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This past April, some Republicans approached Attorney General Jeff Sessions to look once again into the case of Lois Lerner and the IRS targeting scandal. Today, the Department of Justice released a statement that “reopening the criminal investigation would not be appropriate based on the available evidence.” Though the response was expected, it was still disappointing; Lois Lerner deserved to be prosecuted to the fullest extent of the law for her conduct.
Lois Lerner headed the IRS division that processes applications for tax-exempt groups. An inspector general’s report in 2013 found that the IRS had singled out conservative and tea party groups for extra scrutiny when they applied for tax-exempt status. Many had their applications delayed for months and years. Some were asked improper questions about their donors and even their religious practices. Yet, Obama’s Department of Justice concluded in 2015 that they had “found no evidence that any IRS official acted based on political, discriminatory, corrupt or other inappropriate motives that would support a criminal prosecution.” By then, Lerner and others embroiled in the scandal had resigned or retired.
It is a national tragedy that the woman who harassed taxpayer groups, interfered with evidence, and colluded with government entities to suppress thought remains absolved from her transgressions.
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There have been recent articles about the SPLC and their “millions in offshore accounts.” But as a tax accountant, there doesn’t appear to be anything illegal or suspicious in the way they invest their funds — much in the same way that Mitt Romney’s items were completely fine. Non-profits have restrictions on the way they can and cannot invest, so what the SPLC has done or is doing in this regard appears to be rather ordinary.
But if I were the SPLC, I would like nothing better than to have people jumping up and down about my “foreign bank account” so that they’ll completely ignore the fact that the IRS should investigate and reconsider the tax status of the SPLC.
The SPLC intentionally and willfully becomes political by going after various groups, people, and ideologies –with whom they disagree –to denigrate them while lumping them in with true extremists (like the KKK). Then the SPLC issues press releases and maps for the media to pick up the stories. Their running count of “hate” is 917, and their total amount of “monitoring of hate” is 1,600+ — how is this not political?
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As the new jobs report posted 156,000 jobs (forecasted 180,000) and a slight uptick in unemployment (4.4% from 4.3%), CNSNews noticed a shift in government workers stats:
The number of people working for the federal government has declined by 11,000 in 2017 while the number working for state governments has declined 2,000, according to data published today by the Bureau of Labor Statistics.
But because the number of people employed by local governments has climbed 12,000 so far this year, the overall decline in the number of people employed nationwide by government has only dropped by 1,000 in 2017.
Meanwhile, even though manufacturing jobs have increased by 137,000 this year, the number employed by government in August still exceeded the number employed in manufacturing by 9,818,000.
In December 2016, there were 22,299,000 people employed by federal, state and local governments in the United States. By August, that had dropped to 22,298,000—a decline of 1,000.
On the federal level, there were 2,819,000 people employed by government in December 2016. That dropped to 2,808,000 in August—a decline of 11,000 so far this year.
On the state level, there were 5,085,000 employed by government in December 2016. That dropped to 5,083,000 in August—a decline of 2,000.
On the local level, there were 14,395,000 employed by government in December. That climbed to 14,407,000 in August—an increase of 12,000.
With federal and state governments dropping a combined 13,000 employees so far this year, and local governments adding 12,000, the net change in government employment nationwide so far in 2017 has been a decline of 1,000.
The 22,298,000 people employed by government in the United States in August continues to far outstrip the 12,480,000 people employed in manufacturing—evening though manufacturing has seen employment gains this year as government employment has marginally declined.
“Manufacturing employment rose by 36,000 in August,” the BLS said in its release today. “Job gains occurred in motor vehicles and parts (+14,000), fabricated metal products (+5,000), and computer and electronic products (+4,000). Manufacturing has added 155,000 jobs since a recent employment low in November 2016.”
Of those 155,000 manufacturing jobs added since last November, 137,000 have been added since last December. In the last month of 2016, there were 12,343,000 people employed in manufacturing in the United States. In August, there were 12,480,000–accounting for the 137,000 gain in manufacturing jobs thus far this year.
Even with the recent gains in manufacturing jobs and the small drop in government jobs, the 22,298,000 people employed by government in the United States in August still outnumbered the 12,480,000 employed in manufacturing jobs by 9,818,000.
From 1939, when the BLS started tracking manufacturing and government jobs, through 1988, manufacturing jobs always outnumbered government jobs in the United States. In August 1989, for the first time, government jobs exceeded manufacturing jobs in this country.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, HYPOCRISY, POLITICS, RETIREMENT, TAXES
Minnesota’s pension fund was recently revealed to be in crisis-mode after changing the accounting formula to more accurately reflect market realities:
“The jump caused the finances of Minnesota’s pensions to erode more than any other state’s last year as accounting standards seek to prevent governments from using overly optimistic assumptions to minimize what they owe public employees decades from now. Because of changes in actuarial math, Minnesota in 2016 reported having just 53 percent of what it needed to cover promised benefits, down from 80 percent a year earlier, transforming it from one of the best funded state systems to the seventh worst, according to data compiled by Bloomberg.”
During the most recent recession, the Governmental Accounting Standards Boards made accounting rules changes because it began to be more apparent that a majority of local and state pension systems were continuously understating the long-term obligations. It was common practice to depend on and project 8%-10% investment returns even when the reality was more along the lines of 2%.
When the public sector (and unions) signed off on lavish pension provisions for the employee, they hoped there would be enough growth and investment returns to cover it way down the road. There were no provisions made to handle the possibility of a low-interest rate society or a fledgling economy like we’ve experienced the last nine years; they took their chances and their fallback was always that they could suck money from the taxpayer by raising taxes to cover budgeting shortfalls. That is reckless and irresponsible.
Years of fiscal mismanagement in the public sector has resulted in this fiscal nightmare. Because the public sector does not have the economic forces of competition to keep compensation levels in check, as the public sector does, it was always incumbent upon public negotiators to manage contracts properly. Failing to properly negotiate, making cozy deals, and maintaining unsustainable defined-benefit plans has created the soaring budget and pension deficits we see across the country. Though the rules changes to actuarial math are a start, in some places, it’s too little, too late.
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Despite Connecticut’s status as one of the wealthiest states in the country, its fiscal health is in rapid decline. A hefty debt load has left the state without a budget for two months as lawmakers squabble how to best deal with the reality of “high taxes, outmigration, falling revenues and $50 billion of unfunded pension liabilities.”
Governor Malloy has an executive order ready to go into effect that will reduce or eliminate funds for localities and schools if the state government cannot come to a consensus. Lawmakers are staring down a multi-billion deficit for the next two years so austerity measures could be both drastic and necessary.
According to Reuters, “one major factor for the debt load is municipal spending. Some $23 billion of outstanding municipal debt has also constrained spending. Bondholders must be paid ahead of most other expenses like non-essential services and payments to vendors….Connecticut has borrowed for decades to fund school construction, whereas nearly all other states typically borrow at the local level for those projects.”
Other issues besides municipal projects have wreaked havoc. Skyrocketing pension costs have been a major contributor, although Connecticut has been staring down this problem for nearly a decade; Connecticut “piled on debt to bolster its public pensions, selling $2.3 billion of bonds in April 2008.” And budget deficits are not new; 18 months after the bond sale, “in December 2009, the state sold $916 million of economic recovery notes to close a budget deficit after depleting its rainy day fund during the Great Recession.”
So here we have a debt-ridden state — quite possibly the worst of all 50 states — suffering from financial woes for years now with only bandaid solutions. Sufficient tax revenue is not the problem; zealous overspending and fiscal mismanagement is. Unfortunately, Connecticut is one of several states facing the same issues; state insolvency is going to get worse in many places before it gets better.
by | ARTICLES, BLOG, GOVERNMENT, TAXES, TRUMP
As always, CNSnews posts the monthly revenue data as it is released from the Treasury. I have reposted it below in its entirety:
“The federal government collected record amounts of both individual income taxes and payroll taxes through the first ten months of fiscal 2017 (Oct. 1, 2016 through the end of July), according to the Monthly Treasury Statement.
Through July, the federal government collected approximately $1,312,691,000,000 in individual income taxes.
At the same time, it collected $976,278,000,000 in Social Security and other payroll taxes.
Prior to this year, fiscal 2015 held the record for individual income tax collections through July. That year, the Treasury collected $1,309,431,860,000 (in constant 2017 dollars) in individual income taxes in the first ten months of the fiscal year.
Last year (fiscal 2016), individual income tax collections from October through July dropped to $1,293,490,000,000 (in constant 2017 dollars).
This year’s record of $1,312,691,000,000 in October-to-July individual income taxes is $3,259,140,000 more than the 2015’s previous record of $1,309,431,860,000.
Before this year’s record $976,278,000,000 in October-through-July payroll tax collections, fiscal 2016 held the record at $948,709,020,000 (in constant 2017 dollars)—or about $27,568,980,000 less than this year.
Overall federal tax collections in the first ten months of fiscal 2017 were $2,739,861,000,000. Yet that did not the record for October-through-July total federal tax collections. In the first ten months of fiscal 2015, the Treasury collected $2,741,079,280,000 (in constant 2017 dollars) in total taxes. That was $361,218,280,000 more than this year.
While the Treasury has been collecting record amounts of individual income taxes and payroll taxes this fiscal year, some other categories of federal tax revenues have declined since 2015.
For example, in the first ten months of fiscal 2015, the Treasury collected $272,904,380,000 (in constant 2017 dollars) in corporate income taxes. In the first ten months of fiscal 2017, the Treasury collected only $232,294,000,000 corporate income taxes.
In the first ten months of fiscal 2015, customs duties were $30,705,180,000 (in constant 2017 dollars). In the first ten months of fiscal 2017, they were only $28,427,000,000.
In the first ten months of fiscal 2015, excise taxes were $68,686,630,000 (in constant 2017 dollars). In the first ten months of fiscal 2017, they were only $65,187,000,000.
Even as it was collecting record individual income taxes and payroll taxes in the first ten months of fiscal 2017, the Treasury still ran a deficit of $566,022,000,000.
That is because while the overall federal tax collections for the period were $2,739,861,000,000, overall federal spending was $3,305,882,000,000.”
(Historical tax revenues were put in constant 2017 dollars using the Bureau of Labor Statistics inflation calculator.)
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According to Bloomberg’s monthly economist poll, 78% of respondents think that Congress will be successful with tax cuts prior to mid-term elections next year — though they may be less ambitious than what has been originally planned.
Trump has promised to make this a priority. Whether or not this is a permanent change to the IRC — much like the reforms of 1986 — remains to be seen. Bloomberg notes that “White House officials have said they’re still committed to a permanent tax revamp, and the plan is to start hearings and a markup of a tax bill after Labor Day so a version can get through the House in October and the Senate in November.”
Tax reform and cuts are an indispensable way to boost floundering GDP growth, which has remained below 2% now for several years. Healthy GDP growth — 3% or higher — is imperative to restoring confidence in our continuously weak economy of the last decade.
by | ARTICLES, BLOG, FREEDOM, GOVERNMENT, TAXES
A soda tax in Philadelphia, implemented specifically to raise revenue (not to fight obesity) has failed to bring in the projected funds promised by the tax wizards. The tax was supposed to raise some $92 million a year, but people have taken to purchasing their soft drinks outside of the city, because the tax that is levied is a 1.5-cent per ounce tax.
The Tax Foundation studied the tax and its effects and found that, “According to some local distributors and retailers, sales have declined by nearly 50 percent. This is likely primarily due to higher prices, which discourage purchasing beverages in the city. Earlier this year PepsiCo announced it was laying off up to 100 workers because of the tax, which the company blames for costing a 43 percent drop in business. Philadelphians are also no longer able to buy 12-packs or 2-liters of Pepsi products in grocery stores due to the tax.”
This loss of revenue has begun to create further problems with the city budget. The tax was first passed to fund pre-K programs, but “in practice it awards just 49 percent of the soda tax revenues to local pre-K programs. Another 20 percent of the soda tax revenues fund government employee benefits or city programs, while the rest of the money will go towards parks, libraries, and community schools.” Thus, in July, city officials had to lower their beverage revenue projections which in turn affects the pre-K programs that are supposed to be funded by the tax.
In the final nail of absurdity, the report found that “that the tax is 24 times higher than the Pennsylvania tax rate on beer.”
Folks, here’s a prime example of how people change their behaviors — even the simplest ones like buying soda — in response to egregious, illogical, taxes.
by | ARTICLES, BLOG, ECONOMY, NEW YORK, POLITICS, TAXES
Mayor DeBlasio released a new plan to add a “nearly 14 percent tax increase on high-income Big Apple residents” in order to raise money for various transportation projects. It is projected to raise $800 million/year and would be used to pay for subway repairs, bus system upgrades, and low-income train rides.
DeBlasio pitched a city income tax hike that “would raise the rate for individuals making more than $500,000 and married couples earning over $1 million from 3.876 percent to 4.41 percent.” That translates into ” an additional $2,700 levy on an individual earning $1 million a year, and an additional $8,000 on an individual earning $2 million.”
Using quintessential class warfare speech, DeBlasio invoked Obama’s favorite phrases about the “top 1 percent” who “can afford to do a bit more” arguing that “a transit system that works makes New York City’s economy strong and benefits us all.” What he forgot to mention is that New York City is already one of the top tax-heavy localities in the United States for high income earners, who fork over 50% of their income in combined city, state, and federal taxes. Ridiculous, money-grubbing schemes like these continue to be the reason why the wealthy continue their mass exodus from the area.
by | BLOG, TAXES
