Imagine, for a second, that you’re a smoker, which, if you’re a smoker, should be easy. You’ve triumphed over brownish teeth and the lingering stench of stale smoke. You’ve bravely ignored the highly increased risk of lung cancer in the noble pursuit of having something to do with hands while you drink.

What’s your reward? Finding out that people are overwhelmingly in favor of making your addictive and potentially deadly habit MORE expensive.

67% of voters favor a $1 tax per pack of cigarettes, according to a report from the Robert Wood Johnson foundation. Voters far prefer this tax to budget cuts or other tax increases. The report indicates that states could raise up $9 billion to help counter the large deficits many are facing.

Additionally, the report, Tobacco Taxes: A Win-Win-Win for Cash-Strapped States, found that the tax would prevent children from picking up smoking. “Win-win-win” refers to the three benefits of the proposed new tax: more money (52.8 billion saved in health care costs), fewer young smokers (2.3 million kids prevented from starting smoking) and widespread political support (voters support a pro-tax candidate 59-35).

The measure fared particularly well when compared with other health conscious methods for fund-raising, including charging a large one-time fee for Russian Roulette, and making parachute-less skydiving punishable by large fine.

Are you a lobbyist for a large soda company that long ago traded your chance for any sort of spiritual salvation for piles of stress and increasingly redundant money?

Are you perhaps a lawmaker who long ago became jaded and no longer harbors any delusion about helping people?

If you answered “yes” or “huh?” to any or all of these questions, there’s good news for you out of Washington: The soft-drink industry has doused plans to tax their sugary concoctions. Mere months ago, it looked bleak for pop-makers: public health advocates thought the plan would be an easy fit with Congressional Democrats looking to raise money, and figured lowering heart disease and obesity would be the cherry on top of this low-fat fro-yo sundae.

The Congressional Budget indicated that a tax of less then one cent per ounce could raise $50 billion dollars over 10 years. While it is hard to accurately measure the health benefits of the decreased consumptions, it is virtually certain that drinking less soda is healthy per se; such drinks are stuffed with calories but devoid of nutritional value.

The soda-slurping set didn’t take this news slumped in a diabetic coma. Operating under the name Americans Against Food Taxes, a coalition of interested parties sought to prove that such taxes unfairly targeted poor people. They enlisted the help of a bevy of Hispanic advocacy groups, including the National Hispanic Medical Association, which represents 36,000 Latino doctors and focuses on health issues, including obesity.

The coalition was able to convincingly argue that taxing soda set a bad precedent for food taxation, and was thus able to elicit support from a wider range of advocacy groups. Furthermore, they rejected evidence linking soda consumption and obesity, noting that a lack of exercise was for more to blame for the heavy situation the country finds itself in.

So next time you’re training for a 5K, skip the water: bring along a big bottle of Pepsi. A study commissioned by its manufacturers found its negative effects inconclusive. What more assurance could you want?

Who says money can’t grow on trees?

While this plan doesn’t involve special heatlamps and a closet full of contraband, it would seek to profit from the growing and distribution of marijuana. Growers, retailers and distributors in California (where the drug is legal) would have to register with the state and pay a licensing fee. The drug itself would be subject to a tax of up to 41%.

State Senator Ron Calderon is to introduce the bill, which is being pushed by Board of Equalization member Jerome Horton, who sponsored similar legislation aimed at quashing illegal cigarette sales. Calderon was careful to note that the proposal would not legalize the sale of marijuana (that proposal was introduced by Tom Ammiano, and died a legislation timeline death but should be reintroduced in the next several days).

The Senator says the plan would not only help control legal dispution (and crack down on illegal sales), it could also bring nearly 2 billion dollars in yearly revenue to the beleagured state.

Lets just hope that money goes to something more than Natural Light and a really sweet bong.

Look, TaxRascal is no fan of unfair taxes. We’ve pretty much affirmed that by now, yes? But the airlines are already enjoying all kinds of gentle caresses from the IRS (as well as basically every other government agency ever created, ever), so giving them a pass on another somewhat despicable revenue stream is silly, if not unconscionable.

Facts on the ground are changing, and the tax code should follow suit. Airlines are participating in a cashgrab orgy, and given the loose reins, there’s not an end in sight. Just a couple weeks ago, Delta & Continental both increased their baggage fees, tempting other carriers to follow. Delta’s increase moved their fees to $25 for the first and $35 for the second, up from $15 & $25. Delta’s been the pioneer in the baggage fee frontier, with the other legacy airlines quickly following suit once the sky doesn’t fall on their heads.

At the very least, our buddies in the IRS should take their rightful slice of the pie. A couple billion drops won’t fill the deficit bucket, but it’s a start. It’s a simple, common-sense move that’s been sorely lacking in the tax code lately. Which is exactly why it won’t happen, but TaxRascal likes to dream.

All that being said, it appears there’re a few IRSZombies who’re tired of the fees, too:

“This ruling does not address whether fees for the Services are reasonable because such a factor is not necessary to reach a conclusion on the facts provided herein.”

Amen, little taxman. Amen.

(Here’s the code being referenced, btw.)

Why are national tax experts interested in little ol’ Oregon? Why, because Oregon’s trying out a tax increase to deal with their bankrupting state. And the “experts” see it as a the first canary in the tax-raising mine.

Yes, Oregon is proposing a(nother) income tax increase to pay for… well, something. But give the Oregon legislature a little credit – they’re not simply pushing through a tax increase, they’re having the people vote on it.

“No problem, TaxRascal,” you say. “People don’t vote for tax increases.”

Wrong! People don’t pass tax increases on themselves. But they’ll happily tax the teeth off their neighbors. Yes, the hippie (communist) spirit is alive and well in that patchouli bog of the Willamette Valley, and when you’re voting on a tax increase on anyone making more than $125K a year, well, then, let’s spark the joints and dance around some new social welfare programs!

No one ever blamed the free-love sect of forward-thinking or common sense, so let me dance through this twisted logic. Oregon’s boasting one of the highest unemployment rates in the country, at a shade over 11 percent. Rather than spur new business, the hope is to raise taxes on the folk and businesses who’re in a position to change that?

Not everyone’s taking a big bite of this tax turd with a smile. Steve Buckstein of the Cascade Policy Institute says “prominent economists” suggest it’ll cost Oregon 70-80,000 jobs over the next few years. Although the “Cascade Policy Institute” sounds like a thinly-veiled organization some rich folk whipped up to create press releases such as these, and “prominent economists” probably realize the value of getting a couple hundred K to do some “research” into how the tax would negatively effect businesses, it’s safe to say the tax won’t /help/ bring in new business (and the rich folk who’d be running them.)

Whatever. So long as some of that money’s spent on a wider & faster freeway with which to get past the foul paper mill-smell of the state capital, I’ll be happy.

According to Reuters.com, the US is pissed at the Philippine government. Why? Well, Obama’s tax lieutenants have a problem with the Philippine’s distaste of Jack Daniels. The miniature nation of islands has an excise tax on America’s Whiskey and gin. No big deal, except the tax on American spirits is anywhere between 10-40 percent more than those from within its own borders.

Listen, Philippines. America will look the other way if you kick around your second-class citizens or engage in some illegal arms dealing. The government could even deal with your tiny country having the temerity to provide its citizens with nationalized health care. But if you screw with US expatriates’ right to get drunk on old fashioned Maker’s Mark – at a reasonable price! – well then, you’re gonna be looking at the wrong side of a sternly-worded letter to the WTO.

Incidentally, it turns out America’s not the only country suffering from unreasonable excise taxes from the draconian Philippine policy of petty taxation schemes. The EU filed their own grievance against the taxes to the WTO a while back, to no avail. In a turn of events that should surprise no one, it’s been discovered that the WTO has no actual power to enforce its policies, such as the one that says “countries should not discriminate between imported and domestic products in their tax regimes.”

Sounds a bit like the UN. All sizzle, no imported steak.

Because of this, it makes sense to sell at the end of the year. (The IRS will let you buy the stocks back after 30 days and still give you the tax penalty.) And if people are selling stocks they still like, they’re going to buy them back later. All this trading gets other traders excited; it’s fun to try to guess which hammered stocks will be sold for the tax loss—and then to chase them back up when their owners buy them back.

This year, the S&P 500 was up 3% during December. But if you’re expecting Santa to swing by again in January, you might be in for some disappointment.

Compared to previous years, this stock market is a lot less interesting. In the late 90’s, you could pick tech stocks or huge momentum plays that paid off. In 2000-2003, tech stocks deflated, but value stocks roared back. Later on, asset plays and natural resource stocks dominated the market, while other companies lagged.

But in 2008, nearly everything went down—the only question was how “financial” the company was, and thus how far it fell. In 2009, everything went up—and this time, the game was Six Degrees of Ben Bernanke: big banks did great, companies that could borrow from them did well, and the rest of the market tagged along.

But that’s not all. Trading has also gotten choppier: algorithmic trading companies have started shuffling shares back and forth at a faster and faster rate, increasing volume and decreasing holding times.

All this means that there are far fewer stocks available for tax-loss sales this year. The last month’s rally might, in retrospect, look a little over-eager: if nobody is around to sell for tax losses, everyone who buys is buying in order to sell to a buyer who won’t show up. It’s a smaller version of the Greater Fool theory, but this weird tax quirk could cost investors money.

A Santa Clause Rally this year? What do you think?

But that’s a superficial way to look at it. There are some important questions that tax shelters bring up, and not all of them can be answered by soaking the rich:

1. Should people be penalized for following the rules? The tax code is designed to make good behavior more rewarding, and bad behavior less rewarding. But laws can’t just argue about “good” and “bad”—they have to allow specific things. If tax rules are designed to encourage companies to invest in new equipment, they can’t just ask nicely—they have to give companies a tax break based on the depreciating assets they own. And if companies use that depreciation to reduce their tax burden, is it really their moral problem? They just exist to make as much money as possible; if the rules encourage them to do that in useless ways, the rules are the issue.
2. How much should corporations pay in taxes, anyway? Look at IKEA. They dodge a multi-billion dollar tax bill every year. But the company invests most of its profits in expansion, and currently has over a hundred thousand employees—all of whom spend most of their time selling incredibly cheap furniture. Add up the payroll taxes alone and it looks like they’ll end up paying more taxes if they don’t have to pay any taxes.There’s an easy way to sum it up: companies save money. They reinvest it. And if they don’t, they distribute the profits to people or to charities. So there’s no specific reason to tax companies, since the money they make gets handed to taxable individuals in the end. But there’s one good reason not to tax them. They save like crazy.
3. The next round of rules will get written by the bad guys. If you know much about tax loopholes, you probably find them appalling. If you know a lot about tax loopholes, you probably exploit them for a living. The only people who know enough to permanently fix existing problems are the ones who are exploiting them in the first place.

So it’s true. Tax shelters are a huge problem. But the problem isn’t that companies are getting out of paying their fair share: it’s that they do extra work to evade poorly-conceived, poorly-implemented rules.

—Tony Blair

“We know that evidence based policy is window dressing, and now, when they want us to believe them on climate science, to justify Stern’s paltry 1% of global GDP [over $600 billion]to mitigate a global horror, we doubt.”

—Dr. Ben Goldacre

” A billion here, a billion there, and pretty soon you’re talking real money.”

—Senator Everett Dirksen

Climate change! As we shiver through another cold winter day, we often wonder: why did they stop calling it “Global warming,” again?

But climate change is a serious issue. If you squint through the smoggy haze put out by 1200 limos and 140 private jets, you can see the serious faces of politicians trying to decide just how fast they can get away with spending your money. But perhaps you’ve wondered which money pits we’re going to be filling up first. With that in mind, I’d like to present the Taxrascal Climate Change Spending Guide.

Tax and spend (and spend, and spend). This one’s easy. What if we made it harder to do something that caused pollution (like manufacturing things, or transporting them to customers), and made it easier to do things that polluted less (like forming Diversity Committees or inventing new holidays)? We could save the planet!

Tax (and tax) and spend. High taxes in general might be a great way to cripple the economy, but what if you just want it to develop a limp? One suggestion is to only tax the activities that pollute the most, like drilling for oil or burning coal. That’s the theory, anyway. But whenever a particular industry’s profits are mostly determined by the government, you can bet that the industry is going to lobby hard to make sure things turn out the way it wants them to. If Exxon has ten billion dollars riding on how the government feels about it.

Use carbon credits. Carbon credits are a way to pay people for how they could pollute, but don’t. This is an elegant solution since it turns pollution into something subject to supply and demand. The devil is in the details, and the details are devilishly complicated: how do you determine who is a potential polluter? Do you really want to pay Russia and Ukraine for how inefficient they used to be, even though they still pollute a lot?? It’s a little like paying convicted criminals not to be criminals any more: sure, it might prevent repeat offenders, but it also gives everyone a good reason to be bad before they decide to be good.

Invest in “Alternative Energy.” An alternative to what, you ask? Apparently it’s an alternative to sanity: we’d be giving away money to the most expensive kinds of energy production, and taking it from the cheapest. But look at the cost of solar power:

Imagine paying ten times as much for all the energy you use! (And that’s assuming it costs what they say it does, and that we can cheaply get rid of our oil-, gas-, and coal-based infrastructure. Not likely!)

Just. Sue. Everybody. The most efficient way to separate people from their money is to give your lawyer a cut. Some of them make the process easy: the Cueto law firm is now accepting payment in carbon credits (which is like a mob lawyer handling your case for free so long as his biggest competitor suffers an unfortunate “accident”).

As you can image, this is a complex issue. Saving the world isn’t cheap, even when you’re spending other people’s money! But you can rest assured that, in the end, our political leaders will address climate change somehow. And that your wallet will be lighter because of it.

Here’s what you can do to avoid getting a raw deal when new rules come into effect

A “fat tax” has been discussed for years, but only now has it become a political possibility. Now that Barack Obama has endorsed it, it could very well happen—even in the next year.

So what can you do?

• Learn to love diet soda. Even though it’s actually worse for your health than moderate consumption of regular soda, drinking diet soda is probably going to keep you safe from the taxman.
• Try all-natural sodas. They’re high in sugar, but they’re not the target here. These sodas are hipper, less popular, and usually sold by smaller companies—all good signs that they’ll be left alone.
• Learn to make your own. Carbonated water and concentrated flavorings aren’t hard to come by, and you might just find that you like your own mixes better!
• Protest! It’s not exactly the Boston Tea Party, but taxing caffeinated drinks has never gone over well in America. If you tell your Congressman how you feel, you might be able to make a difference.

With any luck, the “fat tax” will be dropped soon. But if we were lucky, we wouldn’t have a trillion-dollar deficit, a weakening dollar, unemployment nearing 10%, and a nervous stock market.

So your best bet is to enjoy soda while you can.