AMT

Believe it or not, there is one thing that I agree with Elizabeth Warren about ... and that is that profitable big tech corporations like Amazon should not be paying zero taxes ... even though the present tax code allows it. There is an AMT, Alternative Minimum Tax, for individuals ... so that the accumulation of tax loopholes (hopefully) doesn’t allow high-income individuals pay no, or very little, taxes.

Trump, if he were wise, would promise to make such a tax-code change part of his next tax reform legislation once he is re-elected in November.

Me, a Liberal?

As conservative as I often seem, there are still some progressive ideas that attract my sympathies. In particular, I do believe income inequality is a problem that needs correcting before it forces the underclass to the streets. So the question becomes — how do we fix things within the context of a constitutional republic? Here are a few suggestions:

- Trump promised when he ran to eliminate the “carried interest” tax break for hedge fund managers. So far, nada. It’s long since time for him to keep this promise.

- The current tax law allows corporations, like Amazon, sometimes to pay zero taxes. I would be in favor of having an Alternative Minimum Tax rate for corporations ... say 5%.

- Corporations use stock options to inflate senior executives’ take-home into the tens of million dollars. This is a major reason for the huge income gap between these executives and their lowest-paid employees. Those stock options profits are often taxed at a lower capital-gains rate. As I have previously proposed, I believe that, instead, they should be considered always as ordinary income.

- There are other ways that corporations, colleges and other non-profits have to reward their higher-ups with non-taxable benefits ... non-interest-paying loans (like for Harvard’s to Elizabeth Warren), loan forgiveness, low-rent housing, etc. These perks should always be recognized and taxed as ordinary income.

- There are many schemes that the wealthy use to avoid taxes ... like donating fine art, at ridiculously inflated prices, to museums. These deductions should be reduced out of the stratosphere with some meaningful constraints.

- There are literally hundreds of other tax-avoidance mechanisms used by the wealthy to reduce their tax burden. There needs to be a house-cleaning of these work-arounds to eliminate those that are outdated and no longer provide any social benefit.


Enough? Am I now in AOC’s fifth column?


Afterthought: Actually, this fine-art donation tax avoidance might have been changed in the last tax code revision where charitable donations may no longer be deductible ... I’ll have to look into this further.

Pass This Jobs Bill Now!

President Obama (The Barry) has proposed new taxes to pay for his proposed $447 billion "jobs" program (see: The NY Times Agrees).  I suspect this tax proposal is as much to play politics as it is to pay for his dog's breakfast of "new" jobs proposals.  That is ... The Barry knows that the Republicans will not go along with any tax increases now and therefore he can call them out during next year's campaign and blame them for what surely will be high unemployment rates then.  In other words, it is a bald-faced set up to try to keep his job rather than grow new jobs for the rest of Americans.

However, surprisingly, I agree with a few of the bullet points in this new taxes proposal ... independent of whether his jobs proposals will or will not help the economy ... and so I will list these points as outlined by the NY Times editorial and indicate my feelings about each:

1) Capping the value of itemized deductions and other tax breaks at 28% (of adjusted gross income?).  I AGREE  This, in effect would be an extension of the alternative minimum tax in the current tax code ... a step that I have already proposed (see: Taxing Ideas).

2) Ending tax breaks for oil and gas companies.  I DISAGREE  If we are going to become energy indipendent then we cannot punish the very companies that would make this happen.  I have opined on this in more detail in the past (see: Oily Decision).

3) Not letting hedge-fund managers pay taxes on most earnings at the capital gains rate.  I AGREE  This has been an egregious loophole through which the wealthest on Wall Street have avoided paying their fair share of our government's cost.

4) Curbing tax breaks for corporate jets.  I DISAGREE  This is pure two-faced silliness by a man who flies, at taxpayer expense, in the most expensive flotilla of jets of any other American entity.  Is he bound and determined to kill the private-jet building business?  Even Warren Buffet has disagreed with this proposal.

5) Ending the lower tax rates installed by George W. Bush.  I DISAGREE  If The Barry's proposal to cap tax deductions (see #1 above) comes about, then there will be no need to scrap the Bush tax cuts as I strongly suspect that government receipts will grow anyway.

The Democrats, as of this hour, have not yet filed The Barry's "pass this jobs bill now." bill.  What's up?

Is this just political theater afterall?