Taxes Are Killing Small Businesses

Did you know that U.S. businesses are taxed at one of the highest rates in the developed world? How bad is it? And why should you care? Watch this short video to find out.

This video is part of a collaborative business and economics project with Job Creators Network. To learn more visit about JCN.

Paul Krugman Gets Rude Awakening

(Originally posted in July of 2012, re-posted as a response to Dennis Prager asking if Paul Krugman has ever debated anyone. RARELY, but here is one of the few examples)

Just so many know, Krugman never debates, and this is one of the only times I am aware of he has. From Video Description:

Tyler Durden submitted this much longer presentation (which I shortened) over at Zero Hedge, and points out the emotional clash between the two economists that is sure to be watched by the many free-marketers out there. Tyler entitled this posting, “The Ultimate Krugman Take-Down,” …he continues:

Forget Ali – Frazier; ignore Santelli – Liesman; dismiss Yankees – Red Sox; never mind Silva – Sonnen; the new undisputed standard by which all showdowns will be judged happened in Spain over the weekend. During a debate on Europe’s crisis, Pedro Schwartz (a mild-mannered Spanish ‘Austrian’ economics professor) took on the heavyweight Paul ‘I coulda been a Fed Chair contender’ Krugman, and – in our humble opinion – wiped the floor with his Keynesian philosophy. From the medicinal use of more debt to fix too much debt, to the Japanization of world economies and the demand-side bias of every- and any-thing – interested only in the short-term economic growth; the gentlemanly Spaniard notes, with regard to the European crisis, the fact that “Keynesians got us into this mess and now we have to sacrifice our principals so that they can get us out of this mess”. Humble and generous in his praise – though definitively serious with his criticism – Schwartz opines: “Often Nobel prize winners are tempted to pontificate on matters that are outside the specialty in which they have excelled,” noting “the mantle of authority whereby what ever they say – whether sensible or not – is accepted with resignation from some and enthusiasm by others.” Krugman’s red-faced anger is evident at the conclusion as he even refused to shake Schwartz’s hand after the debate.

YUGE Tax Cuts (Dennis Prager)

Dennis Prager reads from an IBD ARTICLE about the benefits from Trump’s tax plan… AS WELL AS starting out the show by showing the ludicrous nature of the envious Left. I include a dissenting call to end the upload.

GAY PATRIOT has some key bullet points:

  • Slightly lower personal income tax rates. (Top rate from near-40% to 35%.)
  • Eliminating almost all income tax deductions, except mortgage interest and charitable contributions.
  • Much lower corporate income tax rates. (Top rate from 35%, one of the world’s highest, to 15%.)
  • A one-time tax on overseas business profits. (That haven’t been repatriated to the U.S. Apple has a lot.)
  • A “territorial system” where future profits that corporations earn abroad, are not taxed.
  • Repealing a bunch of taxes and complications, most notably the Alternative Minimum Tax (AMT) and the estate tax.

Here is an excerpt from the article mentioned:

President Trump’s tax plan, unveiled on Thursday, slashes the corporate tax rate from a top rate of nearly 50% to 15%. It’s a smart move. Not only will it kick start the economy and job growth, but it’s likely he’ll be able to get bipartisan support.

Right now, there is no consensus on broad-based tax reform. So, at least for now, a broad tax reform package including tax cuts, fewer deductions and a flattening of tax rates may be tough to achieve. Even Republicans, who are eager for some kind reform, remain split on how it should be done.

But nearly everyone agrees that the current U.S. corporate tax rate is outrageous.

Sadly, average Americans often don’t agree. They believe that corporations pay no taxes. But that’s not true. U.S. corporations pay a top marginal rate of close to 40%, compared to an average of about 24% for all the OECD nations.

That puts U.S. companies at a tremendous disadvantage to other nations’ companies and reduces the money they have available for investing and hiring new workers.

We don’t know what else Trump’s tax reform will contain, but just cutting corporate taxes would be a big winner. Even President Obama supported the idea in 2015, when he and congressional Democrats were considering a deal that would cut corporate tax rates in exchange for spending more on infrastructure.

But apart from Washington political wrangling, the economic reasons for a corporate tax cut are even more compelling.

Back in 2015, the nonpartisan Tax Foundation ran the numbers and concluded that cutting the corporate rate to 15% would boost GDP by 3.7% and actually increase federal revenues by 0.3%.

More importantly, it would be a huge boon to working Americans: “Depending on the size of the corporate rate reduction, we would expect to see an additional 425,000 to 613,000 new jobs, and wages would increase between 1.9% and 3.6% over the long-term.”

That means higher after-tax incomes for all. Talk about a stagnation-buster. That’s a recipe for 3% plus annual GDP growth, something that never happened during the Obama years. The plan that was Trump unveiled Thursday said that one of the goals of tax reform was to “grow the economy and create millions of jobs.”

[….]

Nor is this a “tax cut for the rich,” as some have claimed.

As IBD noted last September, the “dirty little secret” of corporate taxes is that corporations don’t actually even pay them. Average Americans — that’s you — do. You pay it through lower wages, lower returns on investments and retirement accounts, and higher prices for the things you buy.

A study last year by The R Street Institute noted that “some studies suggest that as much as three-fourths of direct corporate income-tax costs are borne by a firm’s workers.”

High corporate tax rates are also why many big American companies are undergoing “inversions” — merging into a foreign company, then relocating their headquarters to the foreign country to avoid super-high U.S. taxes.

In short, our excessively high corporate tax rate does nothing good for the economy, for investors or for workers. While 15% is a very good rate, it would be better to get rid of it entirely….

(read it all)

Trade, Taxes, and Executive Orders | Mark Levin (UPDATED)

(Originally posted on the 27th of January)

People warned the Democrats… “what would happen if a Republican does what your guy did?” Well…

Mark Levin gives us an Econ 101 class on tariffs and taxes. This is why the unions love this because it protects their jobs and not other businesses in the States. An interesting part of the call which I stitched to before the other segment is an article in the Wall Street Journal which notes that the reason car manufacturers build in Mexico is due to free-trade agreements:

  • Audi says that an array of free trade agreements favors Mexico over U.S. sites. Its not just the price of skilled labor that is attractive to Audi. If you think about a $50,000 car made in the U.S. that is then exported to Europe there is a 10% duty on that car. So that’s $5000 in duties that Audi is paying. When that same car is made in Mexico there is no duty. This means with an already concentrated area of auto manufactures in Mexico, low cost skilled labor and free trade agreements it is a huge win for Audi and it will be easy to do business. No reinventing the wheel or stepping out alone as the only auto manufacture, Audi is simply following suit.  (WSJ)

Not only will these Executive Orders (E.O.) worsen us in the long run (unless this administration has something else up their sleeve), it is the same thing we gripped about when Obama was President and Left leaning legal scholar, Jonathan Turley said was not what the office of President was intended for. Agreed.

What is interesting is the juxtaposition the Dems find themselves in regarding the E.O.’s. You see, you had many challenges to Obama’s E.O.’s and he holds the record for the most overturned by the Supreme Court (SCOTUS) in our history as a country. But they were brought to the court mainly by Republican Attorney Generals in a state[s] or a group — or a combination thereof. AND YES, many of these actions Trump is taking with his pen and paper are just as unconstitutional. However, in 2018 we find this:

  • The GOP will be defending just eight seats, while Democrats must fight for 23 — plus another two held by independents who caucus with Democrats. (THE HILL)

This means that since the Democrats know their constituents are already upset enough at them to switch parties… why would you rock the boat on some of these executive orders that they know their constituents like. Like the car manufactures/unions. What Democrat in their right mind would bring a case to SCOTUS to overturn something they wish they had did?

Or how bout’ the growing concern in the black community about jobs and the influx of illegal immigrants? You see, they type of people Trump is putting on the Court would vote AGAINST what Trump is doing. They are originalists, and so, the Democrats would certainly win these cases if brought before the conservative Court.

AGAIN… they also have to win in 2018. They are essentially protecting 25-seats… 10 of which are “red-state” seats.

So many of these E.O.’s Trump is writing could easily be overturned if moved forward by the Democrats. Right now however, doing so would be politically dangerous for them. For now at least.

Again, I emphatically agree with HOTAIRExecutive Orders Are Not The Way To Do Policy…Even Good Ones

President Donald Trump’s latest executive order is as good as executive orders come. Trump has banned executive appointees from becoming a lobbyist of the particular branch they served in for five years, plus several other restrictions.

“2. If, upon my departure from the Government, I am covered by the post-employment restrictions on communicating with employees of my former executive agency set forth in section 207(c) of title 18, United States Code, I agree that I will abide by those restrictions.

“3. In addition to abiding by the limitations of paragraphs 1 and 2, I also agree, upon leaving Government service, not to engage in lobbying activities with respect to any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration.

“4. I will not, at any time after the termination of my employment in the United States Government, engage in any activity on behalf of any foreign government or foreign political party which, were it undertaken on January 20, 2017, would require me to register under the Foreign Agents Registration Act of 1938, as amended.

“5. I will not accept gifts from registered lobbyists or lobbying organizations for the duration of my service as an appointee.

This is really good policy, and also delivers on Trump’s “drain the swamp,” rhetoric from the campaign. Ethics reform is something all governments should engage in, because it can increase transparency and keep cronyism from rearing its ugly head. It can possibly save the government money, and reduce the debt.

But there’s still a massive problem. Trump is doing this action through executive order, instead of letting it go through the legislative process. The Constitution is quite clear on which branch originally comes up with rules. From Article I, Section 8, Subsection 14 (emphasis mine):

  • The Congress shall have Power…To make Rules for the Government and Regulation of the land and naval Forces;

It’s Congress which develops the rules for government employees, not the president. Trump is acting as CEO of the government (which he’s not), meaning he’s so used to doing things his way, without having to have others sign off on his actions. He’s taking another page out of former President Barack Obama’s playbook, but promising he’ll do it right. ….

(H-T to REGGIE DUNLOP for the above)

What leftist is going to bring the above to the Court? This is how I described it on my Facebook:

Many of the economic one will be too far along to be challenged (like the pipelines for instance). There are 25-Dem seats up in 2018 (10-in red states). Only 7-GOP seats. What Democrats would challenge the E.O. putting tariffs on Mexico (something I hate but unions l-o-v-e). The Dems have already alienated their base… unions.

So I think even though these Democrats could challenge many of these — they are stuck between a rock and a voting booth. And let me also say, the people Trump is putting on the Supreme Court are originalists and would vote these down in a heart beat (bravo for Trump for putting forward such upstanding justices!)… but the cases have to make it there

In other words… if Trump were truly a dictator looking to split the branches of government… he would pick Justices who would support his Executive Orders.

California’s Real Debt Is $1.3-Trillion

John and Ken speak to Marc Joffe of the CALIFORNIA POLICY CENTER in regard to these recent articles on the subject of California’s fiscal emergency:

California’s Total State and Local Debt Totals $1.3 Trillion
Can California’s Economy Withstand $1.3 Trillion of Government Debt?

One aspect Marc Joffe mentioned would be a way to overcome this “debt” is to increase California’s population… however, we see through some recent stories…

California Won’t Fall Into The Sea — It’s Moving To Texas Instead
The Exodus of People Moving Away From California Is Becoming an Avalanche

…this is not a viable option… nor will it be as long as Democrats are in charge:

California Regression – Eco Craziness
John & Ken Discuss CalPERS Ponzi Scheme

In other words, Californians are doomed if remaining on this course.

The New York Times Dodges Paying Taxes

The NYT’s was against paying taxes before they were for it. This isn’t an argument against Trump (or the New York Times) as much as is is against the progressive tax code.

To set this story up, we will travel to THE YOUNG CONSERVATIVES regarding the New York Times and Trump’s taxes:

The New York Times ‘illegally obtained’ a copy of Donald Trump’s 1995 tax returns the other day.

The billionaire businessman has said he’d release everything once a routine audit was complete, or he’d do so during the audit against his lawyers wishes if Hillary Clinton released her 30,000 deleted emails.

The ’95 returns show Trump took a $916 million hit that year. Meaning, that loss alone could be why Trump didn’t pay federal income taxes for a number of years.

From New York Times:

Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years, records obtained by The New York Times show.

The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.

Tax experts hired by The Times to analyze Mr. Trump’s 1995 records said that tax rules especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period….

(read it all)

The only problem is, that, the New York Times didn’t pay any taxes as well. Why? Becuase when you are a business/business owner and you have loses… then you can claim those loses. L-E-G-A-L-L-Y! Here is the story from BREITBART:

The New York Times has excited the Clinton campaign and the rest of the media with a revelation that Republican nominee Donald Trump declared a $916 million loss in 1995 that might have resulted in him not paying taxes in some subsequent years.

The implication, reinforced by CNN’s Jake Tapper on State of the Union on Sunday morning, is that Trump “avoided” paying taxes, when in fact his tax liability was zero.

But the Times itself has “avoided” paying taxes — in 2014, for example.

As Forbes noted at the time:

… for tax year 2014, The New York Times paid no taxes and got an income tax refund of $3.5 million even though they had a pre-tax profit of $29.9 million in 2014. In other words, their post-tax profit was higher than their pre-tax profit. The explanation in their 2014 annual report is, “The effective tax rate for 2014 was favorably affected by approximately $21.1 million for the reversal of reserves for uncertain tax positions due to the lapse of applicable statutes of limitations.” If you don’t think it took fancy accountants and tax lawyers to make that happen, read the statement again.