Tax Law

SACRAMENTO - During the middle of a winter night in 2009, sleep-deprived legislators and Gov. Arnold Schwarzenegger devised the deal from hell. It included a tax incentive for out-of-state corporations not to build facilities or hire employees in California. You read right. It was nonsensical. The main feature of the agreement, you may recall, was a four-year tax increase. But the groggy legislators and governor foolishly gave voters an opportunity to halve the tax hike's duration.

Re "Tax planning? Or tax cheating?," Opinion, Sept. 7 The subheadline ("Laws that encourage corporate tax havens are bad for America") suggests an indictment against tax law and those who wrote it. But Edward D. Kleinbard's argument is really against those (Republicans and businesspeople) who take full legal advantage of the law. A valid case can be made that the law should be different; unfortunately, Kleinbard goes after the corporations that are governed by the law, calling them tax cheats.

For citizens hoping for serious tax policy and budget debates, this has been a dispiriting election cycle. One party urges tax rates too low to support any plausible platform from which government can deliver the services we all expect. Those are the Democrats. The other party inhabits a realm of fantasy akin to Erewhon, the fictional land created by the 19th century satirist Samuel Butler. In Erewhon, Butler wrote, "If a man has made a fortune … they exempt him from all taxation, considering him as a work of art, and too precious to be meddled with; they say, 'How very much he must have done for society before society could have been prevailed upon to give him so much money.'" INTERACTIVE: Outside spending shapes 2012 election It is a pity that Republicans do not appreciate that Butler was writing ironically.

The California tax man cometh, and he's headed for the Internet. State tax collectors are preparing to crack down on renegade Internet merchants who don't collect sales taxes, and nearly 100 new state auditors, lawyers and other specialists are being hired to help over the next three years. The effort comes at a time when state and local governments are scrambling for money after cutting billions of dollars from budgets and trimming public services. The governor has asked voters in November to approve a hike in sales and income taxes.

One of the arguments you hear from those who want to extend all of the Bush-era tax cuts is some variation of the quote that Rep. Collin Peterson (D-Minn.) gave the Hill this week : "We shouldn't be raising taxes right now, with the economy where it is. " Ignore for a moment the fact that Congress has raised taxes in the aftermath of recessions before without disastrous results -- witness the large tax increases in 1993. People can argue all day long about what would happen if the Clinton rates were re-imposed today, and they'd generate a lot of heat without giving off much light.

Two times were not lucky for Senate supporters of the DISCLOSE Act, a bill that (beginning next year) would shed new light on the sources of political advertising and other election-related expenditures. On Tuesday, for the second time this week, Republicans blocked a vote on the legislation, reflecting the party's new-found position that disclosure would intimidate donors wishing to exercise their 1st Amendment rights. Never mind that even the Supreme Court in its Citizens United decision reaffirmed the constitutionality of laws requiring disclosure of the identities of political donors.

Re "The limits on liberty," Editorial, July 4 This could be clearer. The individual mandate is a mandate to get insurance, with some people exempted. If one does not, a penalty applies, with some exempted; but the penalty is the only consequence imposed for not having insurance. The Supreme Court did not label the individual mandate itself as being a tax. It upheld a use of the power to tax as a way to impose the penalty. Tax law has many provisions to spur or deter conduct.

A momentous Supreme Court decision collided with a breathless, speed-obsessed media culture Thursday, resulting in botched cable TV coverage of the ruling on President Obama's healthcare law, a boast by a wire service of beating the competition by mere seconds and an understandable round of public mockery over the entire spectacle. CNN and Fox News mistakenly reported that the Affordable Care Act had been overturned by the high court before both quickly correcting themselves, albeit not quickly enough to ward off a round of derision.

WASHINGTON — The Supreme Court is set this week to decide the politically charged constitutional clashes between President Obama and Republicans over his healthcare law and his immigration enforcement policy. By most accounts, the justices must make a stark, clear choice either to endorse Obama's policies — including the mandate for all to have health insurance — or to strike them down as flatly unconstitutional. But the justices could rule in unexpected ways that would allow both sides to claim a victory.