An American MP Scandal?

Looks like the Wall Street Journal is trying to follow in the footsteps of the Daily Telegraph in pointing out the misuse of taxpayer money by politicians. Let's see if the spark catches.

Don't Look Now...But The UK Is About To Catch Fire

If you haven't been following the growing scandal in the UK, now might be a good time to get acquainted with it. What's happened is a common product of when the easy money get's tight: All the fraud is exposed like coral at low tide.

Just like the Bernie Maddoff scandal here in the US, the Daily Telegraph has set alight a fire in England. The Telegraph leaked expense documents for Members of Parliament which show they were abusing their privilege of tax write-offs and government funded expense accounts. Some of the abuses border on criminal. But what did the Labor Party government of Gordon Brown do? They indicated that they would prosecute the person who leaked the documents! Never mind that it was the public's money.

Then the tide suddenly turned. Suddenly the MPs started to worry about the real possibility of pitchforks and bonfires. Now they're sheepishly announcing that they're 'paying back' the money, but all the while still claiming it was all on the up-and-up. Clearly it's not. And since when was agreeing to give back stolen goods enough to just walk away from a theft? I suspect Gordon Brown and the Labor Party will not recover from this one. Keep an eye on this, it might erupt into street violence....who knows these days.

Every day more details leak out. I wonder how long it will be before the same happens in this country?

Virginia Supreme Court Says 'No' To Regional Taxes

The Supreme Court of Virginia, which is known (by me at least) for or it's no-nonsense rationality, struck down the power of the Northern Virginia Transportation Authority (NVTA) and the Hampton Roads Transportation Authority (HRTA) to tax without representation by 'the people'. The opinion can be found here (PDF)

The Virginia Legislature should take notes from the VASC on how to read....and start with the Virginia Constitution.

See: A few Lucky Virginians Have Another Nasty Surprise In Store -- Compliments Of The Legislature

A few Lucky Virginians Have Another Nasty Surprise In Store -- Compliments Of The Legislature

After the public outcry over the last 4 months related to the "Abusive Driver's fees" it's fascinating that another provision in the very same transportation funding bill (House Bill 3202) has not come under more public scrutiny.

Starting January 1, 2008, the Northern Virginia Transportation Authority (NVTA) and the Hampton Roads Transportation Authority (HRTA) will begin taxing all sorts of activities in the Northern Virginia and the Hampton Roads areas. These taxes will be imposed on residents in the cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park, Norfolk, Newport News, Chesapeake, Suffolk, Portsmouth, Virginia Beach, Hampton, Williamsburg and Poquoson and the counties of Arlington, Fairfax, Loudoun, Prince William, Isle of Wight, York and James City.

Here are the new taxes and fees (.doc), all of which are in addition to any existing tax on these activities:

• 2% tax on all motor vehicle rentals
• 5% tax on all automotive repairs, including things like oil changes
• $10 fee for your annual vehicle registration
• 1% (of the purchase price) additional fee for your initial vehicle registration
• $10 additional fee for motor vehicle inspection
• 2% additional hotel tax
• A $0.40/$100 of valuation sales tax on all real property sales (this is an tax increase of 500% from the current tax of $1/$1000 of value. No doubt this will help the ailing housing market)

The money will go into a State Treasurer fund (Special Sales and Use Tax Motor Vehicle Repair Fund) and will be doled out to the NVTA or HRTA as 'appropriate'. What does appropriate mean exactly? Well neither Authority is required to follow Virginia procurement guidelines and is free to issue “no-bid” contracts to whomever they wish. I'm sure it will be frequently 'appropriate'.

The Authorities were also given the ability to issue bonds and to obligate your future taxes to the payments on those bonds. And all of this power, in a pseudo public body that is run by appointees. That’s right, the NVTA and the HRTA members are not elected by the public, so you are being taxed without representation.

The only ray of hope in this is that Loudoun County and attorney Robert G. Marshall were just granted a joint appeal by the Virginia Supreme Court in their cases against the NVTA. Hopefully, the VASC will put a halt to this bureaucracy run amok.

Hypocrites at the Washington Post call out Virginia candidate

I had to laugh when I saw this article in the Washington Post, in which the Post 'outs' a candidate running for the position of Chairman of the Fairfax County Board of Supervisors. The Post has uncovered that the Republican candidate (Gary H. Baise) took "nearly $300,000" in subsidies for an Illinois farm over the last 10 years. All of this was completely legal mind you. It's just that the Post felt there was something inherently shameful with a wealthy individual taking a government subsidy.

So what's funny about that? Well, for starters, I'd bet a large chunk of the wealthy Washington Post elite are taking somewhere between $6,000-$10,000 in government subsidies every single year as well. This subsidy is in the form of the mortgage interest deduction. Sorry but it's true - mortgage interest deduction will be a $100 billion tax-payer funded subsidy by 2009. And not only that, but it's a subsidy that disproportionally benefits the rich over the poor. Year 2003 IRS data shows that taxpayers who had an adjusted gross income (AGI) of less than $30,000 received only 9% of the interest deduction subsidy, in spite of filing more than 52% of all tax returns. Yet those having more than $100,000 in AGI claimed 36% of the money. In fact, those making more than $75,000 in AGI claimed more than half of all mortgage interest deductions.

In 2004, the government handed out $89,500,000,000 in mortgage subsidies. 53% of that money (over $48,000,000,000) went to the 11.8% of taxpayers with AGIs over $100,000. And more than 20% of the money (~$18,400,000,000) went to the 2.3% of tax filers with AGIs over $200,000. Some of those people no doubt live in what would typically be called 'mansions'.

Ending this subsidy of course, is not popular. That's because so many benefit from it. But keep that in mind next April 15th. Do you really need that deduction? I'm sure everyone at the Washington Post will keep their pristine hands out of the cookie jar [/sarcasm]

For more info see HERE

A Scary Thought for Tax Time

It will soon be that time again, and time for the 1040. While you're filling it out, remember that you're helping to rebuild Iraq (and not Detroit, East L.A. or D.C.) to the tune of $100,000 per minute. And Afghanistan at $18,000 per minute. 24/7.

$1, 966.67 per second. Wow.