A group of wealthy people that includes Warren Buffett, George Soros and former President Jimmy Carter is pressing Congress to roll back estate tax parameters, saying the current set-up leaves “too much revenue on the table.” The group of roughly three dozen people released a statement on Tuesday calling for both the current estate tax exemption to fall, from roughly $5 million a person to $2 million, and for the rate to rise from a top level of 35 percent to a minimum of 45 percent. [The Hill, FairEconomy.org]
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Donald Trump Once Proposed a One-Time 14.25% Net Worth Tax
Back in 1999, when the The Donald was also faux-considering a Presidential run, he proposed a one-time 14.25% net worth tax on anyone with a net worth of $10 million that would solve all our national debt problems in a blink of an eye.
According to an article published by CNN in November of ’99, DT crunched the numbers himself and “his proposed 14.25 percent levy on such net worth would raise 5.7 trillion and wipe out the debt in one full swoop.” Of course this was all before the SCOTUS determined the outcome of an election, 9/11, Afghanistan, Iraq, George W. Bush somehow winning re-election, Barack Obama being elected President, The Tea Party, Libya and several seasons of The Apprentice. And seeing how Mr. Trump’s politics change like his hair caught in a a gusty wind, it’d be surprising if he still felt strongly about this particular policy. [CNN via TaxProf]
The IRS Should Really Reconsider Their Employee Screening Process
In another case of former a IRS Agent having reckless disregard for their old employer (i.e. the Federal Govt.), a 76 year-old former agent was sentenced to nearly four years in prison for his part in a fraudulent tax scheme that went on from 1998 to 2000. Thomas Steelman was also ordered to pay more than $10 mil back to the Service.
The old guy really worked hard at his craft too:
He took part in promotional meetings, conferences, rallies and telephone conference calls to promote Renaissance’s services and recruit clients, according to prosecutors. Steelman was also a featured speaker on Renaissance’s promotional videotapes.
From the sound of it, this guy Steelman was the Peter Olinto Tim Gearty Rick Duffy of Renaissance, The Tax People, the defunct company he worked for. It disappoints us how the pleasure of serving your country, as crusader for tax compliance, would eventually lead to a life of a scofflaw and tax avoidance. We are truly saddened that there continues to be very few true tax heroes among us.
Ex-IRS Agent Sentenced to 46 Months for Tax Fraud [Web CPA via TaxProf Blog]
More Appeasement in Obama’s Proposed Budget
President Obama presented his nearly $4 trillion budget, proposing to cut more than $1 trillion from Federal programs over the next ten years, with $200 billion in cuts to occur over the next two years. Although these cuts may appear, at first glance, significant to the average American, in light of the recently enacted tax cuts of $858 billion over the next two years, that $200 billion of proposed spending cuts leaves $658 billion of tho ted for.
In balancing our national budget, Obama and Congress are focusing on the wrong side of the financial equation. The projected deficit in 2011 is $1.65 trillion; however, the whole non-defense discretionary spending budget in 2010 was $477 billion. Even if all non-defense discretionary spending were eliminated, there would still remain a deficit of over $1.1 trillion. The math is clear that Congress cannot eliminate deficit spending by budget cuts. Taxes will need to be raised.
Some of the cuts that President Obama is proposing in his budget include $300 million for community block grants, $2.35 billion for low income home energy assistance program, and $400 billion from a five-year domestic spending freeze, as well as reductions in pell grants, graduate school loans, community access, etc. But all of these cuts do not come close to offsetting the lost revenues from the extension of the tax cuts to the rich.
A pattern has emerged in Obama’s dealings with the Republicans. Obama agreed with the Republican argument to give tax cuts to the rich to help the economy. Now he is proposing to cut programs for the middle class and the poor to balance the budget. In doing such, Obama is moving the political fulcrum to the right. His approach of pre-emptively offering something—whether it be tax cuts for the rich or budget cuts affecting the poor and middle class—instead of negotiating a quid pro quo, is effectively pushing the Republicans further to the right, seeing the prospect of gaining even more ground.
Although compromise is demanded in politics, leadership cannot be defined by compromise alone. There are principles worth fighting for; and leaders must be willing to mobilize public opinion in support of those principles. Since our political system is rigged because of campaign finance and lobbying, a leader professing change and reform needs to present a different narrative to the populace. Churchill, Teddy Roosevelt, and Franklin Roosevelt recognized the value of the bully pulpit. Despite his rhetorical skills, Obama has failed to do so. His posture of appeasement will in all likelihood allow the Republicans to balance the budget on the backs of the working class and low income Americans to the benefit of Wall Streeters and Multinational Corporations, who offshore jobs, brought about the financial crisis, and robbed trillions from the American people. Since Obama is seeking re-election in 2012, and is charting his own course, he will not lead the American people to the Promised Land.
America needs major tax reform. The extension of tax cuts to people who need them the least was the last thing Congress needed to do. Some Democrats want to cut $40 billion in subsidies to the oil companies for five years; however, Republicans refuse to cut these subsidies to the oil companies, preferring to cut programs for the poor and middle class. Moreover, in spite of two wars costing $120 billion per year and an inflation adjusted military budget larger than those in the Bush years and the Cold War, neither party desires to cut military spending, which constitutes 58% of the discretionary spending budget.
Reform will never come from Congress nor a President like Obama. It will require people outside of Washington working with allies inside Congress in order to stop this disconnect between what is transpiring in Washington and what this country needs. It will require people coming together as they did in Egypt in a pro-democracy movement. The question is, can and will the people of America come together before it is too late.