Double Taxation

Bruce Bartlett is absolutely correct that the system of taxing profits from C corporations twice (first at the corporate level and again as dividend income to the shareholders) is completely immoral. The fair thing to do would be to either eliminate corporate income tax altogether or make dividend income tax free. That’s not likely to happen, given the popularly held belief that corporations are inherently evil and not worthy of any tax breaks whatsoever.

Just a reminder, this is really only a problem with very large corporations that have a lot of shareholders who are not involved in the operation of the business. For small closely held corporations, it is easy to avoid double taxation by paying the shareholders in ways that are deductible expenses for the corporation, such as salaries, leases and royalties.

KMK

Nailing Scam Protestors

Lew Rockwell has ticked off many in the tax protestor movement by saying the exact same things I have always said; that they are idiot scammers whose advice will land you in the pokey.

KMK

Too Much Truth

Just when you think the GOP has sprouted a backbone and is willing to step up to the plate on serious issues such as the Social Security scam, they wimp out again. As I have explained on several occasions, one of the fundamental methods for the SS system to be able to stay at least partially solvent is for beneficiaries to die before receiving any payouts. That was why the official retirement age was originally established as 65 when the average life expectancy was just 57, when the SS system was established in the 1930s. Most people are supposed to pay into the imaginary trust fund throughout their working lives, and then kick the bucket before taking any money out. The unclaimed funds are not considered to be part of the decedent’s estate and are essentially forfeited. This is why self controlled accounts are so much fairer.

Certain ethnic groups are known to have lower life expectancies than others, making the scam even worse for them. However, it isn’t politically correct to actually point out this fact. Using the term “reverse reparations” may have been a bit over the edge; but it is technically correct. GOPAC has caved in to the PC Police and is shelving their ads on this point. And it looks like the entire GOP is again chickening out from even discussing any changes to Social Security, especially any mention of private control.

KMK

Pro IRS Propaganda

The current wave of slanted media hype to try to drum up support for more IRS power is underway. These two stories are fairly typical of the lies that the media tell in order to make the public feel good about an even more powerful IRS. Besides their love of big government, which obviously needs as much money as possible, my only guess for the motivation for these puff pieces is a desire to avoid IRS audits. I can only assume that it is working because, if one of these people is ever subjected to the same kind of torture IRS inflicts on millions of regular people each year, they would be sure to bitch about it plenty.

Cheating

The media love to portray everyone as a tax cheater, with a big powerful IRS the only way to prevent that, such as this piece that claims 24% of people don’t consider cheating on taxes to be a mortal sin, based on some idiotic non-scientific survey. This is just pure crap. As I see every single day, rather than pervasive cheating, most people overpay their taxes because of ignorance of readily available tax savings breaks and/or sloppy bookkeeping.

Hamstrung IRS

This sob story for the poor IRS cracks me up. Supposedly, they were the innocent victims of a witch hunt in the 1990s and have been unable to do their job effectively ever since. This is another big fat steaming load of crapola. The big congressional hearings about IRS abuses only scratched the surface and, just like every disclosure of government waste, everyone has a big laugh and then it’s back to business as usual. Have the Feds stopped paying $600 for toilet seats after that came out in a hearing? Not a chance. IRS is still operating in the exact same abusive and incompetent manner as when those hearings were held.

KMK

Bigger Government

It’s often difficult to tell the two big parties apart, especially when Bush’s solution for fighting terrorism is adding yet another big expensive bureaucracy. More Federal employees. Much higher costs and taxes to pay for them. Less effectiveness. How is this any different from what Gore would have done?

KMK

Simon’s Tax Shelter

Some of the details on the kind of controversial tax shelter PRC gubernatorial candidate Bill Simon has allegedly used have been published. Note the tone of the article; that the shelter is an illegal fraud. The truth is that it has not yet been determined to be illegal. IRS is claiming that it is fraudulent, as they like to do with almost anything that can help people hold onto their own money.

I am not defending this particular shelter, and I have no hands-on experience with it. However, it is not right to automatically take the side of the IRS in disputes such as this. Unfortunately, that is the standard template for the media. With them, IRS is always right and anyone who tries to reduce his/her taxes is an evil scum sucking pig.

I’m still waiting to hear how the IRS personnel who illegally released the protected private information about Simon’s tax returns will be punished. I’m not holding my breath. Of course, if an IRS employee had released private details about the liberals’ man, Gray Doofus, the feces storm calling for the head of the IRS employee would be swift and loud.

KMK

Who’s Better For Society?

This is an interesting look at the benefits of capitalism vs charity. It sounds a lot like the teaching to fish metaphor. Charity only helps a few people for a short time, while capitalism builds a structure to help others for a lifetime.

KMK

Cushy Retirement

Just as with the hypocrisy of our rulers in DC condemning the creative accounting done by some big corporations, while they themselves preside over the most corrupt accounting systems known to mankind, comes this similar contrast with expensive retirement perks. There has been a lot of press in the past few weeks over the former Chairman of General Electric, Jack Welch’s very lucrative retirement package as recently revealed in a nasty publicized divorce battle.

I’m not about to defend such a lucrative corporate retirement plan for the top dogs. What has always frosted me is the misapplication of the concept of proper compensation for performance. A corporate executive who runs the company into the ground shouldn’t be rewarded for that. He should be fired and never paid a dime more. The golden parachutes taken by the top guys from such failed companies as Enron and WorldCom are indefensible.

Likewise, it should be the same with our elected rulers. If they make things worse for their subjects, they shouldn’t be rewarded with very expensive retirement benefits, paid for by the same subjects who were already screwed over when they were in office. However, life isn’t fair, especially when the crooks themselves control the purse-strings of the treasury. Their retirement benefits are much more bountiful than most corporate executives can even dream of, including a much more generous payment plan than the Social Security Ponzi Scheme that the rest of us mere mortals are forced to participate in. This brings up the long running peeve of our rulers always exempting themselves from the laws they force the rest of us to abide by. Remember this when our rulers hold hearings in their efforts to dictate how private corporations should structure retirement plans for their executives.

KMK