Category: Taxes

Week 71 in Trump

Posted on June 18, 2018 in Legislation, Taxes, Uncategorized

As of this week, Trump’s said something false or misleading 3,251 times. This averages out to 6.5 times a day. He could probably cut his lie rate in half if he’d just stop tweeting. We all know people lie and politicians probably lie more than most, but I do expect some level of truthfulness from our president.

Here’s what really happened this week in politics…

Russia:

  1. We learn that Trump asked Jeff Sessions to unrecuse himself from the Russia investigation last year. Trump asked him at least four times to take back control of the investigation.
  2. Trump reiterates that he wishes he wouldn’t have appointed Jeff Sessions because of his recusal from the Russia investigation.
  3. Trump again denies that he fired Comey over Russia, even though he said in a live interview that he was thinking about Russia when he fired him.
  4. Trump alleges that Bob Mueller will use the investigation into 2016 election meddling to meddle in the midterm elections to tip the scales toward Democrats. For the record, Mueller’s a Republican.
  5. After meeting with FBI and DOJ officials about their intelligence sources during the 2016 campaign, House Oversight Committee Chairman Trey “Benghazi” Gowdy (R-SC) says he’s convinced that the FBI acted appropriately. Meaning the FBI was likely not spying on the campaign as Trump has claimed.
  6. Andrew McCabe turns over a draft memo about Comey’s firing to Mueller, along with private memos about his conversations with Comey and Rod Rosenstein. This includes a memo saying that Trump asked Rosenstein to mention Russia in his memo justifying Comey’s firing.
  7. Trump’s lawyers send Mueller a 20-page letter saying that Trump doesn’t have to sit down for an interview with him because of presidential power. The argument basically is that since Trump has the power to stop the investigation, he can’t possibly obstruct it.
  8. Tech companies say that Russians tied to the Russian troll farm are working to set up new servers to interfere with the midterm elections.
  9. Contradicting what Trump and his lawyers have said in the past, his lawyers now say that Trump did dictate the misleading message for Donald Trump Jr. to respond to the revelations of his Trump Tower meeting with Russians.
  10. Rudy Giuliani admits that Trump’s accusations that his campaign was being spied on is a PR ploy.
  11. Michael Cohen’s lawyers are pouring through the documents seized from his home and offices to figure out what to claim as attorney-client privilege.
  12. So far, Mueller’s investigation has cost about the same amount as Trump’s trips to Mar-a-Lago.
  13. Giuliani says that Trump probably could pardon himself but that it would be unthinkable and likely impeachable.

Healthcare:

  1. Republicans’ heavy losses in last year’s Virginia state elections finally pushed them to accept Medicaid expansion under the ACA. Nearly half a million Virginians will gain coverage because of this.
  2. The Supreme Court refuses to hear a challenge to Arkansas’ abortion restriction that requires doctors who provide pharmaceutical abortions to have admitting privileges to a hospital.
  3. A scheduled tax cut for coal companies will reduce funding for the already struggling Black Lung Disability Trust Fund. The fund provides healthcare assistance for coal miners diagnosed with the disease. The rate of black lung diagnoses has hit an all-time high. Coal companies, for their part, keep insisting that they end up covering smoking-related lung problems, even though medical science has thoroughly debunked that.

International:

  1. The State Department issues new guidelines that allow for shortening the length of visa stays for Chinese citizens. Student visas will be valid for a year, and other travelers will need clearance from multiple agencies depending on their employment.
  2. After Trump’s announcement that the North Korean summit was off, Mike Pompeo is still working with North Korean officials to come to an agreement that will let the summit continue.
  3. And just like that, the summit is back on again. They say Trump’s cancellation letter was a negotiating technique.
  4. An intelligence assessment says that North Korea won’t give up it’s nuclear program any time soon.
  5. An inmate on two-day leave in Belgium kills two police officers with a knife, takes their guns, shoots a passerby, and takes a woman hostage. Prosecutors consider it to be an act of terror.
  6. Italy’s president rejects the proposed populist government because a key minister supports leaving the European Union. But the president does approve a second, more moderate proposal (which still doesn’t ease fears that Italy might also look to exit the European Union).
  7. This falls under “irony alert” and “this is seriously messed up.” Nigel Lawson, who chaired a group pushing for Brexit, applies for residency in France.
  8. As the U.K. moves forward with plans to exit the EU, British people living in EU countries are scrambling to get residency in countries other than Britain. Understandable, because immigration and travel will get tougher. But this Lawson guy… that’s the height of hypocrisy.
  9. In a presser, Trump says he got a very nice letter from Kim Jong Un. And then later in the same presser (like 10 minutes later) he says he hasn’t opened it.
  10. The finance ministers of the other six members of the G7 condemn Trump’s recent trade moves.

Legislation/Congress:

  1. GOP Senators are working on ways to make sure Trump doesn’t overstep his authority. They’re specifically alarmed by the tariffs Trump is imposing and by Trump’s plans to bail out failing coal and nuclear plants.

Travel Ban/Immigration/Discrimination:

  1. Even though Jeff Sessions announced the policy to separate children and parents seeking entry into the U.S. a few weeks ago, Trump says it’s the Democrats fault that they have to do this because Democrats won’t change the law. Two things wrong here.
    • There is no law to change, it’s Trump’s and Session’s policy.
    • Democrats are pushing Trump to reverse the policy.
    • This is full-on deflection of fault for a horrible policy.
  1. So far, the Office of Refugee Resettlement has lost track of almost 1,500 minors that they released in the last few months of 2017. This doesn’t mean anything is wrong; the ORR just couldn’t reach them. But also the ORR says they aren’t responsible for finding them.
  2. ABC cancels Rosanne after a Twitter rant where she compares Obama aide Valerie Jarrett to a child of the “Muslim Brotherhood” and “Planet of the Apes.” Rosanne also hit Chelsea Clinton and George Soros, popular targets of the right. And also, what’s with the right’s obsession with Valerie Jarrett?
  3. In response Trump wonders why ABC hasn’t stood up for him and apologized for all the horrible things they said about him. I’m not sure what they said, but there’s no doubt it wasn’t as racist as Roseanne’s tweet.
  4. Trump proposes canceling Obama’s visa program that helped foreigners start new businesses in the U.S. Fun fact: Immigrants founded or cofounded over half of the startups that were worth over $1 billion in 2016.
  5. In the past month, the number of immigrant children housed by the government has increased by 22% due to the “zero-tolerance” immigration policy of the Trump administration.
  6. There’s a growing movement of liberal Christians who have banded together to promise not to call the police unless it’s a matter of life and death. This was spurred by a series of highly publicized 911 calls made by white people against people of color who were just living their life.
  7. Border crossings remain high despite crackdowns. This is why Trump’ is so pissed off about immigration.
  8. That we know of, at least eight white nationalists are currently candidates for federal and state offices in the U.S. Most of them aren’t even hiding their racist views anymore, and one is a self-described Nazi.

Climate/EPA:

  1. In emails from a co-founder of the Heartland Institute, he touts the victories of ‘climate change realists.” Under Trump, climate change has been mostly removed from official documents, the EPA no longer has a strategic plan to minimize climate change, and FEMA no longer has a plan to mitigate the effects of climate change or deal with the aftermath of extreme weather. So. Much. Winning.
  2. Meanwhile, the east coast is hit with flash flooding from extreme thunderstorms, and Tropical Storm Alberto hits the panhandle and leaves two journalists dead in North Carolina. Washington state experienced severe flooding last week.
  3. Trump orders Department of Energy Secretary Rick Perry to help struggling coal and nuclear power plants. Both nuclear and coal plants have been closing down because other forms of energy are now cheaper. A draft plan is circulating to force energy grid operators to purchase some of their power from failing plants.
  4. A new study claims that storm-related deaths from Hurricane Maria is up to 4,645 even though the official estimate is just 64. This is a hard number to pin down, but not that hard.
  5. The Climate Action Tracker studies how well countries are meeting their Paris agreement goals. Even though Trump withdrew the U.S. from the accord, it turns out we’re still reducing carbon from electricity because of market forces that call for bringing more renewable sources online and fewer coal sources. And most of Trump’s efforts to roll back Obama’s climate change mitigation strategies are being held up by litigation.
  6. We’re currently on course to achieve 50% of our emissions goals by 2025. Trump hasn’t laid out a clear climate policy.
  7. The Trump administration will only consider the following options when it comes to climate change: debate established climate science, try to cast doubt on scientific conclusions, or ignore scientific conclusions altogether.

Budget/Economy:

  1. Markets are volatile again this week mostly because of Italy’s threat to leave the EU and by trade war threats all around.
  2. After Trump again threatens to apply tariffs to $50 billion in Chinese imports, China accuses Trump of acting erratically and says they’ll fight back it the tariffs are put in place. China also says that Trump is hurting the credibility of the U.S.
  3. Trumps threatens to put in place investment restrictions on China, to file a suit against China at the WTO, and to impose tariffs on $50 billion in Chinese goods.
  4. Trump announces steep tariffs on steel and aluminum against some of our closest allies in the EU. The EU has been working for months to get a waiver on the tariffs.
  5. He then announces Canada and Mexico will no longer be exempted from the tariffs. The EU is our number one source of imported steel, and Canada is our number one source of imported aluminum.
  6. In response, Justin Trudeau says Canada will impose tariffs on U.S. goods. He says it’s inconceivable that the U.S. would consider Canada a security threat.
  7. Even Republicans in Congress criticize the move.
  8. Trump tells French President Emmanuel Macron that he plans to stop the sale of all German luxury cars in the U.S. He says you won’t see any more Mercedes Benz driving down 5th Avenue.
  9. At this point in his presidency, Trump has placed more tariffs on our allies than on China.
  10. The EU announces countermeasures in retaliation to Trump’s announcement. The EU plans to file a complaint with the World Trade Organization (WTO) and to implement retaliatory tariffs by the end of this month.
  11. Unemployment hits an 18-year low of 3.8%. Wages rose 2.7%, but are still stagnant for this level of unemployment. There are now more jobs available than there are unemployed people (for the first time ever), based on people who haven’t given up on the job market altogether.
  12. According to Justin Trudeau, NAFTA negotiations blew up when VP Pence added a demand that the deal sunset in five years. Negotiations had been intense up until that point.
  13. Breaking with protocol, Trump tweets about the BLS report 70 minutes before it’s release, causing Treasury yields to spike. Officials are prohibited from commenting on these reports until at least one hour after they’re released.
  14. The national debt passes the $21 trillion mark this week.
  15. At a Dallas Fed conference, executives at major U.S. companies say that the days when most employees get pay raises, even cost-of-living raises, are past and that they’ll likely be reducing their work forces even more.
  16. Just before Trump promised to find a way to bail out Chinese telecom company ZTE, China awarded seven new trademarks to Ivanka’s company.
  17. The Fed proposes weakening the Volcker Rule, easing the rules guarding against another bank-related financial collapse like 2008.

Elections:

  1. Two Republican Members of the House announce they won’t seek re-election in November.
    • Thomas Garrett (VA) says he’s an alcoholic and needs to address that problem.
    • Ryan Costello (PA) says all he ever does is answer questions about Trump. He also said that the court-mandated redistricting in PA played a role in his decision.
  1. Trump tweets that Mueller will be meddling in our midterm elections. Not sure what he means by this.

Miscellaneous:

  1. Mississippi Governor Eric Greitens retires, finally, after a bunch of personal and political scandals around sexual misconduct and campaign finance fraud.
  2. Trump pardons right-wing propaganda artist Dinesh D’Souza. D’Souza pleaded guilty to campaign finance fraud, and has spread numerous falsehoods about Obama, Hillary, mass shootings, and 9/11 to name a few.
  3. Trump also considers pardoning Martha Stewart and commuting Rod Blagojevich’s sentence. Analysts assume this is to signal to targets of the Russia investigation that they, too, will be pardoned. He can’t pardon those Russian nationals though. I mean he could, but it’s hard to believe even Trump would go that far.
  4. At a fundraiser, Trump brags about a classified skirmish between U.S. forces and Russian mercenaries in Syria.
  5. The district attorney in D.C. interviews James Comey as part of the investigation into whether Andrew McCabe leaked information to the media and then lied to cover it up.
  6. MISC: Gun violence protest
  7. Former President Bush is in the hospital for observation after his blood pressure dropped.
  8. Trump says that Democrats side with MS-13 gang members. Seriously folks. This guy cannot find the truth with both hands.
  9. The American Association of Government Employees, the largest federal employee union, sues the Trump administration to block his executive order restricting time spent on union activities.

Polls:

  1. About 80% of both gun owners and non-gun owners support stronger gun control, including: universal background checks, more accountability for missing guns, safety tests for concealed carry, better reporting on mental health, and gun violence restraining orders, including for domestic abusers.

Things Politicians Say:

Former Speaker of the House John Boehner says the Republican party has lost its identity.

“There is no Republican party. There’s a Trump party.”

Tax Bill Reconciliation

Posted on December 2, 2017 in Taxes

Now that both the Senate and the House have passed some sort of tax reform, they need to reconcile the differences between the two bills and take another vote once they come to an agreement. Here are the major differences:

The Healthcare Mandate

The Senate version eliminates the ACA’s individual mandate, meaning people don’t have to buy health insurance.

The House version keeps the mandate.

It’s estimated that the number of people without insurance would rise around 15% without the mandate.

Permanent and Temporary Cuts

The Senate version makes corporate tax cuts permanent, but lets the individual tax cuts expire.

The House version makes all tax cuts permanent for both corporations and individuals.

The difference here has to do with the Senate’s rules on passing financial bills.

Estate Tax

The Senate version doubles the unified tax credit for estates, but doesn’t repeal the estate tax.

The House doubles the unified tax credit over several years and then repeals it entirely.

Note that only .2% (that’s 1 in 1,000 estates) ever pay any estate taxes. Also note that with the step up in basis, repealing the estate tax means heirs don’t pay any taxes, even on capital gains.

Child Tax Credit

The Senate version increases the child tax credit to $2,000 per child, but certain low-income households wouldn’t qualify.

The House version increases the child tax credit to $1,600, but again certain low-income households wouldn’t qualify.

Both versions prevent undocumented parents from receiving the credit even if the child is a U.S. citizen. Marco Rubio and Mike Lee, both Republicans, tried to expand the credit to low-income households that pay payroll taxes, but it was defeated.

Mortgage Interest Deduction

The Senate version leaves the mortgage deduction as is.

The House version caps the amount of a loan for which interest can be deducted at $500,000.

Tax Brackets

The Senate version keeps the current number of brackets (7), but lowers the top rate to 38.5%.

The House version reduces the number of brackets from 7 to 4, and it looks like those who make the most in the new tax brackets will see a slight decrease in taxes and those at the bottom of each bracket will see a slight increase.

Corporate Tax Rate

The Senate version reduces the corporate tax rate to 20% starting in 2019.

The House version reduces the corporate tax rate to 20% starting in 2018.

But what about simplifying the corporate tax loopholes? I kind of thought that’s what this whole effort was all about.

 

GOP Tax Plan, Fall 2017

Posted on November 6, 2017 in Taxes

Here are summaries of both the House and Senate tax bills. The general consensus is that taxes will go down for everyone in the short term, but will increase for most middle and lower income earners in the long term. In the Senate version, many of the changes expire for individual taxes, but they don’t for corporate taxes. So in the long run, big corporations and the wealthy will see big tax savings, but the rest of Americans will likely see hikes.

The House Bill:

The House Republicans released their tax plan, which was supposed to simplify the tax code but doesn’t really seem to do that. Here are some of the highlights of the plan. I find the last two particularly interesting.

  • Keeps the 39.6% tax rate for the wealthiest ($1 million and over in income for married couples)
  • Caps the mortgage interest deduction for newly purchased homes at $500,000 (down from $1 million)
  • Allows only up to $10,000 of property tax to be deducted from federal taxes
  • Increases standard deductions
  • Consolidates the tax brackets (this will be good for some, not so good for others)
  • Expands child and dependent tax credits
  • Eliminates deductions for student loans and medical expenses
  • Eliminates the adoption tax credit
  • Eliminates the state and local tax deduction
  • Eliminates the deduction for your tax preparer
  • Eliminates deductions for losses from theft and disasters
  • Eliminates deductions for moving expenses and biking to work
  • Repeals the Alternative Minimum Tax (ATM)
  • No changes to 401Ks or charitable contribution rules
  • Lowers the corporate tax rate to 20% and pass-through tax rate to 25%
  • Caps interest deductions at 30% of interest paid
  • Places a one-time tax on repatriated foreign business profits and there’s an eight-year repatriation payout
  • Abolishes the tax credit for electric cars (though car makers have already expanded their lines and can’t turn back now)
  • Raises the retirement age by two years
  • Removes tax deductions for alimony
  • Repeals the Johnson Act, allowing religious officials to promote candidates and policies
  • Codifies the religious definition of life: “An unborn child means a child in utero.” And “A child in utero means a member of the species Homo sapiens, at any stage of development, who is carried in the womb.”
  • Doubles the estate tax exemption immediately and repeals the tax completely in 2024. 70% of Americans think they’ll be affected; 75% think this tax could force the sale of family businesses and farms. In actuality, 2 in 1000 deaths result in any estate tax.

The Senate Bill:

This bill is very similar to the House bill but with a few new surprises:

  • Delays the corporate tax cut by a year
  • Reduces taxes for oil companies with foreign operations
  • Reduces taxes for beer, wine, and liquor producers
  • Repeals the ACA mandate, which would raise premiums and knock millions of people off insurance
  • Fully repeals state and local tax deductions (the House repeal is partial)
  • Keeps the mortgage interest deduction
  • Maintains seven tax brackets instead of reducing to four
  • Puts an expiration date on individual tax changes
  • Gives additional deductions to pass-through businesses, but they expire
  • Keeps deductions for medical and college expenses
  • Expands tax-free 529 savings accounts to include K-12 instead of just college expenses
  • Doesn’t repeal the estate tax
  • Gives deductions to new investments for corporations
  • Raises the threshold for the ATM instead of getting rid of it completely
  • Doubles the deductable amount for teachers to by supplies
  • Keeps deductions for education and tuition waivers
  • Increases allowable medical deductions
  • Opens up the Arctic National Wildlife Refuge for drilling
  • Increases the amount of time you must live in your home before getting a break on capital gains