Category Archives: Taxes

What Will Push Them Over the Edge? by Jeff Thomas

Catalonia is not the only region that resents being milked by a central government. From Jeff Thomas at internationalman.com:

What Will Push Them Over the Edge?

Recently, the people of two of Italy’s most prosperous regions voted in a referendum, on whether they wished to have greater autonomy from Rome. The referendum is non-binding, but that’s not what’s most significant in the results.

What is significant is that over 95% of those who voted in Lombardy did so in favour of greater autonomy. In Veneto, the number in favour of greater autonomy was even higher, at 98%.

Roberto Maroni, president of Lombardy, said, “I now have a commitment… to go to Rome and give concrete actualization to the mandate that millions of Lombards have given me.”

It may appear on the surface that Mister Maroni intends to make an appeal for independence, but this is not what will occur. He’s a politician and won’t invite Rome to jail him for sedition. His goal will instead be to demand that a greater amount of the national income that’s generated by Lombardy and Veneto (about 20% of the total) remains within those regions.

This will not mean that he wants his people to be taxed less; his goal will be to retain a larger portion to be absorbed by the regional governments—to be in his own hands.

So much for the politicians’ agenda. But what does the referendum say about the people of the regions? Well, the extraordinarily high numbers in favour of greater self-determination demonstrate that virtually all the people in the regions have figured out that Rome is bilking them of their earnings and they’re getting pretty cheesed off.

In prosperous times, a population tends not to complain too much about being robbed through taxation. They grumble a bit, but tolerate it. However, in more stringent times, when people are finding it more difficult to make ends meet, they become more resentful of governments that are chronically both overreaching and wasteful.

Since 2008, we’ve been living in such a time, and the longer people go on without a true recovery, the more resentful they’re going to be.

Independence movements have been afoot in many countries in Europe, every state in the USA, and elsewhere on the globe, but, until recently, they’ve been minor issues, attracting primarily fringe support.

To continue reading: What Will Push Them Over the Edge?

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The Fetid Swamp of Tax Reform, by Charles Hugh Smith

Why true tax reform will never happen. From Charles Hugh Smith at oftwominds.com:

The likelihood that either party will ever drain the fetid swamp of corruption that is our tax code is zero, because it’s far too profitable for politicos to operate their auction for tax favors.

To understand the U.S. tax code and the endless charade of tax reform, we have to start with four distasteful realities:
1. Ours is not a representational democracy, it’s a political auction in which wealth casts the votes that count. Those seeking political influence over issues such as taxation place their bids in the political auction via campaign contributions and lobbying. The winner of the political auction gets favorable treatment, and everyone else ends up subsidizing the gains of the winner.
2. The wealthy pay the vast majority of federal income taxes (as opposed to payroll taxes, i.e. Social Security and Medicare), so tax cuts end up benefiting the wealthy.
In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed.
By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes.
After all federal taxes are factored in, the U.S. tax system as a whole is progressive. The top 0.1% of families pay the equivalent of 39.2% and the bottom 20% have negative tax rates (that is, they get more money back from the government in the form of refundable tax credits than they pay in taxes).
3. The unseen burden of the tax code is the complexity tax levied on small business, the self-employed and domestic corporations with no access to global tax-avoidance schemes.
4. This complexity is necessary to hide all the special favors won in the political auction. The tax code could be a few pages long: all accounting of income and expenses must conform to accepted accounting rules, and here are the tax rates on net income/earnings.
To continue reading: The Fetid Swamp of Tax Reform

Class Warfare: People Are Out For Blood, by Simon Black

We live in an age of envy that doesn’t distinguish between rightfully acquired fortune and those which were stolen or swindled (usually with the assistance of the government). From Simon Black at sovereignman.com:

Roughly two thousand years ago, the government of ancient Rome was facing a serious problem.

The tributium capitus, or poll tax, that they had imposed across their provinces was becoming unpopular.

And there was among a growing minority of Roman subjects who felt they were being forced to pay an unfair, overly burdensome, disproportionately high tax bill.

Things got so bad that there were small revolts, especially in one of Rome’s critical eastern provinces where many simply refused to pay.

Eventually the authorities were able to round up the leader of the movement– a youthful, charismatic local artisan who was brought before the provincial prefecture.

After reviewing the evidence, though, the prefecture found that the leader had actually done nothing illegal, and according to ancient texts, announced to the public:

“I have examined him in your presence and have found no basis for your charges against him. . .”

But the crowd was out for blood. They wanted the resistance leader put down for good, viewing him as arrogant and disrespectful of their values.

Plus the central government in Rome wanted to send a strong message to strike fear in everyone subverting their authority and not paying tax.

So in the end the prefecture bowed to pressure, and the resistance leader was sentenced to death.

His name was Jesus Christ.

Two thousand years later there seems to be a lot of people out for blood again.

Over the weekend we witnessed the release of the “Paradise Papers,” another gigantic leak of financial records (similar to last year’s “Panama Papers”) which shows how clients of a Bermuda law firm have legally used foreign corporate and trust structures for privacy and tax mitigation.

Among the names unearthed so far are Madonna, U2’s Bono, actress Keira Knightly, Formula 1 star Lewis Hamilton, Queen Elizabeth II, and US Commerce Secretary Wilbur Ross.

And the public is outraged.

The basis of this outrage is that rich and powerful people are ‘hiding’ trillions of dollars in offshore tax havens, places like Switzerland and the Cayman Islands.

 

To continue reading: Class Warfare: People Are Out For Blood

The Can Kickers’ Cacophony, by David Stockman

Congress and the Trump Administration are doing nothing to address the soaring national debt. Tax cuts are only partially paid for with tax increases, and spending is not being cut by even one thin dime. From David Stockman at davidstockmanscontracorner.com:

They are kicking so many cans down there in the Imperial City that the endless din of clanking and banging is getting downright cacophonous. The last minute delay in the ballyhooed GOP tax bill, for example, is going to be a real racket maker because it’s not just a one day delay—-it’s the start of a forever delay.

In a word, the GOP has lathered itself up in behalf of tax cuts costing $5.5 trillion over the next decade, but only had the (misguided) nerve to carve out a $1.5 trillion free pass (deficit add-on) in its phony FY 2018 budget resolution. We will have more to say about this yawning $4 trillion gap below, but here’s the crux of the matter.

Speaking for the GOP on both ends of Pennsylvania Avenue a month ago, the so-called Big Six framework included $3 trillion of business tax cuts alone. The latter featured three huge sugar plums eagerly sought on the K-Street/PAC corridors—–including the 20% corporate rate ($2.0 trillion), the 25% pass-thru rate for unincorporated businesses ($800 billion) and 100% first year expensing of equipment through 2022 ($200 billion).

But the GOP rank and file on Capitol Hill is just now hearing about the “payfors” and professes to be shocked(!) And unlike Captain Louis Renault in “Casablanca”, no one is going to slip them some cash if they clear the waiting room at Gucci Gulch.

That’s because any “payfors” that could make a dent in the $4 trillion hole are pure political poison. Thus, a true rollback of the 401 (k) deduction could save perhaps $500 billion over ten years, but would also trigger a massive withdrawal of campaign cash by Wall Street and the brokerage industry.

Likewise, eliminating the SALT (state and local tax) deduction entirely would save $1.3 trillion, but would send the real estate brokers, local business leaders and upper income GOP contributors into paroxysms of outrage.

So we are quite confident that most of the big “payfors” will be diluted and compromised down to a relative pittance—even before the tax bill gets out of the Ways and Means Committee.

To continue reading: The Can Kickers’ Cacophony

Breaking: IRS Admits To Specifically Targeting Tea Party Conservatives – Obama Was Going After His Political Enemies, by Alex Thomas

It took years and mammoth legal battles, but the IRS has finally admitted to targeting conservative organizations. From Alex Thomas at shtfplan.com:

The American Center for Law and Justice (ACLJ) has won a years-long legal battle against the Internal Revenue Service in which the agency admitted that it wrongfully targeted Tea Party conservatives, during the Obama Administration, specifically because of their political viewpoints.

In issuing an “apology” to the clients represented by the ACLJ, the IRS admitted that it was wrong to use the United States tax code simply because of an entity’s name. They also admitted the bombshell fact that this discrimination happened specifically because of the applicants political viewpoints. Keep in mind the fact that the mainstream media has spent years telling the American people that this didn’t happen.

In other words, outlets such as The Washington Post, CNN, and The New York Times directly lied to their readers and viewers to protect a Democratic president whose administration was openly breaking the law.

Surprise. Surprise.

On top of an admission of guilt, the IRS apology also included:

· A declaration by the Court that it is wrong to apply the United States tax code to any tax-exempt applicant or entity based solely on such entity’s name, any lawful positions it espouses on any issues, or its associations or perceived associations with a particular political movement, position or viewpoint;

· A declaration by the Court that any action or inaction taken by the IRS must be applied evenhandedly and not based solely on a tax-exempt applicant or entity’s name, political viewpoint, or associations or perceived associations with a particular political movement, position or viewpoint; and

· A declaration by the Court that discrimination on the basis of political viewpoint in administering the United States tax code violates fundamental First Amendment rights. Disparate treatment of taxpayers based solely on the taxpayers’ names, any lawful positions the taxpayers espouse on any issues, or the taxpayers’ associations or perceived associations with a particular political movement, position or viewpoint is unlawful. 

[…]

Finally, and of crucial significance, the IRS admits it targeted conservative and Tea Party groups based on their viewpoints (i.e., “policy positions”) and that such viewpoint discrimination violates fundamental First Amendment rights. This is the first time the IRS has admitted that its targeting scheme was not just “inappropriate” – as TIGTA found – but, as our clients alleged and we have vigorously and persistently argued for years, blatantly unconstitutional.

To continue reading: Breaking: IRS Admits To Specifically Targeting Tea Party Conservatives – Obama Was Going After His Political Enemies

Milton Friedman and Conservatives: Wrong on Education, by Jacob G. Hornberger

Education is far to important to give the government any part in it. It should be left to the free choices of parents and students, and the market for education that has heretofore been stifled by the government. From Jacob G. Hornberger at The Future of Freedom Foundation, fff.com:

Once upon a time, some conservatives used to call for the abolition of the U.S. Department of Education. Lamentably, conservatives today celebrate when a “free-market advocate” like multimillionaire Betsy DeVos is appointed U.S. Secretary of Education, and they get terribly excited when she speaks at conservative conferences.

Meanwhile, even while conservatives continue to pronounce their allegiance to their favorite mantra — “free enterprise, private property, limited government” — they continue to embrace not only public schooling itself but also their favorite public-schooling fix-it program, school vouchers.

Over the years, conservatives have developed various labels for their voucher program: a “free-market approach to education,” “free enterprise in education,” or “school choice.” They have chosen those labels to make themselves and their supporters feel good about supporting vouchers.

But the labeling has always been false and fraudulent. Vouchers are nothing more than a socialist program, no different in principle from public schooling itself.

The term “free enterprise” means a system in which a private enterprise is free of government control or interference. That’s what distinguishes it from a socialist system, which connotes government control and interference with the enterprise.

A voucher system entails the government taxing people and then using the money to provide vouchers to people, which they can then redeem at government-approved private schools.

Does that sound like a system that is free from government control or interference? In reality, it’s no different in principle from food stamps, farm subsidies, Social Security, or any other welfare-state program. The government is using force to take money from Peter and giving it to Paul. That’s not “free enterprise.” That’s the opposite of free enterprise.

Conservatives say that their voucher system is based on “choice” because the voucher provides recipients with “choices.” But doesn’t the same principle apply to recipients of food stamps, farm subsidies, Social Security, and other socialist programs? Sure, the recipient of the loot has more choices because he has more money at his disposal. But let’s not forget that the person from whom the money was forcibly taken has been deprived of choices. After all, after a robber commits his dirty deed, he too has more choices with the money he has acquired. His victim, on the other hand, has been deprived of choices.

To continue reading: Milton Friedman and Conservatives: Wrong on Education

Report: Renewable Energy Is Bigger ‘Scam’ than Bernie Madoff and Enron, by Thomas D. Williams

People are wising up to the fact that paying $2 dollars for $1 dollar’s worth of energy doesn’t make any sense. From Thomas D. Williams at breitbart.com:

The greatest scam being perpetrated against taxpayers and consumers is renewable energy, according to a new analysis published by the Australian, greater even than Ponzi, Madoff and Enron.

While sinking enormous financial resources into propping up renewable energy prospectors, national governments are providing no perceptible benefits to their citizens, writes Judith Sloan, a renowned Australian economist who has served on the Australian government’s Productivity Commission.

“With very few exceptions, governments all over the world have fallen into the trap of paying renewable energy scammers on the basis that it is necessary, at least politically, to be seen to be doing something about climate change,” Sloan writes, before providing readers with an avalanche of economic data to back up her assertion.

In Australia, more than 2 billion taxpayer dollars a year are funneled to renewable energy handlers by virtue of the operation of the renewable energy target and the associated renewable energy certificates, Sloan observes.

At the same time, the Australian Renewable Energy Agency “shovels out hundreds of millions of dollars annually to subsidise renewable energy companies, many of which are overseas-owned,” she states, and the Clean Energy Finance Corporation was given $10 billion in equity by the Gillard Labor government “to lend or grant money to renewable energy companies.”

Despite this enormous taxpayer “investment,” so-called renewable energy has yet to pay any dividends or to suggest it will be economically viable for the foreseeable future.

Sloan’s grim analysis of the state of renewable energy as a financial sinkhole in Australia is mirrored by other countries such as the United States.

According to Forbes, on a total dollar basis, wind and solar together get more from the federal government than all other energy sources combined, despite the fact that neither is anywhere close to self-supporting. Wind has received the greatest amount of federal subsidies. Solar is second.

Based on production (subsidies per kWh of electricity produced), however, solar energy “has gotten over ten times the subsidies of all other forms of energy sources combined, including wind,” writes energy expert and planetary geologist Dr. James Conca.

To continue reading: Report: Renewable Energy Is Bigger ‘Scam’ than Bernie Madoff and Enron