Lion of the Blogosphere

Archive for the ‘Taxes’ Category

Lion’s tax proposal

with 39 comments

We should close loopholes and eliminate deductions that primarily benefit the rich (yes, including deductibility of state taxes and mortgage interest on expensive houses, and even charitable donations), including the carried interest loophole, and use the savings (and only the savings) to lower FICA tax rates. There are a lot of people who pay no income tax but do pay FICA tax. Lowering the employee share of FICA taxes would be a fair way to distribute the additional tax revenue from loophole closure.

Written by Lion of the Blogosphere

November 17, 2017 at EST pm

Posted in Taxes

Republican tax plan

House Republicans release tax plan.

The plan includes abolishing the estate tax, which is a massive giveaway to the richest of the rich.

And lowering the corporate tax rate from 35% to 20%, while doing nothing about the fact that huge corporations like Apple pay way less than 20% because of the tax-accounting fiction that their profits are overseas.

I don’t know if this plan still includes the 20% pass-through taxation, which is just a big loophole to allow every rich person to pay only 20% instead of 39.6%.

Written by Lion of the Blogosphere

November 2, 2017 at EST am

Posted in Taxes

Did Paul Manafort really commit criminal tax fraud?

Let’s remember that big corporations like Apple hardly pay any federal income tax because of the fiction (or maybe the reality) that their profits actually belong to overseas subsidiaries, and according to the tax laws, the profits are only subject to U.S. income tax when the subsidiary pays a dividend to the parent corporation in the United States.

Paul Manafort presumably set up the same sort of structure for his international consulting business.

The primary illegality alleged in the indictments is that he had these foreign corporations spend millions of dollars on a mansion in the Hamptons, an apartment in Arlington Virginia, etc, and these were personal expenses not business expenses, and therefor were in the nature of dividends for which he didn’t pay income tax. (Also expensive cars, rugs, clothes, artwork.)

I don’t practice tax law in real life, so I have no idea if this would normally be a criminal fraud prosecution, or just a civil action by the IRS.

Written by Lion of the Blogosphere

October 31, 2017 at EST pm

Posted in Politics, Taxes

Ann Coulter, read my blog

She wrote this column where she accused Stephen Paddock of being a money launderer.

Too bad she didn’t read my blog. Three days before her column, I wrote:

I am almost certain that the news report that he made $5 million from gambling in 2015 is fake news. Someone is almost certainly ignoring his reported gambling losses during the same year which would be reported as an itemized personal deduction on Form 1040 Schedule A.

What’s more likely? That Stephen Paddock was a master criminal and the authorities are hiding that from us? Or some reporter from the Los Angeles times is too lazy to fact check an article and too stupid to realize that the claim in the article is absurd?

Hanlon’s razor: never attribute to a conspiracy that which is adequately explained by stupidity and incompetence.

Written by Lion of the Blogosphere

October 16, 2017 at EST pm

Posted in Taxes, Uncategorized

Too good for Republicans

http://www.dailymail.co.uk/news/article-4932944/Trump-promote-tax-plan-address-manufacturers-group.html

Yesterday I wrote that the only good thing in the Trump tax plan was removal of the deduction for state taxes. Looks like the only good part is already being rejected by Republicans.

I also predicted that nothing would ever get passed because, as with the ACA bills, zero Democrats would support it, and a few Republican dissenters would kill it. Looks like that’s already happening.

Written by Lion of the Blogosphere

September 29, 2017 at EST pm

Posted in Taxes

Tax plan

The bad:

  • Why is Trump pushing this at all, before he fixes immigration?
  • Elimination of estate tax, a giveaway to the richest of the rich who nearly all hate Trump.
  • 25% pass-through tax, a big loophole that makes the higher 35% rate moot for everyone rich enough to afford accountants to turn their income into “pass-through” income. Making the tax plan a massive tax cut for the rich, lowering the top rate from 39.6% to 25%.
  • Tax break for “money” that’s overseas. Money is in quotes because in most cases that money is mostly an accounting trick to avoid paying taxes and not a bunch of bills in suitcases that are waiting to be paid to U.S. workers if only Republicans could “liberate” it from foreign captivity. Do big corporations like Apple and GE really need another tax break right now?
  • Move to a territorial tax system? The worldwide tax system keeps companies honest and prevents them from shifting all of their “profits” to low-tax countries. See above.
  • Elimination of AMT: new loopholes for the rich.

The good:

  • Reducing the value of tax deduction for state income tax, which punishes high-tax states like California and New York which never vote Republican. I say just pass this and forget about the rest of this stupid plan.

The prediction

  • Suddenly, Democrats will care about the budget deficit and Republicans will forget they ever cared about it. Politicians from both parties disgust me.
  • Like ACA repeal, zero Democrats get onboard, and enough Republicans refuse to cooperate so that nothing gets passed.

Written by Lion of the Blogosphere

September 28, 2017 at EST am

Posted in Taxes

Immigration, not tax reform

I am not happy about Trump pushing tax reform. We know this is going to turn into big tax cuts for the top 1% and for international corporations. And I don’t expect that Republicans in Congress are going to have any greater agreement on this than they had on repealing Obamacare.

And I am very worried about immigration. Trump has done some great stuff on immigration through his appointments and use of executive orders, but all that will be undone if a Democrat takes over in 2020 (which we have to admit is a pretty strong possibility).

I want to see statutes that permanently prevent future presidents from not enforcing the immigration laws the way Obama did. I want E-Verify to be mandatory for all employers whenever they hire someone. I want reductions in legal immigration. I want reductions in H-1 and H-2 visas. I want the wall funded. I want more immigration personnel hired so that we can deport illegal aliens faster. I want the government to stop giving benefits to illegal aliens. This is what Trump should be doing and not wasting whatever political capital he has left on tax reform.

Written by Lion of the Blogosphere

August 30, 2017 at EST am

Posted in Immigration, Taxes

Steve Bannon wants to raise taxes on the very rich

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 EST pm

Posted in Taxes

Libertarians are wrong about taxation

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 EST 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 EST am

Posted in Taxes

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