Tag Archives: taxes

One More Reason

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The last two administrations have dumped $3.5 trillion of supposed Wuhan Virus relief funds into our economy since the virus situation began in early 2020.

Now we’re learning that almost $100 billion of it has been stolen. That doesn’t seem like a large per centage of the total. However, as numbers have a quality all their own, and while those $100 billion are a small per centage of the trillions, they would have had their own use. Fighting the Wuhan Virus’ entry into our nation via our southern border, for instance, by building more of the wall that Biden-Harris has been so desperate to stop. Generating more—many, many more—of the home tests that Biden-Harris has been lying about producing. Plusing up our police forces so as to reduce the rate of crime that Progressive-Democrats like Congresswoman Alexandria Ocasio-Cortez (D, NY) insist are no big deal and that other Leftists insist is justified reparations. Plusing up our military. The list goes on.

In the end, this is just one more reason to not use the Federal government to handle, centrally, such handouts. Instead, make block grants to the States.

That won’t stop the graft of this sort, but it at least would divide the money up across the States so that it would be harder to steal, and the governments making the disbursements would be closer to the problem—and to their constituents for accountability.

Better yet would be to tot up the total of all Federal transfers to each State and roll those into block grants—no strings attached—to the States. Then reduce the size of the block grants each subsequent year by 10% of that first year’s block until no more monies are being transferred to the States from Federal coffers.

After all, those monies, the Federal coffers, are the tax monies sent to the Feds by each State’s citizens. Let each State keep those tax funds in the first place, and eliminate the middle man. Each State will use the money more efficiently and more directly for that State’s citizen needs and wants and not for another State’s purposes.

The Federal government should collect, and use, only that which it needs for the only Constitutionally mandated purposes extant: to pay the Debts and provide for the common Defence and general Welfare of the United States. That general Welfare, too, is enumerated in (and limited to) the purposes delineated in the next 16 clauses of Art I, Sect 8; the last clause being not a spending purpose but an authorization for Congress to make specific laws for specific spending.

If It’s a Good Idea….

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One sub-bill in the Progressive-Democrats’ reconciliation bill would have removed a loophole that lets foreign purchasers of US real estate dodge a tax that could reach 30% on the profits generated by those holdings.

The loophole works like this:

Instead of buying a building directly, a foreign investor creates a shell company in an offshore location like the Cayman Islands.
That shell company then lends money to a US entity called a blocker corporation, which in turn buys the building. Instead of paying any profits from the building directly to the foreign investor, the blocker corporation sends interest on its loan to the offshore shell company, which then passes it on to the foreign investor. By taking this detour, the foreign investor avoids the tax on foreign real-estate owners.

It works because the blocker is a corporation domiciled in a territory that’s a US tax haven, and so those corporations avoid the tax.

There are a couple of implications from closing this loophole.

[P]roponents say it could raise billions in tax revenue.

That works for me. On the other hand,

Property owners worry it could also lead to fewer foreign purchases of US commercial real estate.

I’m having a hard time seeing any serious downside to that beyond a temporary (I say) downward pressure on real estate prices, or more likely, a slowing of increases in real estate prices, in the initial period following the closure of the loophole. After that initial period, though, the real estate market would adjust to the new regime, and real estate prices would resume their normal behavior.

If this sub-bill is a good idea—and I think it is, at least in principle—than it should be excised from that reconciliation foolishness and presented by itself in a clean, stand-alone bill. In January.

Taxes and “Give Backs”

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There is a surprisingly broad misunderstanding regarding taxes and to whom those taxed funds belong, even among those who should know better. One example is The Wall Street Journal editors’ mischaracterization of Arkansas’ tax reductions in an editorial, which they subheadlined

Little Rock returns some of its booming revenue to taxpayers.

The “return of revenue” was this:

Governor Asa Hutchinson recently signed legislation that reduces the top state income-tax rate to 5.5% from 5.9%, effective New Year’s Day. The rate will continue to drop in stages to 4.9% by 2025.

Along with this:

The state Department of Finance and Administration anticipates that some 105,000 residents will soon pay no income tax as a result.

And this “sweetener:”

The legislation includes the sweetener of a $60 tax credit for some 535,000 Arkansans who make less than $23,600.

None of this is giving money back to Arkansan citizens; all of it is letting them keep more of their money in the first place.

Even the tax credit is less a giveback than it is a let ’em keep it, albeit after the friction of a tax man middleman has taken its toll.

Big Progressive-Democrat Government

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A Rasmussen poll suggests that a majority of Americans oppose the socialism in the policies of the Biden-Harris administration.

That’s encouraging, but I have some concerns about the policies anyway, given that they’re being jammed through without regard for the views of the government’s employers.

The socialism aspect of the Biden-Harris and Progressive-Democratic Party policies is less a matter of the raw spending and usurious taxes in them much more a matter of the strings attached to the spending and of who gets (punitively) taxed.

The strings attached would give the Federal government more control over the States and over what businesses are allowed to produce and the prices they charge. The proposed tax structure would give the Federal government more indirect control by “encouraging” businesses to comport themselves IAW Government wishes.

That control is the essence of socialism, whether the control is through outright ownership or through controlling production permissions.

The spendthriftiness should be enough by itself to keep the bill from being passed.

The tax distortions should be enough by itself to keep the bill from being passed.

The increased Government control should be enough by itself to keep the bill from being passed.

Unfortunately, dangerously, each of the three individually (as well as together) are tightly aligned with Progressive-Democratic Party goals of spending to buy votes, taxing the Evil Rich to virtue-signal for votes, and to outright accrete power to Party.

A Rain Tax

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It’s back.

Recall the Maryland rain tax that Progressive-Democrats in that State’s legislature actually got passed into law. That…foolishness…contributed to the State’s Progressive-Democrat Governor getting tossed at the next election and replaced by a Republican. The State’s legislature then repealed the tax within the next couple years.

Now we see that the Progressive-Democrat City Manager for Fairfax (that Fairfax), Robert Stalzer, proposed

taxing local residents and businesses for the amount of rainwater that falls on their roofs, driveways, parking lots, and other “impervious surfaces” on their property.

Just the News opened its article on this with this bit from The Beatles:

If you drive a car, I’ll tax the street
If you try to sit, I’ll tax your seat
If you get too cold I’ll tax the heat
If you take a walk, I’ll tax your feet

Not to be outdone, or not too badly, anyway, I offer this adaptation from The Lovin’ Spoonful:

You and me and rain on the roof,
Caught up in a taxing shower,
Going broke while it soaks our wallets.
Maybe we’ll be broke in hours,
Waiting out the Guv….

To quote Joe Biden, who railed in a different venue, this is a bonehead idea.