tax reform

The Fetid Swamp of Tax Reform

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tax codeCharles Hugh Smith – To understand the U.S. tax code and the endless charade of tax reform, we have to start with four distasteful realities:

1. Ours is not a representational democracy, it’s a political auction in which wealth casts the votes that count. Those seeking political influence over issues such as taxation place their bids in the political auction via campaign contributions and lobbying. The winner of the political auction gets favorable treatment, and everyone else ends up subsidizing the gains of the winner.

2. The wealthy pay the vast majority of federal income taxes (as opposed to payroll taxes, i.e. Social Security and Medicare), so tax cuts end up benefiting the wealthy. Continue reading →

Is President Trump Turning Away from the Republican Party?

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trumpMark Patricks – As the September deadline approached for the government to find a solution to the rapidly encroaching debt ceiling (the fixed limit permissible for the government to borrow funds to keep itself operating), President Trump found himself confronted with two options.

Senators in his own party, led by Senate Majority Leader Mitch McConnell, wished to make a deal that would have granted aid to victims of Hurricane Harvey in Texas by tying the money to a $2 trillion increase in the debt ceiling, with no commitments to any hardline, long-term spending reforms. For President Trump, this meant that his plans for tax reform would have been up in the air, his long-promised wall on the southern border of the U.S. would have to be delayed, and Congress wouldn’t be committed to any more Trump-related agenda items until after the 2018 midterm elections; essentially, the most important policies of his “Make America Great Again” (MAGA) campaign promises would have to be pushed off for 18 months in order to make the deal and get necessary flood aid for victims of Hurricane Harvey. Continue reading →

102 Years of Taxation: Chart Shows How out of Control the IRS Has Gotten

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Lily Dane –  With the end of “tax season” nearly a week behind us, many Americans are likely moving through the five stages of grief: denial, anger, bargaining, depression, or acceptance.

taxesIt is probably not shocking to anyone to hear that the IRS is among the most hated and feared of the government agencies (it has taken first place in many annual polls). A quick look at the history of the income tax might provide some hints as to why we despise the agency so much:

From IJReview:

The modern income tax began in February 1913 when Congress passed the Sixteenth Amendment to the Constitution, thanks to the administration of Republican William Howard Taft.

The House passed the short amendment in July 1909, with a 318 to 14 vote:

The Congress shall have power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

The first tax bill came from the Woodrow Wilson administration in 1913. Wilson made the income tax a key part of his electoral campaign (the Republican party platform of 1912 did not mention the income tax).

This chart from Americans for Tax Reform shows just how much the income tax has grown since 1913: Continue reading →