Taxes and Myth of FAIRNESS

One the phrases I hate to hear from clients is; “I don’t mind paying my fair share.”  The reason I hate that phrase is that in a tax code drenched in special interest tax breaks the idea of a “fair share” is meaningless.  About 47% of Americans pay no income taxes; about half of them get refunds greater than that which was withheld (IRS welfare payments).  General Electric, the sixth-largest corporation in the United States, earned $14.2 billion in 2010, but disclosed in federal filings that it had no federal tax liability.  Other companies that (reportedly) paid no taxes; Verizon Communications, Boeing, NextEra Energy, American Electric Power, Pacific Gas & Electric, Apache, Consolidated Edison, El Paso, and CenterPoint Energy were, along with GE, the top 10 companies for 2011-2012 that apparently paid no taxes.

Even as the morons we elect to congress took until New Years to pass a tax bill that had been, essentially, in the works for over 10 years there was still time to add on a load of stinking special interest tax breaks engineered by Senator Max Baucus (as reported Tim Carney http://washingtonexaminer.com/tim-carney-max-baucus-rewards-ex-staffers-with-tax-breaks-for-their-clients/article/2517635):

Tax breaks for Hollywood, NASCAR, windmills, algae and multinational corporations ended up in the "fiscal cliff" bill thanks to President Obama, according to Senate Republican sources. But they were spawned by a web of lobbyists, donors and staffers surrounding Democratic Sen. Max Baucus of Montana.

Baucus' Finance Committee passed a bill in August extending 50 expiring deductions and credits for favored industries. At Obama's insistence, the Baucus bill was cut and pasted word for word into the cliff legislation. Set aside for a moment how this contradicts Obama's talk about "fair shares" and the need to diminish the influence of lobbyists, and look at what this raft of tax favors shows us about the Baucus Machine.

All this crap was like a barnacle waiting for a ship to float by to attach it to, that became the “Fiscal Cliff” tax bill.   The Senate can plan for this crony capitalist crap in advance but the aspects of taxation that actually affect average citizens, many of whom will have to wait until the end of February to file taxes and get their refunds, is ignored. 
In light of this I ask my reader, what is your fair share?  I will tell you, that it is the lowest amount you can legally get away with paying.  Unfortunately you and I do not have the millions of dollars to spend for expensive tax attorney lobbyist like the major corporations who employee Senator Max Baucus.  As becomes increasingly clear in America today nobody works for us.  

In America the Criminal Class Never Goes to Jail

I recently saw an interview with Lloyd Blankfein from Goldman Sachs opining on the need for America to rein in entitlement spending.  Of course I would have appreciated the interview more if it had taken place where it should have, with him behind bars.   Our countries financial crisis has been beautifully covered by Matt Taibbi in Rolling Stone, his latest “Secrets and Lies of the Bailout” is a wonderful look at consequences of the “bailout” http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104);

We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

Out of the initial bailouts we have moved to “Wall Street Reform,” i.e. - permanent government support to the big banks, and this has skewed the markets in favor of the big banks (crony capitalism at its worst);

The first independent study that attempted to put a numerical value on the Implicit (government) Guarantee popped up about a year after the crash, in September 2009, when Dean Baker and Travis McArthur of the Center for Economic and Policy Research published a paper called "The Value of the 'Too Big to Fail' Big Bank Subsidy." Baker and McArthur found that prior to the last quarter of 2007, just before the start of the crisis, financial firms with $100 billion or more in assets were paying on average about 0.29 percent less to borrow money than smaller firms.

Apparently the government support that is good for Mr. Blankfein and his merry band of criminals at Goldman Sachs and on Wall Street, but it is NOT good for working Americans who might actually need entitlements such as Social Security and Medicare to live on.