Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●Austerity is the government’s method for widening the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive, and the motive is the Gap.
Direct quote from Reason Magazine:
“Jacob Sullum is a senior editor at Reason magazine and Reason.com and a nationally syndicated columnist.
Sullum’s weekly column, distributed by Creators Syndicate, is carried by newspapers across the U.S., including the New York Post and the Chicago Sun-Times.
His work also has appeared in The Wall Street Journal, USA Today, The New York Times, the Los Angeles Times, the San Francisco Chronicle, Cigar Aficionado, National Review, and many other publications.
He blogs about drug policy for Forbes.”
Perhaps Mr. Sullum should focus on drug policy, because when he blogs about tax policy, he goes astray.
Ted Cruz Is Right About Taxes
The Internal Revenue Code’s headache-inducing complexity is a scandal.
Jacob Sullum | March 25, 2015
“Instead of a tax code that crushes innovation [and] imposes burdens on families struggling to make ends meet,” Cruz said, “imagine a simple flat tax that lets every American file his or her taxes on a postcard.”
Flat-tax proponents, including several Republican presidential candidates, have been asking us to imagine a postcard-sized tax return for more than three decades.
If it still sounds far-fetched, that is only because we are sadly accustomed to jumping through hoops for the privilege of parting with our money.
Sounds lovely, doesn’t it? A simple little post card on which you write your income and multiply it by some percentage — and that’s it. Who wouldn’t want such simplicity?
Except for a few tiny details, wherein the devil resides.
First, what is income? You own stocks and they appreciate, but you don’t sell them. Is that income? You own stocks and they depreciate, and you don’t sell them. Is that a deduction from income?
You sell stocks that have appreciated. Income? Sell stocks that have depreciated? Deduction?
You give money to your young children. Income? You give stocks to your young children. Income? You receive life, health or accident insurance payments. You pay FICA, the receive Social Security. You win a free vacation. Income?
Your house burns down. Deduction from income? You win a lawsuit. Income? You lose a suit. Deduction from income?
Half your income comes from an overseas job. Income? Large medical expenses. Deduction? You child receives a scholarship. Income? Are Medicare and Medicaid benefits income? Food and housing for the poor. If the government wants to help these people, why give with one hand and take with the other?
Hmmm . . . have we drifted a bit from that “postcard”?
Let’s continue with the article:
“The most serious problem facing U.S. taxpayers is the declining quality of service provided to them by the IRS when they seek to comply with their federal tax filing and payment obligations,” says the Taxpayer Advocate Service
Well, not really. The biggest problem facing U.S. taxpayers is paying taxes — taxes a Monetarily Sovereign government neither needs nor uses.
Cruz’s solution—a single income tax rate with deductions limited to charitable donations and home mortgage interest—would be a step in the right direction.
ut retaining any deductions at all is an invitation to escalating exceptions, and keeping the income tax would mean keeping the IRS or something like it, contrary to what Cruz implies.
A flat tax with no deductions except for charitable donations and mortgage interest. Sounds simple enough.
Uh, well . . . exactly what is a charitable deduction? If you give clothing to your church, don’t you have to list what you gave and the value of each item? On a postcard??
And are we talking about eliminating all charitable trusts? Or will we keep charitable trusts — on a postcard?
And then there is mortgage interest, but not other interest. Why? No deduction for school loans? If corporations can deduct every expense, why can’t individuals deduct every expense?
Why can’t you deduct the cost of food, clothing and housing, the way corporations do? Why can’t you deduct the cost of raising and educating children? Isn’t that important to America?
Do Cruz and Sullum visualize no deductions for corporations? Not a chance. Rich people own corporations.
Anyway, in all fairness, Cruz wants to eliminate the Internal Revenue Service altogether. No more income tax on anything. And that’s not a bad idea (since the federal government neither uses nor needs tax dollars), except for another one of those small details:
A national sales tax, an approach Cruz also has endorsed, would make “abolishing the IRS” feasible and a return to something resembling the current tax code less likely, with the additional economic advantage of taxing consumption rather than savings and investment.
In 2013 Cruz cosponsored the Fair Tax Act, which would have replaced the federal income and payroll taxes with a 23 percent sales tax, collected by a new Treasury Department agency with help from state revenue departments.
And here is where we drift from loopy and ill-considered to downright evil.
As anyone who has given more than two seconds worth of thought to the problem knows, sales taxes are highly regressive. They punish the poor- and the middle-classes far more than the rich.
Sales taxes are the perfect vehicle for widening the Gap between the rich and the rest.
While the “99%” tend to spend a high percentage of their income on things, the rich invest most of their income. For a poor person, a 23% sales tax effectively would be a 23% income tax. For a rich person, a 23% sales tax might not even amount to a 1% tax on income.
And of course, that is exactly what Republican Cruz wants. It’s what all right-wingers want. Punish the 99%, reward the 1% and sell the whole package to the gullible as a way to “make things easier.”
Yes, Cruz’s “Submit your taxes to the IRS, on a postcard” should be changed to “Submit your entire income to the IRS, on a postcard, unless you’re rich.”
Hey, in the next election, that could happen. The Republican Supreme Court can be depended upon to support income and vote confiscation of the non-rich.
By contrast, I suggest Items #6, #7 and #8 of the Ten Steps to Prosperity, a program to grow the economy and narrow the Gap between the rich and the rest.
Rodger Malcolm Mitchell
The Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Federally funded, free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually. (Refer to this.)
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
Initiating The Ten Steps sequentially will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
THE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.