That ‘Marvelous’ Tax Cut

This will be the first resurrection of the VOMITORIUM…..

About two years ago the Trump tax cut went into effect and we were promised so much to sell them to the public by Trump, Mnuchin and Kudlow the dude that played an economist on TV…….and yet NOTHING they promised to the public has occurred…..corporations are smiling with the windfall of profits because of the cuts….

But the biggest bullsh*t promise was that these tax cuts would slash the federal deficit… far after two years that is NOT happening….

“A treasury secretary who can’t count needs to be held accountable.”

That was the message progressive advocacy group Americans for Tax Fairness (AFT) directed at Steve Mnuchin Friday, marking the two-year anniversary of the treasury secretary’s claim that the GOP’s 2017 tax cuts would slash the U.S. budget deficit “by a trillion dollars.”

AFT pointed out in a statement that the deficit has soared in the two years since passage of the tax legislation. CNN reported earlier this month that the deficit topped a trillion dollars during the first 11 months of fiscal year 2019.

“Mnuchin’s empty promise shows just how much the 2017 tax cuts for the rich were a scam on the American people,” said AFT executive director Frank Clemente. “Mnuchin’s prediction was off by $1 trillion.”

Another economic lie from Trump and his Boyz that has NOT materialized……manufacturing is NOT returning…..factories are NOT re-opening…..and those millions of jobs have yet to appear…….Mexico is NOT paying for the Wall our military families are…..all in all this is just bullshit with a capital “B”.

What more will it take for the American people to wake up and vote these corrupt toads out of office?

Be Smart!

Learn Stuff!


“Lego Ergo Scribo”


2017 Final Tax Bill

It’s Monday and then political world is all a tether over the tax bill that will soon be voted on soon.

This thing had all the political drama that a good saga needed to be newsworthy…..but all that aside…..what does this final version look like?

Congressional Republicans on Friday evening revealed the final version of their massive tax bill, which appears likely to pass next week, the Washington Post reports. Here’s some of what’s included in the “Tax Cut and Jobs Act”:

  • The corporate tax rate is reduced from 35% to 21%, representing an approximately $1 trillion tax cut over the next decade.
  • Despite Trump’s claim the bill wouldn’t cut taxes for the wealthy, the wealthiest Americans see their tax rate reduced from 39.6% to 37%. The bill also raises the income needed to hit that tax rate.
  • People can inherit up to $11 million tax-free—an increase from $5.5 million—in changes to the estate tax.
  • The bill lowers tax rates within all seven tax brackets, leading to lower taxes for most Americans, ABC News reports. But those cuts expire in eight years, and independent analyses have found people making under $75,000 will pay more in taxes over the next decade.
  • The standard deduction is increased from $12,700 to $24,000 for joint filers and from $6,350 to $12,000 for individuals.
  • In a move seen as targeting blue states, the bill limits state, local, and property tax deductions to $10,000. Those deductions are unlimited under current law.
  • The bill keeps popular deductions for student loan interest and medical expenses, as well as graduate students’ tax break.
  • The bill repeals the ObamaCare individual mandate and allows drilling in the Arctic National Wildlife Refuge, the Hill reports.

The Tax Cut and Jobs Act will be voted on next week, starting with the House on Tuesday. Republicans can only afford to lose two votes in the Senate, but there are currently no Republican senators on the record against the bill. Analysts have suggested tax cuts in the bill will add $1.5 trillion to the deficit and would likely not pay for themselves through economic growth, as Republicans and the Trump administration claim.

BTW, nothing about this is true with the exception that it will add to the National Debt……$1.5 trillion that my granddaughter will have to pay….this bill sucks!

That Taxes Thing

The focus of the day is the economy and what is more controversial than taxes?

We can mark the day….taxes will be all over the web come 2014….it will be a major stepping stone for campaigns….the conservs will be all over this issue especially the need to lower taxes, especially for corporations……they will argue that the US has the highest corporate tax rate in the civilized world……but after they take all their deductions and special dispensations it is one of the lower…..(we can argue that later)…..I have a problem with the whole tax thing in general……the argument is that if we lower taxes we will create more jobs which in turn will increase revenue and make the skies blue and the angelic chorus sing……to me it is a total bullsh*t belief.

Jobs will be #1 issue for Dems……but will they follow Bubba Clinton and cave to the conservs on taxes?  BTW, we have been lowering taxes for 20+ years and how many jobs has it made?  How many good paying jobs?  I have been writing on politics and economics for 40 years and I have yet to see any benefit for the nation by lowering taxes……it does nothing to solve poverty…if anything it makes it worse……

But back to the con job…..lower corporate taxes…….from an op-ed written by Nathan Proctor…….

For years, business lobbyists have advanced the theory that lowering corporate tax rates would create jobs in the U.S. Their argument is that any effort to close corporate tax loopholes would have to be coupled with legislation to lower overall taxes for corporations. This argument, with the help of its powerful backers, has become the prevailing theory in Washington.

The report, released earlier this month by the Center for Effective Government (CEG), examined the tax rates paid and jobs created by 60 large, profitable companies. The companies were not cherry-picked. Rather, they came from a larger group of 280 corporations and CEG examined the 30 companies that paid the highest effective tax rate and the 30 companies that paid the lowest effective tax rate.

The report’s conclusion? The 30 companies that paid the highest tax rates created nearly 200,000 jobs over a five-year period. Conversely, the companies that paid little in taxes or no taxes whatsoever shed about 51,000 jobs during that same period.

But rather than avoiding taxes and lobbying for even lower rates, the report’s authors argue that corporations should pay their fair share for the national public structures that allow their businesses to be profitable in the first place. Their argument is that corporations enjoy a number of benefits that clearly are the result of taxes all of us pay: a workforce educated at public expense, roads and transit systems that allow employees to get to work and goods to reach customers, and consumer safety standards and inspections that give consumers confidence in products.

Closing loopholes is not the answer…….changing, not reforming, the tax code is the only way to be sure that equity is practiced in our method of taxation.  And there is the rub……Washington will reform, not change….and that will accomplish only one thing….make life for the middle class worse….maybe 2 things…..reform will make the wealthy pay less and make more profit and in the end…that is the job of Washington…protect the wealthy.

They, meaning the conservs, still cling rabidly to the notion that trickle down economics works…..that has been proven to be a mindless belief with no foot in reality.

Thinking about the taxes thing I have come to the realization……with tax cuts and the loss of revenue will make the deficit raise then they use that to drive the move to cut social programs to help the deficit….and then once they have that accomplished they return to the tax cut thing which they will get and the deficit will raise and then the programs are cut… is a vicious cycle……a cycle that the Dems allow to continue….looks like all the special interests money is well spent.

Rates Or Reform? Part Three

This is the last of the series on the popular misconception that there will be some major tax reform of the code and the closing of loopholes….and this will add to the revenue of the country to get us out of the trouble we are in on the fiscal side of governing……that is right Batman, I said….MISCONCEPTION!

I have covered the taxes on individuals and those are safe…..part two was the taxes of the small businesses, the engine that drives our economy, at least that is the slogan of the day, and these deductions should be safe from tamper…….that leaves the larger corporations……let us now look at their major deductions and who they benefit……..

We will start with the 10 top deductions…… descending order……

10) Graduated Corporate Income
This policy places the first $50,000 of a corporation’s profit at a 15 percent tax rate, with higher profit levels garnering higher tax rates, until it tops out at 35 percent for taxable corporate income exceeding $335,000. The result is that an owner of a small corporation pays only 15 percent in taxes on the first $50,000 of profit, leaving more left over potentially for reinvestment and growth.
5-yr Cost to Government (2011-2015): $16.4 billion
Who benefits: Individuals that own small corporations.
9) Inventory Property Sales
Foreign income of American companies is taxed in the country in which it is generated, and the U.S. gives a tax credit for that amount in order to avoid double taxation. Some companies have accumulated a glut of such tax credits (the “inventory”), and in order to use them up, they artificially boost foreign income through a “title passage rule” that allows companies to allocate 50 percent of income from U.S. production sold in another country as income generated by that foreign country (the “property sales”).
5-yr Cost to Government: $16.7 billion
Who benefits: Multinationals with operations in high-tax foreign countries.
8) Research and Experimentation Tax Credit
Intended to spur research and development within companies, in its simplest form this break allows for a 20 percent tax credit for “qualified research expenses.” There are more complex applications, as well. Detractors complain that it is paying corporations to do research they would have done anyway.
5-yr Cost to Government: $29.8 billion
Who benefits: Pharmaceutical companies, high tech companies, engineers, agriculture conglomerates.

7) Deferred Taxes for Financial Firms on Certain Income Earned Overseas
Because most financial firms conduct their foreign operations as branches rather than as subsidiaries, as most companies in other industries do, they do not benefit from the tax breaks afforded to foreign subsidiaries. To compensate, this loophole enables financial firms to treat income from their foreign branches as if they were subsidiaries, along with all of the attendant tax benefits.
5-yr Cost to Government: $29.9 billion
Who benefits:Any financial firm with foreign operations.
6) Alcohol Fuel Credit
This is a tax credit for the production of alcohol-based fuel, most commonly ethanol, which is made from corn. The credit ranges from $0.39 to $0.60 per gallon. In theory, the credit is meant to encourage alternative forms of energy to imported oil. It is largely responsible for propping up the price of corn, and is extremely popular in corn-producing states like Iowa and Illinois.
5-yr Cost to Government: $32 billion
Who benefits:Food and agricultural conglomerates in the Midwest.

5) Credit for Low-Income Housing Investments
As you might expect, this one gives tax breaks to companies that develop low-income housing. It’s the rule that’s responsible for so many larger new developments setting aside 20 percent or 40 percent of their units for people whose income is well below the area’s median gross income.
5-yr Cost to Government: $34.5 billion
Who benefits: Real estate developers.
4) Accelerated Depreciation of Machinery and Equipment
This one allows companies to deduct for all of the depreciation of a piece of equipment at once (as opposed to over the, say, 20 years it actually takes the item to depreciate). This is the equivalent of the U.S. government giving the company an up-front, interest free loan. Congress recently made this expenditure temporarily even larger for 2011, to encourage investment in equipment.
5-yr Cost to Government: $51.7 billion
Who benefits: Airlines and manufacturers using large equipment that lasts many years.
3) Deduction for Domestic Manufacturing
This loophole enables a tax deduction for manufacturing activities conducted by American companies within the United States. It covers conventional manufacturers, but also extends to industries like software development and film production. The intent is to keep manufacturing from being outsourced.
5-yr Cost to Government: $58 billion
Who benefits: Any U.S. company that produces a product within U.S. borders.

2) Exclusion of Interest on State and Local Bonds
Companies (and individuals) do not pay federal income tax on interest from their investments in state and municipal bonds. What’s more, private companies can in some cases issue tax-free bonds of their own for projects that benefit the public, such as construction of an airport, stadium or hospital.
5-yr Cost to Government: $59.8 billion
Who benefits: High-income investors and corporations.
1) Deferral of Income from Controlled Foreign Corporations
Multinational companies can defer paying U.S. income taxes until they transfer overseas profits back to the United States, under this law. In practice, many companies leave much of their profits overseas indefinitely, thus paying only the tax in the relevant foreign country, which is likely far lower than the U.S. rate, and avoiding U.S. taxes permanently. The list of corporations enlisting this loophole is seemingly endless.
5-yr Cost to Government: $172.1 billion
Who benefits:Every multinational company.

There you have the top 10 deductions for large corporations…….now which of those do you truly see on the chopping block for reform?
I have covered the tax deductions for the three sectors of the economy that would be included in any tax reform of the code……if these are sacred and safe just where will all the cash they promise the country could get with a logical reform of the tax code?
 I ask again….just where will this $1.6 trillion come from that is promised with the reform?  Does anyone see this as simple as the MSM would have us believe?

Rates Or Reform? Part Two

Yesterday’s post we saw that the reforming of the tax code will be the most logical answer in the search for revenue….and that the deductions and loopholes that apply to the individual will most likely not be part of the solution…….if not them, then whom?

The next sector to look at are the small businesses for answers to the reform questions.  Let’s look at the major deductions that are within the tax code…….

Allowable deductions include:

  • Employee wages and most employee benefits
  • Rent or lease payments
  • Interest on business loans
  • Real estate taxes on business property
  • State, local and foreign income taxes assessed to your business
  • Business insurance
  • Advertising and promotion costs
  • Employee education and training
  • Education to maintain or improve your own required business skills
  • Legal and professional fees
  • Utilities
  • Telephone costs
  • Office repairs

1. Start-up Cost Deductions

You can deduct up to $5,000 in start-up and $5,000 in organizational costs for the first year of business. These deductions apply to expenses paid or incurred after Oct. 22, 2004. The rules differ for expenses before that date or if your costs exceed $50,000. Expenses that are not deducted can be amortized over a 180-month period, which begins when you open your business. You can write off or amortize market research, advertising, employee training, business-related travel, legal advising and other costs.

2. Education Deductions

The IRS has strict guidelines for deducting educational expenses, so be sure to read Publication 970, “Business Deductions for Work-Related Education,” thoroughly. Generally, employers can deduct employee educational expenses if the courses maintain or improve job-related skills, or if employees need the education to continue in their current jobs. If you are self-employed, you can also write off some educational expenses. Transportation to and from the classes may be deductible. You can’t write off any educational expenses that train you in a new field, however.

3. Vehicle Deductions

Auto deductions are clearly delineated under IRS rules and tend to be among the more scrutinized items, so meticulous record-keeping is critical. You can deduct vehicle expenses either by the mile (for tax year 2006, the IRS allowed a deduction of 44.5 cents per mile driven for business purposes) or for actual expenses such as gasoline and maintenance. If you use your personal vehicle on the job, keep careful records about where you went and the nature of your business. You also can write off a newly purchased vehicle (even if it’s bought second-hand) in one deduction or through depreciation, which lets you write off parts of business equipment costs over several years.

The IRS stipulates that personal auto use cannot be written off as a business-related expense, so be sure to follow the guidelines in Publication 463. If your employees are using a business car for personal use, the IRS wants you to record the value in their W-2 forms or wages. For credits, keep an eye out for environmentally friendly IRS initiatives: You could receive up to $3,150 from the government if you have purchased a hybrid for your business since 2005. Check out Form 8910 for more details.

4. Equipment Deductions

Small businesses can take a single deduction of up to $108,000 for equipment purchased in 2006. The deduction falls under Section 179 of the tax code and is reduced if those equipment purchases exceeded $430,000. The deduction in prior years was only about $25,000; in 2007, it will rise to $112,000. As of now, however, the higher deductions are only good through 2009.The equipment doesn’t have to be new, as long as it’s newly purchased and will be used at least half of the time for your business. Equipment includes computers, machines, furniture, cars and a host of other necessities. Movable equipment generally counts; property does not. You will need to fill out Form 4562 to take the deduction. Businesses that choose not to take the immediate deduction can write off portions of their equipment purchases over several years through depreciation.

5. Entertainment Deductions

The IRS doesn’t mind your mixing business with pleasure – within reason. You can deduct up to 50 percent of entertainment expenses for unreimbursed business meetings. The entertainment must be within a “clear business setting” (such as at a conference) or should immediately precede or follow a business meeting. If you are self-employed, the 50 percent deduction limit does not apply.

6. Travel Deductions

Unreimbursed travel expenses are tax-deductible. The IRS recommends keeping a log of your expenses and receipts. Transportation, (such as airfare) lodging and even dry cleaning can be deducted, and half of any business meals. You also can deduct expenses for business associates traveling with you. You can’t write off expenses for family members or friends if they accompany you, unless they are employees and are professionally involved in the business end of the trip, but it is fine to deduct your part of the trip if it is for business.

7. Software Deductions

Software normally must be written off over three years because it will serve your business for more than one year. Section 179, however, allows small businesses to fully deduct off-the-shelf software the year it is purchased, as long as it is used the same year.

8. Charitable Deductions

Partnerships, S corporations and limited liability companies all require that their members file the company’s taxes on their personal forms, including charitable donations. Donations are “passed through” members, like the organization’s income. C corporations are entitled to corporate deductions.

Individuals can deduct between 30 percent and 50 percent of their adjusted gross income to qualifying 501(c)(3)charities and foundations. Corporations can deduct up to 10 percent of their taxable income, according to the Better Business Bureau’s Wise Giving Alliance. If you want to contribute $250 or more and receive a deduction, you must have a letter from the organization verifying your donation.

If your business makes a non-cash donation, such as giving a car or a computer, figure out how much you can deduct. The deduction will decrease if you’ve already received a tax break for the donated property or if it has lost significant value. Check both Publication 551 and the Section 179 deduction.

9. Advertising Deductions

Advertising and promotions directly related to your business are deductible as miscellaneous expenses. See Publication 535 to write off advertising and other costs.

10. Legal and Professional Fee Deductions

Accountant and attorney fees are deductible as business expenses, but you cannot deduct professional fees for purchasing business assets such as equipment. Those charges are included as costs of the purchase. Sole proprietors can write off fees from tax professionals on Schedule C or Schedule C-EZ. For sole proprietors, any additional expenses can be deducted on Schedule A of your 1040.

Now there is a whole other post on who is a small business……..the official definition is any company with 500 or less employees……..will these be asked to close their business loopholes?

Hell, NO!  Dems will try to protect the “Mom and Pop” business and the Repubs will protect the larger ones……so these entities will be protecting from any loss of deductions……

Now we have eliminated the individual and his/her deductions and the small businesses that everyone believes is the engine of the economy, at least that is the slogan they want us to latch onto…….so…..who is left?

Part three will be tomorrow and will look at the large corporations and their loopholes…….

Rates Or Reform? Part One

What is it gonna be?  That my friends is the magical question………my grandfather use to say, “why write a book when a paragraph will do?”

Unfortunately this subject cannot be adequately explain in a paragraph…… I tapped into the Russian writer in me (that means using more words than necessary to explain the situation)………

This subject needs a series to properly access the situation……

We are hearing a lot about this possible new found path to bi-partisanship……that tax reform could be that new awakening… that I say… are delusional!  Why so?

Dems want a change in rates…that is a continuing lower rate for us mere mortals and a higher rate for those people making $250,000 a year….we all know this has about as much chance of a compromise as me getting a shot at Megan Fox…….

And then there is the clap from the Repubs….that is that we need to reform the tax code and that will increase our revenue to the point that we should be solvent……there are some Dems that gives this approach a nod or that it is worth some discussion……

Okay, let us say that this is the road that the elected parasites want to travel…….now the question is……where will the reform of the tax code come from……from individuals?  Or maybe from business would be where to start?  A couple of excellent questions… let’s look at the things that would be inclusive……..

Let us begin this series with the individual………..

1. Mortgage interest and property taxes.
You can deduct the mortgage interest (not the principal) that you pay on a loan secured by your primary residence or a second home. To claim the deduction, you must be obligated to pay the debt and you must actually make the payments. You can also deduct any taxes you pay on real estate you own that is not used for business. If you have a mortgage on the property, the annual mortgage statement (Form 1098) you receive from the bank should includeboth the amount you paid in real estate taxes for the year and the interest and points you paid for the year (your mortgage interest deduction).

2. Charitable donations.
You can deduct any cash or noncash contributions you make to a qualified nonprofit organization. You are supposed to have documentation for any cash contribution, including contributions under $250. For all noncash (property) contributions and cash contributions over $250, you must have a receipt or acknowledgement from the nonprofit organization. For noncash (property) contributions over $500, you have to file an extra form with your tax return, Form 8283, Noncash Charitable Contributions.

3. Medical expenses and health savings accounts.

You can deduct the amount of your medical and dental expenses that exceed a certain percentage of your adjusted gross income. For many years, the percentage was 7.5%. However, starting in 2013, this percentage goes up to 10% (except for people over 65 years old who are exempt from the increase until 2017). So starting in 2013, if your AGI is $100,000, you can deduct your medical expenses only if and to the extent they exceed $10,000. Eligible expenses include both health insurance premiums and out-of-pocket expenses not covered by insurance for both you and your dependents. Unless your medical expenses are substantial, however, your medical expenses will probably fall below the AGI percentage limitation, meaning you won’t be able to deduct anything.

If you have a qualified Health Savings Account (HSA), you can deduct your contributions to the account, and you don’t have to pay tax on any interest you earn from the account. To establish an HSA account, you must have a high-deductible health plan that qualifies under the HSA rules. You can use money in your HSA account to pay almost any kind of health-related expense.

4. Child and dependent care.

If you have to pay someone to care for your child (under 13) or a dependent needing care so that you can work or look for work, you may be able toclaim a tax credit for those expenses. The credit is a percentage of your eligible work-related child or dependent care expenses, ranging from 20% to 35%, depending on your income.There is a dollar limit on the amount of expenses for which you can claim the credit. The limit is $3,000 of the expenses paid in a year for one person, or $6,000 for two or more. You must reduce these dollar limits by the amount of any dependent care benefits provided by your employer that you exclude from your income.

5. 401(k) and IRA contributions.
If your employer offers a 401(k), it pays to maximize your contributions, especially if your employer matches them. For the 2012 tax year, the maximum contribution is $17,000. If you are 50 or older, you can contribute an extra $5,500 per year.

For IRAs, you can contribute $5,000 in 2012, and deduct that amount from your income. If you are 50 or older, you can contribute an extra $1,000.

6. Student loan interest.

You can deduct up to $2,500 in student loan interest payment per year, for the lifetime of the loan. There are income limits — you can’t take this deduction if you make more than $70,000 as a single person or $145,000 as a married couple.

7. Education expenses.
You can deduct $4,000 for tuition-related expenses, or you may qualify for the American Opportunity Tax Credit (AOTC; formerly the Hope and Lifetime Learning credits), which are also for education.

In addition, you can set up a Coverdell education savings account and contribute up to $2,000 per year. The amount you contribute isn’t deductible, but distributions from the account for payment of tuition are tax-free. You can also set up a state-sponsored college savings plan, known as a Section 529 plan, which allow tax-free withdrawals for qualifed college expenses.

8. Job expenses.

You can deduct education and training costs for your job if your employer doesn’t reimburse you for them (and if the education is for your current job, not to get a better job later). Job-hunting expenses, including mileage, are also deductible. If you’re a teacher, don’t forget to include teaching-related expenses for a small tax break.

9. Home office tax deduction.
If you use a portion of your home exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, your mortgage or rent, and depreciation.

Of these deductions….can you see any of them being eliminated?  Can you really envision any of these deductions being eliminated from the tax code?

These are not going to be eliminated!  Why?  Dems will not want to involve the middle class in these solutions.

Then where will the reform come from and who will it effect?

Part 2 tomorrow.  Tune in to the continuing story of who gets the shaft and why.

It Is Only A Draft!

First of all–calm down!  It is NOT official…not yet……

By now most Americans have heard all the hullabaloo (the debate not the dance party) over the draft proposals coming out of the Deficit Reduction Commission….right?  The Progressives are up in arms over the proposals for Social Security and Medicare…..the conservs are pretty quiet right now…other than saying the report is a pretty good one when it comes to entitlements…..Reuters seems to have the best analysis of this report…..(since not too many readers actually click onto the links…I have put the meat of the report here for everyone to look at and decide)…….most media outlets are emphasizing that points that they have a problem with……none seem to want the whole draft proposal to be viewed……. so I thought I would try to crap on their parade……


– Would reduce discretionary spending (programs like defense and law enforcement that are set by Congress each year) in fiscal 2012 to 2010 levels; impose 1 percent cuts in each of the next three fiscal years

– In 2015, defense spending would be $100 billion lower and nondefense spending also $100 billion lower than envisioned in the White House’s current budget scenario

– Eventually bring government spending down to 21 percent of gross domestic product, from its current level of 24 percent of the economy

– Automatic cuts would take effect at the end of each year if Congress exceeds spending caps

– Set up bipartisan committee to eliminate outdated and inefficient programs

– Stretch out budget cycle over two years

– Sample cuts include: freeze pay for federal workers; reduce overseas military bases by one-third; cut federal workforce by 10 percent; slow growth of foreign aid


– Would eliminate all of the $1.1 trillion exemptions currently in the tax code, such as the mortgage-interest deduction and the earned-income tax credit

– Lower and simplify individual income-tax rates: 8 percent for those with annual incomes below $70,000; 14 percent for those with incomes up to $210,000; and 23 percent for incomes above that level

– Lower corporate tax rate from 35 percent to 26 percent

– Treat dividends and capital gains as ordinary income

– Set aside $80 billion for deficit reduction

– Gradually raise gas tax by 15 cents starting in 2013 to pay for transportation spending

– Abolish the alternative minimum tax


– Would pay doctors and other providers less for seeing patients under government programs like Medicare and Medicaid

– Cap damages in malpractice suits

– Require Medicare participants to pay more costs themselves

– Require lower costs for brand-name drugs covered by government programs

– Expand successful cost-containment programs

– Strengthen independent oversight board

– If costs grow more than 1 percent faster than the economy after 2020, require president to propose further cost cuts or a robust public health insurance option


– Would reduce farm subsidies by $3 billion per year

– Revamp consumer price index, used to calculate benefit increases, to better reflect actual rate of inflation

– Increase employee contributions to government retirement programs

– Postpone military retirement programs and make them take effect after age 60


– Would revamp the retirement program to ensure its long-term stability, but separately from the deficit reduction effort

– Add minimum benefits for poorest retirees

– Increase benefits for older retirees

– Require more affluent earners to pay more

– Raise the retirement age to 68 in 2050 and 69 in 2075

– Exempt those who work physically demanding jobs; allow them to retire at 62

Thanx to Reuters for this….maybe American media should give it a try… all the facts,  that is……….

Like I said the libs are tearing up the report for the entitlement stuff….but they need to remember that it is a draft and will take 14 or the 18 members to make it official….there will be changes and adjustments…..

To begin with I see where there could be a bit of bi-partisanship in this report….but it will mean give and take and stop all the BS….personally, I do not like the lower corporate tax, but if they are successful at changing ALL the tax code then I will go along with it (for the record, I have been calling for elimination deductions for 20 years and higher wager earners paying more into the SS program)….crappy programs…another good one…..

It is a start….and we need a starting place………if not …we got….NOTHING!

Now It Is Tax Reform?

Inkwell Institute

Budget Deficit Series #3

I was wondering when there would be a new bill dedicated to tax reform….the GOP has been hinting at it for almost a year now…..and now my wait is over….I am talking about the Gregg-Wyden Tax Reform Bill……and I am not disappointed the usual suspect are in there….tax cuts, corporate tax cuts, and on and on…

But I will let the WSJ take it from there:

The plan put forth by Sens. Judd Gregg (R., N.H.) and Ron Wyden (D., Ore.) would lower the number of marginal income tax rates to three: 15%, 25% and 35%. It also would eliminate the alternative minimum tax, which lawmakers scramble to “patch” each year in order to minimize its impact on middle-income taxpayers.

The plan would create a single corporate income tax rate of 24%, but allow small businesses with receipts of up to $1 million to expense all of its equipment and inventory costs.

The plan would target “direct payments and indirect subsidies to businesses each year,” but would leave it to the nonpartisan Congressional Budget Office to identify “the least productive” of those subsidies. Politically, that would be a tough task, as lawmakers fiercely guard subsidies that benefit their states and districts.

The capital gains tax also would see broad changes under the plan. The legislation would exempt the first 35% of capital gains income from the tax. Also, the first $500,000 of investment would be held for at least six months to be considered long-term capital gains income, and the next $500,000 would have to be held for a year to be considered long-term.

As usual this is NOT reform….this is the same thing that ALL health reform plans offer…..not reform but a tweaking of the system to benefit some but not all…..This is just an attempt to slow the criticism for the hyper-partisanship in Washington…..

If they truly wanted to reform the system then they would go with everyone pays a flat 15% of income with those making under $35,000 as exempt……they would call for ALL income to be taxed for FICA…there would be no exemption because of earnings ceiling….

The corporate tax thing….for decades the conservs have been bitching about the US has the highest corporate tax rate in the world….but they fail to mention once the tax breaks, incentives and deductions kick in it will be one of the lowest…..

I will go along with the 24% that these guys are calling for if there are NO breaks, cuts or incentives…..but that is a pipe dream on my part…why?….this section is the one that is most important…..the special interests of the corporations are pushing for this…the rest is just cover to get this section passed……

If they want REFORM then come up with REFORM…tweaking is a cowards way out….but true reform takes guts and hard choices (a future post) and those are sadly missing in Washington.

Privatization Of Medicare Is Back!

Just when you thought it was safe from the perils of the conservative attack machine–the privatization of Medicare has reared its ugly head….just recently the GOP was attacking Dems for their proposals on Medicare and I was truly impressed that they would defend medicare,  a program they have been trying to destroy for decades….but as usual, it was just smoke and mirrors on the part of the Repubs….it was the same game they always play…..

Rep. Broun of Georgia has introduced a bill that will try and privatize Medicare, HR 3889…… is reporting on this issue:

In an attempt to reclaim the right’s rich tradition of opposing Medicare, Rep. Paul Broun (R-GA) has proposed legislation that would roll back the Medicare system and replace it with a system of vouchers that seniors could use to purchase private insurance:

U.S. Rep. Paul Broun introduced his own health care reform bill last week that would, among other things, privatize the Medicare insurance program for seniors.

Broun’s bill would replace government benefits with vouchers that could be spent on private insurance or put in tax-free medical savings accounts.

Oh My God they NEVER stop trying…do they?

Will it be this?  A whole new set of reforms that will help the insurance companies while screwing the consumer?  Not a chance…it is the SAME lame reforms they always try to pass to call it health reform….Do as little as possible, but make it look like a chore to get it done… is just that easy….

God forbid that they, the Repubs, try to resurrect the really lame idea of health savings accounts (HSA)!

The Battle For Tax Loopholes

Major corporations are arming for a brawl over overseas tax breaks that could be the year’s biggest clash between business and the White House.

“We’re going to spend whatever it takes,” said Brigitte Schmidt Gwyn, senior director of congressional relations for the Business Roundtable, which represents CEOs of the nation’s largest companies.

Obama last week announced a “Leveling the Playing Field” plan aimed at overseas tax shelters and other provisions that he calls loopholes for corporations. Combined with other international tax reforms planned by the administration, the crackdown would raise $210 billion over 10 years.

These were the observations written in the Politico.  They also gave us a list of tactics to watch for in the coming battle.

1. Start immediately.

The big companies that would be affected by Obama’s proposed changes have already closed ranks. He revealed his plan in his budget proposal in late March, and a group of about 200 trade associations and U.S.-based multinational firms immediately formed the Promote America’s Competitive Edge coalition. Members range from McDonald’s to computer maker Dell and financial services giant Prudential.

2. Emphasize the economy.

The main thrust of the business argument is that Obama’s proposed changes would be bad for an ailing economy. The companies argue that, contrary to Obama’s contention that multinationals use the targeted provisions to ship jobs overseas, being competitive abroad allows them to create more jobs here at home.

3. Go local.

The coalition’s lobbying strategy aims to localize the fear of job losses by having companies reach out to home-state senators and representatives. After that, the companies branch out to lawmakers from states where they have employees.

4. Go bigger.

Another message PACE members are stressing on the Hill is that any changes to deferral should happen only in the context of a broader rewrite of the tax code. What the lobbyists don’t say is that Congress is highly unlikely to undertake fundamental tax reform anytime soon. Not only are lawmakers strapped with an already ambitious legislative agenda, but the recession means there’s no extra money to smooth out the rough spots that such a major rewrite would inevitably produce.

Now we have the tactics that will be used and it will be interesting to see how they use each one of them.  I will be keeping a scorecard .

Will Obama have his way or will there be a cave to the businesses?  My money is on the cave.