Tag: Taxation

If You Keep Yelling, Folks Will Believe What You Say

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Today’s number is 87,000. Today’s quiz concerns that number and its position in today’s political discussion. What does 87,000 represent? Is it:

  1. The number of new jack-booted thugs armed with assault rifles who will enforce the IRS’s evil mandates, shooting any who resist the decrees from the Federal government,

Or:

2 .  The number of hires the IRS will need over the next 10 years to off-set retirements, and    improve the response time for an agency that has been starved of resources for over a decade.

OK, I know that was an easy question. If you live totally in a right-wing cocoon, the answer is 1. If you have any relationship with reality, the answer is 2.

It really shows up the hypocrisy of the Republican party as to how they frame the issue around the increased resources for the IRS. What they don’t tell their gullible rubes is that a few of these 87,000 proposed employees will end up auditing high-income returns, making it less likely that overt cheating will avoid scrutiny. Look, a vast majority of taxpayers do not have any opportunity for not paying their fair share of taxes. They don’t have ownership of limited partnerships, where income and deductions are played with by accountants of mixed morality. They cannot play with depreciation of assets, since they do not own assets they could depreciate. It has been easier to look for those who cheat by playing with their eligibility for earned income tax credits. Certainly we do not want those who are benefiting from taxation redistribution programs to cheat and cause them to benefit excessively from taxpayer’s largesse. But to pretend that significant amounts of dollars can be recovered by keeping the IRS status quo, and mandating increased work requirements for benefit programs shows the true financial illiteracy of the would-be ruling class. Either that, or they are pretending to care about the true victims of our economy by appealing to moral instincts by lying about the unworthiness of those who are losing out in the national income race.

Over the last several decades, the mantra of the Republicans has been that any expenditures from the Federal Government are unjustified, and wasteful. Therefore, it is their bounden duty to reduce taxes on the productive class (themselves), while imposing strict limits on any redistribution of income to the wastrel class (those who are in the lower bounds of the income distribution). It is as if the belief system of Ayn Rand has sprung to life in their political pronouncements. What they have is theirs, since they earned it. No mention of them rigging the system to ensure their types of income is treated more leniently than income earned through participation in the labor market.

And now they would have us believe the proposed increase in the IRS budget is the number 1 evil they are fighting against. Well, I am of the belief that taxes are the rent we pay to live in a civilized society. Taxation does not represent evil taking. And when overt lying becomes a main form of political discourse, it is the responsibility of others to speak up against these lies from becoming embedded in the beliefs of those who drink the swill of the upper classes.

There has always been an element of wish fulfillment in Republican politics. They always represented the capitalists against the majority who do not have capital to play with. Their trick now has been to convince a substantial portion of the laboring class that they are being deceived by the evil of the social issues favored by Democrats. They have subjugated their economic pitches by wailing about the degradations they see in their culture war issues. Meanwhile, those who provide the political lubricant (money) in the Republican party are literally laughing on their way to the bank as they chortle over the tricks they are playing on the lower classes. It has been their dream to reduce the portion of national income going to those who labor for their living. That way, corporate profits can increase, and they benefit from the share buybacks and increased dividends accruing to those with capital.

I am one of the fortunate ones in this economy. I went to college and majored in a STEM field which was in demand when I graduated. I was able to save throughout my career, and through a combination of pension, and inheritance, I’ve been able to build up my share of capital. I look to deploy my capital in investments where dividends play a significant role in total return. But I see how unfair our income distribution is. Look at the graph of total US income:

Nearly 40% of households earned less than $55,000 dollars in 2019. And while that income may be acceptable in places like West Virginia, it is untenable to live on that amount in our urban centers. So for those who claim only the undeserving in society need assistance, I maintain it is the system imposed upon this nation which precludes many dedicated laborers from earning a decent wage. We either need a system which increases the value of labor, or we need a national program to aid those who find themselves at the bottom of the heap in this ongoing race to the top. Of course, since service worker wages are the foundation of the economy, rises in service worker pay is reflected in higher costs for the products of those service workers. And immediately, concern grows about the inflation those higher costs produce. Of course, blame is attributed to high spending from the Federal Government. And those Republicans who seek to deceive the foolish masses, trumpet their folderol loudly so people believe their words instead of seeking to analyze the situation for themselves.

I’m Agin It!

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High tide pushed about a foot of water inland where Lockwood Drive and Broad Street converge on Monday, Sep. 21, 2020. Matthew Fortner/Staff Journal & Courier

With due respect to Time Magazine’s person of the year, they should have made the person of the year a composite image of an ‘aginer’. Someone who is against anything and everything that hints of progressivism. Vaccines that use science to prevent or moderate infections from COVID? Agin it. An extension of the child tax credit? One person may use that to buy drugs, so I’m agin it. Coming up with a way to provide incentives to use renewable energy? When God gave us all of these fossil fuels to mess up our nest? I’m agin it. Fossil fuels were good enough for my parents, they will always be there to fuel our needs.

In a way, the reason so much was packaged into a single bill was due to the intransigence of the “Aginner” party. After 10 years of total opposition to any legislation proposed by Democrats from Republicans, the Democrats recognized they had a brief window of opportunity to enact their priorities. Thus, all of the desires bottled up were packaged into a single bill, and this unwieldy device tottered through the legislative process.

But for some unexplained reason, legislators still seem beholden to Grover Norquist. Instead of admitting the faults with the trickle down philosophy governing our tax system, we seem to forget the days of balanced federal budgets coinciding with tax increases in the late ‘90’s. I still remember the wringing of hands on CNBC when they were worried about the impending dearth of treasury bills for those who needed an ever-increasing stream of debt instruments.  Of course, those tax increases were swiftly reversed during the reign of W. And thus we’ve had a string of deficits extending from the early years of this millennium to as far ahead as the eye can see. It is amazing the resistance to raising taxes which exists in our ruling class.

So we in this country value capital over labor. That is why the preference for capital is so entrenched in our tax code. I might actually be in favor of a flat tax, if it treated income from capital the same as income from labor. And if the rate were set so that it did balance our expenditures, and we were forced to change the rate annually to account for differences in spending rates. Like that will ever happen!

Meanwhile, we just keep on keeping on, leaving future catastrophes to overwhelm us in their time. Social Security being imbalanced? Well, as long as we have those fictitious bonds in the federal lockbox to balance the spending, we can continue to inflate the money supply to send money to seniors. (Full disclosure – I receive a Social Security benefit at the upper end of the benefit distribution). Climate change costing us more and more? Just let insurance cover the effects, don’t worry about the cause. All of those people living in poor countries on the margins of the seas? They never have mattered, so why worry about them now.

Ah, but those poor rich people in Miami Beach. Time to worry about blue sky flooding, where inexorable sea level rise is reflected in salt water intrusion under the expensive beach front properties. Even Governor DeathSantis is worried about flooding in Florida, enough to propose hundreds of millions of dollars to strengthen the state’s infrastructure. But none of this liberal ideology sticking its camel’s nose under the state’s tent. No, this will be good ole concrete and drainage systems that will stop the sea’s rise in its tracks.

Miami. Charleston, South Carolina. Virginia Beach / Norfolk Virginia. The locations where clear sky flooding are the harbingers of sea rise to come in this country. Still, it is apparent that Republicans will continue to thumb their nose at the true causes of sea level rise, and instead choose to spend billions and billions of dollars to fight a vain and ultimately losing battle against the inexorable enemy of the sea. Meanwhile, an attempt is being made to make the national flood insurance program reflect the costs it incurs in dealing with not only tropical storm flooding, but increased floods upstream from unprecedented storms like my state of West Virginia suffer. The areas that flooded in West Virginia 2016 and Tennessee in 2021 were not highly flood prone areas, but when you are dealing with available moisture, a few degrees of dew point rise can unleash feet of rain in single storm events. So what will happen when the flood insurance premiums rise? The howls unleashed will cause legislators to force the federal agencies to rescind the increases, and one more cost will be amortized across the entire population of the nation.

It is very likely that control of the US Congress will revert back to the Republicans after the 2022 elections. What we’ve seen to try to counter that reversion is a flurry of legislation to attempt to alter the trajectory of this country, since the Reagan administration set the people against the Federal Government. As long as one side of the political spectrum only sees evil and laziness in the lower income brackets, we will continue to have policies that favor the fortunate few instead of policies aimed at improving the lot of the many who find themselves at the lower end of the income distribution. We seem destined to continue our trip into plutocracy, where those who are the true beneficiaries of government policies, convince the masses that cultural issues are all that matters, and it is the Godless liberals who are the true enemies. One wonders how long this misrepresentation of Biblical principles will continue. But in the famous words of H. L. Mencken, “No one in this world, so far as I know – and I have searched the records for years, and employed agents to help me – has ever lost money by underestimating the intelligence of the great masses of the plain people”.

Even one hundred years ago, the foresight of this sage stands out as describing our current situation perfectly. One may ask, who is the Mencken of today? And would anyone listen to that person and heed their words?

It’s Now Or Never

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What is “vengeful taxation”? That seems to be the sticking point now for my senator Joe Manchin from supporting some version of the Democratic social safety net spending program. Note how over the years, the emphasis in discussion has changed from describing the objective of the bills, to strictly focus on the overall cost of the programs. But back to “vengeful taxation”, according to Manchin it is not vengeful to seek the correction of the 2017 tax cut bill, as long as the tax rate for corporations keeps them globally competitive. Whatever that means.

Look, we in West Virginia have benefitted from the attention paid to this small, land-locked state lacking in so much of what is valued in the US these days. Having a Senator at the fulcrum of power is useful. And I am reminded of how small this state really is when I recall we encountered Senator Manchin at a local restaurant as he came in, bereft of staff and entourage, to join a party at another table. He gave us a couple of minutes as my wife pressed a couple of points home to him, and he was able to respond in the way many politicians have mastered – clasping hands, literally backslapping, and saying nothing that could not be interpreted in many different ways.

We seem to be stuck in a do loop (as Andrew Yang noted recently, betraying his computer programmer roots). We cannot break out of the prison of the dichotomy of the Democrats, where the progressive wing says our way or the highway, while a small minority of Senators holds firm to less fiscal stimulus. What I think is being missed by both sides is we’ve had 40 years of underinvestment in both human and physical infrastructure, and this time right now seems to be the only time where it is possible to get anything accomplished. The Republicans are insistent upon their nihilism, where they lay insensate upon the governmental table, while they await their normal due of mid-term elections to anoint them as the powers in Congress. This very time is the opportunity to get something done, in order to have accomplishments to tout for the next election cycle. Maybe, just maybe, if we can get something done, and people are working next year on infrastructure jobs, we can disrupt the Republican’s expectations of mid-term gains.

So much of the political discourse recently is predicated upon who can yell the loudest. Inside of the social media platforms, it is those on the right who seem to reach for the simplistic slogans which seem to captivate the nation’s attention. Couple that with the historical illiteracy of the American populace and it is no wonder the Republicans are able to characterize the Democratic proposals as socialism. It is painful to watch the true socialism for the rich over the past 40 years ignored, while the first attempt to use government to aid the workers at the bottom of the income scale is classified as handouts to the unworthy. But you have to admit it is effective, when polling shows ongoing gains for Republican positions while polling for Democrats shows decreased support since people have forgotten the messiness of the legislative process.

Has there ever been in the history of this nation such a handicap placed in the way of one political party? Where for over a decade, one party declares its implacable opposition to any action of the other party, with zero support for even critical actions like raising the debt ceiling? We should not even have a debt ceiling based upon how it is used as a cudgel rather than as a tool to restrain excessive spending. The consequences of not adjusting this artificial limit far exceed the political gains that one party may achieve in stifling raising the debt ceiling. But who among Americans have the attention span to realize it was the Republicans who were responsible for the dismemberment of our country’s credit rating, and the consequences yet to come if we do technically default on the debt?

The ruling class seems to think only those who can write a sizable campaign check are worthy Americans. They are near to their objective to institute a permanent oligarchy since they seem to view all opposing views as unworthy of consideration. In fact, only their votes would count in the world they wish to impose upon the majority of Americans who do recognize the problems 40 years of trickle-down economics hath wrought. We’ve gone from an America where the middle class was able to get ahead, to one where only raw wealth counts. It is an un-American country we now have. Unless you already have wealth, or unless you can count on a degree from an Ivy-league university to lubricate your rise up the social ladder, you just don’t matter as a human. The new oligarchy will deign to deal with your non-economic concerns, but really they are just laughing at those they patronize by letting them think they have political power.

But at least we won’t have socialism!

And If Elected, I Promise To ….

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My career choices have expanded exponentially. All I have to do now is lie unashamedly and the future is mine as a Republican elected official. It is amazing, you don’t even need to worry about those videos showing your deeds and words, all you need to do is, say, recast those events into more flattering versions of the truth. And to be sure, your version of the truth has just as much merit as any other version that just happens to be backed by video and audio.

So instead of acknowledging the medieval violence perpetrated by those in the vanguard of the storming of the Capitol on January 6, you can portray those inside of the Capitol building as normal tourists, even managing to draw (stay) inside of the lines as they took selfies desecrating congressional spaces. Why, it is impossible for white citizens to have evil intent. We all know it is those others from BLM and Antifa who were the real terrorists. Those Proud Boys and those 3 Percenters? Just patriotic tourists who happened along and shared hugs and kisses with the Capitol police.

If those mean ole Democrats propose any changes to the taxation structure of this country, thereby risking reversal of 40 years of pandering to the rich? Just portray them as unrepentant socialists, who are working at implementing redistributionist policies, taking money away from the hard relaxing billionaires whose spending keeps so many of the little people employed.

If businesses have difficulty hiring people at starvation wages, expound ceaselessly on the dignity of work, and state that America has lost its work ethic. Never worry about the lives of those who have risked their existence by working during this pandemic, just define those who are using what little power they have (their labor) as morally corrupt for not wanting to exchange an hour’s work for 8 federal reserve notes. Of course, we who hold millions of those federal reserve notes have proven our moral integrity and should never be chastised.

Yes, I can lie with the best of them. I can claim no one has ever seen this virus everyone is scared of, and all of the hospitalizations are just efforts at getting the highest reimbursements from our socialized medicine providers. I can claim that since the advice from the scientists has changed from what was given 18 months ago, then all advice from scientists should be ignored, and my anecdotal evidence about efficacy of horse dewormer out trumps your peer reviewed massive trials. I have my rights and you are not about to infringe on them by pansy-assed pleas to consider the public good.

I can even lie about what is going on all around us. Sure, we never used to have these massive fires in Australia, Greece, Portugal, and the US west coast. But it cannot have any relationship to the increase in temperatures we’ve seen across the globe. And those flooding rains we seem prone to now? Has absolutely nothing to do with the fact that higher dew points induced from a warmer climate allows for higher rainfalls. But God would never allow for his infallible creatures to be capable of inflicting harm to the environment. Therefore, all who worry about the coming climate crisis can just go on with their lives (and the campaign contributions of the vested interests keep on rolling in).

I will have to work on my ability to cry crocodile tears at the opposing political party for insisting that we take responsibility for our actions in the past at increasing the deficit. Just as long as I can feign concern for our debt when I didn’t care about increasing deficits as long as the favored classes made out from our tax cuts. I’m not really good at naked hypocrisy, so my acting skills need a little brushing up before I can stand in front of cameras and wail about the reckless spending taking us over Niagara Falls without even a barrel to shield us from the rocks below.

I can if I wish start at the state level. I can say that I’m going to change human nature, and eliminate all rapists from the streets while I prohibit any possibility of abortions. I can insist that all who inhabit our penal systems are deserving of every bad thing they get, and once someone has made a mistake, they forfeit all rights forevermore. I don’t care about offering any rehabilitation programs in prisons, all those who find themselves there are unworthy of anything other than white bread and bologna sandwiches. Bring back Joe Arpaio! He had the right ideas.

Of course, only those who see things the way I do deserve to be placed in positions of public trust. Therefore, I must manipulate the electoral system so that only I and my fellow travelers can win elections from now on. I must pick any remnant of the liberals from my clothing in disgust, so I can remain pure and unblemished.

I can hardly wait. The next election cycle is upon us, so I must hurry so I can establish myself in the minds of those we allow to vote.

The Sweet Smell of Government Revenue

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What’s a poor mobster to do? Over my lifetime, various forms of government have usurped one or another of the functions organized crime used to provide.

Numbers racket? Taken over by multi-state consortiums running nation-wide lotteries, and single-state simple lotteries.

Sports bookie? Through partnerships with the various states, you can now throw your money away on sports betting without having to worry about your legs being broken if you could not pay. You now only have to worry about paying your credit card bills which reflect the losses from sports gambling.

Gambling? The casinos in most states are partners in crime with the state government, resulting in favorable treatment for businesses whose business model relies upon separating its customers from their money.

Loan sharking? In many states you can use one of the legal services for a “payday loan”, or lend your car title to a business that can legally charge rates and fees originally reserved for the shady characters who frequented the alleys in cities.

Selling marijuana? In many states, that is now under the purview of the state, through licensing of the industry.

About all an honest mobster can do now is to import drugs other than marijuana, and facilitate prostitution. Of course, those activities are up for grabs as local governments keep searching for sources of revenue where those who are paying don’t object to their own debasement.

Two things are apparent when you look at the arc of history. One is that human nature has not changed much. It will always be profitable to prey on the need for fast money, money that is not earned through labor. More on that later. The second apparent thing is the need for escapism, either through chemical means, or through mass entertainment honoring humanity’s ability to inflict pain. See WWE and MMA for examples of those diversions.

Those who are on the side of the culture wars decrying man’s descent into debauchery see these growths in government activities as examples of what happened once we turned away from God. What they do not see is human nature, and how much of what we may decry actually hides the real villainy allowed by our legal structure. It is abundantly clear we have abandoned any pretense at honoring labor, since our taxation system is heavily weighted towards valuing capital over labor. Since the radical capitalists captured our legislative functions, the steady march towards giving capital a more favorable view than labor has been unimpeded since the beginning of the Reagan administration. Until now, that is. For the first time in a very long time, someone is proposing to reverse a few of the benefits of capitalism. And the wail from the capitalists is loud and long, as the specter of socialism is invoked on any proposed change favoring the working public.

Look, the Republican party laid their cards on the table when in 2020, they gave up any pretense at being a party of ideas. When things are going well for the money parties, it is not necessary to do anything but hold on to existing gains. Therefore, no party platform was proposed other than what Donald Trump wants. He is the flag-bearer for all of the cadres who wish to keep the favored position of capital. His overt fanaticism for one variant of patriotism, where he literally hugged the flag, hid his true agenda from view. That is, to ensure the continuation of the favored position of capital over labor.

So the ongoing culture wars really are a smoke screen aimed at diverting the attention of the voting public from the real agenda going on. If you get emotionally engaged at the threat of the “other”, you won’t care about the theft of the nation’s monies enabled by legislative action. One thing to consider though, is whether the animal spirits unleashed by the culture war engagements can be put back into the bottle. Witness the horrendous scenes where anti-maskers threaten those who have concern about conditions in schools. Witness the fanaticism unleashed on January 6, where even sober individuals who would not even consider breaching the capitol, were willing to follow and enter once the true believers broke through. Civilization has always had a thin veneer, and those who actively work to strip off this veneer for political and monetary gains must answer for these actions. They may not be able to stop the mob once they have unleashed it, and when that happens, the mob tends to strike back at those who enabled it.

Meanwhile, the real needs of people are still out there. Roads need to be paved, and sewage needs to be treated, and water needs to be delivered. Students must be educated, even though many in the privileged classes gave up long ago on public schools. These services, provided mainly at the local levels, have been hamstrung by limitations on taxation. The effects of Grover Norquist and his acolytes run deep within the legislative class. Therefore, if more revenue is needed, the government tends to coopt something originally considered to be a sin, and enable more revenue to be generated without raising the tax rates.

Are we better off to have the government as the one who skims off the top of the revenues we so willingly give away, as compared to organized crime? Probably we are. But that does not hide the unmistakable truth that government is promoting these activities now, all due to the prohibition against raising taxes. Maybe what we need to do is convert our income tax system into a lottery, where some people have their taxes forgiven, while a fortunate few receive refunds in multiples of the amount due. Perhaps we just are not looking at taxes in the right way, and we need to tap into the inherent greed of the American people and turn taxation into a glorified form of the lottery. We might be surprised at how much tax revenue would be released if that were to happen.

Let’s Subsidize Work Instead of Shareholders

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Substation transformer

Looking back, there is no surprise that the result of the tax reductions passed by Republican votes in 2017 failed to rejuvenate the economy. The stated belief was that businesses would use the windfall from reduced taxation to invest in their employees, through higher wages, or invest in productive assets and expand their production base. Surprise! They didn’t. Businesses found that their analysis of the best use of the windfall was to increase stock buybacks and increase stock dividends. The main reason? There is just not justification for investing in new productivity within a mature market like the US.

Production facilities were not relocated from low wage countries, since the cost of labor greatly exceeds the benefits from lower taxation. Therefore it does not make economic sense to relocate low-value manufacturing back to the US for strictly economic criteria. It is only due to events like the supply chain interruptions from the pandemic (and to a lesser extent trade and tariff wars) that created a new incentive for bringing low value manufacturing back to the US.

What is needed is to create new incentive to build businesses that address needs within the US that are additive to the existing consumer base, rather than attempting to relocate existing production to meet stagnant demand. The best place where new demand could be created is in the energy markets and the infrastructure of the electrical grid. Somehow we must make it worthwhile to cause a market shift to use of renewable energy on a smaller scale than through citing of huge power plants, which result in inefficiencies through thermodynamic factors and through distribution from the grid. We already know that large power plants and the necessary facilities to distribute the energy are vulnerable to external shocks. A single large coronal mass ejection event from the sun could result in system wide outages for months at a time until new transformers are built and installed. Similarly, with the destabilization of international relations, use of electromagnetic pulse weaponry could cause equivalent destruction. Either way, our civilization is vulnerable to external forces that would bring us immediately back to the pre-industrial age, leading to immense loss of life.

So it makes it very clear that we need to create enough incentive to enable the decentralization of our electrical system. By doing that, we would improve our own future by reducing the potential for severe disruption. We would also create literally millions of jobs by creating a market for home energy system improvements that would use local labor to install and maintain. And our large scale manufacturing would also benefit by creating the solar panels and battery storage devices that the new grid would use.

Several years ago, we in West Virginia suffered through the aftereffects of a derecho that stopped electrical service across our region for multiple days. Living through that encouraged us to purchase a whole-house electrical generation system, powered through natural gas. Those systems have a weekly 5-minute system test where the generator runs. In my immediate neighborhood in West Virginia, I can hear three generators (including ours) conducting their tests over the course of the week. Good for us. We are assured that we cannot lose electrical power for an extended time. Or are we? Since we would all tap into the natural gas system, would it have enough capacity to handle all of us (and the others up and down the line) who have generators to handle peak demand? There is no way for us to know that except to run the full-scale test and suffer through an extended power outage. Surely this back-up generator expansion is not a scalable solution for metropolitan areas, since I am aware of no studies indicating how much gas would be available if it was being used extensively to replace standard electrical service.

Electrical service is the best example of an area where new means of producing and distributing a commodity (electrons) could be reworked to create new opportunities for investment and entrepreneurship. Unfortunately, other areas of our infrastructure are not as amenable to creating new incentives for reworking and repair. Other utilities such as water and gas are already regulated, and new fees for upgrading service are scrutinized and rarely approved by regulatory agencies. Face it, to replace water or gas lines involves huge investments, and the incentive to do that is not worthwhile for the private market to seek this as an area for investment. But it is crucially needed. Therefore if we are looking for places for government to stimulate the economy, it makes much more sense to provide subsidies for additional productive work rather than to provide tax reductions that only benefit shareholders. And I’m speaking as one who is fortunate enough to receive dividend income through my owned equities, so I am a beneficiary of the current system.

If anything has become evident during this year of pandemicmonium, it is that maintaining the ability of the consumer to keep stimulating the economy through spending is vital. If we suddenly turn off the spigots, then the result is longer term shrinkage of the economy, and a further increase in income inequality. So the types of changes I am proposing are not appropriate for this stage in the pandemic. But coming out of this mess, it is vital that we begin to plan to actually improve the state of our nation and its infrastructure, rather than accept what we had as being adequate. We now have a wealth of data to show that we’ve lived with inadequate systems, merely because it would have gored someone’s ox to fix the problems.