Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Income Tax

China Forcing Private Businesses to Support Failing State-owned Enterprises

China Unicom

China Unicom

This article appeared online at TheNewAmerican.com on Wednesday, October 11, 2017: 

The latest report from Caixin/Markit should surprise no one watching China’s continuing economic decline. On Monday Caixin/Markit announced that its purchasing managers’ index (PMI) for China’s services sector fell in September to the lowest level since December 2015, and close to the lowest recorded since the survey began in 2005.

Its PMI for China’s manufacturing sector also fell in September, causing Zhengsheng Zhong, a director at CEBM Group, to add that these numbers “suggesting downward pressure on [China’s] economic growth may re-emerge in the fourth quarter.”

Indeed they might. As The New American and others have noted,

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Tax Reform: The Sausage-Making Begins

This article was published by The McAlvany Intelligence Advisor on Friday, September 29, 2017:

Otto von Bismarck is credited, rightly or wrongly, with two famous quotes about laws and sausages: “Laws are like sausages. It’s better not to see them being made.” And “To retain respect for sausages and laws, one must not watch them in the making.”

One of the more insightful comments on the whole business in today’s Washington comes from the President’s son, Donald J. Trump, Jr., (shown above) who said:

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Tax-reform Plan Called “Tremendous” by Trump, “Fake Math” by Schumer

This article appeared online at TheNewAmerican.com on Thursday, September 28, 2017:

In unveiling the tax reform “framework” cobbled together by the Trump administration, the House Ways and Means Committee, and the Senate Finance Committee on Wednesday, President Trump called it “tremendous”: “This is a tremendous change, and the biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up [to] levels you haven’t seen in many years.”

On cue, House Minority Leader Nancy Pelosi (D-Calif.) expressed her concerns about deficits, perhaps for the first time in her political career:

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The IRS Continues to Hire Repeat Offenders

This article was published by The McAlvany Intelligence Advisor on Wednesday, August 23, 2017: 

Following its investigation in 2014, the Treasury Inspector General for Tax Administration (TIGTA, shown above) concluded that the IRS was hiring previously employed thugs with known criminal backgrounds, including backgrounds of failing to file or pay their income taxes, falsifying documents, accessing private records of American taxpayers in order to harass them, disruption while at work, and taking time off without permission.

It made various suggestions to the IRS, which were ignored. When an unnamed Senator asked the TIGTA to do an update, the IG found that nothing had changed: thugs were still hiring thugs at the IRS.

From the update released in July:

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Inspector General Says the IRS is Rehiring People Who Were Fired for Illegal Behavior

This article appeared online at TheNewAmerican.com on Tuesday, August 22, 2017: 

Seal of the United States Internal Revenue Ser...

Seal of the United States Internal Revenue Service.

The IRS ignored a report issued in December 2014 by the Treasury Inspector General for Tax Administration (TIGTA) that revealed that the Internal Revenue Service (IRS) was rehiring people it had previously fired for misconduct. That misconduct included failure to file and pay their own income taxes, falsifying documents, and theft of and illegal use of sensitive taxpayer information. What’s to keep the IRS from ignoring that report’s update, released in late July?

The latest report from the TIGTA scorned the IRS for continuing the practice:

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Oregon’s New Bicycle Tax Proves Ronald Reagan was Right

This article was published by The McAlvany Intelligence Advisor on Wednesday, July 19, 2017: 

Ronald Reagan wearing cowboy hat at Rancho del...

President Ronald Reagan enjoyed excoriating liberals and big government advocates not with spears but with honey:

We should measure welfare’s success by how many people leave welfare, not by how many are added.

 

Within the covers of the Bible are the answers for all the problems men face.

 

When you can’t make them see the light, make them feel the heat.

 

The most terrifying words in the English language are: “I’m from the government and I’m here to help.”

But the one for which the former president is best known is this:

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The Wall Street Journal Tells Investors Not to Worry About Illinois. Really.

This article was published by the McAlvany Intelligence Advisor on Friday, June 30, 2017:

Seal of Illinois. Center image extracted from ...

Seal of Illinois.

The Journal declared that although the state of Illinois is in deep trouble, that shouldnt be troubling to those investors holding billions of the states debt that is about to be downgraded to junk. On Saturday morning, barring a miracle, S&P Global will keep its promise and announce that Illinoiss debt rating is being reduced by at least one more notch, to junk status.

The Journal said that downgrade reflects the fact that the state faces large uncertainties and has major exposure to adverse conditions. But none of those need bother investors, said the Journal. Even though several bond mutual funds have bailed since the first of the year, offloading an estimated $2 billion of the states $25 billion in investor-owned debt, the Vanguard Group is standing firm. It has the largest exposure to Illinois in its seven mutual funds, holding $1.2 billion of its debt and claiming that it is comfortable with (its) risk/reward.

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Illinois Governor calls for “Unity,” Offers “Compromise” that is a “Capitulation”

This article was published by The McAlvany Intelligence Advisor on Friday, June 23, 2017: 

When politicians call for unity, they usually mean “what’s mine is mine and what’s yours is negotiable.” In the case of Illinois, Governor Bruce Rauner (shown)’s Tuesday night closed door compromise offer to intransigent Democrats to get them to agree to a budget before the June 30 deadline was called a capitulation by The Wall Street Journal:

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Illinois Governor Gives Tax Increases to Placate Democrats Before Deadline

This article appeared online at TheNewAmerican.com on Thursday, June 22, 2017: 

Illinois Governor Bruce Rauner (shown), speaking briefly to a closed session at the state house on Tuesday night, urged “unity” in solving the state’s staggering and rapidly accelerating financial problems. Those present reported afterward that the governor declared, “Failure to act [on his budget proposal] is not an option. Failure to act may cause permanent damage to our state that will take years to overcome.”

The state has already suffered massive damage.

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Democrats Love to Tax the Rich – Except When it’s THEIR Rich

This article was published by The McAlvany Intelligence Advisor on Tuesday, June 6, 2017: 

The Trump tax reform proposal has put the Democrats into a deliciously difficult position. He wants to eliminate state and local deductions for income and property taxes (but leave charitable and mortgage deductions alone) as part of his attempt to keep his proposal revenue-neutral.

The amounts involved are enormous. The Urban-Brookings Tax Policy Center estimates that, if passed, it would cost the rich $1.3 trillion over the next 10 years. The Tax Foundation ran the same numbers and came up with an even bigger number: $1.8 trillion.

The law currently allows state and local income and property taxes to be deducted in calculating an individual’s federal tax liability. But, as both tax groups noted, those benefitting the most from the deductions happen to live in liberal, Democrat-leaning and supporting states. This forces Democrats to face a conundrum:

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Aetna Next to Leave Connecticut for Better Business Climate

This article appeared online at TheNewAmerican.com on Tuesday, June 6, 2017: 

Aetna Insurance Company and Aetna National Ban...

Aetna Insurance Company and Aetna National Bank, Hartford, Conn, from Robert N. Dennis collection of stereoscopic views

Aetna, the $50 billion health insurer that has had its headquarters in Hartford, Connecticut, since 1853, confirmed rumors last week that it was looking to move out of state. The company said, “We are in negotiations with several states regarding a headquarters relocation, with the goal of broadening our access to innovation and the talent that will fill knowledge-economy type positions … and hope to have a final resolution by early summer.”

Hartford’s Mayor Luke Bronin expressed his disappointment:

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Trump’s Plan to Eliminate State, Local Tax Deductions Puts Dems in Difficulty

This article appeared online at TheNewAmerican.com on Tuesday, June 6, 2017: 

Tax Foundation

Two tax policy groups — the Urban-Brookings Tax Policy Center and the Tax Foundation — agree on at least one thing in President Trump’s tax proposal: The elimination of favorite tax deductions used by the wealthy would cost them dearly. The Tax Policy Center calculated that it would cost the rich $1.3 trillion over the next 10 years, while the Tax Foundation put the figure at more than $1.8 trillion.

The law currently allows state and local income and property taxes to be deducted in calculating an individual’s federal tax liability. But as both tax groups noted,

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What’s Wrong with Connecticut?

This article was published by The McAlvany Intelligence Advisor on Monday, June 5, 2017: 

English: Aetna building in Hartford, Connectic...

Aetna building in Hartford, Connecticut

The state has a staggering deficit of more than $5 billion, home prices are about where they were a decade ago, unemployment is rising (not falling as it is elsewhere in the northeast), and big companies who have been there for decades are leaving.

What is going on?

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As Expected, Former Florida Democrat Congresswoman Convicted of Fraud

This article appeared online at TheNewAmerican.com on Friday, May 12, 2017:

English: Official Congressional portrait of Co...

Official Congressional portrait of former Congresswoman Corrine Brown.

After 11 hours, the jury hearing the case against former Florida Democrat Representative Corrine Brown reached a verdict on Thursday: guilty on 18 out of 22 charges filed against her in federal court. The jury convicted her of conspiracy, five counts of mail fraud, seven counts of wire fraud, one count of scheming to conceal material facts in the case, one count of obstruction of justice, and three counts of tax fraud.

As The New American reported on the case last year, Assistant U.S. Attorney General Leslie Caldwell provided some of the details:

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Trump Floats Trial Balloon on Tax Reform; Wants Feedback

This article appeared online at TheNewAmerican.com on Wednesday, April 26, 2017:

Initially referred to as a statement of general principles, the one-page summary of the Trump administration’s tax reform plan looked more like a trial balloon. Said the White House, the administration “will hold listening sessions with stakeholders to receive their input … [in order to] develop the details of a plan that … can pass both chambers.”

Reiterating Trump’s goals of growing the economy, creating millions of jobs, simplifying the tax code, and providing tax relief to middle-income families, the trial balloon as summarized would

lower the corporate tax rate from 39.6 percent to 15 percent, including Subchapter S or “pass-through” corporations;

 

reduce the number of individual income tax brackets from seven to three: 10%, 25% and 35%, depending on income;

 

double the standard deduction, currently at $6,300 for individuals and $12,600 for married couples filing jointly;

 

expand tax relief to families with child and dependent care expenses;

 

eliminate various tax breaks that apply mainly to the wealthiest taxpayers;

 

keep mortgage interest and charitable deductions while eliminating deductions for state income taxes paid;

 

repeal the Alternative Minimum Tax (AMT);

 

repeal the 3.8% ObamaCare tax that hits small businesses and investment income;

 

allow a one-time “tax holiday” for international corporations holding trillions overseas; and

 

eliminate tax breaks for special interests.

Trump’s Treasury Secretary Steven Mnuchin called it “the biggest tax cut and the largest tax reform in the history of our country,” while his Chief Economic Advisor Gary Cohn said the plan represented a “once-in-a-generation opportunity to do something really big.”

What’s really big is the potential deficits Trump’s plan could cause, with at least one critic estimating that it would result in $6 trillion in deficits over the next 10 years.

The underlying goal of the administration being pushed by Trump is that by cutting these tax rates the economy would awake from its slumber and start generating three percent annual rates of growth of the nation’s GDP. Although the Laffer Curve was not mentioned by Mnuchin or economist Stephen Moore (in his recent critique of the government’s economic outlook), it’s the same principle: lower tax rates to result in higher economic growth which will (in theory) result in higher taxes collected by the government.

The increase in the standard deduction is also designed to allow an estimated 27 million Americans who file a long form listing their mortgage interest and charitable deductions to use a “big postcard” instead. This “simplification” of the tax code has long been a stated goal of Trump as candidate and his administration after he was inaugurated in January.

Wednesday’s announcement is just the opening salvo in what promises to be a long war before anything reaches Trump’s desk. Senate Minority Leader Chuck Schumer is calling it a gift for the already-wealthy Americans who don’t need any more tax breaks. And Mnuchin referred to the Senate strategy of “reconciliation” that is likely to be needed to pass the Senate without Democrat votes. He noted that he hoped that the bill that finally passes Congress and is signed into law by the president will be permanent, but “if we have them for [just] 10 years, that’s better than nothing.”

Reconciliation would allow Republicans to pass it without a single Democrat vote, but would also cause the plan to expire in 10 years if it generates deficits. This is what happened to the tax cuts enacted under President George W. Bush. When the projected revenue growth didn’t meet expectations, his tax cuts for the most part were automatically ended.

The obstacles are substantial, including determined if futile resistance from Democrats and complaints from the energy industry which might see its depletion allowance deductions cut or removed in Trump’s final bill. Those details will be revealed in June and could also negatively impact heavily-indebted public utilities and cable companies that might see some loss of their interest deductions.

On the other hand, winners could include companies that are currently most negatively impacted by high corporate rates in force, including engineering and construction companies, food wholesalers, publishers, and retailers.

The old proverb applies as Trump’s trial balloon gets translated into specific language in the tax reform bill in June: “There’s many a slip ‘twixt the cup and the lip.” A newer one is this from Isaac Boltansky, an analyst at Compass Point Research and Trading, who has been following these events closely:

The sugar high of tax cut headlines could turn into a nagging headache once stakeholders return to the painstaking consideration of process and pay-fors.

The Restoration of Liberty Begins with Budget Cuts

This article was published by The McAlvany Intelligence Advisor on Monday, February 27, 2017:

English: Anti-United States Internal Revenue S...

For proof, look what’s happened to the IRS. A combination of pique and outrage has caused Congress to cut the agency’s budget each year since 2010, except for a slight uptick last year. As a consequence, it now employs fewer than 80,000 people, down from 94,722 in 2010, with its enforcement arm suffering the most, losing 30 percent of its field agents.

The consequence was predictable.

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Good, Bad News From IRS: Audits Down Again; New Treasury Secretary Wants Larger Budget

This article appeared online at TheNewAmerican.com on Thursday, February 23, 2017: 

Logo of the Internal Revenue Service

Seven years ago the Internal Revenue Service (IRS) audited one out of every 90 individual income tax returns. Last year it was one out of every 119. This year it is expected to be just one out of every 143. And for those who don’t include a Schedule C or other special (i.e., tax shelter, farm income) forms, the audit rate drops even further: one out of every 330.

Even high-income earners (over $1 million a year) can breathe easier, at least for the moment. In 2015, the agency audited nearly 10 out of every 100 of those returns while this year it’ll only be able to audit

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ALEC, United Van Lines Studies: People Moving to Lower-tax States

This article appeared online at TheNewAmerican.com on Monday, January 23, 2017:

State Seal of South Dakota.

State Seal of South Dakota.

The American Legislative Exchange Council (ALEC) just released its latest Rich States, Poor States study showing how states measure up in economic performance based on three variables, and then ranking them in a forecast based on 15 variables. Its conclusion is the same this year as in the past:

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LOL Illinois: Corporate Group Works to Keep State From Becoming a Laughingstock

This article appeared online at TheNewAmerican.com on Wednesday, December 28, 2016:  

English: 1987 Illinois license plate

The name of the group LOL Illinois can taken two ways: Land of Lincoln, or Laughing Out Loud. As Scott Santi, chairman of Illinois Tool Works, which employs 48,000 workers around the world, noted:

There’s a crisis of confidence in terms of a plan to address some pretty significant structural problems in the state. It’s challenging for Illinois to be competitive given the uncertainty around the fiscal crisis.

“Crisis of confidence”? “Challenging”? “Uncertainty”? Illinois was headed into oblivion until Bruce Rauner, the first Republican governor in 12 years, faced reality.

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Chuck Schumer Seeks “Common Ground” With Trump

This article appeared online at TheNewAmerican.com on Monday, November 21, 2016:  

Senator Charles Schumer

Senator Charles Schumer

During a press interview at his office on Friday, New York Democratic Senator Charles Schumer said that he had spoken two or three times with President-elect Donald Trump: “He’s called. He’s friendly. The word is that he thinks he can work with me, but we’ll see. The jury’s [still] out.”

Schumer, just reelected for his fourth term as senator, will become the Senate minority leader in the 115th Congress as Harry Reid, the present Senate minority leader, is retiring. The Wall Street Journal characterized the interview as an effort by Schumer to seek “common ground” with Trump. Other members of the press weren’t so charitable.

Schumer was feisty,

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.