No, He Will Bite

No, He Will Bite And The Dems Know It
No, He Will Bite And The Dems Know It

Despite the GOP’s scaremongering – it is election season, after all – the provisions with the Dems’ Orwellianly named Inflation Reduction Act to grant the IRS nearly $80 billion in new funding in order to, among other things, hire 87,000 new employees, won’t dramatically effect anyone in the next few years. Many of these “new hires” will simply be replacements for the current staff, approximately half of whom are at or approaching retirement age.

But, there’s no more truth or accuracy in the Dems’ claims that the middle-class and small businesses won’t experience greater scrutiny and/or audits. When the stated goal of increasing the IRS’ budget is to increase collections by $204 billion, you can be sure that the IRS is going to target anyone and everyone that they can. You can also be sure that the “Billionaires” and “Megacorporations,” most or all of whom have more and better tax attorneys than the IRS ever will, won’t be the IRS’ primary targets or the major sources of that $204 billion in extra tax collections.

Understand that approximately 50% of the largest corporations in America are already audited each year. Admittedly though, this is down from 100% of them during the Obama Regime. And yet, the Dems want to increase tax collection by $204 billion.

The largest corporations in the United States with over $20 billion of assets have had their rate of audits go from nearly 100% to 50%. Among wealthy individuals who had a positive income of a million dollars or more, the audit rate fell from 8.4% in 2010 to 2.4% in 2019.

Janet Holtzblatt
Senior Fellow, Urban-Brookings Tax Policy Center

But, simply put and much to the chagrin of Dems and their IRS, 38% of those audits fail to find any way to take more of these people’s and corporations’ money than they had agreed to pay.

No; their dog isn’t going to bite the “rich.” He will bite other people instead.

So, that fairly massive increase in tax collections is going to have to come from somewhere and somebody else. And it’s not going to be just the 1% either, since returning to Obama era audit rates for all individuals making over $400,000 would generate only 28%, or $9.9 billion of that expected $204 billion. And, even if the IRS increased audit rates 30x for taxpayers making over $400,000 and to a 100% audit rate upon taxpayers with incomes over $10 million, this would only raise to approximately $28 billion of it.

No, the IRS has a long and ongoing to this very day history of targeting the poor’s – those with $25K or less in income – tax returns for audits at a rate of 5x that of all other groups combined. I would expect that this rate would normalize somewhat… because the rates of audits will dramatically increase for those making between $26K – $200k per year and for most small-to-mid sized businesses, bringing them closer to what the poor suffer from.

It’s simple math and pragmatism. The IRS wants or needs to show increased collection and the poor and the middle-class through the 2%’ers are the ones without the resources to combat the IRS. And, there’s 100s of millions more of us. Of course we’re the ones who will be targeted by the IRS the most overall.

So yeah, the Democrats’ junkyard dog, the IRS won’t bite many now. But, it will most likely do so in 2026 and 2027 if it isn’t put down before then.

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The Hill They'll Die On

Democrats – The Hill They’ll Die On

When it’s Bernie Freaking Sanders saying something like this, Democrats should listen and take what he’s saying to heart. They won’t though. They crossed the Rubicon back in 2015 and there’s no going back for them. They’ve placed themselves in a position where they either succeed in fundamentally changing the very nature of America or this is the hill they’ll die on.

Apparently Insufficient Fear

Then, Congress is full of the sorts who ignored what the January 6th protest and resulting incursion into the Capitol meant. They put up fences; they engaged in a still ongoing kangaroo pseudo-court to persecute President Trump; they are openly attempting to disarm the People. But they’re not asking themselves what they did to bring things to this point. Not one of them – except, apparently, Senator Sanders! 😯 – not even once where we, the People could read or hear it.

When the people fear the government, there is tyranny. When the government fears the people, there is liberty… except, apparently, when that fear is insufficient or the government is too far gone into collective narcissism to understand.

No. Instead, they went directly after the POTUS that they used every means at their disposal – legal, extralegal, and possibly illegal – for four years to forcibly remove from office. In their delusional state and utter denial of their own wrongdoings, they acted as if they believe that one man, President Trump, was such a terrifyingly powerful demagogue that he could actually shape the feelings of the American people.

Hint – Trump isn’t even that great of a speaker, as the Left has pointed out repeatedly. He’s not shaping opinions or policies. He’s a just representation of Americans’ anger.

And these Democrats – and the Republicans who, for whatever reasons, are insufficiently against them – have chosen to “double-down” on things.

Democrat Weaponized FBI
The Democrats’ Federal Enforcers

Fortunately, it wasn’t the second “Shot Heard ‘Round The World.” The President was not in residence during the raid and the FBI managed not to shoot anyone else while carrying out the Democrats’ orders. That would have sparked some sad hybrid of revolution, civil war, and poorly focused violent insurrection.

Weaponizing the FBI and then being that callously overt in its misuse is bad enough. It was probably the last straw for the DOJ and, by extension, all the federal law enforcement and quasi-law enforcement agencies.

At this point, I’m not sure what’s going to happen beyond Congress and their Alphabet Bois and Gurls either not developing self-awareness or realizing that they’ve already gone too far and can’t back down now. What it’s going to look like and exactly when it going to go down is beyond my ken.

But I’m pretty sure that this is the hill they’re going to die on, or it’s going to be the hill that America dies on… or both, as is more likely.

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Auditing Inflation Policies

Auditing Inflation Policies
Auditing Inflation Policies

Ah yes; Biden and Co., along with the Dems befouling the Capitol, are seeking to remediate our supposedly 0% inflation rate, largely by dramatically increasing government spending and adding funding for a slew of IRS agents. And, of course, continuing the Obama era policy of having any and all federal agencies stockpile weapons, ammunition, and military-grade equipment.

But then, this so-called Inflation Reduction Act was never really meant to benefit the majority of the American people, as even freaking NPR admits.

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The 2017 Tax Reform Plan

The White House last Wednesday issued President Trump’s goals and the key features for tax reform to be begun in 2017.

2017 Tax Reform for Economic Growth and American Jobs

The Biggest Individual And Business Tax Cut In American History

Top Line:

  • The U.S. tax code is overcomplicated and fails to create enough jobs, or provide relief to middle class families.
    • Since 2001, the U.S. tax code has faced nearly 6,000 changes, more than one per day.
    • Taxpayers spend nearly 7 billion hours and over $250 billion annually on compliance costs.
    • The U.S. has the highest statutory tax rate in the developed world, discouraging business investment and job creation.
  • President Trump is proposing the largest tax cut for individuals and businesses in U.S. history, which will make everything go up, all the insurances are going to become much more expensive which makes me worry a lot because even though I use a really affordable company for my Truck Insurance, if taxes go up everyone will be very affected.
    • It will simplify the tax code, incentivize investment and growth and create jobs.
    • It will provide historic tax relief for middle income families and small business owners.

The Need For Comprehensive Tax Reform

  • An overly complex tax code is confusing and burdensome on American taxpayers.
    • The last major effort to successfully reform the U.S. tax code was over 30 years ago under President Reagan.
    • Today, according to the IRS’ National Taxpayer Advocate, the federal tax code is nearly four million words long.
    • Congress has made more than 5,900 changes to the federal tax code since 2001 alone, averaging more than one change a day.
    • The National Taxpayers Union estimates that Americans spend 6.989 billion hours at a cost of more than $262 billion on compliance and record keeping costs.
    • Instead of a single tax form, the IRS now 199 individual income tax forms and 235 business tax return forms.
    • Approximately 90% of taxpayers need help doing their taxes, they use tax preparation gilbert az , or H&R Block
  • Today, with a corporate tax rate of 35%, U.S. businesses face the highest statutory tax rate in the developed world, and fourth highest effective tax rate, which discourages job creation or investment.
    • The U.S. is out of step with its competitors, having the highest corporate income tax rate
      among the 35 OECD nations and being the only nation that has increased its rate since
      1988.
    • A lower business tax rate will discourage corporate inversions and companies from moving jobs overseas.
    • The high corporate tax rate keeps trillions of business assets overseas rather than being reinvested back home.
    • Even President Obama proposed lowering the business tax rate to 28 percent to help spur economic activity.

Tax Reform for Economic Growth and American Jobs: The Biggest Individual And Business Tax Cut In American History

  • Goals For Tax Reform
    • Grow the economy and create millions of jobs
    • Simplify our burdensome tax code
    • Provide tax relief to American families-especially middle-income families
    • Lower the business tax rate from one of the highest in the world to one of the lowest
  • Individual Reform
    • Tax relief for American families, especially middle-income families:
      • Reducing the 7 tax brackets to 3 tax brackets of 10%, 25% and 35%
      • Doubling the standard deduction
      • Providing tax relief for families with child and dependent care expenses
    • Simplification:
      • Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers
      • Protect the home ownership and charitable gift tax deductions
      • Repeal the Alternative Minimum Tax
      • Repeal the death tax
    • Repeal the 3.8% Obamacare tax that hits small businesses and investment income
    • Business Reform
      • 15% business tax rate
      • Territorial tax system to level the playing field for American companies
      • One-time tax on trillions of dollars held overseas
      • Eliminate tax breaks for special interests
    • Process
      • Throughout the month of May, the Trump Administration will hold listening sessions with stakeholders to receive their input.
      • Working with the House and Senate, the Administration will develop the details of a tax plan that provides massive tax relief, creates jobs, and makes America more competitive – and can pass both chambers

Breaking It Down

So, for individuals, President Trump wants replace the current seven tiers of marginal rates (10%, 15%, 25%, 28%, 33%, 35%, and 39.6% respectively) with just three: 10%, 25%, and 35%. The President also stayed strong on his call to repeal of the 3.8% Net Investment Income Tax (NIIT) imposed under the auspices of Obamacare upon certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

The President also wants to double the standard deduction while, at the same time limiting itemized deductions to mortgage interest and charitable contributions. He also wants to eliminate the Alternative Minimum Tax and estate taxes aka “The Death Tax.”

Finally, this outline also prescribes “tax relief for families with child and dependent care expenses” and for ending “tax breaks that mainly benefit the wealthiest taxpayers,” but, given the vagueness of these points, I’m writing those off as low-priority talking points that are expected to be ground-up by the Congressional “Sausage Making Process.”

For businesses, The President’s plan is to reduce to maximum statutory corporate tax rate from 35% to 15% and to enact a territorial system of corporate taxation, which generally would exclude foreign earned income from taxation. At the same time, however, the President desires there to be a “one-time tax” on corporate earnings realized and held overseas and upon which tax is being deferred due to those monies not having been “repatriated,” i.e., transferred to the US.

My Informed But Inexpert Analysis

On this document itself – Despite that it’s generally being called a tax plan and despite the lamestream enemedia’s attacks upon as being such, this is not a plan. It is, vastly unsurprisingly, a CEO’s bulleted guidance to his senior executives on the subject of US federal income tax changes and reforms. It needs to be considered and critiqued on those terms and solely within that context.

On personal income tax reforms – It would be indeed a great simplification of people’s taxes. It would also be a small reduction of the tax burden of the upper financial echelons but a much larger reduction to the tax burdens of those in middle to middle-lower tiers, especially single income couples and families.

On corporate income tax reforms – If implemented something close to as envisioned, this reform would represent a 57% reduction to the maximum statutory taxation of American companies’ income by the federal government. This, combined with the proposed one-time tax on unrepatriated funds, could easily encourage more companies to either stop “partnering” with foreign firms to avoid the US’ currently punitive tax levels or, at least, repatriate more of their overseas profits, thereby actually adding those monies to the American economy. At the same time, the switch to territorial taxation – not taxing corporation’s foreign income at all – may well encourage more international partnerships but with a reversed controlling interest dynamic.

Frankly, in my opinion, this is a solid and solidly pragmatic approach for addressing a long-running problem, that of American corporations being taxed away or, at least, using – and sometimes creating through their lobbyists – loopholes to stay in business despite the crushing burden of a %39 corporate income tax.

Less thought of but possibly of greater import is that such a dramatic reduction of federal corporate income tax stands a very good chance of creating more C-Corporations (C-Corps). This would reduce, possibly begin to reverse, the 30+ year trend of C-Corporations declining in favor of S-Corporations (S-Corps) [Note: LLCs are S-Corps for federal tax purposes].

I’m not going to dive into details but suffice it to say that there would be many benefits from switching back to having many C-Corps vs. many S-Corps any these benefits would accrue to the nation as a whole, the government, and the companies’ employees as much or more so than they’d accrue to the owners and shareholders.

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Whenever We Can

Sometimes a small, off-the-cuff remark can be more chilling and more important than either a planned speech or a spontaneous bombast. What IRS Commissioner John Koskinen said as an assurance to the House Ways and Means subcommittee on health is one such chilling and important off-the-cuff remark

Whenever we can, we follow the law.

— IRS Commissioner John Koskinen

Frankly, I can think of no statement more important or more chilling than Koskinen’s simple “assurance” that the IRS obeys the law whenever they can. Whenever the head of a huge and well-armed federal agency such as the IRS, with the power to destroy Americans’ lives wholesale, calmly admits that, in order to accomplish whatever missions the Obama Regime assigns them they sometimes ignore the law, that is terrifying.

It means that either the IRS, and who knows how many other federal agencies given the climate that Obama has fostered, consider the laws that bind them to be mere guidelines and suggestions, or that those laws are so complex, convoluted, and contradictory that they cannot be followed in a variety of circumstances.

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