The Facts vs The Talking Points

Remember when the Democrats said that the Trump tax cuts would blow a huge hole in the deficit because of the money that would not be collected. Those who believed the Democrats need to study the Laffer Curve. Although liberals keep saying it doesn’t work, the history of tax cuts proves it does.

Yesterday Investor’s Business Daily posted an editorial about the impact of President Trump’s Tax Cuts.

The editorial states:

The latest monthly budget report from the nonpartisan Congressional Budget Office finds that revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. That’s a 9% jump, even though the lower income tax withholding schedules went into effect in February.

The CBO says the gain “largely reflects increases in wages and salaries.”

For the fiscal year as a whole — which started last October — all federal revenues are up by $31 billion. That’s a 1.2% in increase over last year, the CBO says.

The Treasury Department, which issues a separate monthly report, says it expects federal revenues will continue to exceed last year’s for the rest of the 2018 fiscal year.

The editorial concludes:

As we have said many times in this space, the problem the country faces isn’t that taxes are too low, but that spending is too high. The CBO projects that even with the Trump tax cuts in place, taxes as a share of GDP will steadily rise over the next decade, and will be higher than the post-World War II average.

But bringing in more tax revenues doesn’t help if spending goes up even faster. And that has, unfortunately, been the case, as the GOP-controlled Congress has gone on a spending spree.

Look at it this way. Tax revenues are up by $31 billion so far this fiscal year compared with last year. But spending is up $115 billion.

In other words, the entire increase in the deficit so far this year has been due to spending hikes, not tax cuts.

There are too many Republicans in Congress who don’t understand why the American voters sent them there. The Democrats have always loved to spend other people’s money, but the Republicans were supposed to be the alternative to that. Unfortunately, many Republicans have failed the voters. The only way to fix Washington is to unelect every Congressman who votes for spending increases. Otherwise the spending will only get worse.

The Internal Revenue Service Has Become A Political Organization

The Wall Street Journal posted an opinion piece this morning about changes that the Treasury Department is proposing to current Internal Revenue Service (IRS) rules. The proposed rule gives 501(c)(3) charities the ‘option’ of filling out reports on every donor who contributes more than $250 to the organization. This ‘option’ would include name, address, and Social Security number. As of now the rule will be voluntary, but based on past experience (particularly with the IRS) voluntary will soon morph into required.

The article reports:

Under current law, nonprofits must report only donors who give more than $5,000 a year, and then only names and addresses. Donors who give less than $5,000 to (c)(3) charities, and who want to claim a tax deduction, must obtain a “receipt” from the charity—to furnish to the IRS if they are audited or examined. This process has been in place for years, and even Treasury and the IRS acknowledge in their new rule that it “works effectively, with the minimal burden on donors and donees.”

So why change it? The IRS is claiming this will aid in more “timely reporting” of tax-deductible donations, and no doubt the agency’s auditors would love more information to harass taxpayers.

Unfortunately, the IRS has used donation information to harass taxpayers before. After a list of supporters was made public a business that donated money to the Proposition 8 proposal in California was target by opponents of the proposal. I reported another example of IRS abuse in February of 2014 (rightwinggranny.com).

The Wall Street Journal reports another example of IRS abuse:

Frank VanderSloot, a Mitt Romney donor, was audited by the IRS and Labor Department after the Obama campaign singled him out for criticism. Catherine Engelbrecht, the head of the 501(c)(3) True the Vote, was publicly attacked by Democrats and then hit with personal and business audits from the IRS, OSHA and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The National Council of Nonprofits, which opposes the proposed rule, notes that the IRS routinely warns taxpayers not to give out their Social Security numbers unless “absolutely necessary.” Donors will be suspicious of charities that now ask for them.

Many taxpayers will also lack confidence that nonprofits, which are often small operations staffed by volunteers, can safeguard their information. The proposed regulation is an invitation to fraud and identity theft by creating an opportunity for scam artists to claim to be charities and solicit Social Security numbers.

It may be time to go to a tax system that does not involve the IRS. Unfortunately the IRS has shown itself to be an agency that cannot be trusted to be above politics. I realize that a lot of the politicization has been under the Obama Administration, but there are no guarantees that any future administrations will not use the agency in the same way.

 

What We Have Here Is A Failure To Communicate

The Internal Revenue Service (IRS) the-dog-ate-my-homework scandal just keeps getting more interesting. CNS News is reporting today that the IRS told the White House in April about the missing e-mails. Congress was finally told in June.

The article reports:

“The IRS knew in February, or maybe even in March, and Treasury and the White House knew at least in April — but Congress and the American people didn’t find out until June. Were you purposely not telling us?” House Ways and Means Chair Dave Camp (R-Mich.) asked Koskinen. “Were you purposely not revealing this to the American people?”

…Camp told the committee he received a letter from the White House two days ago, telling him that the Obama White House learned about the missing Lois Lerner emails in April and was informed by the Treasury Department.

Koskinen said he’s also seen that letter. He said his “understanding” is that someone in the IRS general counsel’s office informed someone in the Treasury Department’s general counsel office “that there was an issue and the IRS was investigating.”

This is amazing. Remember, the White House just recently announced that there were no e-mails between the IRS and the White House. No wonder–they have had since April to find them and get rid of them!

There is so much wrong with the current state of the IRS, including the sharing of confidential taxpayer information about nonprofit groups to the Federal Bureau of Investigation days before the 2010 midterm elections (see rightwinggranny.com). This information included donor lists. This offense is punishable with jail time. It is time to abolish the IRS. It has become a very powerful political tool and needs to go away. We can institute a flat tax or a consumer tax to generate revenue, but the behavior of the IRS and the people involved with it is unacceptable. The IRS has truly become a danger to our freedom.

The Final Chapter Of The General Motors Bail Out

Yesterday Yahoo News reported that the Treasury Department has announced that all government-held shares of General Motors will be sold by December 31.

The article reports:

…On Thursday, it (Treasury Department) announced it sold 70.2 million shares of General Motors (GM) stock and intends to sell its remaining 31.1 million shares by Dec. 31.

Once the final sale is complete, however, US taxpayers will have lost nearly $10 billion of the $49.5 billion the federal government used to prevent the auto giant from collapsing in 2008, Treasury officials say. The loss offsets a greater calamity that would have occurred – the disappearance of 1 million jobs – if the federal government had not intervened, says Treasury Deputy Assistant Secretary Tim Bowler.

I guess the question I have at the end of this is how did Ford Motor Company continue without the government bailout, and could General Motors have done the same thing? The taxpayers lost nearly $10 billion in this transaction. What would have been the result of simply dividing that amount of money between those Americans who pay taxes? I think in the long run, it would have had a more positive long term effect on the economy.

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