No Minister

Posts Tagged ‘Tax Reform

The slow blade penetrates the richest Democrats

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In this post – US Government cuts spending by $5 trillion – I’d already taken a look at the fighting going on inside the Democrat Party over their insane spending plans.

Insane because these multi-trillion dollar plans came on top of previous multi-trillion dollar plans already passed and on top of the “normal” government budget of $6 trillion plus.

Since that post the infrastructure bill ($1.2 trillion) has been passed by the US Senate and signed into law – thanks to help from The Stupid Party (GOP). The majority of the money is never going to be spent on what is actually infrastructure; roads, bridges, water works and so forth. The Progressive wing of the Democrats finally, grudgingly voted for it, accepting that they could no longer hold it hostage to the bill they really wanted, Build Back Better (BBB). They accepted the promises of Schumer and Pelosi that BBB would still pass, all $3.5 trillion of it.

Pelosi did get it through the House (with eleven idiot GOP votes) but it stalled in the Senate thanks to two Democrats: Senators Manchin (WV) and Sinema (AZ), the former in particular.

“President” Biden had already screwed up negotiations before, undercutting both Pelosi and Manchin. But the latest negotiations between he and Manchin were the last straw. While Biden admitted that the negotiations were probably going to go into 2022, he claimed that Manchin had “reiterated support” for the framework’s funding level. But Manchin had never agreed to those numbers – Biden’s statement was just a straight-up lie. That became very obvious when Manchin responded: “The president put out a statement. It’s his statement, not mine,” That’s a very polite hint, but incredibly the White House doubled down on their lie.

That was it. Just to rub salt in the wound, Manchin made the announcement on Fox News.

In addition to not pissing more money against a wall to add to already worrying increases in inflation, and the national debt, there was also one more great reason to celebrate the failure of this monstrosity: no change to the SALT deductions.

SALT you ask? No, it’s not the payment to Roman soldiers (from whence we get the word, salary). S.A.L.T stands for State And Local Taxes and they were a big part of the tax reforms the GOP passed a few years ago under Trump. In the USA when you do your annual tax returns you can deduct from your income the money you’ve paid in State and Local (usually meaning city) taxes before you apply Federal taxes.

It’s basically a tax deduction from the Federal side and it can add up. In Illinois I did appreciate not getting screwed twice for the 3% State Income Tax, and since then it’s gone up to 5%. In California it’s 13% and other Democrat One Party states and cities have followed the same path in introducing and then jacking up their tax rates, all of which are flat taxes. After all, their voters could deduct all that money from the Federal side so who cared – aside from GOP-controlled states that largely have no state income taxes. Let them carry more of the Federal burden while Blue states got on with spending.

In the 2017 tax reform package the GOP finally put a stop to this bullshit by capping the SALT deductions at $10,000. The Blue states howled and have not stopped howling since. Understand that this made no difference to the vast majority of working people in those states, since they didn’t earn enough to reach that threshold and could still deduct SALT as they always had.

But the richest 1% of Democrats, big donors to the Party, were not happy and have banged the drum behind the scenes for years now to eliminate the cap. Being one of these people herself, Nancy Pelosi was eager to help and one of the dirty little secrets of the BBB bill was that it would have eliminated that cap and given them a huge tax break, along with a spending assist to their pals running California, Illinois and New York.

So that’s now also dead. Excellent. Well done to the GOP for having screwed the richest 1%.

In case you’re wondering, Crenshaw is referring to this piece of performative bullshit from a prominent Democrat hypocrite – although to be fair it may be that she’s too dumb to understand this since she voted for the BBB.

Written by Tom Hunter

December 20, 2021 at 12:11 pm

Taxation Fairness

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I’ve often seen data from the USA showing the proportions of income and tax but rarely in such a clean, simple format as this graph.

Mind you, if the wealthy continue to flex their privilege they’ll find increasingly little support from the GOP for tax cuts for them, on top of the GOP’s four decade efforts that have created an ever more progressive tax system that, as the graph shows, very much taxes the rich.

See also Why do Millionaires hate Billionaires? and Every Billionaire is a Policy Failure. Those people are not part of the graph since they don’t rely on “income” and are therefore untouched by income tax.

I wonder what the corresponding data for New Zealand is?

Written by Tom Hunter

November 15, 2021 at 12:18 pm

Under The Radar

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It has been a grand year for President Trump. 

In spite of the machinations of the media, FBI, DOJ, Mueller, Democrat shills et al he has finished the year with his piece de resistance, a long overdue and major reform of the American federal tax system.   The poor bloody Democrats still haven’t figured out how he pulled it off.

In summary, nearly all Americans, from February, will receive very large increases in their pay packets as a result of tax cuts.  A few will see major decreases, as a result of reducing the amount of state taxes one may offset against federal tax.  However that is of no consequence as this only affects rich pricks who live in high tax states like California, New York and Massachusetts.  They are all Democrats so who cares.  If they want a tax break they’ll just have to persuade their Democrat Governors to reduce their respective states’ taxes.

So, the Democrats screamed blue murder about this reform and all voted against it.  They likely just gave the President his second term and certainly handed him a victory in the mid terms.

However, while media and commentators of all stripes have been focusing on the size of the personal and corporate tax cuts, one issue remains vastly under reported, probably because it doesn’t suit the Democrat narrative.   That is, a major change in the way corporate income is assessed.

Currently, corporations doing business are assessed on their foreign income and pay tax on it in the US.   As a consequence billions of dollars of profits earned overseas are held back and not repatriated to the US.   President trump’s tax bill changes that dramatically and now US companies will be taxed only on income actually earned in the US.  This is predicted to lead to very large sums of capital being returned to the US for reinvestment there. 

I have seen one estimate of $400bil per year bringing a 1% increase in GDP and a substantial positive effect on the countries trade balance.

The dumb Democrats wanted to die in a ditch opposing all this common sense.

Written by adolffinkensen

December 22, 2017 at 8:19 am