Things we should be thanking Donald Trump for....

....besides some of the best Saturday Night Live skits ever!

Yes, The Donald has had much ridicule heaped on him this election season for his....umm....unusual ideas.  But he has also brought into the light some issues that had been largely underground for years.  You might have to look deep, but he's done us all a service and maybe secured for himself a worthwhile legacy in the process.  To wit:

TRADE AGREEMENTS  Most Americans don't understand trade deals.  We give a little, they give a little, we both get what we want....win/win, right?  Hardly!

Trade deals are driven by what's in the best interest of business, and not necessarily (rarely, actually) in the best interest of the American workers.  Why do you think millions of well-paying American jobs have have moved beyond our borders, and too much of what we've gotten in return are much-lower-paying warehousing and delivery jobs?  Because businesses can make more $$$$ doing business that way.  Screw US!

American businesses used to have America's interests at heart, but for decades now all they've cared about is making money for themselves, however/wherever they can.  If Carrier Corp hands out 1,000 pink slips in Indiana and hires a like number in Mexico, or Indonesia, etc, they don't care!  There's rarely even a passing thought of good 'ol America's best interest.  Their quarterly profits are up, their executive bonuses are up, their shareholders (many of them foreign investors) are happy, the job-gaining country is happy....the big losers are the 1,000 laid-off American workers.  

We need trade.  We can produce much more than we can consume ourselves.  I'm all for trade, if done fairly, but what we've negotiated recently are simply BAD DEALS!

OUR F___KED UP TAX CODE  Most of us only know "we" pay too much, and "the rich" pay too little.  That's all we ever hear.  It's hard to wrap our arms around that opaque concept.  Donald Trump put a real-world number on it.  How many of us had ever heard of a "loss carry forward" before Donald Trump's $936,000,000 business boo-boo?  That sweetheart tax deal has helped him (and many other of his uber-rich buddies) to avoid paying hundreds of millions (billions?) of dollars in taxes.  

That has led us to take a deeper look at our ridiculously complex 75,000 page +/- tax code, a code that got that way due to special favors granted by lawmakers to wealthy special interests in exchange for.....?
  

The rich usually deserve to be rich....they work hard, they work smart, they take risks....more power to them.  But when they can take their hard-earned gains and, with the signing of a piece of tax legislation, see their wealth explode with little additional effort on their part, that's just WRONG!  That's what "income inequality" is all about.  That, more than anything else, is what is killing our middle class! 

You're likely to ride off into the sunset next month, Donald, to take up company with Michael Dukakis, Walter Mondale, John Kerry, and all those other historical footnotes, but if your spotlight can somehow enable us to fix our tax code and trade policies, you'll at least have that as a legacy you can be proud of.

S

She played him like a three-dollar fiddle....

Did you watch the Presidential Debate last night?  What did you think?  I'm in a unique position to comment as I don't plan to vote for either of them.  As if you care, here are my thoughts:

Overall, Donald Trump had a few good ideas, but he failed to articulate them in terms voters could understand.  He often didn't connect the dots.  For example, he claimed that our trade deals to date, particularly NAFTA, were bad for working Americans.  Hillary said NAFTA was a net jobs creator for the USA.  But Trump didn't follow up with, "yes, but we lost millions of good paying manufacturing jobs and gained lots of lower paying transportation and distribution jobs.  That's a major reason our middle class is in decline."  I think he'll see that as a lost opportunity.

He said he didn't think many NATO members were paying their fair share of the organization's costs.  I tend to agree.  But he could have followed up with "those Europeans who enjoy that comfortable social safety net you're so envious of can only afford to do that because they scrimp on their own defense....they know we'll cover their a$$ if they're ever seriously threatened.  We can't afford those things for our people because we're paying to protect their people."*

But he didn't.

*Not all 28 NATO countries are stingy funding their military.  Notable exceptions include The UK and France.

Trump pointed out that there were TRILLIONS of dollars of earnings kept by American companies overseas because our high corporate tax rate prohibited them from bringing it back here.  Why didn't he expound on that by asking "why would they want to bring it back here and pay 35% when they can leave it in Ireland or the Cayman Islands and pay a single-digit tax rate?"  That might make a believable case for a corporate tax cut.

But he didn't.

When he said that he would stop American companies from moving overseas, and Hillary asked "how", he said he would put a big tax on their (now cheap) products being brought back here for sale. In other words he would start a trade war....a big no-no.  

He could have pointed out that as our tax laws are now written, companies that make a move overseas can take a one-time tax write-off for the expenses involved, often up into the $BILLIONS for large companies.  In other words, the American taxpayers are subsidizing their move....the very taxpaying workers being laid off are paying their former employers for laying them off!  

But he didn't.

Hillary let more than a few opportunities slip by, too.  When Trump said his massive tax cut (to the wealthy) would enable them to create new and expand existing businesses and jobs, all Hillary said was "Trumped-up trickle-down economics doesn't work".  Why didn't she quote some of the authoritative research (such as by the Wall Street Journal) that says there is at least $1.7Trillion in wealth sitting idle on the sidelines right now because wealthy individuals and companies can't find enough good places to invest it, and when they do, it's often overseas?  A tax cut to the wealthy will likely create relatively few new American jobs.  

A lost opportunity, Hillary.

When she pointed out that years ago Trump was sued for racial discrimination regarding the leasing practices of his properties, his comeback was, "and I settled that without admitting any guilt."   She could have said that was like a mobster saying sarcastically "I didn't do it, nobody saw me, you can't prove a thing."  It isn't that he didn't discriminate, it's just that he got away with it.  Bye-bye black vote.

But she didn't.

I could go on and on, but you saw the same thing I did.  Basically I thought Hillary looked poised and well rehearsed, while Trump was just scattershooting and rude.  Hillary goaded him and he took the bait.  She had him on his heels most of the night.

Overall I didn't get a warm fuzzy about either.  Ummm....where was the Libertarian candidate?  The stage looked plenty big enough for a third podium to me.   ;)

S

And the Merry-Go-Round keeps turning....

Sadly, I wasn't shocked when I read in the paper this morning that Caterpillar Corp, the big heavy equipment manufacturer, has been dodging paying its US taxes.  Over the past 13 years they saved $2.4B  in taxes by funneling a lucrative portion of their business through a sham division set up in Switzerland.

It seems they paid PricewaterhouseCoopers $55M to show them how to slink their way around US tax laws.  I won't bore you with the details, but just know that it was all smoke and mirrors.  But it was all (apparently) legal.  And there's my complaint.  Businesses are paid to maximize profits and minimize taxes.  It's Congress, which enabled these shenanigans, that is supposed to represent US!

But big companies, aided by an army of lobbyists, own Congress, and it's Congress that writes the rules.  Want a unique tax break, a special deduction, permission to avoid taxes by something like....oh, I dunno....setting up a sham division in Switzerland?  A few quiet campaign contributions and your wish can come true.

So the Treasury gives up $2.4B here, $3B there, on and on, and to paraphrase the comical former Senator Everett Dirksen, "Before long you're talking real money." And this, boys and girls, is half of the reason we have the horrible government deficit we do.  

Trouble is, 100% of the effort to cut said deficit seems to involve cutting spending, some of it from places that don't need to be cut.  Why isn't 50% of our deficit cutting effort focused on stopping these sham tax dodges that result from all the Swiss cheese loopholes in our tax laws?

We need a clean-sheet-of-paper tax code re-write!  If you have a chance to talk to a congressional candidate, ask them if they will sponsor a bill to completely re-write our tax laws.  Accept only a "yes" or "no" answer.  If they try to lay a bunch of flowery BS on you (and they will), ask them again for a straight yes or no answer.  And record their answer and put it on YouTube.

Unfortunately, it seems the only way for an up-and-coming politician to gain the nomination of their party and tap in to the financial contributions that will enable them to get elected (and re-elected) is to show they are a "team player", that they will go along with what their senior party elders tell them to do.  

Like granting unique tax breaks, special deductions, and permission to avoid taxes by something like....oh, I dunno....setting up a sham division in Switzerland.

*sigh*

S

Not good. Here's why....

According to a recent study by two really smart egghead economists, the rich got even richer in the past year.  Their numbers show that the top 10% of Americans took home over 50% of all income in this country, the highest concentration of wealth since 1913.  Breaking it down further, the top 1% brought home 22.5% of all income, the highest since the years right before The Great Depression.  *red flag!*

The top 1% saw their wealth increase by 20% from two years earlier, while the top .001% saw theirs increase 32%.  The authors point out that much of that increase was the result of special tax advantages the rich enjoy.  In contrast, the other 99% saw theirs increase by just 1%.

I'm not making a moral judgement here.  You can make up your own mind on that.  But what I am saying is that when this much wealth is concentrated in the hands of so few, the few cannot come close to spending it fast enough to generate new production, necessitating new hiring.  

A million people with $1 each could buy a million $1 widgets, requiring the widget factory to ramp up to make those one million widgets.  One wealthy person with $1M would have no need for a million widgets.  A hundred, or even a thousand....maybe.  But not a million.  Production at the widget factory would languish, meaning no new hiring.

This principle x cars, houses, washing machines, iPads, ceiling fans, etc, is what drives our economy.

Do you see where this is going?  The struggling 99% will more than likely have to resort to taking on more debt in order to make ends meet, even on an austerity budget.  The debt bubble will grow and grow until it eventually does what all bubbles do.

To make a fortune due to superior intellect or plain old fashioned hard work is good.  To make a fortune simply because the tax code gave you a wink and a nod will ultimately backfire and take us all down.  Again. 

Think.

S

Here's something else I don't understand....

There seems to be a pretty long list of things I don't understand, huh?

OK, 'splain this to me:  A company with a plant in the United States decides that it benefits their bottom line to close it and move production overseas to somewhere with cheaper labor and operating costs.  So they hand out pink slips, ship all their equipment to the new overseas site (or sell it off as scrap), turn out the lights, and take a one-time tax write-off for shutting down that factory.

Here's where I get lost....Why are the American taxpayers subsidizing them (through the tax write-off) to ship American jobs overseas?  If they want to offshore their operations, that's their business, but why are we taxpayers subsidizing it?  The very people who are getting laid off are paying to get laid off!

Am I understanding this right?

Why can't Congress just re-write the tax code to disallow this subsidy?  If you close a US plant, you don't get a write-off.  If you open a US facility, you get a subsidy.  You reward creating US jobs, not sending them away.

Oh, wait....the businesses that are benefiting from the offshoring write-offs are the same ones who are contributing BIG $$$$$ to Congress to say "thanks" for their....umm...."understanding" in these tough times.  *atta boy, Congress....way to represent your constituents*

Now that I think about it, I guess I do understand.

Nevermind.  

S

"A billion here, a billion there....before you know it you're talking real money!"

I believe any thinking American would agree that our government spends too much money.  These days Washington is just out of control, period.  The question today isn't "SHOULD we cut spending?" but "WHAT should we cut?"


Republicans want to cut back on all the social programs on the books, but they'll fight tooth and nail to protect the loopholes granted to their business special interest buddies.  Not surprisingly, the Democrats want to do just the opposite.  Both parties want to balance the budget on the other guy's back.


Here's my idea:  Do we even know the dollar value of all the tax loopholes, subsidies, "favors", etc that are liberally sprinkled all through our 75,000 page(?) tax code and various other "back door" appropriations?  I suggest we commission someone (the GAO?...maybe a Big 6 accounting firm?) to go through everything page-by-page, identify each, put a dollar value on each, explain how each is justified, and how it would affect the economy/taxpayers if it went away.  We know about some of the high profile ones such as subsidies for the oil companies, big pharma, etc, but we tend to forget things like home mortgage interest deductions and union dues deductions.  I wanna know about ALL of 'em.  How much do you think they would add up to?  $100 billion a year?  $500 billion a year?  A TRILLION dollars a  year?


Do any politicians have the guts to propose something like this?  No...didn't think so.  They all have their special interests they're covering for, and the LAST thing the special interests want is for the people to find out how badly they're getting screwed.


I'll bet it would be a real eye opener.  Then I bet we could make a helluva dent in our deficit!


S