Thursday, December 27, 2018
GOP Guts The IRS To Help The Rich Get Even More
If there's one thing the Republicans want to do, it's make rich people even richer. About a year ago, they gave the rich huge tax cuts, while giving other Americans next to nothing. That would have been bad enough, but it's not all they did to advantage the rich. They have also gutted the IRS by drastically cutting its funding, making it much easier for the rich to cheat on their taxes.
Here's how the editorial board of The New York Times puts it:
Let’s take a moment to pity the Internal Revenue Service. Yes, to many Americans, it’s a money-grabbing ogre siphoning hard-earned cash to the faceless federal bureaucracy.
But the nation’s tax collector today is an enfeebled enforcer. Its budget has been bled dry by a Republican Congress in service to wealthy donors and businesses aggressively pursuing tax avoidance, leaving uncollected 18 percent to 20 percent of potential tax revenues annually. That’s the conclusion in articles by the journalism site ProPublica, co-published by The Atlantic and The Times.
Loopholes are beyond the means of most Americans who earn salaries or are paid hourly wages, and are exploited by those who derive significant income from investments or business revenue. Although we’d all like to pay less, relative to most developed nations our tax burden is a pretty good deal.
It’s an even better deal for the richest Americans, who have benefited the most from President Trump’s tax cuts. The rich are different: They’re more likely to cheat, according to one study of I.R.S. data. And the I.R.S. has about as many auditors now as it did 60 years ago, when there were half as many Americans. The undermining of the I.R.S.’s enforcement capability coincides nicely with the Republican playbook: Enrich wealthy individuals and corporations with tax giveaways that balloon the deficit, justifying spending cuts for health care, education and infrastructure, then amplify the process by not holding high-end taxpayers accountable for the amounts they owe.
Dodging taxes is as old as taxes themselves. Just ask Mr. Trump, who has employed systematic dodging for decades, according to a Times investigation.
We got a good look at one of the bigger problems, the proclivity of the wealthy to hide cash from the I.R.S., in 2008, when the Justice Department was able to pierce the Swiss bank secrecy veil during an investigation of UBS. The department uncovered thousands of rich Americans who were hiding about $18 billion in offshore accounts arranged by that Swiss bank. Many were compelled to fess up and pay up. But eight years later, the Panama Papers, millions of files hacked from a Panamanian law firm that specialized in caching money for the rich and powerful, disclosed that there were still plenty of rich people willing to play hide-and-seek with the I.R.S.
The odds are in their favor, and growing. ProPublica reported that I.R.S. audits dropped 42 percent from 2010 to 2017, a period in which the I.R.S. budget was lopped by $2.5 billion, adjusted for inflation. New investigations of people who don’t file dropped to 362,000 last year, from 2.4 million in 2011. That costs the Treasury $3 billion annually in uncollected taxes. More than $8 billion in back taxes did not get collected in 2017 because the agency couldn’t get to them before the 10-year statute of limitations ran out, another worsening problem. Tax delinquents can simply wait the agency out. ProPublica estimated the total shortfall of uncollected funds since 2011 at $95 billion.
These uncollected billions could pay for any number of things: better care of wounded veterans, infrastructure improvements such as a desperately needed new tunnel between New York and New Jersey. You could even build an expensive wall.
One area where the I.R.S. still bares its teeth is in auditing people in the lowest tax bracket. If you are claiming the earned-income tax credit, which provides cash for people who typically earn less than $20,000 annually, you are as likely to be audited as someone earning between $500,000 and $1 million. ProPublica reported that 36 percent of all I.R.S. audits focused on this group. It may not be a crime to be poor in the G.O.P.’s America, but you can expect to be treated like a criminal for accepting the government’s cash to make ends meet. At best, that’s an inefficient use of I.R.S. agents: Compliance should apply to all, but the I.R.S. should do most of its fishing where the big fish are.
The Trump/G.O.P. tax policy is now operating at peak failure. The tax cuts have failed to increase gross domestic product beyond the “sugar high” stimulus they gave to an economy already heading toward record low unemployment. The economy seems to be slowing, making a mockery of the promise of strong growth that was used to peddle the tax cuts.
The stock market is shuddering at the idea of a slowdown, which corporations contributed to by using their tax windfall to buy back more than $1 trillion of their own stock. They have, to this point, immolated capital instead of using it for additional hiring, increased wages or further business investments.
A CNBC poll found that millionaires are still sanguine about the economy. They can well afford to be. If their stocks lose value, they can take a write-off. If stocks rise, their maximum long-term capital gains tax is only 20 percent. Most American households don’t own stocks — or no longer own them, having been forced to liquidate stock holdings in the Great Recession, which was precipitated by a collapse in the housing market. Thus the wealth gap grows, reaching levels not seen since the Roaring Twenties.
To pay for the millionaire tax cuts, sacrifices had to be made. So Congress limited deductions for state and local taxes to $10,000 annually. While that generally applies to well-to-do people who can itemize their tax returns, it was also a clear shot against blue states such as California and New York that have relatively high state and local taxes. But reducing these deductions, along with higher interest rates, punished the housing market, which is stagnant nationally and in a free fall in the Northeast.
Our ability to keep the $1 trillion deficit created by the Trump tax cuts from deepening depends in part on collecting taxes to which the government is legally entitled.
Think of it this way: To protect our nation, we have the most powerful army in the world. To protect our tax base, we have an army on the order of Liechtenstein’s.
The lack of deterrence will only encourage more cheating. The I.R.S. needs to be capable of doing the job for which it was created — from answering taxpayers’ questions to chasing down the richest cheats, even if they occupy the Oval Office.
Wednesday, December 26, 2018
A Majority Believes Trump Will Not Be Re-Elected In 2020
It's still a couple of years before the next presidential election and things could change, but a clear majority of registered voters don't believe Trump will be re-elected. About 56% say he would not be re-elected, while 40% believe it is at least somewhat likely he would be re-elected -- a negative gap of 16 points. And that includes a majority of both genders, all age groups, and all racial groups.
The chart above uses information in a recent Suffolk University / USA Today Poll -- done between December 11th and 16th of a national sample of 1,000 registered voters, with a 3 point margin of error.
The Congressional GOP Needs To Wake Up And Step Up
The congressional Republicans have spent the last couple of years trying to protect Donald Trump. It's time they woke up and acted to protect this nation.
The following is just part of an excellent op-ed by Thomas L. Friedman in The New York Times:
Up to now I have not favored removing President Trump from office. I felt strongly that it would be best for the country that he leave the way he came in, through the ballot box. But last week was a watershed moment for me, and I think for many Americans, including some Republicans.
It was the moment when you had to ask whether we really can survive two more years of Trump as president, whether this man and his demented behavior — which will get only worse as the Mueller investigation concludes — are going to destabilize our country, our markets, our key institutions and, by extension, the world. And therefore his removal from office now has to be on the table.
I believe that the only responsible choice for the Republican Party today is an intervention with the president that makes clear that if there is not a radical change in how he conducts himself — and I think that is unlikely — the party’s leadership will have no choice but to press for his resignation or join calls for his impeachment.
It has to start with Republicans, given both the numbers needed in the Senate and political reality. Removing this president has to be an act of national unity as much as possible — otherwise it will tear the country apart even more. I know that such an action is very difficult for today’s G.O.P., but the time is long past for it to rise to confront this crisis of American leadership.
Trump’s behavior has become so erratic, his lying so persistent, his willingness to fulfill the basic functions of the presidency — like reading briefing books, consulting government experts before making major changes and appointing a competent staff — so absent, his readiness to accommodate Russia and spurn allies so disturbing and his obsession with himself and his ego over all other considerations so consistent, two more years of him in office could pose a real threat to our nation. Vice President Mike Pence could not possibly be worse.
The damage an out-of-control Trump can do goes well beyond our borders. America is the keystone of global stability. Our world is the way it is today — a place that, despite all its problems, still enjoys more peace and prosperity than at any time in history — because America is the way it is (or at least was). And that is a nation that at its best has always stood up for the universal values of freedom and human rights, has always paid extra to stabilize the global system from which we were the biggest beneficiary and has always nurtured and protected alliances with like-minded nations.
Donald Trump has proved time and again that he knows nothing of the history or importance of this America. That was made starkly clear in Secretary of Defense Jim Mattis’s resignation letter.
Trump is in the grip of a mad notion that the entire web of global institutions and alliances built after World War II — which, with all their imperfections, have provided the connective tissues that have created this unprecedented era of peace and prosperity — threatens American sovereignty and prosperity and that we are better off without them.
So Trump gloats at the troubles facing the European Union, urges Britain to exit and leaks that he’d consider quitting NATO. These are institutions that all need to be improved, but not scrapped. If America becomes a predator on all the treaties, multilateral institutions and alliances holding the world together; if America goes from being the world’s anchor of stability to an engine of instability; if America goes from a democracy built on the twin pillars of truth and trust to a country where it is acceptable for the president to attack truth and trust on a daily basis, watch out: Your kids won’t just grow up in a different America. They will grow up in a different world. . . .
If America starts to behave as a selfish, shameless, lying grifter like Trump, you simply cannot imagine how unstable — how disruptive —world markets and geopolitics may become.
We cannot afford to find out.
Tuesday, December 25, 2018
Happy Solstice Season Holiday
I wish all of my readers a very happy, safe, and fun solstice season holiday.
Is Religion The Answer To Today's Problems ?
Today, most Americans are celebrating Christmas. For some, this is a religious holiday. Others pay lip service to the religious aspect, but don't consider religion to be very important in their lives. And some celebrate Christmas as a purely secular holiday.
How important is religion to Americans? Back in 1965, about 70% of the population said religion was very important to them. Today, that figure has dropped to only 51%. And most Americans don't see religion as the answer to today's problems.
In 1957, about 82% of Americans said religion was the answer to today's problems. Now only a plurality of 46% say that.
The fact is that religion is losing it's importance in this country.
The charts above are from a recent Gallup Poll -- done between December 3rd and 12th of a national sample of 1,025 adults, with a margin of error fo 4 points.
Trump Tries To Blame Fed Chairman For His Own Mistakes
From The New York Times:
President Trump has unabashedly hitched his political fortunes to a rising stock market. Now, with stock prices in retreat, he has become increasingly fixated on the idea that one man is to blame for the recent rout: Jerome H. Powell, chairman of the Federal Reserve.
After the Fed raised its benchmark interest rate on Wednesday, the fifth consecutive quarterly increase, Mr. Trump fretted to aides that Mr. Powell would “turn me into Hoover,” a reference to the man who was president in the early years of the Great Depression.
Mr. Trump has said choosing Mr. Powell for the Fed job last year was the worst mistake of his presidency, and he has asked aides whether he has the power to fire him.
Donald Trump is talking about the Stock Market. He has bragged about the Stock Market since taking office, using it as his only predictor of how good the economy is doing. It's not that good an indicator of economic well-being, but it does show what the investor class thinks of the economy -- and a crash of the market can affect the entire economy (as it did in 1929 and 2007).While Trump was happy to take credit when the Stock Market was doing well, now that it's going down he wants to put all the blame on Federal Reserve Chairman Jerome H. Powell. Powell did raise interest rates slightly to ward off inflation. That raise would likely just have caused a temporary and small blip on the market, and things would have quickly returned to normal (just as it has many times in the past when the rate was raised).
On December 24th, the Stock Market closed at 21,792 for the Dow Jones average. It dropped 653 points -- the biggest Christmas Eve drop in this nation's history. Currently, it is 3,032 points below where it was on January 2 of 2018 -- and 5,036 points below the market's high for 2018.
Could Trump wind up looking as bad as Hoover? I think it's a distinct possibility, but it won't be caused by anything done by the Federal Reserve. The real problem with the market right now is because of Trump. The market likes stability, and that's something the Trump administration seems incapable of providing.
Far more worrying for Wall Street than the small interest rate hike is the tariff/trade war initiated by Trump, the ballooning deficit and national debt caused by his tax cuts, his attacks on our allies and coddling of our enemies, and the continuing chaos reigning in the White House.
Trump may indeed be looked at as the new Hoover in another year or two, but it won't be because of the Federal Reserve. It will be because of the ridiculous mistakes and policy blunders of Trump himself. He is his own worst enemy.
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