Lion of the Blogosphere

Archive for the ‘Taxes’ Category

Steve Bannon wants to raise taxes on the very rich

with 57 comments

He has been talking about it to people. I think that Bannon wants these “leaks” to be covered by the media, because he’s losing to the globalists and the TruCons in the contest to win Trump’s favor, and he wants to get his favored policies out there. But the mainstream media is ignoring this.

I’ve been pushing for taxes on the rich for a while. I always get a lot of hate comments when I write about the topic. Maybe now that Steve Bannon also supports it, the hate comments will die down a bit.

Written by Lion of the Blogosphere

July 26, 2017 at 7:19 pm

Posted in Taxes

Libertarians are wrong about taxation

with 72 comments

Libertarians believe that if Lazy Farmer works in his fields for 6 hours a day, and Industrious Farmer works in his fields 12 hours a day, and Industrious Farmer consequently grows twice as many crops, that it’s not fair to assign a higher tax rate to Industrious Farmer because that would punish him for his hard work in creating value.

If we still had an 18th century agrarian economy, I too would be a libertarian economist! But that’s not how our modern economy works. People aren’t rich because they put in more hours tilling the fields. They are rich because they own monopolies. They are rich because they have the right degrees, the right contacts, the right personality, to get into the high-paying career tracks. Wealth has become divorced from actual value creation. The people doing the real value-creating work, like the engineers (many of whom are from foreign countries because value-creation is work that Americans don’t want to do), are paid salaries on the high-end of middle-class but they are not wealthy.

Another libertarian talking point I see a lot is that high taxes suppress value creation because people will choose not to work. But all empirical evidence from the real economy shows this argument is bogus. The people most likely to be sitting home playing videogames are those who would have had the lowest tax rates had they been working in the labor force. Those putting in the most hours, like BIGLAW partners and investment bankers, have extremely high hourly incomes (and thus the highest tax rates). And the argument assumes that these rich people create value in the first place. There’s a case to be made that our nation would be better off if BIGLAW partners and investment bankers worked fewer hours instead of more hours.

As we move more into a post-scarcity economy, we see jobs being a luxury for the rich rather than the means to create value. Remember my blog post about Toby Milstein? She is an heiress who never needs to work a day in her life, and she lives in the Dakota, but she still has a regular job in “business development” for a tech startup, because not having a job is for the lower classes.

Libertarians say that taxation is “theft.” But as I’ve shown, REALLY rich people voted for Hillary Clinton over Donald Trump by a 3 to 1 margin. Even though it was well known that there would be higher taxes under Hillary Clinton and the Democrats. People don’t vote for theft.

Written by Lion of the Blogosphere

July 19, 2017 at 9:35 am

I’m really tired of this dumb argument

A commenter writes:

Won’t rich people find a way around estate taxes pretty easily? In fact, do we collect that much from estate taxes at their current rate, or are they just avoided?

If the tax is so easily avoidable, why are Koch Brothers and Republicans so adamant about lowering it or abolishing it?

To the extent that there are loopholes, and yes there are loopholes, it’s because Republicans refuse to close them, because they think that tax loopholes are fast ones that they pulled on the Democrats.

So once again, rich people not paying taxes goes back to Republicans who do whatever they can to lower tax rates or allow loopholes to kick into the tax code because they shamelessly agree with the Koch Brothers program to make the rich even richer than they already are.

Written by Lion of the Blogosphere

July 3, 2017 at 9:34 am

Posted in Taxes

Extreme disappointment in Trump’s tax plan

Read this article at the NY Times.

This is not populism, this is standard Republican huge tax cuts for the richest value transferers.

The biggest giveaways to the super rich are:

1. Eliminating the estate tax.

2. 15% “business tax,” which sounds like it opens up huge loopholes because everyone will try to change their “ordinary income” into “business income” and get a huge tax cut. Even if it doesn’t open up any loopholes (unlikely that), I don’t see why the lawyers who are partners in the law firm should pay 15% tax while their working-stiff employees making a lot less money have to pay 25% or 35% tax.

When he was campaigning, Trump said he would eliminate the carried interest loophole, but under the new Trump plan, instead of super-rich hedge fund managers paying 20% capital gains tax, their tax rate is actually LOWERED to 15% “business income” tax.

3. Top tax rate lowered 39.6 to 35%. For those who can’t figure out how to take advantage of the new “business tax” loophole. Remember that you need at least $418,401 of income to be in the 39.6% bracket, so that’s a tax cut for only the very rich.

It’s so unfortunate that we are stuck with this bozo in the White House instead of a true populist like Marine Le Pen.

Written by Lion of the Blogosphere

April 26, 2017 at 8:23 pm

Posted in Taxes

Trump’s taxes: boring subject

They can only be interesting in a way that’s bad for Trump: if he lied, cheated, did something illegal, etc.

Otherwise, it doesn’t matter what his tax rate was. No one is obligated to pay more taxes than they are legally required to pay, and no one does, not Democrats, not Republicans.

Written by Lion of the Blogosphere

March 15, 2017 at 7:29 pm

Posted in Taxes

Why do Americans love low taxes?

Andrew E. wrote in a comment: “Believe it or not, Americans like low taxes.”

Yes, I do believe it.

But, people aren’t thinking rationally about it, they are thinking with the animal parts of their brain. There’s a part that reviles at the thought of stuff being taken away from them, which is based on instincts from our caveman days when stuff was synonymous with having enough of a stockpile to survive the winter without starving to death. And there’s a part which craves status, and thinks that if only they had the money the government was taking away in taxes, they’d be able to buy the house in a “better” neighborhood or buy the stuff their friends have that they can’t afford; but what their emotions don’t realize is that if everyone gets the same tax cut, then the price of the “better” neighborhood goes up by that much and is still unaffordable, and they still can’t afford to buy the stuff their friends have because now their friends can buy more expensive stuff.

* * *

Otis writes:

American’s like low taxes for 1 reason and 1 reason only: America’s large black population.

That is literally the only reason. If it wasn’t for the knowledge that their tax money would just be going to blacks, American would have similar tax rates and a similar social safety next to Western European countries.

* * *

Chairman writes:

One entity can pool large sums of money together to invest in major projects with more efficiency than a large number of people each using their own money can. This principal explains why any large organization exists. The trick, of course, is to find a way to staff the government with intelligent and moral people whose interests are aligned with the general population’s. This is difficult but not impossible, though it’s rarely been accomplished.

Written by Lion of the Blogosphere

August 21, 2016 at 10:42 am

Posted in Taxes

The Hillary Clinton tax plan

http://www.taxpolicycenter.org/publications/analysis-hillary-clintons-tax-proposals/full

Certain commenters keep on insisting that the Democrat party is secretly using taxes to protect the richest of the rich and make it harder to become rich by only taxing income and not wealth.

The actual tax plan from Hillary shows how stupid this is. In fact, it’s an excellent tax plan designed to remove the unfairness from the current tax code. Most notably:

Clinton would also impose a minimum tax of 30 percent of AGI on filers with AGI greater than $1 million(i.e., the Buffett Rule). Taxes counted toward the new minimum tax requirement include: regular income taxes(after certain credits and including the Affordable Care Act surtax on net investment income), the alternative minimum tax (AMT), the 4 percent surcharge on AGI, and the employee portion of the payroll tax.4Taxpayers with AGI over $2 million would owe an additional tax on the difference between30 percent of AGI and the sum of those taxes. The tax payment phases in ratably between $1 and $2 million of AGI.

Because AGI includes capital gains and other investment income, it will ensure that the richest of the rich pay their fair share on investment income as well as so-called ordinary income.’

Clinton proposesto tax “carried interest” as ordinary income. Under current law, general partnersof an investment firm (e.g.,private equity) who receive a portion of their compensation as a share of the firm’s profits may report that portion as a long-term capital gain;thus they benefit from a lower income tax rate (23.8 percent)and avoid paying payroll taxes. Clintonwould tax carried interest income as ordinaryincome (top tax rate of 43.4 percent) and require the partner to pay self-employment taxes on the income.

Closes a major loophole there.

n tax year 2015, the basic exclusion for the estate tax is $5,450,000 (twice that for couples)and the top tax rate is 40 percent. Clinton proposes lowering the exclusion to $3.5 million for individuals and $7 million for married couples, with no adjustmentsf or inflation going forward, and raising the top rate to 45 percent. These changes would return the estate tax permanently to its 2009 parameters. Also, Clinton would establish an unindexed lifetime gift tax exemption of $1 million. The unindexed exemption levels will decline in real value over time meaning that more estates and gifts will become subject to tax. Clinton also proposes to require consistency between valuations for transfer (estate and gift) tax and income tax purposes, and to reform the rules that apply to grantor trusts.

Higher estate taxes, another tax aimed at wealth and not income.

The big political irony of our times is that the rich people most heavily affected by Hillary’s proposed tax increases will be heavily voting for her, which means they don’t consider higher taxes that big of a deal, at least not such a big deal that they would vote for a candidate that supports pro-life, guns, “denies” climate change, and is as low-class as Trump.

On the other hand, the middle-class and working-class white voters have been duped by Republican bigwigs, for so many decades they now take it as a core faith, that higher taxes on rich people somehow hurts them.

If only we could combine Hillary’s tax plan and Trump’s immigration plan and ability to say “radical Islamic terrorism” into a single candidate with the demeanor of Mitt Romney.

* * *

Really, it’s a very good tax plan. I believe that the only rate increase is 5% increase in the estate tax and 4% increase on incomes GREATER than $5 million (a segment of the population likely 80 to 90% voting for Clinton over Trump).

All other revenue raised from the tax plan comes from closing what might be called loopholes, various ways that individuals and corporations avoid paying the existing top rate.

The impact of the tax plan will be almost entirely born by the top 1%, who are voting for Clinton anyway and deserve the tax plan they voted for, even if Trump wins.

Written by Lion of the Blogosphere

July 29, 2016 at 7:18 am

Posted in Politics, Taxes

Dramatic shift, Democrats now the party of the rich

When I first started posting that the rich supported Democrats and supported Obama in 2008, I got a lot of hostile and disbelieving comments.

But let’s move ahead eight years. Does anyone now doubt that Hillary Clinton is going to win the rich vote? She will certainly win the top 1% rich by a really huge margin, and probably the top 5% rich by a smaller margin.

The shift of the rich from the Republicans to the Democrats has been going on for decades. It accelerated in the 2012 election, and because of Trump will massively accelerate in this upcoming election.

But we still have the weirdness of Trump’s tax plan (the one on his website) supporting tax cuts for the rich, while Hillary presumably inherits Obama’s desire to raise taxes on those making more than $200,000/year.

Written by Lion of the Blogosphere

July 28, 2016 at 3:01 pm

Posted in Politics, Taxes, Wealth

Trump disavows his bogus tax plan

Donald Trump told Chuck Todd of NBC News:

Let me explain how the world works, okay? I think nobody knows more about taxes than I do, and income than I do. But I’ll explain how it all works. I come up with the biggest tax cut by far of any candidate. Anybody. And I put it in. But that doesn’t mean that’s what we’re going to get. We have to negotiate.

The thing I’m going to do is make sure the middle class gets good tax breaks. Because they have been absolutely shunned. The other thing, I’m going to fight very hard for business. For the wealthy, I think, frankly, it’s going to go up. And you know what, it really should go up. Because the wealthy–

So it turns out that Trump’s massive tax cuts for the wealthy was actually just a debating point when he was trying to win the nomination of the Republican Party (although it was never really clear that he actually read the stuff on his own website), and now that he has won the nomination he is pivoting towards a more common sense and less stupid tax plan.

This makes me happy that I voted for Trump.

Written by Lion of the Blogosphere

May 9, 2016 at 1:50 pm

Posted in Politics, Taxes

Tax PITA

Cleaning up my apartment, I discovered an unopened envelope with a tax form, a sale of about $500 dollars of stock which was the stock grant from the company I used to work for. There was a tiny profit. I just finished filling out amended returns for federal and New York State so I could pay an extra $12 and $4 respectively. What a waste of time.

Written by Lion of the Blogosphere

April 17, 2016 at 10:26 pm

Posted in Taxes

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