Momentum For A Tax Overhaul Is Growing Day By Day

Investors Business Daily ^ | 11/17/2015 | LEW UHLER AND PETER FERRARA

[expat_panama]

Our tax-cutting cup runneth over. Not since adoption of the Federal Personal Income Tax (16th Amendment) over 100 years ago has so much attention been given to the adverse effects of high-rate income taxes on economic growth, personal wealth creation, and wage and job levels.

Thank you, national Republican debates and presidential hopefuls.

Also weighing in are investment business leaders like Carl Icahn regarding the disastrous effects of U.S. tax laws on American businesses.

U.S. corporations are fleeing the highest corporate tax rate among industrialized nations (about 40%, including state corporation taxes) through inversions — buying a controlling interest in a company headquartered in a low-corporate-income tax nation and moving there.

[snip]

Also citing the $2 trillion of corporate earnings standing offshore because of a double-taxation burden imposed by the U.S. tax code, Icahn is committing a huge sum personally to unravel this mess and find workable — perhaps breakthrough — solutions.

The need to abolish the current tax code grows virtually daily, as does the need to abolish the Internal Revenue Service. The IRS commissioner's arrogance and intransigence have led to a call for his impeachment by House members finally fed up with unresponsive bureaucracy.

Congress should start over with a tax collection bureau reporting to it per a Constitution that says "Congress shall lay and collect taxes" (emphasis added). This will begin to restore our nation's vital constitutional separation of powers.

[snip]

Eliminating the federal corporate income tax entirely looms large in many proposals. Intense public education efforts — starting soon — offer the route to the future.

Once average working Americans become convinced the corporate tax burden falls mainly on their jobs and wage levels, we can create popular support for its reduction or elimination.

[expat_panama]

It's been my estimate that most things that happen in the world are good, while most news that gets reported is bad. Maybe not as negative as it sounds because we all want to read about tha one out of 10,000 that who's trying to kill us, but still... At any rate, this is good news and we're seeing it in the news!

[expat_panama]

Stocks stalled and commodities (including metals) got hit.  Gold's dropped to the lowest it's been since 2010 --right now at $1,072.33; silver's at $14.29.  While that's scary, stocks were boring (thankfully).  fwiw, our futures heap map says we get more of the same today w/ stock indexes +0.01% but metals to -1.05%.

Major econ reports will keep pouring in today:

7:00 AM MBA Mortgage Index
8:30 AM Housing Starts
8:30 AM Building Permits
10:30 AM Crude Inventories
2:00 PM FOMC Minutes
 

Stuff to browse over breakfast:

Hillary's Quip About Dems & Growth Lacks Causality - Caroline Baum, e21
Rescuing U o 'Chicagonomics' From Its Caricature - David Leonhardt, NYT
What To Look For In the Fed's Minutes - Ben Leubsdorf, Wall Street Journal
The World's Multi-Trillion Liquidity Problem - Ben Wright, The Telegraph
It Still Looks Like Wall Street Topped In May - Doug Kass, Kass's Corner
Mkt. Recovery Intact Despite November - Michael Ashbaugh, MarketWatch
Don't Let a Conservative Portfolio Kill Your Retirement - Eric Nelson, SW
Why Are Markets Largely Immune to Terror? - John Kimelman, Barron's

[palmer]

It is good news that we are seeing it in the news. It is not really good news until it becomes more real.

After a year of nothing, mainly $200's, bitcoin had a cute little exponential rise, then dropped back and bounced into 330's range. As far as I can tell it is a purely technical trade, there might have been some news, I don't keep up, but there are a lot of easy and relatively cheap exchanges. Sooner or later I will get back into the cryptocurrency game doing SW for the fun of it.

[Jack Hydrazine]

Time to scrap the Progressive, Leftist tax system we have now and replace with a 10 percent simple, flat tax to the Feds. And a max of another 10 percent to the states and municipalities. Anything more is overspending.

The Torah (the Bible) and economists both agree that a total tax burden of 19 to 20 percent is the right balance.

[wita]

Frankly Scarlett, any tax proposal that lends any legitimacy to individual citizens of Sovereign states sending money directly to Washington D.C. bypassing the environment provided by the state they live in that provides the climate and conditions fostering their ability to earn a living, should be dead on arrival. The States literally gave up the ghost when they bought in to that idea.

To be clear, no State should allow it’s citizens to send any money directly to D C. All tax money should flow first through the state with the requisite money needed for the expressly enumerated items in Section 1 Article 8 of the Constitution spelled out to the penny. If that number what ever it might be exceeds the tax money available to the state after it’s needs are met, Houston we have a problem.

We already have a problem and it is the spending habits of an organization with unlimited cash to spend and little if any controls on the habit. Most if not all of the low population states are what I call welfare States who get more from D C than they contribute in tax dollars sent to Washington. This needs to stop before the donor states get tired of their dollars going for welfare payments to states who do not deserve to be called welfare states. d

[wita]

oops, in the excitement I got my article and section reversed.

[Buckeye McFrog]

Hate to break it to yinz, but at least half this country wants a MORE progressive tax system that soaks the rich even MORE than the current one.

[Sequoyah101]

This is wishful thinking:

Once average working Americans become convinced the corporate tax burden falls mainly on their jobs and wage levels, we can create popular support for its reduction or elimination.

The average working American is a dolt and the lower half are worse than that and the whole lot of them are only half the voters.

[i_robot73]

No, no, no...HELL no. NO more slave tax, please.

Scrap it, yes. At the WORST, institute a LOW (5%?) Fed. sales tax on all NEW purchases.

- Does away w/ the IRS
- Line item on EVERY purchase so everyone sees
- EVERYONE (finally) has skin in the game
- Starves the Fed back in the right direction
- Completely VOLUNTARY
- Utilizes the same structure we have today (Fed < State < Biz < User)
-

[DoodleDawg]

Ronald Reagan cut tax rates sharply. In his eight years as president, federal tax revenues nearly doubled...

So did the federal debt. Tax cuts are only half the equation. They have to be combined with significant cuts in spending. So far none of the candidates are coming up with the spending cuts that bring the budget into balance.

[expat_panama]

half this country wants a MORE progressive tax system that soaks the rich even MORE

Really makes me uneasy the way we keep hearing that "soak the rich" garbage from the Rep candidates --even the supposedly conservative and outsider types.  My hope is that this may change as the clamor for tax cuts intensifies and the candidates either pander to us or at least decide that they don't need to pander any more to the left.

[citizen]

While they are abolishing or overhauling the FIT, do the same for the FED.

[citizen]

So, this sounds like a December rate increase....

zerohedge ‏@zerohedge · 6m6 minutes ago
FOMC MEMBERS WANTED TO CONVEY DEC. LIFTOFF MAY BE APPROPRIATE
FED OFFICIALS MOSTLY AGREED ON GRADUAL ACCOMMODATION REMOVAL
23 retweets 4 likes

[expat_panama]

a December rate increase....

There'll either be a rate hike followed by a ruinious deflation that the Fed's will have a miserable time fixing, or there won't be a hike followed by more economic stagnation as folks continue to rethink their war on business.

Either way, it will be entertaining, and we'll know a lot more when the next PCE index comes out at the end of the month.

While they are abolishing or overhauling the FIT, do the same for the FED.

What was it you wanted instead of the Fed?

[citizen]

There'll either be a rate hike followed by a ruinous deflation that the Fed's will have a miserable time fixing...

Well, that certainly is not the thing to do.

As for dollar valuation & hence interest rates, I just think it would be less exposed to volatility if the dollar is tied to gold or a commodity basket. Let the USA lead in that fashion instead of fracturing our financial systems with risky and worthless mortgage derivative schemes.

[expat_panama]

less exposed to volatility if the dollar is tied to gold or a commodity basket.

The price of gold is about as volatile as we can get, the 'commodity basket' that the Fed ties the dollar to is the sum of all personal purchases which the get from the PCE index.  Here's how the PCE yr/yr compares to gold yr/yr:

 Let the USA lead in that fashion instead of fracturing our financial systems with risky and worthless mortgage derivative schemes.

This leaves me a bit stumped --trying to find an instance where they're doing that now or have ever done that in the past.

[Jack Hydrazine]

Depends on how you define, “rich.”

[Jack Hydrazine]

Then those that want a more progressive tax system make them pay more!

[citizen]

The price of gold is about as volatile as we can get...

In the short term, I agree. Tho as the cause or the result I wonder...
Long term, gold outlasts every fiat economy and maybe will the dollar as well. But in these phony times of computer graphics reality, the bitcoin and derivatives where 0x10 = wealth, who knows?

[KeyLargo]

ILLINOIS

Preckwinkle’s tax-laden 2016 COOK county budget easily passes
Hal DardickContact ReporterChicago Tribune
Preckwinkle’s budget approved, find out How They Voted

Cook County Board President Toni Preckwinkle’s $4.5 billion budget won approval Wednesday, and people who shop, stay in hotels and file lawsuits will be paying more next year.

Overall county spending is expected to increase by about $500 million under a budget commissioners approved 12-5. The spending plan depends on a penny-on-the-dollar sales tax increase, a new 1 percent tax on hotels and $20 in additional fees for each lawsuit filed.

Preckwinkle’s budget also includes a 20-cents-per-milliliter tax on the liquids that fuel electronic cigarettes and

AMMUNITION TAX: a bullet tax that ranges from 1 cent to 5 cents per round, depending on the type of ammunition.

All told, the tax hikes are expected to bring in nearly $512 million a year, with the bulk of that — $474 million — coming from the sales tax increase. Come Jan. 1, Chicago once again will have a sales tax rate of 10.25 percent, the highest among big U.S. cities.

http://www.chicagotribune.com/news/local/politics/ct-cook-county-budget-vote-met-1119-20151118-story.html