finally have some facts to work with. 

The ever astute Mrs. Megan McArdle-Suderman has looked things over and found....surprise!....perhaps someone is stretching the truth a bit here.  Or comparing apples with bananas or kiwi or something.  She has a link to the original ABC report.

The summary?

While it is difficult to justify the exact percentages, it is pretty easy to see that those pushing the Buffett-secretary myth are comparing his secretary's total tax load (including payroll taxes, including the part paid by Mr. Buffett's company) with Mr. Buffett's cap gains tax rate (but not including the corporate taxes paid by his company).

Cherry picking has done been done.

A couple thoughts via Glenn Reynolds.  Mr. Reynolds had a secretary at Dewey Ballantine that made $50k per year back in the 1980s.  Mr. Buffett's secretary, Ms. Debbie Bosanek, only makes $60k today.  Not only could Mr. Buffett voluntarily pay more in taxes if he feels he is under taxed, he could also voluntarily bump Ms. Bosanek's paycheck if he feels that she is one of "the people who got the short straw in life."  Even a 90/10 split would be an improvement over the current situation for Ms. Bosanek.

Not that $60k in Nebraska is anything like a truly short straw.

The cold hard fact is that the number of super-rich that pay lower income tax rates than their secretaries is quite slim.  The number of the super-rich hedge fund managers that benefit from the "carried interest" rule is an order of magnitude smaller.  Changing the law so they pay income tax rates instead of the capital gains rate might be a good idea.  Doing so will not raise enough money to spit at when compared with our current deficits.

I'd love to have both people release their complete tax information so that we can truly compare apples to apples.

Even better would be to have Mr. Buffett put his money where his mouth is by writing bigger checks to the U.S. Treasury and to his most worthy secretary.  I'm betting that it will take pigs in the sky and ice in Hell before either happens.

Psssttt....Can Someone Do Something To Fix This?

It might help.

It took Bob Bertsch 25 years to build his construction business and just a day for it all to go away.

...

"I am tired of carrying all the tax load," Bertsch said. "I renew 13 licenses here every year just so I can spend money in this city."

Bertsch makes no attempt to conceal his frustration with the costs government imposes on small businesses like his.

"Government is killing small business. We used to have 24 employees at our peak. Now, all of those people who used to work here are in unemployment lines," he said.

...

Bertsch told a friend at the auction he is selling out because government was taking more out of his business than he was.

Or we can keep giving handouts to big businesses with ties to the government.  The whole idea of keeping everyone's taxes low is apparently over rated.

 

Link to the source.

What A Tax Payer Wants

Rasmussen recently released the results of a recent poll regarding tax policy.  While I might quibble a bit with the question as to whether or not a simpler, yet still progressive tax structure is a good idea, I am willing to consider it.

Most folks I know do want a simpler tax code.  They don't want lots of deductions.  They want to pay their taxes and know what they will owe at the end of the year.

I know that I find the inability to accurately predict my tax debt to be terribly frustrating.  I don't necessarily want to get a huge refund at the end of each year.  Nor do I want to write Uncle Sam a big check.

A simpler, less intrusive system would be an improvement over the current system.

Mr. Obama's Great White Whale

Every time I hear Mr. Obama talk about raising taxes on the 'rich'....

Every time I hear Mr. Obama speak derisively about the luxury of private jets....

Every time I hear a story about Mr. Obama's NCLB appointees halting the construction of a new Boeing plant in South Carolina....

Every time I read about Mr. Obama's EPA initiatives to install 'Cap and Trade' and other anti-CO₂ measures without the benefit of Congressional authorization...

Every time I think of the impact of Obamacare...

I think of the above cartoon.  I've been thinking of the cartoon long before Mr. Ramirez drew it!

Investment drives our economy.  The wealthy and corporations are sitting on huge piles of cash instead of investing it because they fear that new taxes and regulations will make it impossible to recoup those investments.  This isn't about making new money.  It is about recovering the invested principle.

Those investments create jobs.  Jobs like the union jobs in Kansas and Oklahoma that build private jets.  Jobs like the non-union jobs created by the Boeing plant in South Carolina.  (For transparency, my employer has sold and will continue to sell products being used to build that plant.  In the larger scheme of things, it isn't a lot of money.  For us, the amounts are significant.  We also do business with other Boeing plants as well as the aircraft manufacturers in Kansas and Oklahoma.)

The government needs revenue.  Some regulations are indeed required.

There is a reason why the United States had a 'Great Depression' while the rest of the world had a depression.  There is a reason why the United States is in a 'Great Recession' while the rest of the world had a recession.

That reason is an excess of government and a lack of individual liberty.  When Mr. Obama comes to view individuals...and corporations...as being not only qualified and capable of operating without total government direction, but also far more qualified at discerning the best use of their money, then we will see a recovery.

And The Counter Argument Is?

Simon over at Classical Values is taking a look at response to a recent Sarah Palin speech.

That is all explained rather reasonably by what Palin said,“We have the highest federal corporate tax rate in the industrialized world. Did you know our rates are higher than China and Communist Cuba?”

The essence of the plan is to attract businesses to America by making America the best place in the world to do business. It seems like a good idea to me.

 Ahem....me, too!

I would gladly entertain a logical counter-argument for eliminating the corporate income tax.

Keynesian? Really?

Nick Gillespie over at Reason makes the salient point that current federal spending is not really what John Maynard Keynes had in mind when he suggested that government spending in a down cycle might spur growth.

But Whalen isn't simply dumping on Keynesianism, he's bent on pointing out that even its latter-day adherents are straying far from their master's theory. And in this, he's surely correct. As Allen Meltzer has argued, Keynes was against the very sort of large structural deficits that characterize contemporary federal budgets and policy, believing instead that deficits should be "temporary and self-liquidating." And Keynes believed that any sort of counter-cyclical spending by government should be directed toward increasing private investment, not simply spending current and future tax dollars on public works projects.

Nick quotes Mike Whalen in an article posted at The Washington Times.  Mike suggests...

If the federal government announced a real road map to fiscal soundness, the impact would be truly stimulating. If American businesses and consumers saw that Washington was really cutting, not just reducing future increases, there would be tremendous relief and an increase in confidence across the country. Job creators would sing “hallelujah”; they would get off their wallets, start hiring, and then you’d see that Keynesian multiplier kick in.

Which is a point that the current Administration and their supporters keep passing over as if it did not exist.

A big part of the problem with the sluggish economy is that business owners can see current government spending, and future spending obligations as being capable of turning a sour economy into a really dismal economy.  Greco-Japanese dismal.

When they are convinced that their sidelined capital could be safely invested with the reasonable expectation of making a profit in the bargain, then they will begin investing.

All this talk of raising taxes on "the rich" and passing behemoth federal programs does nothing more than reinforce the idea that they are better off sitting on their cash.

Leftists Back Cutting Corporate Income Taxes

Which is a bit of a milestone.  But given how little we collect and how much gets spent enforcing and complying with those laws, isn't better to just eliminate the corporate income tax?

That would make the US a tax haven.  Just think of all the money that would be parked here!

Death And Taxes.....Well Just Taxes This Time

My highly esteemed and well read visitors will no doubt have heard the big news in corporate taxation.  General Electric paid $0 in taxes last year!  In fact, they got billions of dollars back!!

!!!!!

At least, so says the ever questionable New York Times.

Megan McArdle has a piece about how the Times reporters screwed things up.  Fortunately this isn't a case of the reporters maliciously misrepresenting the facts.  Instead, it is a case where reporters assigned to report on matters of corporate and tax accounting should have known that those are two very different types of accounting that almost always result in two very different answers.

Ms. McArdle also makes the persuasive case....again....for total elimination of corporate income taxes.

Let's face facts.  Corporations do not pay a single penny in corporate income taxes.  People do.  Investors pay by getting lower returns.  Employees and managers pay by getting less in salary and/or benefits.  Customers pay by paying higher prices.

Given that the corporate income tax only generates a few hundred billion dollars ($191 billion in 2010) in revenue, is it really the most effective method for collecting taxes?  No.

Particularly when so many businesses, including GE, spend so much money on accountants to keep track of the taxes owed, and spend so much time and money getting Congress to tweek the tax code to their advantage. Ever hear of tax credits for wind power?  Care to guess what business (among many) GE is in?

Ms. McArdle's stuff is always a great read.

End The Corporate Income Tax

Megan McArdle had a piece recently regarding the benefits of ending the corporate income tax.  The fact that we have one of the highest corporate income tax rates in the world aside, Mrs. McArdle-Suderman offers the following reasons for eliminating this onerous and wasteful burden.

You can't tax a corporation; you can only tax a person

Corporations simply pass along corporate taxes in the price of their products.  It is just that simple.

The incidence of "corporate" taxes is not necessarily progressive.

Big companies can afford armies of attorneys and accountants to help them avoid tax liabilities.  Smaller companies that earn far less do not have the benefit of those resources.

The corporate income tax encourages firms to use debt finance, rather than equity.

I know a fair bit about this.  Consider that Apple is one of the strongest companies in America.  I remember 10-15 years ago there were many people that thought Apple was done as a computer company.  Yet they are still in the business of making computers...and many other useful gadgets.

How did they survive?  They took the road less traveled and became an asset rich company.  They own most of their corporate facilities.  As a result, they have the flexibility to invest in future products.

Most other companies are in debt.  They borrow against their buildings.  They borrow against their office furniture.  They borrow against their inventory.  And when hard times come along, they end up doing what their lenders want instead of having the freedom to re-tool, re-design, and re-orient on new products, new markets, new customers, and new profits.

If we want more stable companies, then we need to get rid of incentives that make them less stable.

You can't eliminate all the loopholes

The corporate income tax encourages firms to waste resources on tax avoidance

The corporate income tax doesn't raise that much money

The above three justifications represent the careful dance that companies and tax inspectors do with one another.  Companies waste valuable resources so they pay the least tax possible.  Tax inspectors waste valuable resources looking for corporate malfeasance.

Eliminate the tax and companies will focus on earning a profit without the contortions and market distortions caused by the corporate income tax.  And tax inspectors can go do something productive...like picking up litter in Antarctica.

Without the corporate income tax, a lot of the incentive for lobbying would go away

If getting corporate America out of the political funding game is so important, you would think that more people would be racing to end the corporate income tax.

Megan has more details, but the above should be enough to pique your curiosity.  Have a read.

Slaying The Beast, Pen In Hand!

This Peggy Noonan article speaks to me and it speaks to the motivations of the Tea Party movement.  I have no idea how long the link will last as the article is supposed to be behind their firewall.  Here's another that might work.

If you write a column, you get a lot of email. Sometimes, especially in a political season, it's possible to discern from it certain emerging themes; the comeback of old convictions, for instance, or the rise of new concerns. Let me tell you something I'm hearing, in different ways and different words. The coming rebellion in the voting booth is not only about the economic impact of spending, debt and deficits on America's future. It's also to some degree about the feared impact of all those things on the character of the American people. There is a real fear that government, with all its layers, its growth, its size, its imperviousness, is changing, or has changed, who we are. And that if we lose who we are, as Americans, we lose everything.


...


And what I get from my mail is a kind of soft echo of this. America is not Greece and knows it's not Greece, but there is a growing sense,I should say fear, that the weighty, mighty, imposing American government itself, whether it meant to or not, has for years been contributing to American behaviors that are neither culturally helpful nor, as we now all say, sustainable: a growing sense of entitlement, of dependency, of resentment and distrust, and an increasing suspicion that everyone else is gaming the system. "I got mine, you get yours."


...


Because Americans weren't born to be accountants. It's not our DNA! We're supposed to be building the Empire State Building. We were meant, to be romantic about it, and why not, to be a pioneer people, to push on, invent electricity, shoot the bear, bootleg the beer, write the novel, create, reform and modernize great industries. We weren't meant to be neat and tidy record keepers. We weren't meant to wear green eye shades. We looked better in a coonskin cap!


There is I think a powerful rebellion against all this. It isn't a new rebellion - it was part of Goldwaterism, and Reaganism - but it's rising again.

Tax Delinquency......With Lessons Learned!!

I saw this item today over at Glenn Reynolds' Instapundit site:

It’s easy to see why these people don’t mind higher taxes. They don’t plan on paying ‘em anyway . . . .

One aspect of the current government criticisms currently on display is the differential...dare I say disproportionate in many cases...treatment that the IRS offers to those who theoretically owe federal incomes taxes. The two current poster boys are US Representative Charles Rangel who "forgot" to report well over US$1 million dollars in income over a number of years and Treasury Secretary Timothy Geithner who owed $14,847 in back taxes. Mr. Geithner apparently had no intention of paying until he was nominated for his current post.

Mr. Rangel has provided amended returns and paid the taxes that were owed. He has not paid any interest nor was he assessed any penalties. Mr. Geithner paid $15,000 in interest, but was assessed no penalties by the IRS.

No normal citizen could expect such lenient treatment from the IRS when they experience a legitimate tax debt. Trust me. I had one. We weren't in the same league as Mr. Rangel and Mr. Geithner. Yet when I asked to receive the same treatment that Messrs. Rangel an Geithner received, I was told that the IRS cannot guarantee equal treatment for all taxpayers.

Apparently, the 14th Amendment of the US Constitution is not applicable when it comes to matters related to US income taxes.

Glenn has been following the fiscal follies of both Messrs. Rangel and Geithner for quite some time. Additionally, Glenn has been following the huge disconnect between those that run our government. Part of that disconnect is the penalties that our government "masters" and the well connected never seem to pay for violating public laws and policies while us little folks bear the brunt of an overly officious, oafish, and offensive federal government.

Pitchforks were made for situations where public servants forget who they work for.

I believe that Glenn was attempting to demonstrate that people in the federal government were disproportionately above the (tax) law. Glenn's post linked to this LA Times blog which continued the theme of federal workers that were unduly delinquent in paying their taxes. The blog points out several federal departments who's employees have significant tax delinquency issues and who also employ several well connected individuals with tax delinquency issues.

That LA Times blog entry was based on this Washington Post story by T.W. Farnam. T.W.'s story is focused on Capital Hill employees with tax delinquency issues. The general thought again was that the people that are imposing laws on us are apparently unable or unwilling to abide by them as well. In his story, he pointed out that the employees of the Executive Office of the President owed about as much under Barack Obama in 2009 as they had under George W. Bush in 2008.

And that got me to thinking.

If you take the federal civilian employees, the US Postal service (which are not counted as federal employees), and those serving in uniform, the US federal government employs roughly 5.3 million people. The total labor force runs roughly 154.5 million people. That makes federal employees be roughly 3.4% of the total labor force.

Alternatively, if you count only taxpayers, there are 138 million people. That makes federal employees be roughly 3.8% of the total.

The story by T.W. Farnam had a link to a more complete listing of federal employee tax delinquency that was broken down by department/group. You can sort that list a couple of different ways. But the one way you cannot sort it is by the average tax debt per person within a given group. I had to do that myself. We will get there in a moment.

The total tax delinquency of federal employees was roughly US$3.3 billion. The total tax delinquency for the entire United States was roughly US$120 billion in 2003. That's the only number I could readily find. At that rate, federal employees are only 2.76% of the total delinquent tax bill. Given the state of the economy since 2003, I think it is safe to say that the total tax delinquency has gone up just a bit. Which makes federal employees responsible for less than 2.7% of the total bill owed.

So the big lesson learned here is always get to the data before you draw a conclusion. While I do think that the larger point of government policy makers creating laws and policies that they have no intention of obeying, but that they certainly expect us to obey holds true, this particular story doesn't necessarily justify Glenn's comment from above.

Sort of.

The more complete listing linked above had 85 categories of people. It took the data and calculated the average tax debt per person in each category. I then ranked the groups on that average data. The results were surprising.

The table below shows the top 20 categories, plus some others that I found interesting.

GOVERNMENT PERKS - GOVERNMENT EMPLOYEES

Index	Organization/Type of worker to the IRS	Number of delinquent employees	Balance owed	Average Owed
1	Presidio Trust	10	$680,682.00	$68,068.20
2	Office of Government Ethics	3	$75,304.00	$25,101.33
3	Education	163	$3,995,066.00	$24,509.61
4	Tennessee Valley Authority	292	$6,766,333.00	$23,172.37
5	Executive Office of the President	41	$831,055.00	$20,269.63
6	Federal Housing Finance Board	4	$79,829.00	$19,957.25
7	National Endowment for the Humanities	4	$79,279.00	$19,819.75
8	Nuclear Regulatory Commission	57	$1,099,897.00	$19,296.44
9	Military retirees	84034	$1,525,688,378.00	$18,155.61
10	Railroad Retirement Board	31	$531,798.00	$17,154.77
11	Export-Import Bank of the United States	10	$166,288.00	$16,628.80
12	Labor	463	$7,481,463.00	$16,158.67
13	Administrative Office of the U.S. Courts	754	$11,808,236.00	$15,660.79
14	Equal Employment Opportunity Commission	84	$1,303,316.00	$15,515.67
15	U.S. House of Representatives	421	$6,524,892.00	$15,498.56
16	Energy	331	$4,899,649.00	$14,802.56
17	Federal Deposit Insurance Corporation	155	$2,249,326.00	$14,511.78
18	Federal Election Commission	8	$115,747.00	$14,468.38
19	Commerce	1556	$22,246,314.00	$14,297.12
20	Office of Personnel Management	172	$2,367,268.00	$13,763.19
23	Federal Reserve System - Board of Governors	81	$1,076,733.00	$13,293.00
28	U.S. Senate	217	$2,774,836.00	$12,787.26
29	U.S. Tax Court	4	$51,111.00	$12,777.75
39	Civilian retirees	40000	$454,938,448.00	$11,373.46
43	Navy	6841	$72,432,604.00	$10,588.01
53	Defense	4454	$38,495,128.00	$8,642.82
56	Air Force	5817	$46,787,244.00	$8,043.19
57	Army	11330	$89,966,859.00	$7,940.59
67	Treasury	1204	$7,670,814.00	$6,371.11
74	Military active duty	28853	$109,557,536.00	$3,797.09

The first big surprise is how many government agencies that are directly responsible for either setting or enforcing tax policies have employees that cannot follow those policies. And we're not talking about chump change!

The Executive Office of the President comes in at number 5 on the list!

The Administrative Office of the Courts comes in at number 13.

The US House is 15th on the list.

Perhaps there is some validity to the idea that our government is staffed by people that are unwilling to live under the laws and policies that the rest of us have to observe and obey.

You would think that money men would know how to pay their taxes. Yet the US Federal Reserve - Board of Governors ranks 23rd on the list. The US Treasury department came in at number 67. I am not sure how comforting it is to know that 1200 Treasury department employees cannot satisfy their tax bill in a timely manner.

Due to my military service, I am naturally curious about the military related categories.

Active duty personnel came in at a very respectable 74 out of 85 categories. That may be the result of their lower than average pay simply limiting their ability to get into trouble with the IRS.

Yet the civilian component of the military services....the people responsible for maintaining civilian control....all fared much worse. The Navy at #43, the DoD at #53, the Air Force at #56, and the Army at #57. How can these civilians claim any authority over the active duty military when they cannot complete the simple task of paying their tax debt is beyond me.

Even worse, military retirees were 9th on the list with 84,000 tax scofflaws while civilian government retirees were 39th with only 40,000 tax reprobates! Unacceptable!

When we think about elected or appointed policy makers, I think the general theme of people that pass laws for us to obey, but not necessarily for them is sound. Mr. Rangel and Mr. Geithner are simply the last in a very long line of people that either do not understand or do not care how laws and policies affect the rest of us.

At the same time, I think we ought to be careful about using something as innocuous as tax debt data to slur all federal employees. That brush is more than a little too broad.

I didn't do a rigorous statistical regression, but a plot of the data is mostly linear. While there is a big difference in the dollars owed per person from 2nd to 85th on the list, each office is only incrementally more delinquent than the group below it. The exception at the top of the list is the Presidio Trust with a whopping $68,000 per tax debtor.

The other notable exceptions were at the bottom of the list where six agencies have 35 tax debtors with a cumulative tax debt that is less than the average delinquent from the Presidio Trust.

I would like to have population data for each category as well as some hard numbers of total taxpayers for comparison purposes. I think it is pretty easy to see where the Presidio Trust is a hotbed of tax delinquency, but it would be good to know what percentage of Presidio Trust employees are tax debtors. It would also be good to compare that percentage with the percentage of the general population.

There is no such thing as too much data.