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 There needs to be a house-cleaning of these work-arounds to eliminate those that are outdated and no longer provide any social benefit.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.

The Squeeze

When I was a newbie to the world of finance, as a programmer at the Bank of New York, I had a boss that said something that set me back on my heels.  He expressed the elitist feeling that paying higher taxes to keep the lower classes mollified was not such a bad thing.  I guess that this quid pro quo had never entered my mind at this point in my life ... but of late I have thought about it more and more.  Clearly limousine liberals reflect this notion to a fair-thee-well ... while at the same time hiring lawyers and tax accountants to minimize their actual tax burden.

And what is the result of this "let 'em eat cake" attitude?  To use Senator Elizabeth Warren's phrase (herself a plutocrat) "the middle class is getting hammered."  This is because they do not have the benefit of all the tax avoidance schemes of their betters ... or access to politicians to write new ones ... nor do they receive much of the largess directed to their poorer brethren. I have written before about the squeeze being put on the middle class ... please read: Middle-Classness and pay particular attention to the chart in the referenced Washington Post story.  If this growing divide is obvious to the statisticians, it must also be obvious to the politicians.

Anyone who can add two and two must also see that Obamacare is also constructed to put pressure on middle Americans.  Something like 80% of those signing up on the health care website are being placed in expanded Medicaid (read free or heavily-subsidized health insurance) while the upper classes are either now being exempted from this law by our fearless leader ... or already have no-sweat Cadillac coverage. The ones again getting squeezed are individuals in the middle class who, having lost their existing coverage, are now being forced to pay higher premiums, higher co-pays, higher deductibles  ... or all three.  This law's true intent is now becoming evident -- income redistribution.

Let me unwind the political logic here.  If those sucking on government teats will vote Democrat ... and those well-off liberals, who share my former Bank of New York boss's attitude, will vote Democrat ... and the middle class is disappearing ... who is left to vote Republican?  All the juice will be out of the orange.