Tag Archives: taxes

Progressive-Democrats and Taxes

Posted on by
Reply

The Wall Street Journal asked in their Sunday op-ed how it came to be that

the party of the Kennedy tax cuts of the 1960s and the co-writers of the Reagan reform in the 1980s [became] implacably opposed to pro-growth tax policy?

The WSJ‘s editorialists should know better.  This isn’t their (or your or my) grandfather’s Democratic Party.  This is the Progressive-Democratic Party of Hillary Clinton, Barack Obama, Chuck Schumer, Elizabeth Warren, Nancy Pelosi, Steny Hoyer, and all of its rank-and-file politico members.

These politicians and their nine-year-old Progressive-Democratic Party that is the inevitable evolution of that prior entity do not want the folks who earned the money to be able to keep it and spend it IAW their own needs and wants and imperatives.  The Progressive-Democratic Party and its members need to have control over our money, and they are thoroughly dismayed over the loss to their political power that’s represented by the reduction in the amount of our money they’ll be able to control.  That’s power they’ll have much less of.

It has nothing to do with ideology.  It has nothing to do with income inequality.  It has only to do with political power.  It’s that nakedly simple.

“major distortive impact on international trade”

Posted on by
Reply

That’s the claim of European nations–Germany, France, Italy, Spain, and the UK—as they worry about the drop in corporate tax rates that the House and Senate bills propose.

Well, of course.  They also don’t like the highly competitive tax rates applied by Ireland and Luxembourg and routinely excoriate those nations for having the temerity of competing via tax treatment for business.  While the nations bleat about double taxation and how European businesses operating in the US would be at a tax disadvantage compared to US companies operating in the US, here’s the nub of the thing:

Even without those provisions, the reform would leave US businesses facing lower domestic-tax rates than some of their European peers, putting governments under pressure to reciprocate.

The horror.  And those nations—and the EU generally—still have not justified either their high tax rates or their high spending rates that underlie those tax rates.  The nations also have exposed their hypocrisy:

[T]he proposed “base erosion and anti-abuse tax provision” contained in the Senate bill could harm international banking and insurance businesses because it would treat cross-border financial transactions between a company and a subsidiary as nondeductible, subjecting it to a 10% tax[.]

Never mind that the EU already is attacking the international banking industry (and the insurance industry won’t be far behind) by demanding a tax on all financial transactions (currently masqueraded as a tax on investment transactions, but what else does an international bank do?), which itself can only depress international banking.  But hey, it’s a tax, so it’s all good.  Or so insist the Know Betters of EU Big Government.

The UK’s concern is especially interesting both as that nation drifts away from Thatcherism, even in its allegedly Conservative coalition and as the UK stands to make out like bandits in international trade following Brexit and the loss of EU fetters on its economy (always assuming the timid May government doesn’t surrender the farm in the face of EU intransigence).

Minimum Wage in San Francisco

Posted on by
Reply

City Supervisor Jane Kim, in a recent Letter to the Wall Street Journal Editor sang huzzahs for the city’s $15/hr minimum wage and touted a tax on robots that were replacing those low-skilled workers priced out of the labor market by that minimum wage.

The minimum wage isn’t a pathway to the middle class; it is a safety net to prevent destitution.

And

[A] “robot tax” is a practical way to smooth the transitions caused by automation….

She’s wrong.

I’m sure the robots and kiosks that are replacing those low-skilled workers appreciate being saved from destitution.

However, a true safety net would be a vasty reduction in San Francisco’s runaway regulatory regime and usurious tax scheme.  Then one of the most expensive cities in the nation could become affordable for the low-skilled and other poor.

Instead, the Supervisor wants to tax those robots and reduce them to similar jobless poverty.

How Close Are the House and Senate Tax Reform Bills?

Posted on by
Reply

See the table below, from The Wall Street Journal.  While the Left and its NLMSM emphasize the differences, and the Progressive-Democratic Party denizens rail at the claimed iniquities in their manufactured dudgeon, the tax reform bills on offer from the House and the Senate are remarkably similar.  The agree right down the line on the goals of tax reform, and they agree right down that same line on the means of achieving those goals.  The differences between the two bills are matters of degree, details bordering on trivial.

Tax rates and brackets differ only slightly, even the Senate’s seven brackets only amount to a finer parsing of income.  In both bills, the death tax disappears for at least eight years—four House election cycles, a Senate election cycle, and two Presidential election cycles.  It’ll be tough, even for the Progressive-Democratic Party, to let the death tax reappear after that amount of time, and the same difficulty will exist for letting the individual tax cuts disappear.

The biggest difference is with the Medical Expense deduction, but that effect on our general taxes or on Federal revenues flowing from the tax code reform is minor; settling it entirely in favor of one house or the other, without compromise, should be easily doable.

The House-Senate Conference should be able to settle these minor differences quickly.  Whether the Conference Bill passes both houses then will depend in large part on the egos of a very few snowflake Republican Senators.  Keep their votes in mind come primary season.

Tax Reform and SALT

Posted on by
Reply

The Wall Street Journal Friday opined that a House-Senate conference on the tax reform bills passed by the House and then-on offer by the Senate (since passed, with some changes to the on-offer version) could improve on the two bills and produce a better one for final passage and President’s signature.  The Editorial Board is right as far as it goes.

Notably in the context of their piece and this post, one of those changes to the Senate’s version that was included in what finally was passed was a change to their complete removal of State and local taxes: the Senate-passed version now includes the House’s deductibility of up to $10,000 in property taxes paid.

But the Editorial Board included this in their piece:

…the bill’s biggest flaw, which is a lousy individual tax reform that raises taxes on many Americans in high-tax states. Eliminating the state-and-local income tax deduction, as both bills do, is sound policy. But the bills don’t offset that with a corresponding reduction in the top marginal tax rate.

This is disingenuous because the editorialists know better. It’s certainly true that, with SALT deductions severely restricted (only that $10k max deduction), citizens of Progressive-Democratic Party-run States likely will pay more in State and local taxes. But to call this a raise in taxes on those Americans is obviously false. Those (excessively) high State and local taxes were already in place, and the House and Senate tax reform bills do not, cannot, touch them.

The “offset” needed is not a “reduction in the top [Federal] marginal tax rate;” although such a reduction would be optimal in its own right.  No, the offset actually needed is for State and local politicians, with encouragement from those States’ Congressional delegations, to reform their own tax codes and reduce their own States’ spending.

It would seem that some members of the “Editorial Board” reside in New York and New Jersey while others phone it in from California.