How to Stick it to Leftist Billionaires without Crushing the Little Guy
Democrats are coming up with all sorts of schemes to transfer money from the private sector to the government. Their aim is to have more power and money. They truly do not care how many jobs and businesses they destroy in the process.
The newest suggestion is to lower the amount of wealth that can be transferred from one generation to another, from around $11 million currently to one million. It's a horrible idea. This will cause people who inherit small businesses or farms, that have been built up over generations, to liquidate or leverage up to pay the government their huge estate tax bill. Way to go, Democrats, but not surprising.
Why do Democrats think they are entitled to so much of what other people have built?
A much better way to capture wealth from billionaires, which is something they have been talking about since the 1990s, would be to hit up the likes of Bill Gates, Warren Buffett, George Soros, Mark Zuckerberg, and others who set up charitable foundations. They set these up, and then take huge amounts of stock that they paid little for and deduct shares at market value, to offset ordinary income rates fpr themselves, when they never paid capital gains on the increase in value of the stock.
Just change the code to make them pay capital gains rates on the appreciation of the stock. Also, such a tax change could be used when rich people give away art at appreciated value instead of cost. That would have the additional benefit of blocking inflated appraisals.
Gates, Buffett, and others always say it is unfair that they pay such low rates, so they should support this break since it essentially helps only the rich.
Hedge fund managers, like George Soros, also get a huge tax break, one that long preceded Trump's tax cuts, by paying taxes at capital gains rates instead of ordinary income rates. Billionaires like Soros should be taxed at operating rates. The investors can still get capital gains rates.
Another way to properly get more taxes would be to use the current tax code to get corporations like Berkshire Hathaway, Apple, Microsoft, Amazon, and Google from accumulating so much wealth and cash. The law says they must pay an accumulated earnings tax if they don't have a use for the cash.
What Is an Accumulated Earnings Tax?
An accumulated earnings tax is a tax imposed by the federal government on companies with retained earnings deemed to be unreasonable and in excess of what is considered ordinary. Essentially, this tax encourages companies to issue dividends, rather than retain their earnings. The IRS allows for certain exemptions to the tax rule.
Buffett always lectures that he doesn't pay high enough rates, but Berkshire Hathaway doesn't pay dividends so that the corporation isn't taxed twice, first at the corporate level and again at the individual level. Even Democrats in Congress can fix that.
Bill Gates always tells others to pay higher taxes but billionaires like him use every method they can to avoid paying higher taxes at the companies they own. It is pathetic that a company the size of Microsoft and a billionaire of the net worth of Gates are so greedy that they pretend a substantial part of their income comes from Puerto Rico so they can pay a zero tax rate. Another word for falsely moving income would be fraud. It is a shame that members of both parties along with special interest groups and CPA firms support this avoidance of taxes. It is pure greed.
The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher.
Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%. Microsoft had justified this transfer with a ludicrous-sounding deal: It had sold its most valuable possession — its intellectual property — to an 85-person factory it owned in a small Puerto Rican city.
Microsoft fought back with every tool it could muster. Business organizations, ranging from the U.S. Chamber of Commerce to tech trade groups, rallied, hiring attorneys to jump into the fray on Microsoft’s side in court and making their case to IRS leadership and lawmakers on Capitol Hill. Soon, members of Congress, both Republicans and Democrats, were decrying the IRS’ tactics and introducing legislation to stop the IRS from ever taking similar steps again.
Gates would not be nearly as rich if Microsoft paid its fair share.
Income and expenses should be properly allocated among counties and states.
Google, Facebook, and others also manipulate their books in order to hide their income from the U.S. to pay far lower taxes as they support higher taxes for us through radical leftist policies. That is especially dishonest and greedy.
How Google Saved $3.6 Billion Taxes From Paper 'Dutch Sandwich'
They clearly don't care about paying their "fair" share as their wealth multiplies.
The higher the Democrats raise the corporate tax rates, the more that companies will move operations and headquarters abroad, and manipulate their earnings. These CEOs and special interest groups are clearly lying when they say they want to pay higher taxes and the higher tax rates won't harm the economy.
Why do Democrats insist on punishing small companies and individuals trying to build wealth?
We know why these virtue-spouting leftist billionaires do -- can you say 'upstart potential competitors'?
If Democrats truly want to pay for more infrastructure projects, they would get rid of the prevailing wage laws which have oppressed minorities and taxpayers for over ninety years. These laws are known as the Davis-Bacon Act and Related Acts, and were passed in 1931 at the end of the Jim Crow era, and explicitly for racist reasons. The Foundation for Economic Education, in a 1994 piece, calls it "Jim Crow's Last Stand." It's still a racist law that targets poor minorities.
New Study Finds NY’s Prevailing Wage Increases Cost of Public Construction by Up to 25%
A new report released by the Empire Center for Public Policy on April 24 found that prevailing wage requirements inflate the cost of publicly funded construction projects in New York by between 13 percent and 25 percent. The varying percentages are based on the area or region of the state. Taxpayers can expect to pay billions in extra costs, given the tens of billions the state plans to spend on public projects over the next five to 10 years.
Democrats are taking references and statues of Lincoln, Washington, and Jefferson down across the country as racist relics, while keeping racist laws like Davis-Bacon on the books to appease their special interest groups. Their own racism is obvious.
If we had an honest media, they would report that the ordinary rich and upper middle classes, who don't have these billionaire dodges, pay a much higher federal share of taxes than their share of income instead of repeating the talking point that the rich don’t pay their fair share. Here is the reality, from of all places, the leftist Brookings Institution:
The rich generally pay more of their incomes in taxes than the rest of us. The top fifth of households got 54% of all income and paid 69% of federal taxes; the top 1% got 16% of the income and paid 25% of all federal taxes, according to the CBO.
There is never enough for Democrats.
The media should also report that Senate Majority Leader Chuck Schumer, House Speaker Nancy Pelosi and other Democrats are wanting to restore the full state and local tax deduction where most benefits go to the rich. The biggest benefactors of this cut would be millionaires and billionaires from New York and California, especially those at Apple, Google, Facebook and Twitter. There is a reason most billionaires supported Biden.
Billionaires like Gates, who do everything they can to reduce their personal and corporate taxes, can be adored by the media and other Democrats if they donate to the right causes and politicians, repeat the same talking points and reside in the same swamp. Otherwise, they will be disparaged and destroyed by unpaid Democrat campaign workers posing as journalists just like women and minorities who refuse to go along with the radical leftist agenda will also be destroyed. The hypocrisy is amazing.
Jack Hellner is a certified public accountant.
Image: World Economic Forum. swiss-image.ch/Photo by Sebastian Derungs, via Wikimedia Commons (cropped) // CC BY-SA 2.0. Image filtered with with Graphite by BeCasso program.
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