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.  

The fat guy did it!

This is pathetic, the problem is not the Republican Party or Mitt himself but the campaign strategies of his staff, an alteration in tactics would have yielded better results - what a bunch of horse shit!  Romney’s campaign was hardly perfect, which no campaign ever is, but the Republican Party needs to do a hard and honest self-examination - that is where the problem is.  Beating up Mitt, his staff, hurricane Sandy, Chris Christie, or the dog that ate my fucking game plan is not gonna put you in the win column in 4 years.  

http://www.washingtonpost.com/politics/decision2012/life-after-defeat-for-mitt-romney-public-praise-private-questions/2012/11/07/4db3bc38-2916-11e2-96b6-8e6a7524553f_story_1.html

Time for Republican introspection not recriminations

As I have said often this season, if you have a Republican friend be sure to thank them for 4 more years of Obama.  It could not have been planned better if the Romney campaign actually hired David Axlerod as an advisor. 

Amid all the mewing about Chris Christie and “super-storm” Sandy, Governor Romney actually ran a fairly good campaign given that he was an intrinsically weak candidate to start with.  As I have discussed, a primary plank of his platform was the repeal of Obamacare, legislation of which he was the principal architect, add to this the dizzying velocity of flip-flops and you had quite a stinky stew.  I am rather stunned that he got as close as he did (I suspect the election would have been called even earlier in the evening if Obama had not slept thru that first debate).

It is now time for some serious soul-searching by the Republican Party, I think they have worked themselves into a position where they are going to be unable to successfully field a national candidate, and there are 3 things that need to happen:

1.     Figure out some reasonable solution to immigration.  We have millions of illegals in this county, they are not going to “self-deport” (to use Governor Romney’s laughable term).  John McCain (with Ted Kennedy) had a reasonable solution back in 2007 that practically ended his political career.  Whether conservatives are “right or wrong” it is obvious that their hardline position is not practical, figure it out, hold your nose and come to some resolution.  You are never going to get the growing Hispanic vote until you do.

2.     If you are serious about the deficit, you must understand that the solution HAS to include a less engaged, smaller, more efficient military.  The Republican equation that more money = better defense will simply make America the best armed country in the world bankruptcy court.  The right loves to mew about American exceptionalism, but bankrupting ourselves in the name of defense and homeland security is not a path to being “exceptional.”  You are never going to get the support of younger voters unless you stop the idiotic saber rattling and wasteful spending rampant in the defense department and homeland security.  

3.     Get out of the bedroom and STOP making personal issues of morality a federal matter.  This is both stupid and runs in direct opposition to the conservative values of smaller and less intrusive government.  You are alienating women and younger voters with these moronic discussions on contraception, rape, abortion and other matters.  It is not reasonable to lobby for the repeal of Roe vs. Wade, it has been the law of the land for almost 40 years there is no way modern women are going to move back into the alley for abortion treatments.  At this point it is a personal issue, if you don’t morally agree with abortions, don’t have one and work aggressively to offer alternatives so that women chose to not have them but further legislation on this front is futile, give it up!

History would seem to bear out that Governor Romney is probably a fairly centrist man, but he was hamstrung by the idiotic, right-wing Christian gauntlet that he had to run in the Republican primary.  This left Democrats with enough ammo for 5 campaigns.  If Republicans are smart, and the Governor is willing, Romney might be a wonderful resource for the party to start rebuilding.  Having gone thru what is no doubt a heartbreaking process coupled with his long career in analyzing problems and finding solutions he might be just the man to lead a rebuilding of the Republican Party into one more focused conservative economic values and move away from the angry, unreasonable and harsh social issues that are killing it.   

The Hangover Part III

Today there is little to celebrate, it is hard for me to imagine any thinking person being glad for 4 more years of President Obama (you may be happy to not look forward to a Romney Presidency but that’s different).  At this point in time we have to pray that President Obama seriously examines his legacy and decides that he needs to focus on 3 things; tax reform, entitlement reform and begin seriously addressing the deficit.  

Etch-a-Sketch Mitt

Well I guess I owe Eric Fehrnstrom (senior aid to the Romney campaign) an apology, I ridiculed him in a previous blog on his “Etch-a-Sketch” remark.  I was clearly wrong as the “Etch-a-Sketch” seems to be working just fine. 

If Romney wins it will clearly hinge on the first debate, Obama slept thru while Romney slid to the center and defused millions of dollars in negative campaign ads in a short hour and a half.  Why did this work so well, after all the Romney camp could not have planned it?  You can’t possibly plan on a media master like Obama showing up so desultory. 

The aspect of all this that I missed is hidden in the numbers of viewers; the Republican nomination debates drew approximately 7.6 million viewers, the Republican Convention about 22 million, the first presidential debate; a whopping 70 million viewers.   Clearly millions of viewers were paying attention for the first time, and what they saw was a centrist Mitt Romney and I suspect the reaction of many viewers was something like “this guy’s not so bad.”  That (maybe) is all Romney needed in light of the failed presidency of Barak Obama. 

Mitt was right!

Many on the left have jumped on Romney's statement during last night’s debate; "But gosh, to tell our kids that before they have babies, they ought to think about getting married to someone — that's a great idea because if there's a two-parent family, the prospect of living in poverty goes down dramatically. The opportunities that the child will — will be able to achieve increase dramatically."   Many on the left viewed this comment as a slap in the face to single parents (I have heard references to this at least 4 times this morning).  What Romney was referring to, of course, was a famous study done by William Galston (of the Brookings Institute) a Clinton domestic policy advisor in which he stated;  “You need only do three things in this country to avoid poverty - finish high school, marry before having a child, and marry after the age of 20. Only 8 percent of the families who do this are poor 79 percent of those who fail to do this are poor.”

Romney did not make the argument as clear as he should, after all the question Romney was "answering" related to gun control but the clarity and logic of Galston's thesis is abiding and one that all American's and their policy makers should take to heart.