Category Archives: Taxes

Two Easy Predictions: Wealth Tax and Windfall Tax, by Charles Hugh Smith

Governments are broke and rapacious. From Charles Hugh Smith at oftwominds.com:

Looks like we need another $500 billion or so. Hum baby!

Predictions are hard, especially about the future, but two predictions are easy: 1) governments that do not yet impose wealth taxes will do so within the next five years and 2) governments will impose windfall taxes on all outsized unearned gains, from any source, anywhere on the planet.

Glancing at the chart of federal tax revenues, we note a steep increase–hum baby! Governments have financial commitments, and these never seem to decrease, they only increase.

It’s nothing personal, we just need more money. We have responsibilities and we made promises.

A few nations already have wealth taxes: for example, Norway, Spain and Switzerland. In Switzerland, the wealth to be taxed is self-reported, and the top rate is 1%. The Swiss wealth taxes account for 3.6% of tax revenue. It doesn’t sound like much but every little bit helps, right?

That 3.6% of tax revenues applied to the U.S. tax revenues equals a cool $108 billion. That’s a useful sum.

Self-reporting isn’t going to cut it once tax revenues are viewed as inadequate. Third-party reporting will be required so wealth can’t be under-reported, and the Foreign Account Tax Compliance Act (FATCA) already requires foreign entities to report U.S. account holders’ data.

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Doug Casey on Class Warfare, “Eat the Rich” Sentiment, and What Happens Next

If you have a lot of money, probably a good idea not to tell anyone about it. From Doug Casey at internationalman.com:

Class Warfare

International Man: Politicians looking for ways to finance their extravagant spending increasingly complain that the wealthy aren’t paying their “fair share.”

It’s a trend in motion that is accelerating. This rising anti-wealth sentiment seems to be taking the US into dangerous territory.

Our friend Rick Rule once said, “Eat the rich? Prepare to starve.”

What is your take?

Doug Casey: Once upon a time, government apologists liked to say that the rich had to be taxed in order to help the poor. That’s no longer the case. Nobody in America is starving. Even poor people have flat-screen TVs, air conditioning, and refrigerators. The poor live better than medieval royalty.

What’s going on is the institutionalization of envy, a terrible vice. It’s different from jealousy.

Jealousy says, “You have something that I want. I want one too. Give it to me.”

Envy says, “You have something that I want. If I can’t have it, I’ll destroy it, so you can’t have it either.” Envy is the moral flaw that underlies all socialist economic theories. Socialist feelings and morality underly the economic lies, race hatred, class hatred, sex antagonism, and political polarization tearing the US and the West apart. Envy and socialism have become secular religions. The country has been divided into two different and mutually antagonistic worldviews.

It’s a question of what’s right and wrong, what’s good and evil. It’s not a question of economics, about what’s more productive. This is a much more serious division. It amounts to a religious war between the Left, who want to overthrow and transform society, and the Right, who want to more-or-less maintain traditional values, but lack any real ideology.

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Inflation: State-Sponsored Terrorism, by Jeff Diest

Inflation is theft, which makes it criminal. It takes money from the productive and stealthily transfers it to the government and its cronies. From Jeff Diest at mises.org:

I. Introduction

Remember the quaint old days of 2019? We were told the US economy was in great shape. Inflation was low, jobs were plentiful, GDP was growing. And frankly, if covid had not come along, there is a pretty good chance Donald Trump would have been reelected.

At an event in 2019, my friend and economist Dr. Bob Murphy said something very interesting about the political schism in this country. He said: If you think America is divided now, what would things look like if the economy was terrible, if we had another crash like 2008?

Well, we might not have to imagine such a scenario much longer.

If you think Americans are divided today, and at each other’s throats—metaphorically, but more and more literally—imagine if they were cold and hungry!

Imagine if we had to live through something like Weimer Germany, Argentina in the 1980s, Zimbabwe in the 2000s, or Venezuela and Turkey today? What would our political and social divisions look like then?

Ladies and gentlemen, we live under the tyranny of inflationism. It terrorizes us, either softly or loudly. I suspect it will get a lot louder soon.

As the late Bill Peterson explained, “Inflationism, in today’s terms, is deficit-spending, deliberate credit expansion on a national scale, a public policy fallacy of monumental proportions, of creating too much money that chases too few goods. It rests on the ‘money illusion,’ a widespread confusion between in­come as a flow of money and income as a flow of goods and services—a confusion between ‘money’ and wealth.”

Inflationism is both a fiscal and monetary regime, but its consequences go far beyond economics. It has profound social, moral, and even civilizational effects. And understanding how it terrorizes us is the task today.

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Biden’s IRS Auditor Army Will Disrupt Economic Recovery, by Julio Gonzales

The inevitable target of Biden’s army will be small businesses and their owners. From Julio Gonzales at realclearpolitics.com:

Biden’s IRS Auditor Army Will Disrupt Economic Recovery

(AP Photo/Susan Walsh)

The Biden administration’s decision to recruit nearly 90,000 new IRS auditors could have a chilling effect on small businesses and economic growth, permanently impeding our nation’s ability to recover from its current economic malaise.

As part of the misleadingly titled “Inflation Reduction Act,” President Biden and his allies secured roughly $80 billion in new IRS funding to hire 87,000 auditors. This is bad news for the American economy.

One of the many ways that small businesses can succeed and help grow the economy is by taking advantage of tax credits and deductions which leave more money in the hands of owners to reinvest in their businesses and offer more competitive pay for their employees.

But with the looming threat of a veritable army of auditors being mobilized by the Biden administration, it is highly likely that many small businesses will decline to seek the benefits of those credits and deductions, lest they face the costly headache of aggressive audits from the IRS. In fact, my firm, Engineered Tax Services, specializes in working with businesses to understand and utilize those credits and deductions, and some of my firm’s small business clients have told me this is the case.

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The US is about to go full Louis XVI, by Simon Black

The U.S. government is broke and the IRS will be further turning the screws on American taxpayers. From Simon Black at sovereignman.com:

On September 3, 1783, after nearly a year of excruciating back-and-forth negotiations, all sides had finally gathered together in Paris to sign a historic peace agreement.

It was a pretty important peace deal. Because the Treaty of Paris, as it is now known, is what formally ended the American Revolution, and when Great Britain legally recognized the United States as an independent nation.

The treaty was signed in Paris because France had been a major supporter of the US war effort. And just as soon as the ink was dry, French King Louis XVI ordered his finance minister to prepare an accounting of exactly how much money France had spent on US independence.

The result was nothing short of astonishing—more than 1 billion livres.

To put that number in context, the French Treasury’s entire annual revenue only amounted to around 200 million livres.

So they had basically sunk FIVE YEARS worth of their tax revenue fighting someone else’s war.

Granted, Britain was still one of France’s main rivals. And the French did not care for British King George III.

But the American War was simply too costly, and France had already been on very shaky financial footing well before this point.

Louis XIV had nearly bankrupted the country a century before. His successor, Louis XV, had to drastically slash expenses and could barely hang on financially.

Then, in 1774, just prior to the American Revolution, Louis XVI became king at a time that France was rapidly deteriorating.

You’d think that with so much economic turmoil at home that he would have focused on his own national interests… and, in lieu of money, weapons, and ships, he would have instead sent the royal thoughts and prayers to America.

But no. Lucky for the United States, Louis XVI courageously fought the American Revolution down to the very last French taxpayer.

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IRS Hiring Spree Is The Biggest Police-State Expansion In US History, by David Harsanyi

The government desperately needs your money, and it doesn’t care how it gets your dollars. From David Harsanyi at The Epoch Times via zerohedge.com:

The Democrats’ new reconciliation bill isn’t just going to be the largest-ever expansion of a government agency. It’s going to be the largest expansion of the domestic police state in American history. Only a statist could believe that a federal government, which already collects $4.1 trillion every year—or $12,300 for every citizen—supposedly needs 80 battalions of new IRS cops.

White House press secretary Karine Jean-Pierre answers questions during the daily briefing at the White House in Washington on Aug. 5, 2022. (Win McNamee/Getty Images)

The average American has less reason to be concerned about cops with guns—though the IRS is looking for special agents who can “carry a firearm and be willing to use deadly force, if necessary”—than they do bureaucrats armed with pens who are authorized to sift through their lives. If you pay your taxes you have nothing to worry about, Democrats claim. But most law-abiding citizens know they have something to fear from a state agency that doesn’t concern itself with your due process, has no regard for your privacy, and is empowered to target anyone it wants without any genuine oversight.

And, please, spare us this nonsense about the IRS expansion focusing exclusively on “high earners.” White House press secretary Karine Jean-Pierre promised that the IRS wouldn’t engage in new audits of anyone making under $400,000—a claim she has no authority to make and could not possibly predict even if she did. Connecticut Sen. Chris Murphy also said that the bill was passed to stop an “epidemic of tax cheating amongst the millionaires and billionaires” and promised that “audit rates won’t increase for anyone making under $400K.”

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Tax Freedom in Puerto Rico, by John Stossel

If you move to Puerto Rico you will pay no federal income tax and only Puerto Rico’s 4 percent tax. From John Stossel at townhall.com:

Tax Freedom in Puerto Rico

Source: AP Photo/Carlos Giusti

Want to pay no federal income tax?

Move to Puerto Rico.

Really. If you move to the island, you can legally pay none. There’s also no capital gains tax.

You just have to give 4% of your income to Puerto Rico.

The tax break was started by a Puerto Rican politician who’d watched years of high taxes fail to improve life on the island. He decided to try something different.

Obviously, it’s a popular idea, when people learn about it.

Tens of thousands have applied for the exemption, and applications tripled last year.

YouTube star Logan Paul moved his show from California to Puerto Rico to take advantage of the tax deal.

Investor Peter Schiff says, “I did it for the obvious benefit of being able to keep most of what I own … It’s too bad that Puerto Rico didn’t do this decades ago. They wouldn’t be in the economic trouble they are today.”

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Is the IRS Coming for You? By MN Gordon

One way or another the government is coming after your income, your wealth, your freedom, and eventually, your life. From MN Gordon at economicprism.com:

This week, while you were busy working, President Biden signed what he says is, “one of the most significant laws in our history.”

It’s called the Inflation Reduction Act (IRA) of 2022.  The name implies it will reduce inflation.  How pumping $750 billion into preferred sectors of the economy will reduce inflation is unclear.

But what is clear, and as confirmed by the Congressional Budget Office, is that the bill will force working-class Americans to pay an estimated $20 billion more in taxes over the next decade.

For the Biden administration, this is all part of its plan to consolidate power, push its socialist agenda, bury workers with crushing taxes, and destroy the middle class with soaring inflation.  The Build Back Better Act may have failed.  But the IRA, which cobbles together much of the trash from BBB, is now federal law.

We’ll have more on this in just a moment.  But first, some context is in order.

Where to begin…

Money provides the means for trading available goods and services.  If a person wants to increase their portion of goods and services, they must first increase their productivity.  They can do this in one of two ways.  By working harder.  Or by working smarter.

In an economy with stable money, those who gripe about not having enough money are, in essence, pointing out they should be more productive.  But in an economy with unstable money, like most economies of the world circa 2022, not having enough money can be a function of where your place is on the money trough…

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Trump Voter Excited To See Whether He’ll Get Raided By FBI Or Gunned Down By IRS

From The Babylon Bee:

Article Image

DENVER, CO — Local man Walter Bishop is reportedly excited to find out whether he will soon be raided by the FBI or gunned down by the IRS. The longtime conservative is reportedly ecstatic to show people how right he was about the slippery slope he’s been warning everyone about.

“This is terrific!” he told next-door neighbor Phil Astrototop. “I wonder which it will be — a raid or an epic showdown with IRS agents.”

Phil, a moderate Democrat disapproved of Bishop’s oddly gleeful attitude. “Nothing’s going to happen, man. It’s not like you’re breaking the law. Don’t do anything wrong and the government won’t bother you.”

Bishop laughed. “That’s what you think! I voted for Trump. I guarantee they’re coming for me. You’ll see, I’m right!”

Friends and family members of Walter Bishop are concerned that his optimistic anticipation of a pessimistic event may be a mental disorder.

“We’re really worried about him,” said Bishop’s wife. “Also he’s kind of scaring me. I don’t want to be raided by the FBI! They’ll see my unmentionables!”

At publishing time, the home of Phil Astrototop was raided by a team of federal agents working in conjunction with the IRS but, because Astrototop is a known Democrat, Walter Bishop was unable to gloat that he had been “right all along.”

Former IRS Whistleblower Says Middle Class Americans Will Be Targeted Under Inflation Reduction Act, by Katabella Roberts

The IRS is tasked with shrinking an already shrinking middle class even more. From Katabella Roberts at 2ndsmartestguyintheworld.substack.com:

The IRS is an unconstitutional “Federal” agency that terrorizes America.

A detail of the Internal Revenue Service (IRS) headquarters building is seen in the Federal Triangle section of Washington, on April 27, 2020. (Chip Somodevilla/Getty Images)

A former Internal Revenue Service (IRS) whistleblower has said that the Democrats’ Inflation Reduction Act (IRA) will see the government target middle-income Americans with increased scrutiny and audits.

William Henck previously worked as a lawyer for the IRS for 20 years until 2017, when he was terminated for allegedly revealing sensitive information to the media about how the IRS had reportedly failed to identify a multi-billion-dollar corporate tax credit scheme involving a source of energy known as burning pulp byproducts, or black liquor.

Speaking to Fox Business, Henck disputed claims by the IRS and other officials who have said that increased funding for the agency under the IRA, which is set to be signed into law by President Joe Biden this week, would only lead to more audits for wealthy millionaires and billionaires and large corporations.

“The idea that they’re going to open things up and go after these big billionaires and large corporations is quite frankly [expletive],” Henck said in the interview on Aug. 15. “It’s not going to happen. They’re going to give themselves bonuses and promotions and really nice conferences.”

“The big corporations and the billionaires are probably sitting back laughing right now,” he said, adding that it was “insane” to double the IRS budget.

Henck also said he believes that the agency will go after businesses that don’t have enough money to hire Washington lobbyists.

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