Tag: Tax Cuts

GOP Needs New Material

The GOP has been pushing the whole tax cuts thing for decades…….kinda in the same vain as the whole trickle down theory, which as we all know is a worthless lie that has never been proven to be accurate….election after election GOP candidates premise tax cuts and the world will be a better place…..if they are allowed to cut taxes then all problems will be solved and the peasants can dance…..

The problem with their solution is that it does nothing but make states broke and poor people in more debt……but they continue to push the dream and we Americans buy it every time……

Let the truth be known…….take Kansas for instance…..the gov promised with more tax cuts the state would prosper…….it was total GOP bullshit!

In 2012, Kansas governor Sam Brownback signed a massive tax cut into law, arguing that it would boost the state’s economy. Eventually, he hoped to eliminate individual income taxes entirely. “Our place, Kansas, will show the path, the difficult path, for America to go in these troubled times,” he said.

Brownback’s tax cut proposal came as Kansas’s revenues were on an upswing. Spending cuts and a one-cent sales tax passed by Brownback’s Democratic predecessor had combined with economic growth to give Kansas a surplus. Now, Brownback argued, his tax cuts would lead to even more success. “I firmly believe these reforms will set the stage for strong economic growth in Kansas,” he said.

The governor proposed to cut income taxes on the state’s highest earners from 6.45 percent to 4.9 percent, to simplify tax brackets, and to eliminate state income taxes on most small business income entirely. In a nod to fiscal responsibility, though, he proposed to end several tax deductions and exemptions, including the well-liked home mortgage interest deduction. This would help pay for the cuts.

Yet it’s now clear that the revenue shortfalls are much worse than expected. “State general fund revenue is down over $700 million from last year,” Duane Goossen, a former state budget director, told me. “That’s a bigger drop than the state had in the whole three years of the recession,” he said — and it’s a huge chunk of the state’s $6 billion budget. Goossen added that the Kansas’s surplus, which had been replenished since the recession, “is now being spent at an alarming, amazing rate.”

In other words the tax cuts did not create jobs or new business or new residents….what they did was bankrupt the state….in case you are interested it is the same with every state that has cut taxes to the bone……and it will get worse.

A noted economist, David Cay Johnston, has tracked the numbers since 2000……..

I calculated that enormous figure by comparing the average income Americans reported on their 2000 tax returns with what they reported each year for 2001 through 2012, adjusting for inflation and the growing population. Add up the income for 12 years and it turns out to be $6.6 trillion less than if we had maintained the prosperity of 2000 for a growing population.

Why use 2000 as a benchmark? Well, first off, it marks the end of one era and the start of another. More important, that very good year economically was when George W. Bush, running for president, said American prosperity would get even better if he was elected and his tax cuts — key aspects of which he kept secret until after the election — would ensure American prosperity.

The results: The prosperity of the prior decade was lost. Job growth fell far behind population growth. The median wage (half make more, half less) has been mired since 1998 at a bit more than $500 per week.

In 10 of the 12 years when the Bush tax cuts were in effect, the average income shown on tax returns was lower than in 2000. In the two upside years, average income rose modestly, up $504 for 2006 and $1,744 for 2007.

Total those 12 years and the net shortfall per taxpayer comes to $48,010.

Consider what $48,000 of additional income over those 12 years would have meant to you. It is the equivalent of $11 appearing in your wallet every morning from the start of 2001 through the end of 2012.

How much better off you would be if your income had been $48,000 higher over those 12 years? To be sure, you would have owed taxes on that money. If you were not in the top 1 percent, federal income tax would have taken on average about 10 percent of that, leaving you with $43,200. (The top 1 percent would have paid 23.5 percent in tax.) In addition, if the extra income was all in wages, then Social Security and Medicare taxes also would have taken a bite, leaving you with about $39,500.

So how much better off would you be right now if you had another $39,050? And remember that is just the extra after-tax income you would have enjoyed had the prosperity of 2000 been maintained, while then-Gov. Bush promised greater and more widespread prosperity.

I know economics can make your brain melt but the truth is that Americans are worse off because of all the tax cuts…..that is the average working stiff….the wealthy made out lioke bandits which in some sense is exactly what they are….BANDITS!

The GOP needs new material…..their bullshit about tax cuts is nothing but LIES on top of LIES!

Someone Explain ‘Loopholes”!

We hear the GOP talk about closing loopholes…….we also hear Obama and the boyz speak on the need to close tax loopholes……well it seems we have bi-partisan deal working, right?

I recently did a three part series about “Rates or Reform?  In these post I listed the most common tax deductions for the individual, small businesses and large corporations and then I asked if any of those would be acceptable to eliminate……NONE of them will be touched…….so with that said……what are these loopholes that both parties are saying that need to be closed?

I say that closing loopholes will not do anything to help the budget……it is a con job or at best just code for corporate tax reform…..where NO loopholes get closed, rather corporations just get more help with the avoidance of paying taxes…and then there is one LARGE loophole that should be included but will not be for the obvious reason…..

The top 83 US-based companies now hold a massive $1.45 trillion offshore, parked in low-tax countries, after increasing those holdings by 14.4%—or $183 billion—just in the last year, reports Bloomberg. The leader in offshore profit parking is GE (owner of MSNBC), with $108 billion, up $6 billion from last year, followed by Pfizer with $73 billion. Tech giants Google, Apple, and Microsoft increased their non-US holdings by 34% last year and $75.2 billion over the past two years. Experts say the rise is due to US tax laws, which incentivize booking profits offshore, and estimate the total amount all US companies (not just the top 83) are keeping offshore could be $1.9 trillion. “The corporate system is broken and it’s broken primarily because of international,” says one professor of tax law. The United States is one of the few countries that applies its full 35% corporate tax rate to profits made by US-based companies’ overseas offices, but companies can defer paying taxes until they return those profits home. Congress is working on alternative tax strategies—such as levying a much smaller tax on accumulated earnings, whether repatriated or not—but for now, those stockpiles keep growing.

This is the sort of loopholes that should be in the mix…..but my guess is that they will skate like they always skate……any thoughts?

Does anyone have a good idea what is meant by the generalization of “closing loopholes”?

Slaughter The Sacred Cows

Soon, March 14-16,  the start of the annual meeting of our conserv friends…..the CPAC…….and this year their slogan is “New Challenges, Timeless Principles”.   A March first was the kicking in of the sequestration that we have all heard so much about in the media……talking head after talking head has given their take on what it is, what will happen and who will be at fault……by now you, my reader, have formed your opinion with the help of your favorite talking head and I would wager that you would defend your opinion to the end……but I feel that I need to point out a few things that may have been overlooked…….

What is the time worn principles that the conservs in Congress have stood by for decades now?  (pause here for reflection)……..

First, tax cuts, not tax increases are the only way to save the economy and second, the military-industrial complex was sacred and not to be cut less we weaken our national defense and security……am I right?

The problem is that they abandoned their principle of no tax increases in the fiscal cliff debacle…..of course they could argue that it was not an increase but just letting Bush tax cuts expire……but call it what you may….it was a tax increase.

Then there is the sanctity of the defense spending…..but voila!  Now that the sequestration (who gives a damn whose idea it was?) kicking in there will be heavy cuts in defense spending…..and there is no better way to defend this……they would not come to any agreement and now the DOD will be hit and hit hard.

So, two of the sacred pillars of conservatism have been slaughtered in the name of partisan crap………I find it a bit silly to say that they are timeless principles…….principles that have been sacrificed on the alter of politics.

Let’s not forget the small government plank……..I mean look at the massive bureaucracy that GW created and he was a conserv….we could always try to defend it and say that 9/11 had something to do with the expansion…..but an expansion is an expansion….just another sacred cow that the GOP has slaughtered.

I guess conservs will try to salvage what they can by signing on to some damn silly immigration bill that they can use as one liners during the next round of elections in 2014.  But sorry sports fans……too late…..they have compromised their principles…..what’s next?

I am sure that tax cuts will still be on the agenda…..but their argument that cuts will create jobs is not playing well…..the working stiff, middle class if you will have seen their pay decline almost yearly for 20 years and corporations making billions by using those job creating tax cuts……if the GOP wants to win ever again they must find a way to connect with the middle class and I do not believe they can sell the tax cut con much longer…….

Of there is more!  The Violence Against Women Act (VAWA)……….this was a game.  The House voted on a bill that they knew that they could not get past the Senate and then this deal was hammered out and passed…….and will be signed.  The finally vote was not at all unanimous…..but when asked during interviews they can say that they voted for the VAWA……which will be a deception……true they voted for the one that could not get passed in the Senate…..just a game to try and not alienate women voters……keep an eye on this for 2014 it will be a talking point.

Addendum:  My point was proven…..on Saturday a GOP rep from Virginia was asked why he voted against VAWA and his response was….”I voted for the House version but their was a constitutional question on the final version……”  He then went on to say that he voted in favor of it twice……and that is how the game is played.

Shining Example On The Hill

Today the guys and gals should be returning from their much needed summer vacation (that is sarcasm) and the debate and the finger pointing and the lies will once again be leveled at us normal mortals…..and of course, there will be much to do about nothing (no offense to Shakespeare) we will hear all about the jobs that will be created….and to that I say CRAP!  And then the inevitable….TAX CUTS!  You want a real example of what tax cuts do to a people, a state or a country?  (Read on, McDuff)…..

Mississippi is that shining example of how NOT TO GOVERN!

As part of the spending debate I have heard a couple of pundits use Connecticut as an example of what happens when a state raises taxes…..apparently the state’s economy went into the crapper after they were raised…of course most of those making that argument are conservatives and I would expect NO less from them…..but why has not the Dems jumped on the dismal state of affairs in Mississippi as an example of what constant tax cuts do to a state?

After 20+ years of constant tax cuts and breaks the state is NO better off than it was 50 years ago….It is perpetually at the bottom of every “best” list and at the top of every “worse” list….that means education sucks, health care sucks, income sucks, more poverty and a horrible standard of living….just to mention a few.    For instance, poverty has declined by about 2% in 20 years……income has risen less than 1% in the same time…..the median income for the state is $26,000 a year….that is well below the national average……tax cuts have done NOTHING to better the living conditions of the people…..maybe the wealthy, but the regular working stiff has NOT gained anything.

In the North of the state an industry is building a plant…..to come here they demanded and got tax breaks and economic development money and in the end will create 50 jobs….in essence the state is paying companies to re-locate……

And now all the candidates are thumping their chests about tax cuts to gain supporters and one of them will win…..no one is mentioning the fact that the state is REVENUE….not more give-a-ways to big business.  Those corporate benefits are creating few jobs for the money lost….the math does NOT add up……and the people as stupid as they are, keep falling for the lies and promises and they NEVER see them for what they are….total bullsh*t!

Yes…Mississippi is a shining example of how NOT to govern…….an example of how special interests are destroying an otherwise beautiful state ……it is true for Mississippi and it is true of the United States…..the federal government is doing all it can to destroy a once proud nation into a pile of poverty stricken areas…..good job!

Tax cuts and tax breaks are just a ducky way to drive the state or the country into the crapper……take a look at Mississippi…..is that the future you want for America?  If you listen to the a/holes in Washington, that you sent there to do the country’s business, then YOU have doomed this country to mediocrity.  You can be proud of your vote!  I know I am proud of you!  (that is sarcasm in case you went to school in Mississippi)…….

Letter To Candidates

Yesterday was primary day in Mississippi and all I could do was laugh at the outcome……

The Hotline reports that Mississippi Lt. Gov. Phil Bryant (R) won a crowded Republican primary with 59% of the vote, avoiding an August 23 runoff that will most likely be necessary for Democrats Johnny DuPree and Bill Luckett.

This is a letter that I sent to each candidate for the state of Mississippi……so now after the comedy of errors that was the debt debate and final deal……I ask ALL candidates to explain the thought…….

Dear Candidate:

You are asking the people of Mississippi to vote for you in an upcoming  primary…election after election we, the people, have been told and promised that tax cuts would make Mississippi a more prosperous state….year after year that has NOT been the case….and candidates are still trying to sell that idea and the people buy it….each and every time.  So my question is about these promised tax cuts.

Tax cuts….so far the only thing they have done is make for a great campaign slogan and a couple of bumper stickers…and that is about the extent of the promise……for more years than I care to count Mississippi has been at the top of every “worst” list and the bottom of every “best” list….so tax cuts have not help the state in anyway that is noticeable.

Every administration for the last couple of decades has cut taxes as way to attract good jobs to the state….and so far all it has done is basically pay corporations to re-locate in Mississippi…the jobs are NOT there….i.e.  a recent multi-million dollar industry has come to North Mississippi, they got tax cuts and breaks and economic development money and it will create 50 jobs…where was that tax incentive making Mississippi more prosperous?

We have heard the pundits use Connecticut as an example of what happens when taxes are raised….the business economy in the state sucks….but then if tax cuts are the answer why is Mississippi so far down the list?  By that analysis Mississippi should be leading the nation in jobs creation and a good economic atmosphere….we are NOT…so what is it that tax cuts is doing for the state?

Since jobs/education/health are all in the toilet in Mississippi….how will tax cuts change that?  And why, with all our past tax cuts is it not improving now?

My question is very simple….explain to me and the people of Mississippi just how tax cuts will make their life better and more prosperous?

Cracks In The Nordquist Wall?

In case there are still those who do not know who Grover Nordquist is let me assist……he is the guy that has the Tax Pledge that almost all Repubs sign promising to NEVER raise taxes….and there is where the rub is in the debt debate…..Repubs want nothing but cuts and Dems are calling for cuts and revenue sections to any bill…..up until about a year ago…cracks are starting to form in his wall of tax cuts only…….

One of the leaders of the hammer brigade is Sen. Coburn, a Repub, but it is more in the form of a technicality than an outright dismissal of the Pledge he signed when he came to Washington……

This from the Fiscal Times……

The Wall Street Journal reportedthat Coburn was among the members of a small bipartisan group of senators who are willing to consider taxes as part of a deficit reduction package. Norquist immediately went after the three Republicans named in the article: Coburn, Saxby Chambliss of Georgia, and Mike Crapo of Idaho. (The Democrats are Kent Conrad of North Dakota, Richard Durbin of Illinois, and Mark Warner of Virginia.)The same day the Journal article appeared, Norquist fired off a letter to Chambliss, Coburn and Crapo, threatening them with retaliation for their apostasy:

I was disappointed this morning to read an article … in which you were implicated as parties to a bipartisan budget deal containing a net tax increase…. Needless to say, support for such a deal would most likely be a violation of your Taxpayer Protection Pledge. That pledge which you made to your constituents and the American people obligates you to “…oppose any net reduction or elimination of deductions and credits, unless matched dollar-for-dollar by further reducing tax rates.”

I urge you to reject this so-called “deal” which is little more than a transparent attempt to hike taxes and put off the spending restraint the country clearly called for in the 2010 elections.

Chambliss, Coburn and Crapo immediately wrote back to Norquist, rejecting his threat and the logic of his argument. They said there is a huge difference between a legislated tax increase and the natural rise in revenue that would accompany faster growth resulting from tax reform.

To Nordquist, the deficit is NOT important at all…….

Norquist is backed into a corner and forced to admit that he doesn’t really care about the deficit. He told the Washington Post’s Ezra Klein on March 9, “The goal is to reduce the size and scope of government spending, not to focus on the deficit.”When asked to explain how the size and scope of government is reduced by the tax pledge, Norquist fell back on a discredited doctrine called “starve the beast,” which says that tax cuts somehow or other automatically reduce spending and that the only thing to talk about is spending.

There must be revenue increases if there is to be a true recovery……cuts alone will do little to nothing….hopefully there are those that can do the math…….it is basic math not some exaggerated formula…….

So I ask again, is there cracks appearing in the Nordquist wall?

But wait!  There is an addendum……..this from yesterday’s Think Progress……

The Washington Post editorial board reported this morning that Norquist himself stated that allowing the Bush tax cuts to expire in 2012 would not technically violate his pledgeas “not continuing a tax cut is not technically a tax increase”:

Would allowing the Bush tax cuts to expire as scheduled in 2012 violate this vow? We posed this question to Grover Norquist, its author and enforcer, and his answer was both surprising and encouraging: No.

In other words, according to Mr. Norquist’s interpretation of the Americans for Tax Reform pledge, lawmakers have the technical leeway to bring in as much as $4 trillion in new tax revenue — the cost of extending President George W. Bush’s tax cuts for another decade — without being accused of breaking their promise. “Not continuing a tax cut is not technically a tax increase,” Mr. Norquist told us. So it doesn’t violate the pledge? “We wouldn’t hold it that way,” he said.

Norquist is quickly trying to walk back that statement, declaring that “any failure to extend or make permanent the tax cuts of 2001 and 2003, in whole or in part, would clearly increase taxes on the American people.” However, even while reaffirming this principle on MSNBC this morning, Norquist stated again that there are technical ways to allow the tax cuts to expire that “and not violate the pledge.”

Cracks are forming……’Mr. Nordquist…tear down this wall’………(sorry could not resist)………

The Truth Will Piss You Off!

From the VOMITORIUM

BTW….every one have a Good Friday and a pleasant Easter…..

We hear everyday about the debt and the deficit and the plans…cut taxes….raise taxes…..kill Social Security…..Kill Medicare…..but the biggest lie of all is the no taxes on the rich because they will create jobs if they pay less taxes….to me that is a lie…..why?……..they have been paying less taxes for years and how many jobs are they creating….especially NOW?

But put all that aside for now…..put your conserv ideas and your lib inclinations and try to wrap your head around these figures……

The US Commerce Department released a report today throwing into sharp relief just how drastically US multinational corporations are shifting jobs overseas. During the 2000s, US companies cut 2.9 million jobs in the US, while hiring 2.4 million abroad—including an increasing number of highly-skilled workers, the Wall Street Journal reports. That’s a big reversal from the 1990s, when they hired 4.4 million at home and 2.7 million abroad. These big companies employ roughly a fifth of all US workers. “It’s definitely something to worry about,” says one former George W. Bush adviser. Companies generally defend the trend by saying that productivity has increased in their US factories, and that they are chasing sales abroad. “We’ve globalized around markets, not cheap labor,” says GE CEO Jeff Immelt. “Today we go to Brazil, we go to China, we go to India, because that’s where the customers are.”

Does that piss you off just a bit?  Corporations that have taken billions in taxpayer money and they repay our generosity like that…..it s a bitch, huh?

Now people….what are you willing to do to change all this misuse of your trust?

How Many Corporations Pay Their Taxes?

Riddle me that…….

(sorry this is a bit longer than most of my posts….but it needs to be said….)

I know that some of my more conservative readers will not want to hear these proposals…..I believe that if the middle class must suffer and sacrifice then so should the others……I believe in shared sacrifice…..in action not in the idle words of politicians…….

For years conservs have been rattling on about the high corporate taxes in the US…..but they seemingly leave out the part that they get enormous tax breaks and tax cuts almost yearly….and in some states, mine to be exact, the conserv legislature is trying to eliminate corporate income tax, even though they pay very little as compared to what the working stiffs pay……

Think not?  This from Politifact Ohio……..

To back up her assertion, Fudge’s office cites media reports about particular companies – like General Electric and Bank of America — that did not pay 2009 taxes as well as a July 2008 report from Congress’ Government Accountability Office that showed it’s relatively common for big companies to pay no taxes.

Between 1998 to 2005, GAO found that about 72 percent of large foreign controlled companies and 55 percent of large U.S. controlled companies reported zero tax liability for at least one year. About 57 percent of foreign controlled large companies and 42 percent of U.S. large companies paid no taxes in two or more years, and a third of the foreign companies and one quarter of their U.S. counterparts paid no taxes for at least four of those years. Just 45 percent of large U.S. companies and 28 percent of foreign companies reported a tax liability for each of the eight years. The report defined large companies as those with at least $250 million in assets, or at least $50 million in receipts

I say if I pay a 30% tax then corporations pay the same….a shared sacrifice….that they all keep going on about……and there are other ways that corporations can be more socially involved…….I read a piece in the UK’s Guardian by Nicholas Shaxson and I say it is worth considering…..

1) Corporate profits depend on tax-financed public goods: healthy and educated workforces; good infrastructure; publicly enforced respect for contracts and property rights, and so on. When corporations avoid or evade tax, legally or illegally, they free ride on the backs of the rest of us. Stop taxing them, and you savagely undermine political community.

2) Corporation taxes are an essential backstop to personal income tax. Cut them to zero, and wealthy individuals will increasingly reclassify their earnings as corporate income, typically using offshore corporate structures, and escape tax. Gauke’s arguments about employees footing the corporate tax bill are irrelevant.

3) Gauke’s claim of a “consensus among economists” that the burden of corporation taxes falls on employees and not on capital owners, is false. The US Congressional Budget Office said last week that it was “unclear” how much of the corporation tax burden fell on employees; earlier, it said that capital bore most or all of the corporate tax burden. The Institute for Taxation and Economic Policy (ITEP) in Washington said this month that the incidence of corporate tax fell mostly on capital owners, not employees. It added that corporate income tax was among the most progressive taxes, because stock ownership was heavily concentrated among the wealthiest taxpayers. This is an especially precious tax.

4) When Gauke talks about “employees”, who does he mean? Goldman Sachs employees earned $430,700 on average last year. To the extent that the burden falls on them, taxing such firms makes the tax system more progressive. It would also cut into excessive bank remuneration, which has been a big factor in the recent financial crisis. Taxing financial corporations also curbs the “too big to fail” problem where large banks can hold governments hostage and shift losses on to taxpayers.

5) If corporation taxes didn’t fall on the owners of capital, as Gauke claims, then corporations, responding to shareholders’ wishes, shouldn’t mind being taxed. So why do they spend so much time and money designing tax avoidance strategies?

6) Limited liability companies are separate legal persons, greater than the sum of their parts. So they should be taxed separately: this is not “double taxation”. Limited liability lets shareholders dump costs on to society when things go wrong. Corporations must pay for this privilege.

7) Many corporations earn what economists call rents. These – like oil money that flows effortlessly into Saudi or Kuwaiti coffers – are earnings that arise not from hard work and real innovation but from accidents of nature or good fortune. Adair Turner recently explained how banks in the City of London are particularly adept at earning rents, such as from exploiting insider knowledge and expertise; from natural oligopolies in market-making and other activities; and from “valueless” trading activity. Economists since Adam Smith – including Turner – have advocated taxing rents especially hard.

8) Corporate tax avoidance, despite hiding behind weasel words such as “tax efficiency”, is unproductive and inefficient. When corporate managers pursue tax avoidance they take their eye off what they do best – producing better or cheaper goods or services – and focus instead on engineering transfers of wealth from taxpayers to corporations. Clamp down on it, hard, to make markets more efficient.

9) It matters where company owners and business activities are. Take a US mining company digging gold in Zambia. If Zambia raises corporation taxes, wealth will flow from wealthy US stockholders to ordinary African taxpayers. The investor will stay, because that’s where the gold is – and even if it goes, another will take its place. That basic formula works for profitable opportunities in general. Tax corporations, within reason, and they may bluff and bluster – but they will stay.

10) The “Laffer argument” that corporation tax cuts pay for themselves has been thoroughly debunked. Even Greg Mankiw, formerly chairman of George W Bush’s Council of Economic Advisers, calls Laffer’s adherents “charlatans and cranks”.

Good stuff and excellent proposal……it will NEVER come about……special interests are in control….they have almost always been in control…….but what about shared sacrifice?