Tag Archives: taxes

The Trump Tax Leak

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Host Rachel Maddow said the two-page summary of Trump’s federal return for that year was first obtained by journalist David Cay Johnston, who gave MSNBC a first look at the documents.

It is unclear who leaked them. Johnston, with the website DCReport.org, said only that he found the documents “in the mail.”

If you believe that the leaked return just sort of showed up like that, maybe you’ll believe that I have some beachfront property north of Santa Fe to sell you.

The question, though, is how did they get these tax files from the IRS?  How did the IRS come to leak them—which leak is a felony?  How did Johnston and Maddow obtain these files—which looks a lot like receiving stolen goods, if the stuff wasn’t, strictly speaking, leaked?

On the lesser matter, it turns out that Presidential Candidate Donald Trump wasn’t the one blowing smoke over his taxes—it was the mendacious NLMSM.  Trump, from those 2005 tax data, paid nearly 25% of his income in income taxes.  Which is considerably more than the Left’s other billionaire hero, Warren Buffet, who paid less income tax than his secretary and who wants billionaires to pay more (but he still refuses to make donations to the Treasury…).

However, don’t expect the mendacity of the Left and its Progressives to lessen on matters related to President Donald Trump.

Tax Credits in the Obamacare Replacement Proposal

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In the main, I’m opposed to these on a couple of grounds.  One is that it’s just more welfare; we need to find a way to move folks off welfare and into the labor force and jobs rather than keeping them trapped in the welfare cage—like we did when we originally reformed the food stamps program by requiring recipients to get a job or lose the stamps.  That reform not only reduced overall unemployment, it put recipients back into jobs (and off that welfare program).  These weren’t make-work jobs, either; net prosperity for those recipient families increased.  (Then the Obama administration withdrew the work requirement, and we got record numbers of folks back on food stamps).

The (refundable) tax credits are just more of this sort of subsidy, just in the form of a tax credit rather than a direct payment, like most subsidies are.

The other is that the tax credits won’t encourage health coverage providers to lower their rates and deductible requirements.  Quite the opposite, the credits would prop up those costs by allowing the providers to put a commensurate fraction of their charges onto the taxpayer: the credits would be used by the providers to make up the difference between what the coverage purchaser pays and what the provider charges.

On the other hand, the tax credits would approach acceptability under a couple of conditions: if the credits decline year-on-year to a final value of zero over some number of years, say, two or three; or the credits are sunsetted and disappear after some number of years, say two or three.  Or a combination of the two.

With those conditions, and with the understanding that both individual and State budgets need time to adjust, a disappearing tax credit, by providing that adjustment time, could become acceptable.

Hysteria or Hypocrisy?

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You pick ’em.  The latest example of irrationality (which is a superset of both hysteria and hypocrisy) comes via V the K at GayPatriot.

Recall that the Progressive-Democratic Party that runs Philadelphia passed a massive sugar tax to be levied against soft drinks sold in the city.  Recall, too, the high school economics teaching that if you raise the price of something, demand for that something falls off.  Finally, recall that applying a tax to that something is the same as raising its price.

The [soda] tax is huge, amounting to a 45% to 100% increase in the final consumer cost of typically affected beverage products.

Last week the other shoe dropped.

Two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30% to 50% drop in beverage sales and are planning for layoffs.

And

One of the city’s largest distributors says it will cut 20% of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring.

“People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.

And

Sources with Teamsters Local 830 say that layoffs are “imminent” and that some workers have seen their take-home pay drop by 50 to 75% because they’re moving less product.

Restaurants are feeling the pinch, too. Josh Kim, owner of Spot Gourmet Burger, says sugary drink sales at his shop have gone down about 10 to 15%.

Naturally, the Progressive-Democrats, unable to confess to their economic illiteracy (I don’t think they’re economically illiterate, either; these are the party of Know Betters; economics is one of the things they Know Better than us petty commoners), are calling the supermarket and distributor management greedy liars.

We have no way of knowing if their sales figures and predicted job losses are anything more than fear-mongering to prevent this from happening in other cities,” said city spokesman Mike Dunn.
…
“I didn’t think it was possible for the soda industry to be any greedier,” [Philadelphia Mayor Jim] Kenney said in an emailed statement. “… They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven figure bonuses.”

Go figure.

Foolish

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Bill Gates, the co-founder of  Microsoft and world’s richest man, said in an interview Friday that robots  that steal human jobs should pay their fair share of taxes.

He said, and he was serious,

Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things.  If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.

No, I wouldn’t.  Leave aside his blithe assumption that that money is the government’s in the first place, and not the property of the human worker.  Leave aside his blithe assumption that the government needs the money.  Leave aside his blithe assumption that a human worker should be taxed for a stranger’s current retirement and medical needs (Gates omitted the Medicare-related taxes also collected) instead of his own future retirement and medical needs.  Leave aside Gates’ omission of the employer’s payroll taxes on that human worker’s labor.

The whole point of automation is to hold down costs, is to be competitive with other companies, and an outcome of all of this is lower costs to the consumers who are using—in some cases dependent on—the goods and services being sold.

Recode, citing a McKinsey report, said that 50% of jobs performed by humans are vulnerable to robots, which could result in the loss of about $2.7 trillion in the US alone.

Loss to whom?  One “loss” is to government revenues—but there is no submission of a justification for Government’s need for the revenue.  Another loss seems more real: to the private sector.  The money isn’t lost, though, it’s misallocated—to unnecessarily high cost labor, which translates into unnecessarily high cost to consumers.

Besides—the robots already pay taxes, at every company along the production path that leads to a completed robot: costs of acquisition of that stage’s components—from the mine on up—and income tax on their part of that stage company’s income, and on the final assembly’s cost allocation in the production of the final good or service.

Human workers don’t pay much of this at all.  This is just another backdoor effort to prop labor costs artificially above the value of the labor.  And it’s foolish.

Evil Tax Deduction for Trump Businesses

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The Wall Street Journal has decided to put its collected knickers in a twist over a Trump tax-overhaul proposal that would preserve millions of dollars in savings for companies controlled by his family.  True.  His proposal would preserve the ability of companies to take a tax deduction for interest payments on company debt.

Companies that are part of the Trump Organization pay more than $20 million a year in interest on their debts, according to a Wall Street Journal analysis of financial disclosures and other public information about the companies’ outstanding loans and their interest rates.
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The Journal‘s estimate of $20 million is conservative, meaning Mr Trump’s or his companies’ tax savings from being able to deduct interest payments from taxable income might be higher.

The horror.

Such deductions reduce the amounts companies owe to the government.

The horror.  The horror.

Carefully ignored by the WSJ is the fact that all businesses with debt-based interest payments would save tons of money from such a deduction. The $20M (or more) the WSJ claims to have identified for Trump’s businesses is chump change compared to that national-level total.

Whether debt interest payments should be deductible is a separate argument.  I think they should not because I think there should be no deductions, credits, what-have-you; income should be taxed (at a single, low rate) without special treatments for this or that source.  Our tax code should not be in the social engineering business at all.

That such deductions reduce the amounts owed to the government is a good thing.  The money is more efficiently, more intelligently, allocated by private citizens in the private economy than any government can hope to do.