‘Damn it … I’m sick and tired of ordinary people being fleeced’: Biden defends corporate tax hike

For a LOT of things that people actually have to buy in normal life, we've already got inflation -- and way more than anything even discussed by the Federal Reserve central bank. You would think that this would cause an increase in interest rates -- but NO! Gotta keep all that easy money in the pipeline to support an already horribly overvalued stock market.

 

“Loophole” is a loaded word deployed to sneak in hidden assumptions without justifying them. The word is traditionally used to describe an unintended provision that allows someone to avoid their obligations.

If people are getting out of their income taxes via some unintended technicality in the law, by all means, that should be patched.

Take “mandatory donations” to popular college sports teams in order to get season tickets. This sells tickets while giving them the appearance of a deductible charitable donation for the purposes of the IRS. This was clearly not an intended effect of the deduction for charitable contributions; therefore, it meets the true definition of a loophole. This loophole was corrected through legislation.

However, the word “loophole” is clearly misused when applied to deliberate, well-known policy provisions. For example, the mortgage interest deduction is no more a loophole in the tax code than Memorial Day sales are a loophole in mattress pricing. The deduction is sitting right there on Schedule A. It’s not some hidden obscurity.

Deliberate tax provisions are designed with the explicit intention of changing the income tax code.

What politicians and their uninformed parrots do is promise lots of money for tax reform by “closing loopholes,” using the elimination of deliberate tax reducing provisions as evidence for this claim. Then, when pressed on specific provisions, avoid naming any.

 

Honestly, though, why should there be any "deductions"? Why should there be any tax "shelters"? Why should there be anything that allows a person to pay less than the tax they SHOULD owe according to the 'bracket' their income is listed in? Just because a "policy provision" is "well-known" doesn't make it right or fair to all of us.

When discussing real 'tax reform', none of us is looking at the BIG picture, or embracing the fact that in order to achieve fairness in the U. S. Tax Code, it needs to be completely rewritten with all of those loopholes, shelters, and hundreds of other gimmicks thrown out!

Look... if you have to pay tax that I can weasel my way out of using some trick in the tax code, how is that fair to YOU?

 

I agree for the most part. But I don't think loopholes are unknown to tax accountants. Nothing secret about them. They are interpretations of tax laws which can be sorted out in court or patched as you said above. Complaining about them is of no value since it changes nothing.

 

I completely agree, and the answer is that control over tax law and it's massive array of set-asides, cutouts, and penalties is a massive power and neither the Legislators nor the Administrative agencies wants to give it up.

Here are some ideas: Milton Friedman advocated simply dispersing checks to every American, equal to the poverty line, in exchange for eliminating every other social safety benefit (except for social security). It would not only be cheaper than our current welfare and assistance system, but, it would eliminate all poverty in this nation.

Combine that with a flat sales tax, set at the amount necessary to keep the federal budget balanced, and a lot of problems are solved and freedoms restored.

It looks to me like 22 to 23% would be a good starting point.

​

Now you have a system, where proportionately, everyone has skin in the game. Their basic necessities are met, and if they want government to spend more, they know exactly what their share will be. If our GDP is $21T a year, and we are taxing at 22.5% then we are providing $4.725T in taxes. If government wants more, they can raise tariffs or sell assets, or they can be satisfied with those amounts. Or, they can say: "we don't want to use those other revenue streams, but, we still want to increase spending over and above the growth of the economy by a $100B, and here is how that will benefit you, but, it will also cost you an additional 1/2%. And those amounts should begin being collected immediately via the flat sales tax and dispersed as they accumulate.

Of course doing that will require coordinated effort by the State Legislatures, our Federal Legislators will never give up these great powers they have accumulated over time. There are a number of problems that we blame on this or that, when actually they are a problem we have with our Federal Congress, and voting out Democrats and replacing them with Republicans has not brought about the necessary changes, I think we need more accountability for them, and greater involvement by the State Legislatures. The State Legislatures lost a LOT of power when we went to direct election of Senators. The State Legislatures begged to lose this power because they sometimes deadlocked and couldn't select a senator and so went without Senate representation. That was fixed through Constitutional Amendment, but, instead of now having dependable representation in national politics, the State Legislatures lost ALL representation in national politics. And once Senators were no longer representing their State Legislatures, the Judges and Cabinet members they were confirming became less and less concerned with making sure the voice of the State Legislatures are heard in national politics, to the point where it's no longer even discussed.

I think this could be at least partially restored with an amendment providing the State Legislatures the power to recall their US Senator on a majority vote. That would at least get the Senator to take the call when a State Legislator reaches out to them. Article V provides for the State Legislatures to be able to draft and circulate Constitutional Amendments to the States for ratification, all with zero input from any part of the Federal Government. The Framers insisted on preserving that power for our State Legislatures, and while they have yet to use it, it's there for us, once enough of us decide that it's time. I suspect that we will get there, but not until we try everything else, first.

Yes. Accountants and tax attorneys won't like a flat tax any more than the federal legislatures and agencies will, but you know what? They work for us, not the other way around.

 

Again, I am very impressed with your economic perspicacity, Zorro. If I had your mind maybe I could figure out what the best no-risk thing to do with $100k right now.

It's pure hell for an old guy like me to remember the U.S. economy back when it made some sense. Now, I'm so damned disoriented....

 

We're perhaps the wealthiest country in the world, and we claim we can not pay for our roads, bridges, reasonable internet speed and coverage, electric network, clean water, etc.

We're the spoiled children of a bygone era.

I have NO idea what your comment could possibly mean. You talk about government as if it is someone else. WE are the ones who select those who make up this government.

The fact that we refuse to pay our bills is because WE as a nation demand that our bills NOT be paid.

 

HAHAHAHAHA! Well first, congrats on having a $100k to salt away for a rainy day.

We all are. We are all playing the Fed rather than examining fundamental values. Now to the Fed's credit, I don't trust them. I don't think they have a clue what they are doing, and I expected this all to blow up and collapse a long time ago, but it hasn't. They've kept this bubble rolling without popping way past my expectations, to the extent that clearly my expectations were wrong.

I think we are still in a long-term deflationary cycle, that we'll see a short term inflation spike, but then it will run out of gas. At the bottom line, I think that they are fighting guys like you. Older folks, with a lifetime of work and prudence behind them simply have more money than younger folks that are forming families, buying homes, filling them with appliances and furniture. They are in their peak spending years, and have little money, and what they have they don't always do a good job of exchanging money for value. You are well past that, probably spend your money more wisely than at any time in your life.

The Fed wants you to spend your money, not save it, because they want consumption, not savings, so they disincentive you from spending, which makes you concerned that your money won't last, so you clamp down even harder on your consumption. I see that standoff staying in place for another 5 years or so as neither of you perceives a better choice.

 

You have hit the exact dead-center of the 'bulls eye', Zorro, on ALL points in your commentary. You did not miss even one of them! It is almost as though you can see me through a 'remote-viewer' of some kind...(kinda scary, actually....).

I know you probably can't give investment advice, and I respect that... still, man, I'd love to buy you lunch at the Brown Palace in Denver or down south at the Broadmoor in Colorado Springs, and just listen, listen, listen.

 

Who claims that?

That's true. I was raised by the greatest generation and I have seen a cultural decline since the early1960's

I view it as something else. In fact I view federal government as an enemy and a scary one. We are the ones who vote, We aren't the ones that decide who takes power. The donors and political parties handle that.

It is government who refuses to pay its bills. Not we. It considers it more fun to spend more. It has been that way since the Jackson administration with a short pause during the Coolidge administration. I like to think federal government was less corrupt and incompetent decades ago but that could be wishful thinking on my part. At least it was smaller decades ago.

 

a 25% interest rate would provide a $25k return every year from $100k

if that was tax free it should be enough for savers.

 

disagree, the Fed is all powerful and all knowing as you discovered.

spending will win because that improves the economy.

 

No, WE choose not to pay our bills.

Look at our voting record. Ever since WE chose Reagan, and with only a few exceptions, the principle economic direction has been to borrow and spend, as Reagan began the march to cut off funding.

We need our infrastructure.

And, WE the people refuse to pay for it.

If you want more specifics on how that works, it's not hard. It's one of the top issues today, and the hole we have dug is gigantic.

 

I've discovered no such thing.

Further, if they have figured out how to stimulate spending, why has the velocity of money been declining for 13 years?

​

 

As part of this Biden speech he fell back on his " I was raised in a middle class family in Scranton" but he fails to ever mention his dad bought an airstrip on Long Island to run a business out of. So much for middle class and honesty Creepy Joe. Looks like you and the "Biden Crime Family" are on a roll, but we will see it is short lived.

 

TOTALLY partisan with NOTHING behind it.

And as if you had to label it as such by adding ad hom!

 

Maybe the Fed could try this to stimulate spending:

China's Digital Yuan Comes With An Expiration Date

The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start.

 

the Fed has kept the bubble going since greenspan.

some say even longer

https://en.wikipedia.org/wiki/Alan_Greenspan

 

Yes, we need infrastructure and yes maintaining it is important. Who should do the maintenance? The owner of the infrastructure, of course. So federal government should maintain its infrastructure and states, cities and the private sector should be responsible for its infrastructure. You and I have opposite concepts of the appropriate role of federal government. You are arguing for what we should do and I agree with it. I am arguing about how we should do it and we don't agree there.

I can assure you that federal government borrowing predates Reagan by 150 years.

 

Excellent point! I have asked myself the same question over and over ever since the Fed took over everything of any real consequence in the economy since August 2007. They 'buy bonds' using vast amounts of imaginary 'money' and crush interest rates on people's savings accounts to zero -- which has a corollary effect on the value of the U. S. Dollar. And yet, it doesn't accelerate the velocity of money being passed from point 'A' on down to point 'Z' through the system. Why?

Many people, including myself, smell fraud and manipulation in this whole stinking thing, and if anything it went into 'high gear' even AFTER the so-called "Great Recession" ended in June 2009! The "Quantitative Easing" bullshit and "Operation Twist" made it clear that all this money-'printing' by the Fed during 2008 was not merely some kind of to-be-expected rescue for the 'too-big-to-fail'. No, it was a hell of a lot bigger than that, and it went on for year after year.

And isn't it interesting that just shortly before the 'virus' popped up out of nowhere and showed everyone what a 'fraud-balloon' the Fed and other central banks had created, here came with the 'Repo-Crisis' of September 2019!

Quick question for you @Zorro -- because you are one of the very few whose opinion about this means anything to me... today, how overvalued are the Dow, the 'Daq, and the S&P? I have theorized generally that all are currently overvalued at least 50% by any calculation, but I don't have your understanding. Thank you!

 

Greenspan retired at the end of 2005.
Bubble popped in 2007.

 

That literally isn't what was asked.

 

The left has never seen a tax and spend policy they didn't like.

Pitting "common people" against corporations is just a ploy to make one group think they are getting something off the backs of others to support it.

The end game, we all pay more to cover the cost of ever increasing government.

 

1.8 BILLION is "almost" nothing?

 

That was only in one year. They went many years tax free.