Tuesday, July 7, 2020
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Tax Preparation Double Talk

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Tomorrow is not just Valentine's Day. It's also the first day the IRS will accept tax returns containing certain forms. Last Sunday the RTD ran an article about tax preparation that was both evidence of the intellectual insolvency of journalism and that the print news business model is hemorrhaging.

The article titled Do-it-yourself or pay a pro? Taxing decisions turned out to be a free advertisement for Virginia Certified Public Accountants (CPA). Now, some of my best friends are CPAs (that's probably less accurate than the article), but one should never recommend anyone go to a CPA for tax preparation just because those three letters are in the title. CPA does not mean tax expert. Nor does it equal financial advisor any more than a lawyer or doctor is necessarily a businessperson because they file business taxes (a whole other fallacy our politicians would have us believe; after all, so many are lawyers). But at the end of the article, a Richmond area CPA, who may also be a Certified Financial Advisor but doesn't indicate such qualification on his website, is quoted as saying "CPAs are trusted advisors who can guide you on what you should be doing to minimize taxes and grow wealth today and in the future."

There you have it: The tax tail wagging the financial dog. It's a meme familiar in political discourse these days. It's also a very bad first fundamental in planning and managing wealth. Here's the best advice anyone can give to people who want to minimize taxes: don't be successful; make no money; just throw in the towel. The Tea Party Dream: a flat, zero income tax rate with all of us operating on the barter system. But I digress.

Moral Priorities

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The extra tax cuts for the rich (they collect the same tax cuts as everyone else on their first $250,000 of income) will cost about $68 billion next year alone. Extending unemployment insurance for the long-term unemployed will cost about $65 billion.

Those words are from Katrina vanden Heuvel's weekly Washington Post op ed, this morning titled The GOP:  Gobbling up our Blessings which I recommend that people read.

This diary is not exactly an examination of that column, although I will make reference to a few other items of interest she offers.

Rather, it is a meditation on our priorities as a nation, and what they say about us.

I believe that our nation, our society, lacks a moral compass.  Our priorities are screwed, and as a result, so are an ever-increasing number of our people.

The Truth Behind GOPhers’ “Small Business” Tax Lie

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The liars get more ingenious by the day. They purport that a huge number of "small businesses" will be adversely affected by the Democratic tax plan.  They lie.  Ladies and Gentlemen, America has been scammed by the GOP. Specifically, they are scammed by the nefarious argument of GOPhers and the tax dodging plutocrats among some very large corporations. This is a story about pass-throughs, pretense (and more). And if you missed the original Keith Olbermann piece, this is a really important read and video (above). The first three segments of Olbermann's show deal with this story.  

… on the unlit, unpaved road to nowhere

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Let me begin with the end.  
So the end result of the long campaign against government is that we've taken a disastrously wrong turn. America is now on the unlit, unpaved road to nowhere.

That is the conclusion of America Goes Dark, Paul Krugman's column this morning.  I am aware that it is covered as part of bobswern's diary.  My focus will be somewhat different, hence I do not consider this diary duplicative.

For Krugman, the imagery of going dark is both literal and figurative.  Literally, cities like Colorado Spring are turning out their streetlights in a desperate attempt to save money.   Figuratively, we are watching as budgets for schools are being slashed, programs eliminated, teachers discharged (and the passage of the measure that is bringing the House back into session will only partially ameliorate the damage to schools).  

I am a teacher, and for me the imagery is not figurative, either in what will happen inside school or what happens to our commons, our infrastructure.  So I wish to react.

Reagan’s Budget Director Rips Republicans for Ditching Fiscal Conservatism

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In this morning's New York Times, former Reagan Administration OMB director, David Stockman, rips Republicans a justified new you-know-what.  The cause of Stockman's righteous rant?  How about the fact that Republicans - and a few foolish, craven, pandering Democrats - are calling for continued tax cuts for the wealthiest Americans, even as our nation's public debt "will soon reach $18 trillion." According to Stockman, Senate Minority Leader Mitch McConnell's stance on this issue "puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy."

In other words, so much for traditional, Republican, balanced-budget, fiscal conservatism. Instead, according to Stockman - and he's absolutely right about this, of course - today's GOP has subscribed to an approach that involves "little more than money printing and deficit finance - vulgar Keynesianism robed in the ideological vestments of the prosperous classes."  And that, in Stockman's view, has both "made a mockery of traditional party ideals" and "led to the serial financial bubbles and Wall Street depredations that have crippled our economy."

I strongly urge that you read the entire article, including Stockman's appeal to Republicans that "the old approach - balanced budgets, sound money and financial discipline - is needed more than ever."  It's a refreshing and important reminder that today's Republican Party wasn't always the crazy hybrid that we see today: theocrats, anti-science and anti-reason "know nothings" like Ken Kook-inelli, foreign policy super-hawks like Dick Cheney and Newt Gingrich, supporters of enormous corporate welfare (to whatever their favorite industry happens to be - oil, agriculture, etc.), and supply-side/la-la "Laffer" land loonies on budget matters (translation: spend and borrow, cut taxes for the rich, launch wars that aren't paid for, repeat until we all go bankrupt).

Scott Rigell: The Anti-Tea Party Candidate?

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Read the Hampton Roads Tea Party fact sheet on Rigell and see for yourself. This guy now claims to be a "conservative," but in the past he did the following un-"conservative" things.

*Gave $1,000 to Barack Obama's presidential campaign, because he "was moved by [Obama's] rhetoric and by the prospect of seeing a minority rise to the highest office in our land."

*"Before that, Rigell gave $1,000 to then-gubenatorial candidate Democrat Mark Warner, (source: VPAP.org) who went on to sign into law the largest tax increase in Virginia's history!
Does that sound like a fiscally conservative Republican?" (of course, that's a ridiculous line of attack on Mark Warner, but be that as it may, it's not going to be popular among the tea party crowd)

*"But it gets worse. In 2002, Rigell bankrolled ($10,000!) the YES Campaign- a failed referendum that would raise the sales tax of Hampton Roads residents (that's the 2nd district!). If passed, sales taxes in Hampton Roads would have increased by 22%!!!"  Wow, this guy simply is NOT a "conservative" in the tea party mold. Period. In fact, based on this letter, it's hard to imagine how any tea partier could ever support him. That could, of course, kill him in the general election. Which is why, as a Democrat, I strongly hope that Scott Rigell wins the Republican nomination on June 8. Go Rigell! :)

P.S. "Loudoun Insider" of Too Conservative wonders if Bob McDonnell and Bill Bolling are "completely clueless or poorly served by staff" in endorsing Scott Rigell for the 2nd CD Republican nomination. LI wonders, "Did they know this donation history and chose to ignore it?  Or did their staff simply do no vetting of this guy?"  Good questions.

“The idea that taxes are high right now is pretty much...

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Courtesy of USA Today:
Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency, a USA TODAY analysis of federal data found.

Some conservative political movements such as the "Tea Party" have criticized federal spending as being out of control. While spending is up, taxes have fallen to exceptionally low levels.

Federal, state and local taxes - including income, property, sales and other taxes - consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

"The idea that taxes are high right now is pretty much nuts," says Michael Ettlinger, head of economic policy at the liberal Center for American Progress. The real problem is spending, counters Adam Brandon of FreedomWorks, which organizes Tea Party groups. "The money we borrow is going to be paid back through taxation in the future," he says.

Actually, the "real" problem - and this is most definitely NOT difficult to comprehend, unless you're trying not to comprehend - is our long-term, structural imbalance between expenditures (too high) and revenues (too low). On the expenditures side, it's almost all health care and other "entitlements" spending, plus the military and interest on the debt. Other than that, "non-defense discretionary spending" is tiny and not growing significantly, so even if we wanted to cut all our national parks, roads and bridges, agricultural subsidies, education spending, homeland security, etc., we'd still face the same structural problems (e.g., aging population, skyrocketing health care costs) we do now.

Which brings us to the revenues side of the equation, where we're at the lowest relative levels since 1950, despite fighting two wars (unpaid for), cranking up spending on "homeland security," and dealing with the aforementioned health care cost spiral. In short, as much as the "taxed enough already" crowd wants to complain, the fact - and it is a FACT - is that taxes are actually very low by historical standards. Not that this will get in the way of the right wingers' sob story; the facts rarely do with those people.

The bottom line is that, as much as conservatives think that all this is super complicated, a combination of rocket science and brain surgery, it's actually very simple. To solve our huge budget problem, we need to rein in rising health care costs, pay for the wars we fight and security we require, and stop implying that we can all have "something for nothing" while maintaining the lowest tax rates in 60 years.  Or, we can continue on our current path of borrowing from China and against future generations.  But that would be as "nuts" as "the idea that taxes are high right now."

Rename Tax Day: Call it “95% of Americans Celebrate Day”

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Teabaggers, listen up.  It's not usually how you roll, but there is always a first time.  If you pay attention at last, you're in for a shock. You are celebrating with the wrong side.  The sad thing is you don't even know it.  Even generally conservative blogs such as Bacon's Rebellion have it correct.  But not the rest of you.  You should be celebrating that 95% of Americans got a tax break this year.  That's right, our taxes were cut. And there you go again, carrying on for nothing.  

Both our paychecks were reduced each week and the tables were reduced to allow further savings come tax Day (er, Celebrate with the 95% Day). So, celebrate, unless, that is you care more about the other 5%--or unless you prefer to serve as a useful pawn for Dick Armey, Peter Peterson and the big moneyed interests feeding their astro-turf groups.)

Why Are 25 Hedge Fund Managers Worth 658,000 Teachers?

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That is the question Les Leopold asks in this Huffington Post entry.

Here is his opening paragraph:

In 2009, the worst economic year for working people since the Great Depression, the top 25 hedge fund managers walked off with an average of $1 billion each. With the money those 25 people "earned," we could have hired 658,000 entry level teachers. (They make about $38,000 a year, including benefits.) Those educators could have brought along over 13 million young people, assuming a class size of 20. That's some value.

Leopold writes

The wealthy will have placed an estimated $2 trillion into hedge funds by the end of this year. (That's about $6,500 for every man, woman and child in the U.S.)

And there is more. . .

Weekly Address: Relief for the Middle Class at Tax Time

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So far, Americans who have filed their taxes have discovered that the average refund is up nearly ten percent this year - to an all-time high of about $3,000.  This is due in large part to the Recovery Act.  In fact, one-third of the Recovery Act was made up of tax cuts - tax cuts that have already provided more than $160 billion in relief for families and businesses, and nearly $100 billion of that directly into the pockets of working Americans.

No one I've met is looking for a handout.  And that's not what these tax cuts are.  Instead, they're targeted relief to help middle class families weather the storm, to jumpstart our economy, and to bring the fundamentals of the American Dream - making an honest living, earning an education, owning a home, and raising a family - back within reach for millions of Americans.

The full transcript is here.