Space Tax

Although the government has been slow to change given all of the technological advancement over the years, at least California is getting ahead of the curve by setting up the taxes for future space launches. Good to see California has its priorities right.

“We have seen the future, and it is more taxes. The state prides itself on the presence of innovative companies, especially in Silicon Valley, but if it wants a brighter economic future, it should learn to take a more hands-off approach, whether it is the treatment of exciting new ventures whisking goods and people into space or the more terrestrial and mundane pursuits of other businesses that provide economic opportunities for workers and needed goods and services for consumers in California and across the globe.”

http://www.eastbaytimes.com/2017/05/20/editorial-californias-latest-tax-idea-is-out-of-this-world-literally/ 

 

The Rich Tap Out

Even though Connecticut is considered one of the richest states  in the US given the amount of hedge funds in the state, tax revenues are continuing to decline. But lawmakers this time around are acknowledging there is a limit to how much they can keep on demanding from the wealthy.

See the article here at the Wall Street Journal

 

Steve

The $16,000 IRS Windfall

An immigrant to the U.S. from Mexico filed his Federal Income Tax return.  He paid $800 in taxes and got a $16,000 refund. How?  He did it by claiming 16 minors as dependents, none of whom live in the United States. None of whom are even actually his children.

scam

If you don’t know what an ITIN is you’re not alone. Until today, neither did I.  I happened to hear an immigration lawyer talking about this and what I heard made me really angry.

The ITIN is part and parcel to the IRS regulation that allows a taxpayer to file for what is termed the Additional Child Tax Credit. This provides a credit of up to $1000 for every child claimed. It is intended to offset the expenses incurred in raising children.  But in order to get the credit, you need to file a social security number for the dependent child, or, if the child is not eligible for one, obtain an ITIN (Individual Taxpayer Identification Number) and use it in place of a social security number. You can easily recognize an ITIN because they all begin with the number 9.

If you go onto the IRS government website this is the criterion for applying for an ITIN:

“Use this form to apply for an IRS individual taxpayer identification number (ITIN). An ITIN is a nine-digit number issued by the U.S. Internal Revenue Service (IRS) to individuals who are required for U.S. tax purposes to have a U.S. taxpayer identification number but who do not have and are not eligible to get a social security number (SSN).” [emphasis added].

The only thing you need do to get an ITIN is submit a birth certificate for the alleged child.  So for example, in the case above of the person who paid $800 in and got $16,000 back, he got birth certificates from children of relatives who live in Mexico and used those to get the ITIN’s for all 16 children.  The submission requirements for minors under age 18 require no photo ID and only a civil birth certificate—since civil birth certificates do not contain an expiration date, they are considered current at all times. They don’t have to be U.S. birth certificates!

You can even be a non-resident alien, who works in the United States and therefore has to file a federal income tax return for income earned within the United States and still be able to apply for an ITIN (or as many ITIN’s as you have the nerve to file) for every child you want to claim as a dependent.

Hence, turning an $800 liability into a $16,000 windfall!

So, you can see why this made me angry. Perhaps you can also see why I am supporting Ted Cruz. He is the only candidate who has pledged to abolish the IRS and replace it with an across the board flat tax you can file on a form the size of a postcard.

Between the IRS, which has been corrupted and weaponized…and the Federal Reserve, which is grossly negligent if not intentionally corrupt, we have little hope of regaining whatever individual liberty we ever had unless one or both are deconstructed.

I, for one, want to see an individual put in the White House who has a verifiable record of promises made to constituents that have been kept. Again, Ted Cruz. An individual who has spent his entire career respecting individual liberties and standing for the Constitution. Again, Ted Cruz.

I am not willing to bank what is left of my freedoms, and the freedoms I hope my daughter will enjoy, to an individual who has publicly acknowledged, and even brags about, having knowingly participated in the incestuous and corrupt relationship between business and government. An individual who has most recently hired, as his convention delegate expert, a former lobbyist for Saudi Arabia and Pakistan’s Intelligence Service who sought to influence members of the United States Congress against the interests of Israel and Kashmir, respectively.

Yes, I am angry at how easy it is to milk the system, whether you are a non-resident alien or a corrupt businessman. But I am even angrier that so many Americans are willing to act out their anger without taking the time to question whether or not the choice they are making while in anger will cause them, and the nation, more harm than good.

Carole

contact@carolegold.com

Time To Print My Taxes

As 2016 begins, the day of reckoning is fast approaching for all Americans: April 15 2016. This is the day we are obligated to pay our personal income taxes.

print money

Most Americans don’t realize that this hasn’t always been the case. The Constitution, as originally drafted, had no tax clause. Excise taxes (like sales tax) and tariffs were the primary ways that the U.S. government financed its operations. But given government’s penchant for power, it was only a matter of time until it figured a way to feed its financial hunger by creating a Constitutional Amendment for taxing citizens.

We live in strange times. The notion of paying personal taxes has become more complicated as a result because the federal government has developed a much more intrusive role than was ever intended by the Founders. In its original design, the role of government was to provide for its citizens’ safety, enforce the laws, and honor basic property rights. There are many other derivative laws which flow from these; however, the government’s role today is nothing like what the Founders envisioned or intended.

The U.S government now reaches into almost every aspect of our lives. From education, to housing, to labor law… there are few things we can do freely as citizens that do not infringe upon some law penalizing or criminalizing behavior.  Due to this overreach by government, there are many things for which tax money is spent that the average citizen finds objectionable. From wars to abortion services there is now something to which almost every citizen can object. Republicans, Democrats, Libertarians and Progressives all have something to loathe in the IRS Code;  yet, they continue to pay because 1) they want a functioning government and 2) they fear the heavy hand of government should they  not pay.

As stated earlier, this growth in government has been accompanied by a voracious need for money. As citizens, we hope the government is a good financial steward because absent that, the results can be dire. Many would say we have reached that point.

Part of the problem is that the federal government has poorly (no pun intended) mismanaged the nation’s finances, particularly over the last 15 years . Since  2008, the national debt has doubled from 8 trillion dollars to 16 trillion dollars!  Much of this debt and spending was attributable to the financial crisis of 2008. The narrative from the government is that the crisis was initiated by greedy bankers who caused the system to fail. But like everything in life… the story is much more complicated.

At the heart of the crisis was the Community Reinvestment Act passed in the 1970’s but only enforced as of the 1990’s. The federal  government began forcing local and regional banks to make riskier and riskier loans to the under-qualified lest they lose their banking license. Fannie Mae and Freddie Mac (two quasi government entities) bought these loans and in-turn sold them to investment banks touting U.S. seal of approval. This set the stage for a massive scandal that nearly wrecked the entire U.S. economy.  If you want more information please take a look at the fascinating story here: (Reckless Endangerment).

After the crisis in 2008, the government bailed out the banking sector at a tune of 700 billion dollars. Realizing this wasn’t enough, the governments started printing money in the form of quantitative easing. Printing money is not done by firing up the printing press but rather by the central bank buying securities in the open market, lending new money to private banks and/or buying assets from banks. The money is then credited to private banks. Theoretically, the private banks then use this money to create more money through lending (although this did not happened). This process then adds more money into the economy.

Part of the reason that this money never went back into the economy in the form of new loans was because there was no incentive for the banks to do so. In the role that government took, it became the proverbial “300 pound gorilla” in the room, buying tons of assets from the banks. All the banks had to do was copy what the federal government was doing to start making money.  Once the banks got wind of what the Treasury was buying, they in turn bought the same assets and sold them back to the government at a profit. Its called “monetizing the debt.” There was no longer a need to loan money to make money as the government itself was providing free money.

Sadly, this bailout only helped a select few institutions in the form of free money and asset purchases paid for by that taxpayers. But for those same taxpayers, we the people, there has been no aid. The whole notion that the government needs taxpayer money to function seems a bit of a stretch given the fact that when it needs money it can print (digitize) it… and has done so repeatedly. The IRS Code, as it stands today, is the way the government keeps people in line, indebted and for some enslaved. It is the ultimate tool of control.

If only I could act the same way the government does, come April 15th, I’d print my taxes instead of sending them a check.

 

Steve

sleeclark@gmail.com