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: Small Business

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.

Trump’s Strange Reversal on Ex-Im Bank: Names One Opposed to It to Run It?

This article appeared online at TheNewAmerican.com on Monday, April 17, 2017:

English: Congressman Justin Amash

Congressman Justin Amash

When Representative Justin Amash (R-Mich.) learned on Friday that President Trump intended to resuscitate the Export-Import Bank by naming two people to its board (it has been limping along with just three out of five board members present), he nailed it, tweeting, “ExIm corporate welfare bank is the symbol of D.C. cronyism. It steals from taxpayers to subsidize big corporations. End ExIm. Drain the Swamp.”

For a while it looked as if the Ex-Im Bank was for all intents and purposes dead. In 2015, the House failed to renew its charter for the first time since 1945. However,

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Is Trump Pulling a Pruitt – Putting an Anti-Ex-Im Exec in Charge of the Bank?

This article was published by The McAlvany Intelligence Advisor on Monday, April 17, 2017:

English: Export-Import Bank of the United Stat...

Many were surprised when President Trump named the EPA’s fiercest enemy – Oklahoma Attorney General Scott Pruitt – to head up the agency. For years Pruitt has raged against the agency for overstepping its bounds and writing rules, mandates, and regulations that negatively impacted the fossil fuel industry. He sued the agency more than a dozen times in the last eight years.

What was Trump thinking?

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The Clock is Running Out on Trump’s Use of the CRA

This article was published by The McAlvany Intelligence Advisor on Friday, April 7, 2017:

English: blue scissors Español: tijeras azules

The beauty of the CRA, the Congressional Review Act, is that it provides a process by which an incoming administration can look back at the previous administration’s rules and regulations and repeal, neuter, or abandon those it doesn’t like. In addition, once a rule has been repealed, the CRA prohibits it from growing back again. Call it “Roundup” 2.0 for political weeds and unwanted grasses.

What’s remarkable is that, since its enactment in 1996 as part of the Republicans’ Contract with America, it has only been used once: by George W. Bush. Congress passed five CRA resolutions under Obama but he vetoed them all. For him, no government was too big nor any regulation too outrageous.

When Marc Short, Trump’s Director of Legislative Affairs, was given the mike at the White House press conference on Wednesday, he spoke at length about the president’s aggressive use of the CRA to turn back a few of the many hundreds of burdens applied to businesses by the previous administration. Before taking questions Short said:

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Trump Uses CRA to Roll Back Obama Rules

This article appeared online at TheNewAmerican.com on Thursday, April 6, 2017:

President Donald Trump will be signing legislation to overturn a rule that the previous administration put in place prohibiting states from blocking federal grant money to abortion providers, including Planned Parenthood. The announcement was made during Wednesday morning’s press conference and will affect some $300 million of federal money this year.

The president has already signed legislation repealing or neutering 11 such rules left over from the Obama administration, with two more pending and a couple more working their way through Congress. There’s a time clock running: the Congressional Review Act (CRA), which allows a 60-day “lookback” on the previous administration’s rules, runs out on April 28.

The leftist DailyKos celebrated the collapse of RyanCare but warned its progressive audience that these small victories using the CRA are mounting up:

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Restaurants Add “Labor Surcharge” to Tabs to Cover Minimum-wage Increases

This article appeared online at TheNewAmerican.com on Monday, March 13, 2017:

English: This is actually Tom's Restaurant, NY...

Instead of increasing their menu prices in response to increased minimum-wage levels, restaurant owners are burying their increased labor costs at the bottom of each tab. The increase, between three and four percent, only comes after the customer has completed his meal. The increase also increases the tip customers leave behind as most customers leave a gratuity based on the check’s total. This is going to raise the average customer’s check, which has already increased by nearly 11 percent since 2012, close to five or six percent.

Some restaurant and fast-food owners aren’t burying the increase but are instead calling attention to it so that customers know that they’re the ones actually bearing the brunt of the forced increase in the minimum wage. Sami Ladeki, the owner of six Sammy’s Woodfired Pizza & Grill restaurants in San Diego and eight others across California, used to call it a “California mandate” but removed it after getting a call from the city attorney. Ladeki, who says he makes a profit of around one percent charging $12 to $14 a pizza, told the Wall Street Journal:

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Trump Meets With Ma: One Million U.S. Jobs Over Five Years?

This article appeared online at TheNewAmerican.com on Monday, January 9, 2017:

Jack Ma, Founder of Alibaba Group

Jack Ma, Founder of Alibaba Group

Monday morning’s meeting between President-elect Donald Trump and Alibaba Executive Chairman Jack Ma, said to be China’s second-richest man, is the latest likely to generate more U.S. jobs. Following on the heels of a meeting in December with Masayoshi Son, the founder of venture capital firm Softbank, Trump continues his quest to bring new jobs to the United States. That meeting with Son ended with the announcement that Softbank would be creating 50,000 new jobs in the United States by 2018.

The details of Monday’s meeting are unclear, but the potential is enormous.

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Trump’s Labor Secretary: Fast-food Magnate Is Anti-Minimum Wage

This article appeared online at TheNewAmerican.com on Friday, December 9, 2016:  

CKE Restaurants

When President-elect Donald Trump nominated Andy Puzder, the head of CKE Restaurants (Hardee’s and Carl’s Jr.), on Thursday, he called him the “ideal candidate,” stating, “Andy Puzder has created and boosted the careers of thousands of Americans, and his extensive record fighting for workers makes him the ideal candidate to lead the Department of Labor. Andy will fight to make American workers safer and more prosperous by enforcing fair occupational safety standards and ensuring [that] workers receive the benefits they deserve. [In addition] he will save small businesses from the crushing burdens of unnecessary regulations that are stunting job growth and suppressing wages.”

Puzder is ideal in more ways than one.

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Trump Adds to His List of Advisors

This article appeared online at TheNewAmerican.com on Thursday, November 10, 2016:  

English: Deck of cards used in the game piquet

In March, Donald Trump trotted out an early list of foreign-policy advisors on whom he would be relying if he were elected president. In an interview with the Washington Post, Trump said, “I can give you some of the names … Walid Phares, who you probably know, PhD, adviser to the House of Representatives Caucus, and counter-terrorism expert; Carter Page, PhD; George Papadopoulos — he’s an energy and oil consultant, excellent guy; the Honorable Joseph Schmitz, [former] inspector general at the Department of Defense; [retired] Gen. Keith Kellogg; and I have quite a few more.”

In August he added “quite a few more” and then, the day after he was elected, Trump added still more, this time in the economic policy area.

There are at least four “wild cards” in the deck that Trump is building,

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Congress Pushes Back Against Gunsmith Edict

This article appeared online at TheNewAmerican.com on Monday, October 3, 2016:  

English: Gunsmith counter at H&H Shooting Spor...

Last week, House Minority Whip Steve Scalise (R-La.) and Senator Steve Daines (R-Mont.) introduced a bill in their respective chambers that would effectively rescind the State Department’s “guidance” issued in July that would have forced many small gunsmiths out of business. The bill is not a direct confrontation but a demand that the authority of the State Department be transferred to the less anti-gun and more business-friendly Department of Commerce, according to Scalise:

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The “Ratchet Effect” at Work Once Again, This Time Against Gunsmiths

This article was published by The McAlvany Intelligence Advisor on Monday, October 3, 2016:

English: This image is of economist Robert Higgs.

Robert Higgs

In interpersonal relations, the ratchet effect has been called “What’s mine is mine; what’s yours is negotiable.” In politics it’s been called “Two steps leftward, one step back.” Robert Higgs, a Senior Fellow in Political Economy at the Independent Institute for nearly a quarter century, described the effect much more elegantly: once a crisis that calls for more government has passed, state power usually recedes, but it rarely returns to its original levels; thus each emergency leaves the scope of government a little wider than before.

Thomas Jefferson put it this way: “The natural progress of things is for the government to gain ground and for liberty to yield.”

The latest example is the State Department, through its Directorate of Defense Trade Affairs (DDTC), expanding its definition of “gunsmithing” so that it is called “manufacturing,” thus allowing it to

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Brazil’s Economy Entering Depression

This article appeared online at TheNewAmerican.com on Monday, March 28, 2016: 

English: Aerial view of Rio de Janeiro city ce...

English: Aerial view of Rio de Janeiro city center, Rio de Janeiro, Brazil.

The latest numbers coming out of Brazil confirm what Goldman Sachs said last December: “What started as a recession … is now mutating into an outright economic depression, given the deep contraction of domestic demand.”

Translation: President Dilma Rousseff’s attempt to stimulate the slowing economy via massive insertions of new debt has in fact had the opposite result.

Consumers have cut back by more than eight percent across the board, while investment spending has declined more than 10 percent last year, with cumulative capital spending

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Another Keynesian Failure: Brazil

This article was published by The McAlvany Intelligence Advisor on Monday, March 28, 2016:  

John Maynard Keynes Русский: Джон Мейнард Кейн...

John Maynard Keynes

Boiled down to its most crude elements, Keynesianism, according to Antony Mueller at the Mises Institute, is “the economic policy doctrine of growth by spending.” Since 2003, when the current political party in Brazil, first headed up by Lula and now by Dilma Rousseff, came to power, it installed it in spades. For a while it seemed to work: demand for Brazil’s raw materials: oil, iron ore, and agricultural products grew as China (also pursuing the “growth by spending” mantra) also grew.

But the boom, which at one point included Brazil as one of the BRIC (Russia, India, and China) nations that would soon overtake the developed world, went bust.

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Minimum Wage Hikes Are Costing Jobs

This article appeared online at TheNewAmerican.com on Thursday, January 21, 2016:  

Employment data now coming in from six U.S. cities that have mandated increases in the minimum wage are proving a basic economic law: When the price or cost of something increases, less of it will be demanded.

In his analysis of the preliminary data now available from Chicago, Oakland, San Francisco, Seattle, Los Angeles and Washington, D.C., Jed Graham wrote:

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Like a Zombie, the Export-Import Bank is Threatening to Come Back to Life

This article was published by The McAlvany Intelligence Advisor on Wednesday, September 9, 2015:  

The movie White Zombie, a horror film in 1932 starring Bela Lugosi, featured zombies as mindless, unthinking henchmen under the spell of an evil magician. The Export-Import Bank doesn’t quite fit the definition, but it’s close.

Crafted by socialists surrounding FDR in 1934 and given life by an executive order, Ex-Im was granted permanent status as an agency in 1945. It has been repeatedly, endlessly, mindlessly resurrected almost 20 times since then, until the end of June.

Since then pressure has been building among its crony beneficiaries

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Trickle of Companies Leaving Illinois Turning Into a Flood

This article appeared online at TheNewAmerican.com on Friday, August 14, 2015:  

On Thursday, Hoist Liftruck’s announcement that it was moving more than 500 manufacturing jobs to Indiana was just the latest in a long and almost fevered list of other companies seeking to escape Illinois’ outrageous workers compensation costs and high taxes.

On July 14 machine-maker DE-STA-CO said it was moving 100 jobs to Tennessee. The next day energy processor Bunge North America said it was shutting down its plant in Bradley, Illinois, and laying off 210 workers. The day after that General Mills pulled the plug

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Seattle Progressives Prove Certain Economic Laws Cannot Be Repealed

This article was published at The McAlvany Intelligence Advisor on Friday, August 14, 2015:  

Peter, Paul & Mary

By changing the meaning of the word “flowers” to “businesses,” the lyrics from Peter, Paul & Mary’s anti-war song applies perfectly to the new Seattle under its new minimum wage mandates: Where have all the businesses gone?

Where have all the flowers gone, long time passing?”
Where have all the flowers gone, long time ago?
Where have all the flowers gone?
Young girls have picked them everyone.
Oh, when will they ever learn?
Oh, when will they ever learn?

And when will Mayor Ed Murray and his gaggle of progressives who unanimously passed the anti-business, anti-employment minimum wage law last summer ever learn: you cannot fool Mother Nature, and you cannot repeal economic laws.

In Murray’s case the economic law still to be learned is:

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Export-Import Bank’s Charter Expires, for the Moment

This article appeared online at TheNewAmerican.com on Wednesday, July 1, 2015: 

English: Export-Import Bank of the United Stat...

Visitors to the Export-Import Bank’s website on Wednesday would have found a terse notice that its charter had “lapsed” effective midnight, June 30, meaning that “the Bank and any of its delegated authority lenders cannot authorize any new transactions.” However, the bank is likely to have a very long life even after its death:

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Pushback Against Supremes’ Same-sex “Marriage” Ruling Begins

This article appeared online at TheNewAmerican.com on Monday, June 29, 2015: 

No doubt anticipating what was coming in the Supreme Court’s ruling in Obergefell v. Hodges on Friday, Senator Mike Lee (R-Utah) and Representative Raul Labrador (R-Idaho) introduced bills a week earlier to keep the federal government from discriminating against individuals and groups exercising what is now left of their First Amendment rights. Called the First Amendment Defense Act, Lee asked rhetorically:

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Kansas Considers Tax Increases Just as Its Economy Revives

This article appeared online at TheNewAmerican.com on Friday, June 12, 2015:

English: Aerial view of Kansas City, Kansas, l...

Aerial view of Kansas City, Kansas, looking southwest. The Kansas River (right-center) joins the Missouri River (left). A small piece of Kansas City, Missouri is visible on the left of the Missouri River.

 

Kansas House members debated until midnight Thursday whether to raise sales and cigarette taxes in order to close the state’s budget deficit. The House had just resoundingly defeated a previous measure that would have raised those taxes even more, but the state is facing a deadline to balance its budget, required under its constitution.

There’s a roughly $400-million shortfall this year, which is estimated to increase for the next several years.

Left-wing pundits have had a field day taking Governor Sam Brownback to task for calling his massive tax cuts enacted in 2012 an “experiment,” a “shot of adrenalin,” and similar to Ronald Reagan’s experiment based on the Laffer Curve: Reducing tax rates will increase tax revenues as the economy grows.

Paul Rosenberg, senior editor of Random Lengths News, a tiny weekly newspaper operating out of Long Beach, California, is a good example. His paper describes itself as an “independent progressive newspaper” with a readership of 63,000 that “is proud of the support from the Harbor Area labor unions, who allow us exclusive distribution inside most of their union halls.”

Rosenberg managed to get a screed attacking Brownback published in the hard-left Salon magazine in which he describes the Kansas governor as

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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.