TAX POLITIX
The Politics of Taxes
Downgraded
The S&P has downgraded our rating to AA+. Here is their press release, reprinted below in its entirety. TORONTO (Standard & Poor’s) Aug. 5, 2011–Standard & Poor’s Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. Standard & Poor’s also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor’s affirmed its ‘A-1+’ short-term rating on the U.S. In...
Tea Party Terrorists
It is clearly arguable that it was ONLY the Tea Party that was rational. Our national deficit is $14.3 trillion only if you lie and exclude unfunded entitlement debt of at least $7.7 trillion for social security and $37.9 trillion for Medicare (these are CBO numbers which are considered too low by most economists). That is a total of at least $60 trillion, or $200,000 of real debt for every man woman and child in this country. It's getting worse every day that something is not done. Are you...
Is Social Security Taxable? Should It Be?
Under federal tax law, Social Security amounts that people receive are either 1) not taxable if income is low enough; 2) partially, from 0% to 85% as your income rises or 3) fully if you pass a certain income threshold. Your income is based on a Modified AGI which is basically gross income, subject to certain things such as municipal bond interest income. Should Social Security be taxed? A fundamental principle of taxation is that you should not be taxed on money on the monies you have...
Pay Czars And Public Service
Have we forgotten about the Pay Czar? Ken Feinburg's activity during the early part of the Obama administration certainly had some troubling components. Chief among these was the basic fact that this “pay czar”, as he was dubbed, was technically acting independently of any authority in this role. Dana Milbank aptly pointed out that,“he was neither confirmed by Congress nor accountable to President Obama”. And even after he was replaced, no one has still answered the question -- who does the...
Attacking The Wealthy Attacks Our Economy
As the deficit talks ensue, Obama continues to blather on about eliminating tax cuts for the wealthy. In fact, this is shaping up to be a major theme of his reelection campaign as well. Thankfully for the Republicans, this position serves to highlight his continued economic incompetence. As a practicing CPA for nearly forty years, my clients are mainly those that fall under the category of "wealthy". They may make the most money, but they are assuredly the ones paying the most taxes. These...
To Reform or To Campaign: That Is The Question
Charles Krauthammer has an interesting strategy for debt negotiations -- short term solution now to avoid default, which will give a both sides a little extra time to formulate a long-term plan. The intriguing thing to me about this approach is that it forces Obama to make hard decisions during his campaign season. Would Obama stand and do what is right for the budget and economy regarding entitlement reform and tax increases, or will Obama push any major reform initiatives to the Republicans...
WSJ: Adding Taxes To Taxes
The WSJ had a fantastic piece today, reminding us of the new taxes yet to come, signed into law under Obama. And he wants MORE tax increases as part of this deficit negotiation? Go read the full synopsis right now. Some of the additional taxes are listed below • Starting in 2013, the bill adds an additional 0.9% to the 2.9% Medicare tax for singles who earn more than $200,000 and couples making more than $250,000. • For first time, the bill also applies Medicare's 2.9% payroll tax rate to...
He Was Against It Before He Was For It
Over at the Weekly Standard, Stephen Hayes gives a cogent summary of Obama's flip-flopping on raising taxes during a recession. When pushing for his stimulus package in 2009 and again on his bipartisan relief effort in December 2010, Obama stated that raising taxes would be difficult on the economy and small businesses. Now when he's running for president, to heck with the economy. Taxing the wealthy is popular and necessary in order to avoiding entitlement spending cuts -- as a means to gain...
Obama’s Businesses and Unfriendly Policies
The current assertion that we are in a recession because the wealthy companies haven't put money back into the system is just plain wrong. But even our president is peddling this idea. Last month, Obama chided businesses to hire more workers. Specifically, he said "it is time for companies to step up. American taxpayers contributed to that process of stabilizing the economy. Companies have benefited from that, and they're making a lot of money, and now's the time for them to start betting on...
Obama’s Businesses and Wealth Redistribution
It is truly embarrassing for the businessmen in this country to have a president who makes such economically incompetent statements and gestures. Speaking to the U.S. Chamber of Commerce a couple of months ago, our president effectively rebuked business success. He suggested that “if we're fighting to reform the tax code and increase exports to help you compete, the benefits can't just translate into greater profits and bonuses for those at the top. They should be shared by American workers”....
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