by | ARTICLES, BLOG, ECONOMY, FED, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA, POLITICS, POTUS, TRUMP
George Will shined the light on yet another disturbing case of civil asset forfeiture a practice that denies citizens the right to due process. In this particular instance, a border agent on US soil unlawfully demanded the password a citizen’s phone; when he refused, they searched his truck and then seized possession of it after finding five .380-caliber bullets (and no weapon) in the truck’s center console. Their rationale? He was transporting “munitions of war.”
Civil asset forfeiture allows law enforcement to take money or property from a citizen who is merely suspected of criminal activity — not charged or convicted. Though original asset forfeiture laws were aimed at drug cartels to interrupt their business and money, it use has expanded rapidly in recent years. It’s not being used just for “organized crime” anymore; that’s a red herring that gives police a green light to continue to abuse citizens and take their property without due process. Citizens are guilty until proven innocent and have to prove that they were not involved in any criminal activity, which can be a long and expensive process against the government.
Outrageously, the citizen had to petition to get a judicial hearing about his truck (after paying a bond of 10% of his truck’s value) — but then the hearing actually never happened. He never got his due process and only got his truck back after two years, during which he faithfully continued making loan payments and maintained insurance. This lack of any hearing for a citizen to redress the unlawful seizure is not an anomaly, either. In fact, the citizen is now pursuing a class action lawsuit, just “to establish a right to prompt post-seizure judicial hearings,” which should already be a given anyway in such incidences — even though the practice of civil asset forfeiture should be abolished outright.
Civil asset forfeiture is really all about money. “Under the equitable sharing program, federal authorities may “adopt” state and local forfeiture cases and prosecute them at the federal level. Those local police departments get to keep up to 80 percent of the forfeiture revenue, while the rest goes into the equitable sharing pool and is distributed among partner departments around the country.” During the Obama Administration — after some highly publicized appalling asset forfeiture cases, Obama began addressing asset forfeiture and restrictions were rightly implemented as a stepping stone to reign in this abominable practice. Unfortunately last year, AG Jeff Sessions loosened those once again.
Clarence Thomas wrote a scathing dissent of asset forfeiture last year when SCOTUS chose not to hear a case on the matter. He wrote, “this system—where police can seize property with limited judicial oversight and retain it for their own use—has led to egregious and well-chronicled abuses. He further pointed out, “because the law enforcement entity responsible for seizing the property often keeps it, these entities have strong incentives to pursue forfeiture.” Clarence Thomas is entirely correct, and the policy of civil asset forfeiture should be entirely eliminated. Continuing to highlight this abhorrent practice is the only way to bring about change.
by | ARTICLES, BLOG, BUSINESS, CONSTITUTION, ECONOMY, EDUCATION, FREEDOM, GOVERNMENT, HYPOCRISY, POTUS, TRUMP
It seems like spending reductions, smaller government, and eliminating waste are no longer Republican ideals. When Education Secretary Betsy DeVos presented a budget that did just that, Congress turned a deaf ear. What’s more, they made it difficult for her to even make some systemic changes to the Department of Education that (like most departments) desperately needs.
As part of the massive spending bill that was passed last week, Congress “awarded the department a $2.6 billion boost when Mrs. DeVos had requested a $9 billion cut. She had sought to dismantle her agency’s central budget office, a move she said would create a leaner structure, and to cut the number of field offices in the civil-rights division to four from 12. The spending package included specific measures preventing her from doing so.”
Apparently, trying to implement change caused some problems among more seasoned politicians that Congress just put a stop to by hamstringing her efforts at education and fiscal reform: “in the spending package, lawmakers forbade Mrs. DeVos from dismantling the budget office and increased the civil-rights division’s funding by $8.5 million, specifying that the additional money couldn’t be used to reduce staff, such as through buyouts. The civil-rights division is tasked with, among other things, enforcing Title IX.”
It’s a shame that politics over policy has gotten so pervasive even among Republicans. Such ridiculous behavior shows how broken our system has become — which is why it’s getting more and more likely that a huge Democrat sweep will happen at midterms.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, FED, FREEDOM, GOVERNMENT, POLITICS
Did you even notice that whenever the economy issues good results (a strong jobs report, etc.), the stock market goes DOWN? Logic would seemingly have it be the opposite. If the economy was strong, one would assume the stock market would respond positively. But often that’s not really the case.
For years, I couldn’t understand it — how stupid could the market be? Why would the market do poorly? Wall Street professionals claim to understand it. They point out that the stock market and economy are not necessarily affected the same way. When the economy is strong, the market has often already gone up in anticipation of the improving economy. But with the stronger economy, the Fed is likely to hike interest rates, threatening the strong growth going forward. Also, with interest rates rising, investors have the alternative of earning fixed, safe rates of return by buying bonds.
Though I do follow that logic, I do not agree with it. My strong belief is that as long as the economy is strong, with sound existing economic policies in place, I believe that financial growth and profitability will continue. And I would view downturns caused by positive financial results as a buying opportunity.
The economy has begun the road to renewed growth – finally getting rid of the Obama stagnation caused by increasing taxes, stifling regulation, and anti-business sentiment. It’s unreasonable to believe that the concern of interest rates should have more sway than a growing economy. Even if interest rates rise, does anyone really believe that a business will forego an expansion opportunity just because borrowing costs are 1 or 2 percentage points higher?
Of course, it would make sense for the stock market to become weaker if President Trump goes ahead with his economically ignorant tariff and anti-free-trade policies, as well as his economically stagnating immigration restrictions.
But as for now, the fluctuations are a confirmation of a stronger economy and the multiple opportunities afforded to investors.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, TAXES
The IRS recently announced plans to “close a loophole,” suggesting that hedge-fund managers have been suddenly trying avoid paying higher taxes on carried-interest profits. This issue, however, is really a non-starter, and should not be getting the coverage that it is.
The IRS wrote a rule that exempts carried interest from a longer holding period when it’s paid to a corporation rather than an individual. But it didn’t specify that it applied solely to regular corporations, whose income is subject to double taxation. What some are ridiculously suggesting is that an S-Corp “loophole” exists to allow a hedge fund manager to treat a two- or three -year capital gain as long- term. That is a joke.
When the IRS wrote the rule, they said it applies for all flow-thru, but not corporations. The reason why is because corporations don’t have capital gains rate. So if you have a hedge-fund manager for a corporation, they pay taxes at regular rates. All of a sudden, some people are suggesting that hedge fund managers might make their entity an S-Corp, so they could get the one-year provision instead of the three-year provision.
It should be obvious to anyone that the law would be implemented as applying to non flow-thru entities only. It only affects the one year holding period which was raised to three. This is unimportant anyway, because most (and certainly most substantial) gains usually take more than three years to develop anyway.
Almost every article published on this subject also incorrectly states that carried interests converts ordinary income to capital gain. In fact, it simply allocates to the manager income of the same nature as earned – ordinary, dividend, short or long-term gain.
You could probably fix the law by adding a couple of words of clarification. Every tax law is subject to the Technical Corrections Act, which is page and pages of errors that get changed. Yet all of a sudden, people are writing articles about it the rule being a loophole. It’s not, and it’s nonsense. This issue should not be getting any serious attention.
by | ARTICLES, BLOG, GOVERNMENT, HYPOCRISY, IRS, TAXES
A few years ago, it was revealed that thousand of IRS employees who were in non-compliance with the IRS — or had actually committed tax fraud — had received bonuses from the agency. The IRS had promised to place safeguards or closer scrutiny to ensure that such employees who had not done due diligence with their taxes would not receive bonuses in the future. However, a new Treasury Inspector General for Tax Administration (TIGTA) report reveals that only about a third have been caught by the additional screening. “The IRS is still paying bonuses to nearly 2,000 bad employees, including more than two dozen who were actual tax-cheats themselves.”
From the Washington Times:
“The IRS understands the importance of withholding awards from employees whose conduct is deemed to impact the integrity of the service, and/or who have a tax compliance issue, regardless of the level of discipline imposed,” wrote Katherine M. Coffman, a “human capital officer” at the agency, in the IRS’s official response.
She agreed with all three recommendations for fixing the problem, but said they won’t be done until next January. Among those getting bonuses were two employees who illegally snooped on others’ tax returns.Two other employees sexually assaulted colleagues, yet were paid nearly $1,500 in combined bonuses, the audit found.
The inspector general said the agency only screened for people who were disciplined enough to serve at least a one day suspension. Investigators said the agency didn’t screen people who had tax problems but weren’t suspended. That included three employees who received a combined $7,000 in bonuses despite having $65,000 in outstanding tax balances deemed impossible to collect by the agency. Paying those bonuses broke the law, the investigators said.
In a statement after the report, the IRS said the examples were “unacceptable” but said it’s taken steps to try to get a handle on things since the last audit. “This continues to be a priority for us, and we will continue to make improvements going forward,” the agency said.”
The IRS continues to be an abomination, even five years after the scandal that targeted certain non-profit groups in 2013. It is outrageous that taxpayer money is appropriated to those who have not fulfilled their basic tax obligations.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, TAXES
From CNSNews.com, the monthly deficit/surplus roundup:
The federal government this January ran a surplus while collecting record total tax revenues for that month of the year, according to the Monthly Treasury Statement released today.
January was the first month under the new tax law that President Donald Trump signed in December.
During January, the Treasury collected approximately $361,038,000,000 in total tax revenues and spent a total of approximately $311,802,000,000 to run a surplus of approximately $49,236,000,000.
Despite the monthly surplus of $49,236,000,000, the federal government is still running a deficit of approximately $175,718,000,000 for fiscal year 2018. That is because the government entered the month with a deficit of approximately $224,955,000,000.
The $361,038,000,000 in total taxes the Treasury collected this January was $11,747,870,000 more than the $349,290,130,000 that the Treasury collected in January of last year (in December 2017 dollars, adjusted using the Bureau of Labor Statistics inflation calculator).
The Treasury not only collected record taxes in the month of January itself, but has now collected record tax revenues for the first four months of a fiscal year (October through January).
So far in fiscal 2018, the federal government has collected a record $1,130,550,000,000 in total taxes.
However, despite the record tax collections so far this fiscal year, and despite the one-month surplus in January, the federal government is still running a cumulative deficit in this fiscal year of $175,718,000,000.
That is because while the Treasury was collecting its record $1,130,550,000,000 in taxes from October through January, it was spending $1,306,268,000,000.
The levels of federal taxes and federal spending fluctuate from month to month, and it is not unusual—but not always the case—for the federal government to run a surplus in January.
Over the last twenty fiscal years, going back to 1999, the federal government has run surpluses in the month of January 13 times and deficits 7 times. Six of the Januaries in which the federal government ran deficits overlapped President Barack Obama’s time in office—including January 2009, the month Obama was inaugurated, and the Januaries in 2010, 2011, 2012, 2014 and 2016.
The federal government also ran a deficit in January 2004, when President George W. Bush was in office.
According to an analysis published on Dec. 21 by the New York Times, a “majority of provisions” in the tax law President Trump signed in December would “go into effect” in January. However, according to the Times’ analysis, February “is the earliest that most will see changes in their paychecks.”
The Internal Revenue Service released its new withholding tables, based on the tax-cut law, on January 11.
“The Internal Revenue Service today released Notice 1036, which updates the income-tax withholding tables for 2018 reflecting changes made by the tax reform legislation enacted last month,” the IRS said that day in a press release. “This is the first in a series of steps that IRS will take to help improve the accuracy of withholding following major changes made by the new tax law.
“The updated withholding information, posted today on IRS.gov, shows the new rates for employers to use during 2018,” said the IRS release. “Employers should begin using the 2018 withholding tables as soon as possible, but not later than Feb. 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.”
The record total federal taxes the Treasury has collected in the first four months of this fiscal year have included $606,726,000,000 in individual income taxes; $75,533,000,000 in corporation income taxes; $371,931,000,000 in Social Security and other payroll taxes; $27,738,000,000 in excise taxes; $7,550,000,000 in estate and gift taxes; $12,634,000,000 in customs duties; and $32,637,000,000 in miscellaneous other receipts.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, NEW YORK, POLITICS, TAXES
In a continued tantrum against the “Tax Cuts and Jobs Act,” Governor Cuomo called the tax changes an “economic missile” as he unveiled his new budget proposal for the fiscal year. His solution? Raise more taxes mainly on businesses and restructure certain taxes so that New York gets its share of the pie.
One major change Cuomo has proposed is to eliminate the state income tax on wages for many New Yorkers; it would be replaced by a new payroll tax paid for by employers. This would be an disastrous burden for New York businesses who would conceivably have to cut wages in order to cover the cost of such a tax and deal with an excessive amount of increased paperwork.
Other ridiculous ideas include: a) a 2-cents-per-milligram tax on all opioids produced, paid for by the drug manufacturer; b) expanding the internet sales tax, a measure that has already failed twice; c) a 10-cents-per-milliliter tax on vapor products, paid for by the distributors; and d) a $120 “safety inspection fee” for motor coaches, ambulances, and other for-hire, for-profit cars that carry passengers subject to inspection by the DoT.
Just as egregious is Cuomo’s proposal to go after health insurers who stand to benefit from the tax reform bill. As some insurers could see up to a 40% reduction on their federal corporate taxes, Cuomo wants to pick their pockets by implementing a 14 percent surcharge on those gains in order to close the budget deficits.
For a governor who once emphasized his fiscal restraint, this budget shows how unhinged and out-of-touch with New Yorkers and New York businesses Cuomo has become.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, GOVERNMENT, NEW YORK, POTUS, TAXES, TRUMP
Governor Cuomo has come out blasting the new tax law, and in particular the substantial reduction in the deduction for State and Local Taxes (“SALT”), as unconstitutional and an “attack only on blue states.”
But everybody who has any knowledge of taxation and its constitutionality knows that Cuomo’s assertion is ludicrous. The SALT deduction – and ALL deductions – are at the complete discretion of Congress. And as long as deductions apply under the same rules to every taxpayer no matter where situated, constitutionality can never be an issue All the Governor’s raving does is show that he and his entire staff are either totally clueless, or they know that their statements are total nonsense, but think so little of voters that they can be fired up with something that is utterly phony.
If Cuomo is concerned about what is devastating to New Yorkers, it is astounding that he is objecting to this law and yet he did not object to other tax issues in the past that clearly targeted his constituents. Despite acknowledging the very bad effects of high taxes on New Yorkers, Where was Cuomo’s concern when:
1) the federal government (Obama) raised taxes on capital gains by almost 60%?
2) the federal government raised the regular rate by 25%?
Furthermore:
1) Cuomo reneged on his campaign promises and kept income tax rates on New York’s high income earners outrageously high,
2) he continues to hide from his constituents that his tax law already denies New Yorkers some or all of their deduction for SALT.
3) he continues to hide that NY tax law also denies middle and high income earners significant parts of the charitable deduction as well, buried so deep that most New Yorkers are not even aware they are being fleeced.
4) as a final point, a New Yorker who dies leaving $10 million to his heirs would now pay no federal estate tax – but he would owe $1.06 million to New York State.
But now Cuomo is bothered by the elimination of the SALT deduction in New York? He was AFFIRMATIVELY IN FAVOR of all of these past provisions, which have been devastating to his constituents for some time. Cuomo’s sudden compassion is complete hypocrisy.
by | ARTICLES, BLOG, ECONOMY, POLITICS, POTUS, TAXES, TRUMP
I am very glad the new Tax Cuts and Job Act is now law. With ongoing work reforming and reducing regulations, the tax bill will spur economic growth, and get people to understand the importance of reducing marginal rates. On the corporate side, the huge rate reduction (from 35% to 21%), move to territorial taxation, and expensing of equipment, is a home run. However, on the individual side, Congress allowed politics to get in the way of real reform, and that is inexcusable.
Without any discussion, Congress eliminated the deduction for miscellaneous itemized deductions. This is truly the only legitimate deduction, and it is absolutely necessary to maintain the integrity of the tax code. It gives people the chance to write off expenses incurred to allow them to earn the income they are taxed on. For instance, under current tax law, a person who earns $100K in a venture but had to pay $30K for legal fees to get it, would be able to pay taxes on only the $70K net that was actually made. With the new change now removing the miscellaneous itemized deduction, the person will have to pay taxes on the full $100K!
Another deduction Congress removed summarily is the moving deduction. Similar to the miscellaneous itemized deduction, this is a real and actual expense that is incurred when moving to get a new job (in order to earn the income that will be taxed.) It was removed from the tax code without discussion, and should not have been.
The casualty loss deduction was also eliminated. This enabled you to deduct a loss that was due to a sudden, unexpected event, such as a fire, hurricane, or robbery. Now, if your house burns down, you can no longer write it off. The exception to this change is if your loss is in a federally-declared disaster area. So if your house burns down, you get no deduction. But if it burns down in a large wildfire that was declared a disaster, you can claim the deduction. This is egregious; the effect on the individual — the loss of a house — is absolutely the same. This deduction elimination is unacceptable.
Furthermore, the alimony deduction was thrown out. The alimony deduction is a mechanism that prevents an inequitable tax burden to be created when a married family unit is split into two. It is inequitable and mean-spirited to create a targeted tax burden on people who suffered a family breakup.
While eliminating these important and equitable donations, Congress left in place a number of purely political, social engineering deductions and credits. Congress left in a substantial part of the mortgage deduction, which is really nothing more than a government subsidy to the real estate industry. They left in energy credits, rehabilitation and low income housing credits, and the Alternative Minimum Tax (AMT). It’s disappointing to see Congress talk about simplicity, efficiency, and equitability, and then remove good provisions from the tax code while leaving in parts that are merely political.
by | BLOG, GOVERNMENT, LAW, TAXES
Everyone talks about how true reform of our tax laws should have three goals: 1) equitable; 2) efficient; and 3) simpler. In doing that, many have argued for removing the individual mandate, but at the same time have left in things like charitable deductions, SALT, and the mortgage deduction. This is ludicrous. With those three concepts above, the other provisions need to be addresses, as they are not equitable, efficient, or simpler — they are political. To leave them in, while removing the individual mandate, is illogical.
