Fixing this nation: Taxes …

Tax policy is the open cesspool of American politics. 

Our Federal tax system is a fetid swamp tended and nurtured by hordes of lobbyists, special interests and big campaign contributors, aided and abetted by elected politicians.

Most of the public only see the tip of the iceberg – what they as individuals have to pay in taxes. What lies below the surface is a labyrinthine maze of subsidies, credits, special tax treatments and exemptions that hardly anyone understands fully.

The only ones who do are the lobbyists and politicians who are on a never-ending quest to use tax policy for their own narrow purposes.  They try to manipulate tax policy to punish their perceived enemies, reward their patrons, and curry favor with key voting blocs.

Consequently, our current tax system is far from fair, by design. 

The public battles over tax policy typically center on Federal income tax and the need to either raise or cut Federal income tax on key constituencies.  Some want across-the-board tax cuts; others, tax cuts for the “middle class” and “the poor” although neither of those groups pays much if any Federal income tax; almost nobody is willing to propose across-the-board tax increases.     

Ironically, the people who usually rail about having “the rich” pay their “fair share” of income taxes aren’t paying much if any Federal income tax themselves. Meanwhile, “the rich” are actually paying most of the Federal income tax the Treasury takes in. 

When Romney said that almost half of all Americans aren’t paying any Federal income tax he was crucified. But he was right.   

Between all the credits, subsidies and exemptions, almost half of all Americans don’t owe any Federal income tax; many actually get money “back” from the government without paying any money in through programs like the Earned Income Tax Credit (EITC) – a program plagued by rampant fraud.  

And most of this is perfectly legal, thanks to Congress. All those credits, subsidies and exemptions exist because members of Congress have over the years used tax policy to win votes, push causes, and, of course, reward their friends and sometimes punish the enemies of their friends.    

But while the media and politicians constantly focus on “the rich” and “the poor” and the “middle class” both the media and politicians conveniently ignore all the tax breaks given out to certain businesses and industries, consumers who are incented to buy certain products and services, and others in the general public – depending entirely on where they live.   

Trump and Republicans like to say our corporate taxes are among the highest in the industrialized world. Technically our corporate taxes are among the highest, but the truth is hardly any major corporation here pays that rate. Many of our largest corporations make billions in profits and pay zero or close to zero in corporate taxes.  Again, it’s all perfectly legal. 

And for the same reason so few ordinary Americans pay Federal income taxes. Congress has provided so many tax breaks and credits to specific businesses and industries that when corporate accountants are done almost nobody owes anything.

So what’s the point of lowering a corporate tax rate nobody pays? It’s about as useful as lowering the Federal income tax rate on poor or middle-class people who also aren’t paying anything.

It’s all about optics. 

In a perfect world, there would be no Federal corporate income tax. 

There’s really no point to it if you eliminate all the subsidies, credits, exemptions and other special tax treatments; these only exist to favor one business or industry or another, to reward organizations that do what politicians want, and provide leverage to politicians seeking campaign funds. If you wiped these all away and eliminated the Federal corporate income tax very little would actually change in the long term. 

Trump and Republicans say they will enact major tax reforms to benefit ordinary taxpayers, too. 

Good luck with that. Watch carefully as the Republicans tiptoe around simplifying and making the tax code more rational so that everybody pays some taxes. Even more telling will be how they deal with provisions that actually subsidize wasteful spending by some state and local governments at the expense of taxpayers in more fiscally responsible states.   

They should start by getting rid of all the subsidies, credits, exemptions and other special tax treatments for the rest of us as well. Like the corporate tax breaks, many of these simply reward dumb behavior, or incent people to do what they should do anyway on their own dime. 

Get rid of all of these and people might start doing things for the right reasons.  Or, at the very least, understand that subsidies inevitably raise the price of whatever is subsidized, and cause some people to make poor choices they would never consider making with their own money.  

If they could do that, and that is a very big if, they could rethink what our tax policy should be, philosophically and ethically, to make taxpayers real participants in our government.       

The ultimate goal of a responsible Federal tax policy should be that every person has some skin in the game so they have a vested financial interest in how government spends their money.  The only way to do this equitably is for every bit of income a person received – whether from interest on savings, from salaries, or from distributions of profit to employees, bondholders or shareholders, or whatever – to be subject to Federal income tax at the same rate.

This is what a true Federal flat tax would be; not the wishy-washy mish-mash often proposed where certain groups would still be exempt from taxes, or would pay a lower or higher rate. Or a different rate, or exempted from tax altogether, based on where the income was derived or how that income was spent.

Not going to happen. 

The reason is simple: too many special interests have their hands in the process, all clamoring to retain whatever tax treatment they have now.  And they always want more. 

I’ll pick just a few of the more egregious examples.

Residents in several high-tax states such as New York and New Jersey can deduct many of their state and local taxes from their Federal taxes. This alone cost the Federal Treasury almost $80 billion in 2013. But that’s not the worst part – it hides the true cost of out-of-control spending on the state and local level. Without the offset, even more people who could would be fleeing New York and New Jersey in droves.  

So when Republicans from low-tax states like Florida and Texas start discussing which tax breaks to cut, expect Senators and House members from high-tax states to fight tooth and nail to preserve this nonsense for their constituencies. 

Getting rid of the mortgage interest deduction would also save a bundle for the U.S. Treasury – between $70 and $100 billion a year.  Realtors will, as always, fight to the death to defeat any attempt to eliminate it.  It’s a fundamental part of some realtors’ sales pitch to get potential home buyers to buy a more expensive house than they planned.  The mortgage interest deduction doesn’t really make that more expensive house more affordable, and contrary to what some realtors pitch, it only – at best – temporarily lowers the buyer’s gross income for tax purposes. 

It’s a variation of the car dealer con when he or she asks a first-time car buyer “How much of a monthly payment can you afford?” Conveniently forget the cost of insurance, maintenance, gas and every other expense associated with that car and, sure, it looks like a deal.     

Remember when Congress eliminated the ability to deduct credit card interest on personal purchases from your income? The banks and credit card issuers howled. But it really didn’t make any difference in how consumers used credit cards. Neither would eliminating the mortgage interest deduction, except to make home buyers a bit more realistic about what they could afford. 

Next, you’ve probably heard about generous tax credits for installing solar panels. In some cases you can deduct up to 30% of the cost of installation and qualifying equipment from your Federal tax bill. This has done absolutely nothing except help solar panel manufacturers and installers sell more stuff at a fat profit. Much like the pitch from realtors, the solar industry makes it seem like the government is helping you save even more on your utility bills.  It’s not.

By the way, the top residential uses of solar power in this country are to power attic ventilation systems (photovoltaic panels) and to heat swimming pools (passive solar panels). Neither of these seems to me to fall into the category of absolutely essential applications that promise to wean America from its dependence on fossil fuels.  But that’s just me. 

The real problems with subsidizing solar panels and installations are that these are a waste of our taxpayer dollars for almost no benefit whatsoever to consumers or the nation. The payback – if ever – on photovoltaic solar panels the green energy lobby is so enamored of can take as much as 20 years.  Next, because these panels and their installation are so expensive, the credits mainly reward the affluent who could afford to pay for the solar panels anyway without the credits, or make enough taxable income to make it worthwhile to get these credits to lower their tax bill.  

Think about it – how many poor or middle income families could afford to spend from $10,000 to $30,000 on something that’s breakeven in about 20 years or more? 

But what about all the American jobs making and installing green energy solutions? 

Well, despite squandering hundreds of millions of dollars in grants and loan guarantees to now-bankrupt companies like Solyndra, most solar panels now come from China.

Is that helping put Americans back to work on green energy?

The tax credits to consumers are set to expire in 2019. But don’t count on it.

There are so many of these. I earlier mentioned the EITC where low-income families get paid extra money from the government based on how many dependents they have. Please note this is not a conventional tax credit – offsetting the taxes someone paid – but is really an outright grant; checks are sent to recipients from the government despite what they paid in. 

However, while some politicians see the EITC as a valuable anti-poverty program, it’s also a program that has experienced major fraud. It’s been estimated that as much as $2 billion has been fraudulently claimed by illegal immigrants alone. Perhaps many billions more have been fraudulently claimed by people working the system claiming fictitious dependents or multiple people claiming the same dependents within the same household.

Is EITC fraud just the result of a poorly written law with unexpected consequences?  Nope, I believe it’s a matter of nobody wanting to enforce the rules. And why not? Well, because it would mean cracking down on the poor and illegals.  Also, like most government giveaways, it’s hard to pull back something people are used to.  

That’s the point.  Nobody will willingly give up their special tax breaks, credits, or subsidies. Whenever talk of tax reform comes up, everybody wants to eliminate or scale back the breaks for others, but they don’t want their own touched.

Parochial politics consistently override doing the right thing; politicians want to protect their home-state industries and residents and keep the support of key special interest groups.  

That’s why there’s always a huge fight over reforming the tax code. And why real reform of the Federal tax code almost never comes.

For the record, the last time was in 1986. More than 30 years later it’s still a mess.

I don’t care …

There’s only so much you can care about.  I’ve reached my limit.

I’m suffering from a serious “care” overload.  I can’t possibly care about everything – whether that’s what the media, the Democrats, the Republicans, Trump, St. Jude’s Hospital, the ASPCA, poor Jews in Israel, immigrant-rights activists, and innumerable others want me to care about.

It’s all one big blur anymore. 

Everything related to Trump is too much. And we're all supposed to care. Every time the man does anything you can be certain somebody will be outraged.

He puts out an Executive Order about immigration. The media, Democrats and immigration-rights groups go nuts. He amends the order in response to make it more acceptable and less draconian. The media, Democrats and immigration-rights groups go nuts.  Again. 

I swear, Trump could issue an Executive Order establishing a national kitten and puppy day and somebody, somewhere would be outraged.

I can hear it now: Chuck Schumer or Nancy Pelosi saying something like “if only he cared as much about poor undocumented immigrants and their families as he does about kittens and puppies …” PETA would be in the streets protesting his “support” of kitten and puppy mills. Ezekiel Emmanuel would be on CNN talking about how this is unfair to children with life-threatening pet-dander allergies, especially since they will no longer get treatment after Trump repeals the Affordable Care Act.  There would be people upset that he was favoring kittens and puppies over endangered species.   

Black Lives Matter folks would be pissed that … well … they are always pissed. As, it seems, everyone else is these day. Everybody is looking for something to be outraged over.   

It just never ends.    

No detail of what Trump does goes unreported.  The perfect example is the news that Trump recently had an overcooked $54 steak with ketchup. I’m serious – that made the news.     

Now, certainly he has his faults. Those are too numerous to even begin listing.  But for Christ’s sake, if he likes burnt steak with ketchup, who cares?  I don’t. 

Here’s a list of other things I find equally important to caring about Trump’s steak:

“If silver only reaches its recent all-time high …”

Mike Lindell’s latest My Pillow offer …

“Rosland Capital ships my gold fast … “

“For only $19 a month …”

“Get this love-to-the-rescue blanket that shows you care …”

Get the picture?  Enough is enough. 

The worst, by far is the political circus. 

The other day I watched Lethal Weapon 3 and Lethal Weapon 4 back to back – on regular cable, with commercial interruptions – rather than the never-ending saga of claims, counter claims, counter-counter claims, and counter-counter-counter claims of who is accusing whom of doing whatever in Washington. That should tell you something. 

It’s gotten to where I can’t even stand to watch any news but local news, which, given where I now live, is really pathetic. Half the reporters in the field look and act like kids still in high school wearing borrowed clothes; the other half are like cast-offs from bottom-tier media markets who retired to Florida and still do the odd report to stay in the biz. 

The local news itself is mostly a non-stop litany of who got murdered by whom in Orlando – typically somewhere in the Pine Hills area; where the latest brush fires are; and traffic accidents on I4 causing backups for miles. Oh, and the local weather forecasts, which, this being Central Florida, are pretty much the same every day and about as accurate as a Magic Eight Ball. 

However, it’s a refreshing change from the national news. 

It’s not that I’ve turned my back on “important news” altogether – I still get The Wall Street Journal at home to learn what’s really happening in the world.

It’s just that so much of what the national broadcast media – NBC, CBS, ABC and Fox – consider “important news” isn’t really that important. At least not at this time. And I have lost patience with all of the networks for substituting opinion and bickering for real news I could use. 

Too often these days I feel like I’m caught in the middle of a perpetual pissing match between nitwits on both sides of the aisle who resort to invective and talking over each other instead of bringing something meaningful to a debate. It’s like being in a household with parents who bicker over every little thing.  I’d rather not participate, even as a viewer.    

Do I care what Chuck Schumer has to say? Nope. Do I care what Trump says? Nope.  Do I care what Rand Paul says? Nope. John McCain? Nope. Do I care what Nancy Pelosi says? Nope.  Do I care what the Republican or Democrat strategist or spokespuppet du jour has to say? Nope.  Do I care who won at the Academy Awards, the Grammys, the Screen Actors’ Guild Awards, the People’s Choice Awards, the Golden Globes, the Emmys and whatever other awards shows there are – and what the emcees and recipients said? Nope.   

The old line about “sound and fury signifying nothing” comes to mind. 

If something meaningful comes up, some news that’s actually important, I’m sure The Wall Street Journal will report  it. I can wait until the next issue to find out. 

Until then, I’ll watch something else; something that doesn’t demand I care.  

The debate over gender identity …

I watched with amazement the other night when an advocate for transgender rights said that gender is whichever sex someone feels they are and has nothing to do with biology or anatomy.

I’m having difficulty believing anyone – short of surgical procedures plus hormone treatments – can actually become a different gender. This isn't about appearance; that's easy to accomplish. No, this is about being fully accepted, legally, as a different gender, on your word alone.    

That’s not to minimize the plight of those who feel that, despite the anatomy they were born with, they are in fact more female than male, or more male than female for that matter. I am sure that’s very difficult for them. Yet there’s a profound difference between feeling like one gender or another psychologically and actually being a certain gender physiologically and legally.    

Advocates say this is a civil rights issue – they believe people of virtually any age should be allowed to claim whichever gender they feel they are.  And if they are anatomically male but identify as female, or anatomically female but gender identify as male, they should be accepted by society, and government, and the law, as the gender of their choice. 

By logical extension then, anyone should be allowed  to use bathrooms and locker rooms, to play on whatever teams and compete in whatever sports, based solely on their personal gender choice, not the anatomical and genetic gender they actually are. 

This may sound fair and all about “inclusiveness” to some but ignores the real physiological differences between most males and females that go well beyond genitalia and feelings.

Accepting that gender is merely an intellectual exercise could be devastating to women-only sports and scholarships that are protected under Title IX.  Some males could decide they would win more often and gain more scholarships simply by claiming to self-identify as female. 

Don't dismiss that possibility.

Then there are all the current gender-specific preferences, much like race-based preferences, created by Federal, state and local governments for a wide variety of programs. The good intention of these has always been to provide more opportunities to certain groups considered historically disadvantaged in some way – in short, to level the playing field if possible. 

Those gender-based preferences are based on biology, not self-identification. Until now, it’s been pretty clear: women-owned businesses get preference for government contracts; women-owned businesses help other contractors comply with government contract requirements; and women are entitled to special treatment for loans and start-up assistance from the SBA, just to name a few.

The result is that billions of dollars – both from governments and the corporations that do business with governments as well – flow through to women-owned firms by edict. 

I am not saying this is wrong. Or questioning the validity of these policies.  That’s a different discussion altogether about government picking winners and losers.   

Still, by redefining gender – which it appears some activists are trying to do – to be based on psychology rather than biology or physiology, a new problem is created.  Does a male who claims to self-identify as a female qualify for participation in these women-only programs? 

Who decides?

And is that fair to physiological females competing for the same preferences?   

Personally, I am fundamentally opposed to all artificial preferences by race, gender, sexual orientation, religion or whatever. It’s all discrimination no matter how you look at it.  I’d like to see us stop playing games in employment or government aid based on anything other than merit or true financial need.  Putting the fickle fat finger of government on who gets what based entirely on other criteria is a recipe for corruption and fraud. 

Right now, the media and Democrats are obsessed with which bathrooms transgender people should be allowed to use, and that Trump has pushed that decision back to the states. Lost in all this is that there are much bigger implications of self-defined gender identity down the road. 

Democrats and the media see the whole issue of transgender rights as a wedge issue to keep the LGBTQ community on their side, while painting those opposed to allowing people to use the bathroom of the gender they identify with as homophobes and bigots. The word “discrimination” keeps surfacing in almost every discussion.   

The reality is that the concept of self-defined gender to gain access to restrooms is baffling to a lot of folks who are neither homophobes nor bigots. Me included. 

How did this become such an important issue?  And why are almost all the “victims” of discrimination reported by the media transgendered children or adolescents?   

More to the point, is there really a point to all this? That’s what has most of us puzzled. 

Why would a transgender female who self identifies as a male prefer to use a men’s restroom in the first place? There’s nothing particularly inspiring or enlightening about a men’s restroom. There are sinks, stalls, urinals, and no small talk; most males spend as little time as possible there, and, trust me, most men’s restrooms are pigsties. Men’s restrooms don’t even have a couch.     

Then there’s the issue of a transgender male who self identifies as a woman preferring to use a women’s rest room. 

While men seeing a woman entering a men’s restroom might be surprised, most of us have seen that before, especially at sporting events when the women’s restroom lines are so long.  However, at the present time, I suspect women seeing a man enter a women’s restroom might be exponentially more freaked out; not because women are homophobes or bigots, but because they are more afraid – warranted or unwarranted in this case – of possible sexual assault.

So how did this gender identity thing become such a big deal – especially since there are maybe at most 300,000 adults in the U.S. (much less than one-tenth of one percent of the population) who may or may not feel they are transgendered?  And even that’s a conditional number; more of a high-side guess by advocacy groups. Still, it’s 300,000 people – maybe.

Advocacy groups won’t even estimate how many kids may or may not be considering themselves transgendered – which is what’s getting most of the media attention now – since kids really don’t have much of a firm gender identity until they are older, and even then aren’t sure. 

I’ll tell you why it’s suddenly become a big deal.

The media and Democrats are running low on “victims” to exploit. When there are openly gay Republicans and conservatives, black and Hispanic Republicans and conservatives, and female Republicans and conservatives, their universe of potential victims to hype is shrinking. That’s very troubling to those who rely on victimology to advance their political agenda.    

Sure, there are the illegal immigrants and the Syrian refugees, but polls show most Americans aren’t in favor of either; the majority of Americans want to cut down on both.  

So the transgendered are their new McGuffin – an elusive, hard to define category – perfect foils for the media and Democrats to wield as a cudgel against their nemesis, conservatives.  Using children and adolescents to make their case is a new low, even for them.   

How disingenuous is this?  Recently, on two separate nights Tucker Carlson interviewed two serious advocates for the transgendered.

He asked both the same question: What are the absolute standards for deciding someone is actually transgendered and the gender they self-identify with is real? 

One blathered on about several psychologists coming up with tests, but when Carlson asked for the science behind it to definitively prove someone was really the alternative gender they chose she had nothing. Carlson then asked if there was any reputable scientist – and offered $1,000 if she could name just one – who would show there was a scientific way to prove someone was really the alternative gender they chose. She said she’d have to get back to him on that.

The other, and more entertaining advocate, maintained that people didn’t have to prove anything to support their claim to be a male or a female – it was enough for them to believe they were to be accepted as the gender of their choice.  When Carlson asked if biology and physiology didn’t matter, the advocate insisted gender identity was a strictly personal choice – not based on biology or physiology – and anyone could be any gender they chose. 

Then, Carlson said, what’s to prevent him from deciding he was now a female to gain access to government preferences for women? The advocate responded that Carlson was being ridiculous. Carlson followed up by asking if he could choose his gender, despite biology and physiology, could he also choose his race – could he, for example, choose to be African-American? 

Well of course not, the advocate replied. You can’t simply change your race just because you want to – race is something you’re born with.   

But apparently you can choose your gender. Who knew? 

The unintended consequences of the media and Democrats’ push for everyone – including government officials at all levels and the people running our schools – to  accept that gender is merely a matter of personal choice, are potentially far more serious than which bathroom someone should be allowed to use.   

There’s an awful lot of money at stake. And there are a lot of well-meant programs designed to help women using gender as the qualification on the proverbial block. 

Don’t count out the probability of people switching gender just to gain an edge.