Monthly Archives: October 2017

Tax Reform for Dummies

Economics

 

So you want to give middle income American’s a tax break which also simplifies the voluminous tax laws and regulations. Or at least make the tax system less tilted in favor of the richest Americans.  Yet, there are elements of the current code which incent people to do things in the country’s best interest.  I can think of three.

  • Home ownership tax breaks (deductions of mortgage interest and property taxes) prop up an industry on which a growing U.S. economy depends.
  • Charity as a major source of funding for the arts and those in need is unique to the American experience.
  • To support a system of government services based on federalism, citizens pay taxes to multiple jurisdictions.  Consistent with the finding in McCullough vs. Maryland, “The power to tax is the power to destroy.”  Therefore, revenues paid to state and local governments should never be subject to federal taxation.

My point?  Any tax reform proposal promising to eliminate deductions should consider three things sacred.

  • Mortgage interest
  • Charitable contributions
  • State and local taxes

In fact they should increase the benefits for these items for the middle and lower class by converting these deductions to a 20 percent tax credit.  In other words, regardless of your wealth or tax bracket any money used for the purpose of mortgage interest, charitable giving or state and local taxes would be subsidized by the federal government at a 20 percent rate.  Consider the following examples.

  • A family or four with taxable income of $10,000 that pays $5,000 in mortgage interest currently receives a $500 tax break (10 marginal rate times $5,000).  Under this proposal, the same family would receive a $1000 tax break (20 percent credit against $5,000).
  • In contrast, a family with taxable income of $400,000 that pays $50,000 in mortgage interest currently receives a $19,800 subsidy (39.6 marginal rate times $50,000).  Under this proposal, the same family would receive a $10,000 tax break (20 percent credit against $50,000).

The same principle would be applied to the other two sacred categories: charitable giving and state/local taxes.

Next, a standard deduction (currently $12,700 for a married couple) and personal exemptions (currently $4,050) would apply to ALL taxpayers.  Rather than doubling the standard deductions as suggested in the GOP framework, all tax payers would still be eligible for mortgage interest, charitable giving and state/local tax credits.  In other words, all taxpayers would be rewarded for investing in America and Americans.

That only leaves the issue of tax rates and taxable income levels.  To ensure any tax reform proposal is revenue neutral and does not accelerate growth of the national debt (as has been empirically proven of the George W. Bush tax cuts), I will leave the exact number to the Congressional Budget Office.  But something in the range of five brackets seems to make sense.  For illustrative purposes, it might look like this for a married couple filing jointly.

Taxable Income/Marginal Tax Rate
$0-$20,000/10 percent
$20,001-$80,000/15 percent
$80,001-$1500,000/20 percent
$150,001-$300,000/25 percent
$300-001+/30 percent

The decreased rates at the highest brackets would be offset by limiting tax deductions and converting any remaining tax incentives from deductions to credits.

And for you rich folks who still think this is unfair, just remember.  You’ll also be saving a wad of cash due to the lower cost of accounting and legal services.  Maybe you could give that extra cash to real charities (not conservative think tanks) or give your business and household employees a living wage.  Just saying!

For what it’s worth.
Dr. ESP

 

Random Thoughts on a Sunday Morning

Politics, Random Thoughts

 

In Mueller We Trust

Once again, Robert Mueller has shown he is several steps ahead of public officials and journalists.  The quickness with which he has filed initial indictments took most by surprised.  In an effort to catch up with the #realnews, cable news outlets have spent the last 48 hours speculating about arrests and perp walks based on what usually happens after a prosecutor files a sealed indictment.

I caution you not to be disappointed if this does not happen.  All the pundits are assuming the indictments were sealed in case the persons named are a flight risk.  But there is an alternative possibility.  Mueller may not want the next group of interview subjects to have the benefit of what he already knows.  If I were on Mueller’s team, I would hope to catch future interviewees in contradictions between their versions of what happened and what a grand jury has already determined as sufficient to bring charges.  It would be much easier for these interviewees to elude the truth without committing perjury if they had advance knowledge of what others have offered up or the prosecution’s interpretation of the evidence.

I’m “Mattis” as Hell and I’m Not Going to Take It Anymore

We’ve already seen how contact with Comrade Trump has corrupted one general as evidenced by John Kelly’s pathetic effort to defend the liar-in-chief by dishonestly smearing a member of Congress.  It now appears Trump’s stupidity is also a health threat to anyone in his proximity.

On Saturday Secretary of Defense Jim Mattis made two statements which appear to have come straight from Trump’s cranium.  First, he said, “I cannot imagine a condition under which the United States would accept North Korea as a nuclear power.”  I hate to break it to you, General, but North Korea IS a nuclear power.  You are not the father of the bride.  Kim Jung-un obviously did not need your blessing.  Recognizing this fact would go a long way toward crafting policy to lessen the threat of a no-win nuclear confrontation.

This non-starter was followed by, “Make no mistake, …any use of nuclear weapons by the North will be met with a massive military response that is effective and overwhelming.” Duh!  Some things need not be said.  And while this statement is probably true, it could be said by any nuclear power to any other nuclear power.  Imagine Trump’s tweet-storm if Kim Jung-un had said, “Make no mistake, any use of nuclear weapons by the United States will be met with a massive military response that is effective and overwhelming.”  Trump’s tiny fingers would be on fire.

A Tale of Two Administrations

Carl Jung must be laughing hysterically this weekend.  I can hear him point to Friday’s news and saying, “Now you know what I meant by synchronicity, unrelated events which can have a deeper meaning.”  Is it a coincidence that on the same day CNN reported the filing of the first indictments in the Trump/Russia investigation, former President Barack Obama was called for jury duty?  In other words, while one man continues to honor his oath to “preserve and protect the Constitution” by fulfilling his public duty, the other is trying to figure out how he can sidestep his oath of office to save his own skin.

For what it’s worth.
Dr. ESP

 

if…

Politics

 

Related imageIn what is largely remembered as Malcolm McDowell’s film debut, Lindsay Anderson’s 1968 cult classic if… tells the story of a dystopian English private school in which the students forcefully take on the administration.  No, I’m not suggesting the resistance take up lethal weapons.  But as you’ll see at the end of the post, it may be time for 66 million Americans to take up legal arms in a class action suit against Comrade Trump, his campaign and the Republican Party.

Up until Thursday morning, I believed priority number one was the removal of an “unstable and incompetent” individual (according to Bob Corker) from behind the Resolute Desk in the oval office.  I had reconciled myself to the fact Mike Pence would step in, but felt comfortable he would be a caretaker incapable of much harm following the 2018 midterms when the Democrats would capture a majority in one or both houses of Congress.

That all changed with news of (1) evidence one of the Trump campaign contractors (Cambridge Analytica) offered to coordinate with WikiLeaks and (2) reports of the first indictments out of Robert Mueller’s office.  It no longer matters if Russian intervention affected the vote outcome directly or indirectly.  It is increasingly clear the Trump campaign engaged in illegal if not treasonous behavior.  That alone should nullify any veil of legitimacy for the Trump administration.

Which brings me back to Lindsay Anderson’s film.  if… Trump occupies the oval office as a result of criminal behavior, then everything that has happened since noon on January 20th should be declared null and void.  This includes:

  • the swearing in of Mike Pence as vice-president.
  • every cabinet and sub-cabinet appointment.
  • every ambassadorial appointment.
  • the nomination and confirmaiton of Neil Gorsuch as a Supreme Court justice.
  • withdrawal from the Paris Climate Accords.
  • executive orders dismantling Obama era accomplishment.
  • creation of Chris Kobach’s voter fraud commission.
  • passage of the FY2018 budget with its $1.5 trillion cuts in Medicare and Medicaid.
  • expiration of CHIP.
  • expansion of off-shore drilling.
  • eliminating or cutting back some public land designations.
  • approval of the Keystone pipeline.
  • reduction of automobile mileage standards.
  • pardon of Sheriff Joe Arpaio.

It is not a stretch to assume that everyone of the 66 million Americans who voted for Hillary Clinton is impacted by one or more of these actions which would not have taken place if… the Trump campaign had not chosen to employ illegal methods to affect the ballot outcome.  Therefore, we all have standing and should demand the case be brought with all deliberate speed before the Supreme Court.  The logical remedy would require reversing all of the above actions which were taken by a pretender-in-chief.

The bigger question is, “Who becomes president?”  Some would argue Hillary Clinton is the most sensible choice.  But for the Trump campaign’s illicit activity, she might have won.  However, the operative word is “might.”  Absent a re-vote, a case cannot be made Clinton is the rightful president.  There is another option.  The Supreme Court could acknowledge the constitutional line of succession with three conditions.  The speaker of the house be referred to as “acting or interim president.”  To ensure bi-partisan support for this solution, the minority leader would be appointed “acting or interim vice-president.”  And both must resign following the 2018 elections at which time the leader of the House majority party–Republican or Democratic–becomes the 46th president.  Under this proposal, the voters would still have a say who the next president should be.

Just one snag.  Justice Gorsuch would have to recuse himself from the decision which leaves the possibility of a four-four split.  Thus, as has been the situation with so many close cases, the swing vote would probably be Anthony Kennedy.

When the resistance gathers in front of the Supreme Court during the justices’ deliberation, we should take a cue from Simon and Garfunkel and start singing…

Here’s to you Justice Kennedy;
A nation turns its lonely eyes to you.

For what it’s worth.
Dr. ESP

 

Mystery Revealed

Random Thoughts

 

Several of my readers have asked about the progress I’ve made on my book.  Not as much as I had hoped.

Others have asked about why I had decided to shift emphasis when being part of the “resistance” remains important.  My hope was to finish the book by today.  Why?  Because I wanted to posit my counter-intuitive theory (as opposed to conspiracy theory) about the Kennedy assassination before many of the lingering doubts as to what really happened are resolved.  And as you are now aware, the government will be releasing previously sealed documents today related to the assassination later today.  My fear is that the new information will either confirm my theory (which I seriously doubt) or will make the story less compelling.  NOTE: It is a fictional account of what happened based on the best available facts in the tradition of Gore Vidal’s Burr.

Of course, there is the possibility the newly released material will provide additional fodder which can be woven into the story line.  Assuming the narrative will still be relevant, I will continue to work on it as time allows.  To whet your appetite, today I am sharing the prologue with you.  The working title is, “In the National Interest.”

PROLOGUE

There was just one thing I never understood.  How could an operation involving so many players be kept a secret for 55 years?  And yet it was.  But knowing what I now know, it is obvious.  The truth was so implausible, anyone with knowledge of these events would appear either a delusional conspiracy theorist or a victim of dementia.

Just imagine yourself in their place.  What do you do?  Walk into the editorial board room of the Washington Post or New York Times and announce you know what lay behind the crime of the 20th century?  And everything ever said or written about the assassination of President John F. Kennedy is not even close?  And the reason you are now coming forth is you are the last surviving individual who helped plan and carry out the slaying of the chief executive of the United States.

Imagine the barrage of questions you would face.  How do you know this?  What proof do you have?  Is there anyone else who can corroborate your story? Do you expect us to believe a 92-year-old, former Secret Service agent who, for four decades, has been interviewed on the anniversary of Kennedy’s trip to Dallas?  And each time, expressed guilt that he was unable to protect his only charge?

Finally, imagine this human fount of undisclosed knowledge chooses never to reveal what he knows to journalists or historians.  Instead, upon his death, he leaves you the only existing written chronicle of this incredible account and tells you to do with it whatever you believe you feel is in the best interest of the country and history.

Much to my consternation, I now face that exact dilemma.  My name is Jonathan Sheppard.  And two days ago, my deceased uncle Mason Rhodes posthumously anointed me guardian of the best kept secret in the world.  What would you do?

Jonathan Sheppard
October 13, 2017

For what it’s worth.
Dr. ESP

Moore Trouble Than It’s Worth

Culture, Politics

 

Having been born and raised in the South, I still bristle at some of the unfair stereotypes portrayed in cartoons and movies of anyone who uses the term “y’all” or thinks white sauce with sausage crumbs makes everything taste better.  Yet for every Nobel laureate or Pulitzer Prize winner from below the Mason-Dixie line, there is always someone stealing the spotlight who sets us back a century or more.  The most recent recipient of the “What New South?” award is the Republicans’ chosen candidate for the U.S. Senate from Alabama.

roy-mooreOver the best efforts of the Republican establishment (or what’s left of it post Trumpism), twice ousted, former Chief Justice of the Alabama Supreme Court Roy Moore was nominated to fill Jeff Sessions unfinished term.  Just in case you’re not familiar with Judge Moore, here are a few of his greatest hits.

  • Terrorist attacks and mass shootings “are sparked because Americans are losing acknowledgment of God.”
  • When reminded Vladimir Putin shares his view of same-sex marriage, said, “Maybe he is more akin to me than I know.”
  •  Still believes Barack Obama was born in Kenya.
  • “[Islam is] a faith that conflicts with the First Amendment of the Constitution.  The Constitution and Declaration of Independence has a direct reference to the Holy Scriptures.”
  • Muslims should not be allowed to serve in Congress.
  • “There is no such thing as evolution. That we came from a snake? No, I don’t believe that.”

On September 26th, Moore garnered 54.6 percent of the 480,000 votes cast in the Republican runoff election, not surprising in a state Comrade Trump carried by a margin of 28 percent.  On December 12th Moore will face Democrat Doug Jones, former U.S. Attorney for the Northern District of Alabama.  Jones first came into the national spotlight when he prosecuted the two remaining Ku Klux Klan members responsible for bombing the 16th Street Baptist Church resulting in the death of four African-American girls.

Both parties are pouring money into this campaign and the latest polls suggest the race may be more competitive than it should be in such a scarlet red state.  However, this race should NOT be Moore versus Jones or a referendum on Trump or Steve Bannon’s coattails.  This is a chance for the voters of Alabama to show Americans who they really are.  Yes, an alt-right loony won the Republican nomination.  But that victory resulted from 262,000 Moore ballots out of the current total of 3.3 million registered voters.

Rather this is chance for Alabamans to make a statement and demonstrate that Southerners can be conservative without also being cruel or ignorant.  My hope is a majority of Alabama voters will consider the following as they enter the voting booth.

I may be pro-life, I may believe in trickle down economics, I worry about my right to own a firearm and I fear single-payer health care is just one more step on the path to socialism.  But, most of all, I still believe in the First Amendment, that facts matter and America’s future depends on a system of justice where all are treated equally.  And that’s why I’m voting for Doug Jones.  Not because I agree with him on policy.  In fact, if the Republicans put up a responsible candidate in 2020 when Jones runs for re-election, I am likely to switch my vote.  But NOT TODAY.  We are better than this.

So to the 3.1 million Alabama registered voters who have not yet cast a ballot for a disgraced, xenophobic, homophobic supposed defender of  the rule of law, you have a choice.  On the morning of December 13, I will have one of two reactions to the option you select.

Damn!! The decent people of Alabama stood up for American values.  They showed us Southern conservatives do have a conscience and country does come before party.

-or-

DAMN IT!! I guess I was wrong.  Maybe there is more truth to the Southern stereotype than I want to admit.

For what it’s worth.
Dr. ESP