by | ARTICLES, BLOG, HYPOCRISY, OBAMA, POLITICS, TAXES
A fresh Op-Ed this morning by IRS head Steven Miller reveals the lengths to which the IRS and the White House are going to spin the on-going scandal.
“The agency was simply trying to manage the explosive growth in applications for 501(c)(4) status that started pouring in to the IRS in 2010. The Internal Revenue Service recognizes that we should have done a better job of handling the influx of applications by advocacy groups,” Miller wrote.
We saw the shoots of this line of thinking yesterday both from David Plouffe and Nancy Pelosi. Trying to suggest that all these groups that have sprung from the Citizen’s United ruling clogged up the IRS, who was then somehow reduced to scrutinizing groups in order to manage this problem. If only Citizen’s United could be overturned!
David Plouffe, former WH Adviser observed on Twitter “What IRS did dumb and wrong. Impt to note GOP groups flourished last 2 elections, overwhelming Ds. And they will use this to raise more $.”
And Nancy Pelosi was a bit more to the point:
“We need accountability at the IRS, of course, as to how this happened. But we’ve really got to overturn Citizens United which has exacerbated the situation. So I’ve called for DISCLOSE, that’s a dare, disclose… I’ve been calling for it for over a year, disclose, who are these people? Transparency, amend the constitution to overturn Citizens United, reform the political system, let’s take money down as far as possible. Public financing of campaigns, clean campaigns and empowerment of people because people feel very left out of the loop“.
However, the organizations who were subject to additional scrutiny were applying for either 501(c)3 or 501(c)4 or others, as revealed in this timeline put out by the WSJ on May 13th. but the apologists are counting on citizens to not know the different. By focusing on the 501(c)4 side of it, they can focus on calling out and blaming Citizens United.
Now back to Steven Miller. Further down his Op-Ed, he writes
“Mistakes were made, but they were in no way due to any political or partisan motivation,” he wrote. “We are — and will continue to be — dedicated to reviewing all applications for tax-exempt status in an impartial manner.”
Except, of course, when it comes to the Barack H Obama Foundation.
I have not found this elsewhere, so you’re seeing it here first.
Let’s go back to May 8, 2011, right in the thick of the IRS targeting activity. The NY Post writes a revealing piece about the Barack H Obama Foundation, run by Obama’s half-brother Malik:
“President Obama’s half-brother runs an off-the-books American charity that claims to support poor Kenyans — but it lies about its federal status and no one knows how it spends its money.” … “Malik started his charity the year his brother ran for president. The foundation claims to be a tax-exempt, federally recognized nonprofit. It is not. Nor are there any filings of its expenditures, which the IRS requires of larger charities. Alton Ray Baysden, a former State Department employee at whose Virginia home the charity was founded in 2008, admitted the organization has not even applied for tax-exempt status”
Oh and incidentally, the National Legal and Policy Center, a Washington, DC, watchdog group, made a formal complaint to the IRS and US Post Office about the Foundation that prior week in the beginning of May 2011.
The result? This sunlight on the foundation means that the The Barack H Obama Foundation hurriedly applied for and received tax exempt status in an unprecedented 30 days. The letter of their approval is currently available on the foundations’ website.It was signed Lois Lerner, the senior IRS in the middle of this scandal, of all people. On top of it, the status was made retroactive to December 2008.
See here:
Barack H Foundation Letter For Tax Exempt Status in June 2011
The plot thickens, as the apologies ring hollow.
UPDATE: Thanks Daily Caller for “borrowing” from information regarding the Obama Foundation in my post this morning (written at 9:45 am) for your post at 5:00pm. It was also posted on Canada Free Press and Red State this morning before anyone else wrote on it. Glad I could help (without receiving credit).
by | ARTICLES, BLOG, HYPOCRISY, OBAMA, POLITICS, TAXES
(h/t) pjmedia
With all the reports coming in fast and furiously from different news agencies, here’s a pieced-together timeline of events. The information below is a timeline of events taken from numerous media outlets with their links provided.
Early 2010:
WSJ: The report [Inspector General’s report due out this week] indicates that in 2010 and 2011, some IRS workers weren’t just singling out groups because their names contained certain words, as IRS officials suggested on Friday [May 12], but appeared to be probing for indications of political interests or leanings.
March 2010:
Washington Post: The IRS targeted We the People, Take Back the Country, and 9/12, a group founded by political commentator Glenn Beck, starting around March 2010, according to a TIGTA timeline provided to congressional staff.
Also in 2010:
Jewish Press: the passionately pro-Israel organization Z STREET filed a lawsuit against the IRS, claiming it had been told by an IRS agent that because the organization was “connected to Israel,” its application for tax-exempt status would receive additional scrutiny. This admission was made in response to a query about the lengthy reveiw of Z STREET’s tax exempt status application.
In addition, the IRS agent told a Z STREET representative that the applications of some of those Israel-related organizations have been assigned to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies”
March 2011:
WaPo: The report is being prepared at the request of the House Oversight and Government Reform Committee, which asked in March 2011 for an audit of the IRS’s tax-exempt unit amid complaints from conservative groups who were seeking tax-exempt status.
Mid 2011:
WSJ: The investigation also revealed that a high-ranking IRS official knew as early as mid-2011 that conservative groups were being inappropriately targeted—nearly a year before then-IRS Commissioner Douglas Shulman told a congressional committee the agency wasn’t targeting conservative groups.
June 2011
WSJ: According to the report, by June 2011 some IRS specialists were probing applications using the following criteria: “issues include government spending, government debt or taxes; education of the public by advocacy/lobbying to ‘make America a better place to live’; statements in the case file criticize how the country is being run.”
June 29, 2011
AP: 2011: Lois G. Lerner, who heads the IRS division that oversees tax-exempt organizations, said last week that the practice was initiated by low-level workers in Cincinnati and was not motivated by political bias.
But on June 29, 2011, Lerner learned at a meeting that groups were being targeted, according to the watchdog’s report. At the meeting, she was told that groups with “Tea Party,” `’Patriot” or “9/12 Project” in their names were being flagged for additional and often burdensome scrutiny, the report says.
July 2011
WaPo The IRS switched to more generic search criteria in July 2011 due to concerns from senior agency officials, the timeline said.
and
WSJ The report’s timeline indicates that the criteria were changed to be more neutral in July 2011 after Ms. Lerner “raised concerns.” The criteria for heightened scrutiny continued to evolve over the next year or so, even as complaints from tea-party groups—and questions from GOP lawmakers—mounted over IRS inquiries to various groups about their activities.
Late 2011 – Mid 2012
WaPo: The IRS made no mention of targeting conservative groups in five separate responses to congressional inquiries between Nov. 18, 2011, and June 15, 2012, according to the TIGTA timeline.
January 2012
Reuters But then [instruction] changed again in January 2012 to cover “political action type organizations involved in limiting/expanding government, educating on the constitution and bill of rights, social economic reform/movement,” according to the findings contained in a Treasury Department watchdog report”
March 2,2012
NRO reports on the American Center for Law and Justice’s (ACLJ) interaction with tea party groups which had been receiving missives from the IRS to find out more about their activities
March 2012
WSJ The IRS also said the report reflects that “IRS senior leadership was not aware of this level of specific details” at the time of a March 2012 hearing where Mr. Shulman denied any targeting of conservative groups. Mr. Shulman, who no longer works for the IRS, declined to comment”
April – May 2012
WSJ Letters from Ms. Lerner in April and May 2012 responding to questions by Republican lawmakers made no mention of the problems that had surfaced in the IRS unit.
According to the draft report, on April 24 and 25 of last year, officials in Ms. Lerner’s office were reviewing “troubling questions” that had been asked of organizations, including “the names of donors.”
Ms. Lerner’s April 26 {2012} letter to Mr. Issa, the chairman of the House Oversight and Government Reform Committee, said that “there are instances where donor information may be needed…such as when the application presents possible issues of…private benefit.”
May 2012
Reuters The criteria for scrutiny were revised again to cover a variety of tax-exempt groups “with indicators of significant amounts of political campaign intervention (raising questions as to exempt purpose and/or excess private benefit),” according to a TIGTA timeline included in the findings.
Other Factoids:
WaPo: Lerner said that about 75 groups were selected for extra inquiry — including, in some cases, improper requests for the names of donors, but added that the targeting was not driven by partisan motives.
AP: The report also said that the IRS asked “unnecessary questions” of conservative groups, according to the aide.The IRS’ Lerner said that about 300 groups were singled out for additional review, with about one-quarter scrutinized because they had “tea party” or “patriot” somewhere in their applications. She said 150 of the cases have been closed and no group had its tax-exempt status revoked, though some withdrew their applications.
The Anatomy of an IRS Process:
The Richmond Tea Party has been blogging about their interactions with the IRS since they began their IRS status request on December 28, 2009. Included in their reporting has dates and document links. You can read the overview here: and the chronicles of the Richmond Tea Party here
As more information comes out, I will update this timeline accordingly.
UPDATE: David Plouffe, former WH advisor, suggests: “What IRS did dumb and wrong. Impt to note GOP groups flourished last 2 elections, overwhelming Ds. And they will use this to raise more $” REALLY?s
FLASHBACK: Obama jokes in 2009 about the IRS auditing people — and a thoughtful responsive essay in the WSJ and a chilling prophecy: Should the IRS come to be seen as just a bunch of enforcers for whoever is in political power, the result would be an enormous loss of legitimacy for the tax system.” Indeed.
by | ARTICLES, ECONOMY, NEW YORK, POLITICS
In a twist of irony, “Big Government” Bloomberg has admitted that NYC is at the edge of a fiscal precipice.
“There is no practical ways to pay our workforce given the current environment, current tax structure, current other obligations we have more than what we have been doing, with the possible exception of dramatically raising taxes”.
Bloomberg points to public service unions as being among the biggest roadblocks to any meaningful fiscal health in the city.
Currently in NYC, most of the unions are refusing to negotiate contracts right now. This is completely legal. If the contract is not re-negotiated, the current terms continue. The unions are trying to hold out for more money until a new mayor is elected, in the hopes that a new mayor will cave to their demands. One thing Bloomberg wants — which is met with hostility — is to “force union workers to pay part of the health care costs”. Imagine that! “Unless we do something those expenses will bankrupt us,” Bloomberg said.
Additionally, when Bloomberg mentions “obligations”, he’s talking largely about the pension system.
Living in NYC, I am no fan of Bloomberg’s at all. I do want to give him a little (tiny) credit — he’s been sounding the alarm about this for the past few years. Even back in 2010, Bloomberg told CrainsNY that
“city pension funds have set unrealistically high assumed rates of return on investments, at 8%, which may require spending more than has been budgeted for retirement benefits…The pension system itself provides defined benefits that can’t be reduced under guarantees the Legislature has placed in the state constitution. While it permits new, less-expensive benefit tiers for future employees, savings wouldn’t be realized for 10 or 15 years”
The New York pension system is out of control. In addition to the extravagant, irresponsible and under-reported negotiated levels of benefits, there is an additional characteristic of the system that is never talked about. There is a huge break that goes to New York retirees; anyone who gets a retirement pension from New York State, or any locality or agency (teacher, firefighter, etc) pays no city or state income tax on that pension money. This hearkens back to the days when New York workers were so underpaid that this benefit was warranted.
It should be noted that nearly a decade ago, that provision of New York state law was declared federally unconstitutional. It was determined that New York state could not exclude federal retirees from the tax exemption. The courts gave New York two options: make New York government pensions taxable, or add federal workers to the list of non-taxable agencies. Of course, New York chose the latter, thereby adding to the state budget deficits.
Even though historically, public sector employees earned less than what those skills would command in the private sector, that is clearly not the case today. Study after study has shown that public sector compensation – which includes retirement pensions – has steadily outpaced its private sector counterparts in recent years. New York is among the worst offenders.
This state of affairs must be reversed. Allowing the exempted retiree pensions to be taxed the same way other retiree pensions would accomplish two goals: 1) lessen the compensation disparity with private sector employees, and 2) severely reduce the New York budget deficit by providing additional revenue to the state.
But it won’t happen. Too many people are entangled in the system as it is and don’t want to give up their tax-free benefit. And with the unions unwilling to budge on anything with Bloomberg, the likelihood that any real reform will take place — be it pension reform, benefit reform, or anything where the public service union employee might have to pay a little more — is very remote.
How is NYC going to afford all the tsunami it has created? Bloomberg warns that taxes could go up 50% if the unions are given what they want once a new Democrat mayor is elected. For high income earners, federal/state/local taxes combined already total 54%! More than half of your income going to the government. This is legal plunder.
Frederic Bastiat characterized “legal plunder” as a “fatal idea” in “The Law”. He wrote, “Imagine that this fatal principle has been introduced: Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few”
and also this:
“Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism”.
Sounds a lot like NYC. It is running out of other people’s money. Of course, Bloomberg never mentions cutting govenment spending and waste as a dent in the abyss, but that’s a whole other matter. The current fiscal trajectory is unsustainable. Higher taxes are unsustainable too. What happens when a Democrat once again gets elected as mayor, and what happens when the union negotiations begin in earnest again? The people of New York City have no idea about the financial mess that will inevitably hit them.
by | ARTICLES, ECONOMY, OBAMA, POLITICS
Four years without a budget — it’s delicious!
April 29, 2013 marks four years without a true operating budget for our country. 1461 days and running. In the realm of budget history, April 29 is an historic day.
First, an interesting juxtaposition exists between April 29, 1909 and April 29, 2009. On April 29, 1909, the world’s biggest Superpower — Great Britain — introduced the “People’s Budget”, which is famously noted for being the first budget in the history of Britain with the “expressed intent of redistributing wealth” among the British people. A century later, on April 29, 2009, the world’s biggest Superpower — the United States — passed its last operating budget, the first budget in the history of the United States with the expressed intent to run a trillion dollar deficit.
Back in Great Britain, it took both a full year and the threat of adding additional Liberal “peers” (seats) in Parliament by the British King to garner enough votes in Britain to actually pass the “People’s Budget”. This ultimately succeeded exactly a year later on April 29, 2010. Winston Churchill’s biographer observed that this budget, which Churchill supported, was a “revolutionary concept”.
Here in the United States, it has taken Congress a full four years of continuing resolutions, Supercommittees, Fiscal Cliffs, Sequestrations and trillion dollar deficit spending, and still we have failed to pass a new budget for the people of the United States.
Of course, there have been budget attempts. President Obama, for his part, submitted a budget late to Congress every year except for 2010. His last two budgets prior to this year’s submission, however, were so outrageous that not even one Democrat from his own Party either year would sponsor or vote for his budget proposals.
In 2010, the Democrat-led Senate chose not to offer their budget plan on the Senate floor. The GOP-led House of Republicans passed a budget for $1.2 trillion.
In 2011, the GOP-lead House passed a budget for FY2012, cutting $6 trillion in comparison to Obama’s budget, which failed 0-97 in the Senate. The Senate did not offer their own budget that year. Senate Majority Leader Harry Reid said that would be “foolish”, while Senator Schumer remarked ““To put other budgets out there is not the point.”
In 2012, the GOP-lead House passed a budget for FY2013, while Senate Majority Leader Harry Reid announced in February that the Senate would not consider a budget yet again. The House this time voted on President Obama’s $3.2 trillion budget, which failed 0-414.
Now in 2013, both the GOP-lead House and the Democrat- led Senate passed their own budgets for FY2014 (the first for the Democrats in four years) President Obama presented his budget 2 months late on April 10, totaling $46.5 trillion over the next 10 years without ever balancing. It is also noted for even more taxes on the wealthy to pay for more social programs, a generous helping of wealth redistribution. But nothing has been agreed upon by Congress.
This past Saturday, President Obama described the “pain” of the current operating scenario from sequestration, and further urged,
“There is only one way to truly fix the sequester: by replacing it before it causes further damage…A couple weeks ago, I put forward a budget that replaces the next several years of these dumb cuts with smarter cuts; reforms our tax code to close wasteful special interest loopholes; and invests in things like education, research, and manufacturing that will create new jobs right now.”
Sounds similar to the threats of the British King used to pass the “People’s Budget”.
So here we are, 4 years without an operating budget for our nation. We also now consistently have yearly, trillion dollar deficits on top of the additional, higher taxes. Many will likely observe that — to borrow from their UK counterparts a century ago — this budget status, this new modus operandi for the United States is also a “revolutionary concept” for the land of the free and the home of the brave.
by | ARTICLES, ECONOMY, OBAMA
John Steele Gordon’s recent Op-Ed in the WSJ opened with following observation: “The question of how to fairly and equitably tax capital gains has been a political problem since the modern personal-income tax was adopted in 1913”. Being a business/financial historian, he gives an adequate overview of the history of capital gains and how it has reached its present state. But because he is not an economist or CPA, he disingenously presents a one-sided treatment of the issue of capital gains and “carried interest” without actually exploring the merits of the tax. The result is that Gordon sounds like sour grapes on the wealthy and ultimately, he is wholly unable to answer his own question.
Gordon puts forth the notion that “carried interest” is a “cause of much recent controversy”. This much is true, in that the recently defeated Baucus/Grassley bill was attempting to “fix” carried interest because of a seemingly unfair low-tax capital gains income rate.
This is true. But so what? It’s not as though the income isn’t from capital gains. If the law was changed so that the operators were taxed at ordinary income only, it wouldn’t get rid of those gains — it would simply mean that the investors get the benefit of the capital gains lost by the operators. This fixes nothing.
Ultimately such a change, which is again being explored in Obama’s proposed budget, will merely shift the tax benefit from the operators to the investors. This takes a tax break away from people who are working for a living and gives it to millionaires who are just investing – pure hypocrisy from liberals who wish to inflict additional taxes on the wealthy at every step. It make compensation deals for hedge fund operators a bit more complicated (i.e. requiring more assistance from accountants), but the amount of compensation stays revenue neutral.
Therefore, it takes a whopping dose of either incompetence or disingenuousness from Gordon and other carried interest critics to look at the hedge fund industry and proclaim that the hedge fund operator “carried interest” is the problem that needs to be addressed.
by | ARTICLES, ECONOMY, OBAMA
Peter Ferrara pens a fantastic Op-Ed in Forbes this morning. He documents the myriad inaccuracies claimed by the Obama Administration regarding his new budget, the staggering amount of spending contained therein, and the additional taxes to be levied. He also does some cost comparison to Ryan’s budget and dispels the myth of the tax cut vs tax credit, (a point I have made many, many times as a CPA), and discusses the problems with Obama’s treatment of entitlement reform.
Some of the highlights include:
- No reduction in spending, even net reduction from expected increase in spending.
- Cancels sequestration
- “Obama’s budget proposes to spend $46.5 trillion overall over the next 10 years, even more than the Senate Democrat budget, the highest government spending in world history
- “Obama’s budget also proposes $1.1 trillion in additional tax increases, on top of the $1 trillion in tax increases already going into effect this year under Obamacare, and the $600 billion in tax increases from the expiration of the Bush tax cuts for them in January”
- Raises taxes on the middle class
- The “Buffett Rule” doubles the top capital gains tax rate from when Obama entered office — making it the 4th highest rate on the globe
- Explains the difference between tax credits and tax cuts — and how most of Obama’s so-called “cuts” are credits, which is government spending run through the tax code.
- “His own budget admits that after 10 years, the deficit would still be $439 billion, still about the highest in history before President Obama. Congressman Paul Ryan’s House Republican budget, in sharp contrast, would balance the federal budget within 10 years, with no tax increases, as scored by CBO”.
- “President Obama’s budget claims to reduce federal deficits by $1.8 trillion over the next 10 years. But that only results from calculating the effect on deficits from an “adjusted baseline” used by the Obama budget, and not the CBO baseline”.
- “Obama’s budget assumes a suddenly booming economy to result from these policies, with real GDP growth in 2016, the end of his second term, at 3.6%, more than four times the average of his first term”
- He assumes that there will not be another recession within the next 10 years
- Obama budget will “only reduce Social Security spending increases by one-fourth of one percent. Even with Obama’s “reform,” his own budget projects Social Security spending to soar over the next decade by 85%, from $768 billion last year to $1.427 trillion in 2023.
So what is the point of the President issuing a budget proposal now?
The point is to simply posture for all those low information, Twitter voters in the 2014 elections, who will hear only from all the Democrat Party propagandists at the New York Times, the Washington Post, and MSNBC and brethren. They will hear only about President Obama’s “spending cuts,” his grand, compromising, entitlement reforms, and how he is fighting for the middle class, with declining median incomes throughout his Administration, for the poor, with record, soaring poverty, and for “equality,” even as inequality has actually risen throughout his Administration. Is this generation of Americans in the process of proving America’s more than 200 year experiment with democracy a failure”
Ferrara analysis is spot on. I urge you to read the piece in its entirety.
by | ARTICLES, BLOG, ECONOMY, OBAMA, POLITICS
There was a lot of discussion this past weekend on the Sunday talk show circuit regarding the March Jobs Report released last Friday. Only 88,000 jobs were added in March. Compared to February, which added 268,000 jobs, this is a 180,000 drop. Actually, more like a plummet: economists had figured more than twice that number would be added. However, this number was the lowest jobs addition since in nine months (June 2012).
Why was this one so terrible? The pundit debate this weekend was puzzled and trying to discern the cause — Was it sequestration? The 2% payroll tax? The weather? Other? Why this anomaly when prior reports of the last few months were good. (Translation: how do we spin this atrocity?)
Here’s the truth. We haven’t had a good jobs report in nearly 5 years.
Yes, we are adding jobs, but they are not enough. We are barely adding enough jobs to cover the natural population growth. That is currently calculated (for this month) to be roughly 106,000 jobs in order to keep pace with population. In fact, this most recent report didn’t even cover that.
Yes, we are going down in unemployment (from 7.7% – 7.6%)– but not because we are adding jobs. It’s because less people are actively looking for a job. The Labor Department noted that 496,000 Americans stopped working or looking for work. That’s nearly half-a-million in one month.
This jobs report just compounds nearly 5 years of Obama’s policies. From Obamacare burdens, to increased regulation, to higher taxes, we are no where near a recovery, and really haven’t been.
If you are interested in a decent jobs calculator, the Atlanta Fed has a neat little one set up that gives you all kinds of data, percentages, etc in a multitude of categories. You can click here to play with it.
For instance, if you wanted to get the unemployment rate down to 6% over the next 12 months (a year to achieve this rate), the average monthly change in payroll employment needed to achieve the target unemployment rate would be … 303,141 jobs a month. When was the last time those numbers were consistently that high? Years…
As you can see, We haven’t been there with job creation in a long time. With Obama’s policies continuing to undermine our country and small businesses, the recovery will be continue to be excruciatingly slow and disappointing.
Crossposted at alanjoelny.com
by | ARTICLES, BLOG, FREEDOM, OBAMA, TAXES
In another class-warfare move, The Hill reports on the latest Obama gimmick: Obama’s budget includes a cap on IRAs and other retirement accounts.
The White House apparently has a problem with how much money might be in your retirement account(s).
The senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”
The administration official then proceeds to define their level of reasonable retirement: $205,000/year, or around $3 million. Tax-deferred retirement accounts — like IRAs — will be prohibited from containing more than that.
The government is just salivating over the thought of tax-deferred money just sitting around. By capping the amount allowed in such an account, it keeps money from being deferred (hint: taxed now) so it can go directly in the government coffers. “The proposal would save around $9 billion over a decade, a senior administration official said, while also bringing more fairness to the tax code”.
So, what’s really going on?
$9 billion over a decade. That’s $900 million in revenue a year for 10 years. When that amount is checked against the more than $1 trillion in deficit per year the last several years, the suggestion that capping retirement accounts is part of a grand plan to reduce the deficit is insulting.
It’s not about deficit reduction. It’s about class warfare and need. The White House cites this measure as a way to bring more “fairness” in the tax code. Fairness? Restricting any American taxpayer how much money they can save for retirement is not fair. Pre-determining for any American taxpayer what is “needed to fund reasonable levels of retirement saving” is not fair.
They use the word need to get what they want. William Pitt the Younger sagely put it, “Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.”
So it’s not about deficit reduction and it’s not about any real fairness either. It is about a body politic with a rapacious appetite. First it determines your needs, and then goes after the wealthy because the wealthy have what it needs (money for more spending).
As I have written before, the question of additional taxes on the wealthy is really a liberty and equity issue, impinging on the very entrepreneurial environment that made our country great. At the heart of any monetary decisions should be free will, not free money (for the government).
In a free country such as ours, it is entirely my judgment as to whether or not I want to work hard and try to earn a lot of money (or not), and/or save my money (or not). It is unequivocally immoral that our government – or any government – should feel it has the place and authority to come along after I earned my success and basically declare that because I have done well for myself, I should have to now pay more to that government. This is legal plunder.
Why should I, who have proven myself to be successful (according to the government) have to give my success over to people who have proven to grossly mismanage our country’s finances?
This is a true and concerted effort to keep the wealthy less wealthy. It a disincentive against saving and a punishment for success. Why bother to work hard, to be self-sufficient, if the government can potentially decide, willy-nilly, that it needs more money than you?
by | ARTICLES, ECONOMY, HYPOCRISY
Obama continuously tells us he has made jobs a priority. ”I will not rest until everyone has a job, a good wage, and benefits.” -Barack Obama, July 8, 2010.” So how does this assertion square with the revelation that Obama’s Jobs Council has not met in a year? (more…)
by | ARTICLES, ECONOMY, POLITICS, TAXES
So, in the cloak of night, while the rest of the nation celebrates the start of a new year, the Senate voted 89 to 9 in favor of the “American Taxpayer Relief Act” crafted by Biden and McConnell. The funny thing is, there is no “taxpayer relief” in the act.
The Congressional Budget Office has calculated that the bill includes $620 billion in revenue increases via tax hikes. Additionally, because the bill “kicks the can” on a myriad of spending programs, the actual spending cuts total a mere $15 billion. That’s 41 times more taxes than spending reduction — and it’s spending which is the root of the problem!
It is incomprehensible that McConnell was actually proud of this bill. He pointed out that now that the tax (revenue side) is settled, “now it’s time to get serious about reducing Washington’s out-of-control spending. That’s a debate the American people want. It’s the debate we’ll have next. And it’s a debate Republicans are ready for.”
Gimme a break. They’ve had plenty of time since Simpson-Bowles failed and the Super Committee failed to “get serious about reducing Washington’s out-of-control spending”.
The tax hikes include:
— An increase from 35% to 39.6% for individuals above $400K and couples above $450K. Way to punish families!
— Itemized deductions and personal exemptions and will be limited once individuals meet the $200K threshold and couples meet the $250K threshold.
— The Estate Tax (Death Tax) increases from 35% to 40% on all individual estates above $5 million and family estates above $10 million.
— Dividends and Capital Gains rates increased from 15% to 20%.
— There will be a permanent AMT “patch” as well, finally indexing it to inflation.
What about the spending cuts side? Here’s what they did:
— A $30B one-year extension of 73 week unemployment insurance, — which effects about 2 million people.
— A $30B one-year extension of the Medicare “doc fix”
— A 5 Year Extension of 2009 Stimulus tax credits aimed at college students and low-income workers.
— An extension on the Wind Production Tax Credit (the 2.2 cent per kilowatt/hour credit) that gives a refund to a wind company if it doesn’t turn a profit.
Additionally, Sequestration was delayed for two months –right about the time that the debt ceiling will reach its limit.
So many questions swirling around at this point. Do the Republicans actually think this is a good thing? That there won’t be factions at negotiation time in a couple months (defense/fiscal, etc). Why are we supposed to consider accepting more taxes now with the “promise” of spending cuts later? How is this better than Simpson-Bowles? (or even “Plan B” for that matter?) This is supposed to be an example of a “balanced approach”?
The two things to come out of this “package” are that 1) Obama was able to shape the narrative and make this about taxes, not spending; and 2) Obama was able to make Republicans break their pledge about not voting for new taxes. The damage has been done. The effects of these negotiations will be very long-term.
Let’s hope the House Republicans have the courage to do what it right. Chime in with your thoughts.
