If you’re reading this the day it’s published it means this is the due date for extensions for partnerships and corporations. If you work in a tax office and things are quiet you might want to consider another job. (This is an inside joke directed at a former employee who struck out on her own. If you need bookkeeping in Vegas I know a qualified person to handle that. Seriously.)
I thought today would be the perfect day for me to announce my candidacy for president with a few tax policies I’ll sign into law via executive order if elected. Some of you might be darn excited about this unwelcome event as you think I’m a Democrat. Other might be excited because they think I’m a Republican. The truth is I’m neither. I prefer to waffle between both side of the aisle or as the police call it: walking in a drunken stupor.
As much fun as I’m going to have writing this, I am also dead serious. What follows are tax policies I would like to see instituted. Some things will sound very liberal and some things will sound downright conservative. Basically, I should tick off just about everyone in the room with something.
Welcome to politics.
Before we start I want to point out some things I plan as president are not completely tax related. For example, I will deal with the minimum wage, but connect it to tax policy. The same with welfare of every kind. Along the way I’ll fix the health care issues of the United States by default and solve trade issues and immigration policy in a way everyone will love until I’m elected. Then a third will love me and two-thirds will hate me until we approach the next election. Then the population polarizes and it ends up a dead heat until I’m assassinated re-elected.
Tax policy controls everything. Al Capone gets away with murder until they called in the Treasury Department. (It worked!) Welfare once required a trip to Social Services. Now it’s handled at the tax preparer’s office. Corporate welfare is even worse.
Trade disputes sometimes result in tariffs, an excellent way to tax your own people while convincing them it punishes the other country. (Don’t underestimate the ignorance of voters.) Once again important issues of national importance end up in a tax bill.
So, let’s get down to business. I’m confident I’ll win your vote.
Simple and Basic
With the exception of my own profession, everyone should love the basic framework of my tax plan. Republicans lowered tax rates to the lowest level since taxes were collected in this country. And I think they’re still too high!
For individuals and families: I propose to raise the standard deduction to $100,000 for joint returns; $75,000 for head of household returns; and $50,000 for single taxpayers. That means a married couple filing jointly can enjoy their first $100,000 of income tax free! (I know! It makes me giddy too.) Exemptions were eliminated with H.R. 1 and I don’t want to rock the boat so all you guys get is a huge standard deduction. In fact, itemizing is gone! If a hundred grand tax-free isn’t enough to stay solvent there isn’t a thing any politician can do to help you.
As for tax brackets, people like the idea of a flat tax. I propose two brackets so my peers at least have an outside chance of staying in business: 20% and 50%. After the standard deduction, the next $400,000 is taxed at a flat 20%. All income above this level is nailed at a 50% rate with nary a deduction available to reduce the tax.
I hear the howls of protest, my tax obsessed readers. You think President Accountant will bankrupt the nation with such a plan. Au contraire. To pay for this simple tax plan all the welfare tax credits are nixed. The Earned Income Credit: gone. The Child Tax Credit: gone. Savers Credit: nope. Education credits: huh? No, no, and no. No more handouts on the tax return. Let’s turn the tax office back into a tax office and not an unpaid extension of the welfare department of the government.
Also, all income is taxed at the same rate. No more special rate for qualified dividends or long-term capital gains.
Poor people need not complain. The Earned Income Credit was designed to compensate low income workers with a kickback of their FICA taxes. In my tax plan every worker gets the first $20,000 FICA tax free. If you work you get an instant EIC on your paycheck.
HOWEVER. . .
Social Security taxes now are like the Medicare portion of FICA: paid all the way to the sky. And FICA applies to ALL income: dividends, interest, capital gains (long- and short-term) and more. A sports star gets a $20 million bonus. Good for everybody! A CEO of a public company enjoys a windfall of stock options? Good for everybody. The Social Security and Medicare financial problems are solved.
If you think about it (I have) the reduction in tax credits more than offsets the massive standard deduction increase. We may have to institute another round of tax cuts or risk paying off the national debt.
I see fear in the eyes of business owners. Don’t worry. I thought about you guys, too.
This crazy new tax deduction for qualified business income is insane. All it does is increase complexity in the tax code, lining the pockets of tax professionals and attorneys practicing in tax law. In my plan the QBI is gone.
Don’t shoot! I propose a better solution. Businesses will enjoy their own standard deduction of $1 million. That’s right, my Republican friends, every small business owners will enjoy their first million tax-free on top of their generous standard deduction.
Big business is sweating right now, worried I’ll fill the Treasury at their expense. No way! As a gift for funding my political campaign you get the same $1 million standard deduction, plus a flat tax rate of 15%. You heard that right. The Republican plan of 21% is still waaaaay too high to compete internationally. We will start at 15% and reduce the rate 1% per year until it hits 12%.
Oh, don’t be sad, my liberal friends. To pay for this tax cut we will cut corporate welfare the way we did for individuals. If you think welfare to people is costing taxpayers, you haven’t added up how many handouts are lining the pockets of super-rich corporate executives. Those handouts will be eliminated completely.
To prevent small businesses and the big guys from gaming the system, all businesses controlled by a group only get one $1 million dollar business standard deduction only. In other words, you only get one million dollar deduction per investor. (And you guys thought I didn’t give this adequate thought.)
The U.S. is one of only a few remaining nations taxing on a worldwide system. My plan brings us in line with the world by switching to a territorial tax system, where only profits from inside the U.S. are taxed. The tax rate for profits outside the U.S. is 0%, giving a major competitive advantage to American companies operating abroad, something they have to dance around now to compete with other nations. That alone could resolve half the trade deficit.
Americans working abroad would not be taxed unless they earned the money in the U.S. The Foreign Income Exclusion would be obsolete with President Accountant.
To prevent games, corporations could not shift profits outside the country. Strong measures will be in place to avoid such a practice with a 10,000% penalty for offenders. (You’re getting an awesome deal. Don’t get greedy!)
Foreign companies that want to sell in the U.S. would also pay U.S. taxes for their profits earned in the U.S. (Where ya gonna get a fairer deal than that?)
This is just plain stupid. Tariffs are a tax on your own people! I would open the door to trade with all tariffs eliminated. If other countries don’t follow suit, fine. They can tax their own people more. All the better for our economy.
The U.S. and its businesses whine endlessly about free markets. Well, trade wars and tariffs are the exact opposite. Compete or go broke. Under President Accountant we will allow markets to decide the winners and losers.
The one issue we have a right to complain about is the theft of intellectual property. (I’m pointing at you, China.) Our current president has a point on trade issues with China and a few other countries. Policies that strip intellectual property from U.S businesses will be dealt with harshly. If it is determined (China is the worst offender here) that theft has taken place, the government of the country where the offending company resides must compensate for losses and prevent such theft. If the government of said country can’t regulate their own people that country is barred from selling any goods or services in the U.S. until they govern responsibly. No more stealing our stuff and using it to sell against our own hard-working business owners.
The details are more than I can publish right now, but trust me. It’ll be great! The best trade plan this country has ever seen.
It is repugnant that the wealthiest nation on the planet can’t provide basic medical care for all its people when other nations do just that. Therefore, I will sign an executive order my first day in office expanding Medicare to cover all U.S. citizens from Day 1 to Day End. No more Medical Premium mandate needed. If you want more than basic coverage; buy additional coverage. There is no additional deduction and businesses are not allowed to provide more health coverage to employees. Businesses are out of the health care business from now on (unless they are a medical business).
To pay for this basic benefit the Medicare portion of FICA will be increased 2%; half paid by the employee and half by the employer. All income, including dividends, capital gains and interest, will pay the additional FICA tax. And remember the FICA exemption above. Nobody gets hurt.
I hear my conservative friends complaining already. “We need to keep government out of our conversations with out doctor,” you say. I agree. Let’s keep your employer out of it, too. I for one am sick to death of telling my employees what kind of medical care they can get. Unless I’m a doctor or hospital, I’m out of the health care business and devoting all my time to my business, which is what I’m good at and the reason I started my business.
Is that grumbling I hear at the back of the room? No worries, my liberal friends. Under President Accountant the minimum wage will be abolished! You heard me right. Now holster your weapons.
The reason I’ll eliminate the minimum wage is because if we have a minimum wage to increase the number of jobs, then it stands to reason we must have a maximum wage to create more jobs. Don’t hear that argument too often, do you?
Eliminating the minimum wage will not put you at risk. Your favorite president will guarantee you see $15 per hour minimum on your paycheck each and every week. Rather than force companies to pay a minimum wage, there is a special tax for every hour any employee earn less than $15 an hour. That special tax is 20 times the amount your employee paid under $15 per hour.
I bet there will be no companies paying less the $15 an hour right quick.
Yes, businesses will be encouraged to automate with higher wages. But when has increased productivity been bad for a society? You get more for less. And with the new standard deduction and Medicare-for-all programs you will have a secure safety net.
There will be slightly fewer jobs, but they will pay better. Do I have your vote yet?
There is a lot to love by both sides of the aisle with my plans. Unless you are a tax professional you probably like my proposals.
It is unlikely I’ll actually be elected. Rumor has it a stark-raving mad crowd of accountants are approaching the Accountant farm as I write. With such a simple tax code with no loopholes, tax professionals are out of business. But then again, what did we produce? We manipulated a system created by man with no logical connection to reality. Very unproductive.
Was that gunfire?
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Eight years ago Barack Obama was hitting full stride in his first term as President. The economy was in tatters. The banking industry was only beginning to come to terms with the level of bad loans they had on their books. The largest insurance company (AIG) required a bailout to survive; the largest domestic automakers needed a bailout to preserve jobs; nearly every bank required assistance and every money center bank actually took assistance to weather the storm. This easily could have been another Great Depression.
So what did President Obama do in this desperate environment? Why, tackle health care reform, of course.
Every President has a short window of opportunity to build a coalition at the beginning of their Presidency to pass a key piece—or if lucky, several pieces—of legislation. These are the tough issues, things like major infrastructure investments and tax reform.
President Obama chose health care reform. The country needed, and still needs, major health care reform. The country also needed economic stimulus. Badly! Unemployment was high, income inequality was expanding at a rapid pace, while the nation’s bridges, roads, sewer lines and water works crumbled.
It was an honorable effort, but a tactical error that prevented any additional large, and necessary, legislation. (Yes, I am aware banking reform was passed along with other legislation. This will all become clear in a minute as I illustrate why the most pressing legislation never happened.)
And President Trump is making the exact same mistake.
A New Man
Presidents get two terms max in the United States. After eight years it is time to bring in some new blood. If you loved the old guy, wave goodbye nostalgically; if you hated him, bid him good riddance. President Obama served his two terms and it was time for the new guy. The American people choose (well, the electoral college chose) Donald Trump.
Break out the confetti. A new guy on the job means another opportunity to pass significant legislation early in his first term. And what did President Trump choose as his key legislation? Why, health care, of course.
You would think Trump would have learned from Obama how easily healthcare can bog down your agenda. A litany of problems to solve devolved into a serious fight extending longer than anticipated when Congress went to work on a health care replacement plan.
Obama was lucky. He was able to pass major health care legislation, the Affordable Care Act. It was an improvement, but far from perfect. Many more people now have insurance and pre-existing conditions no longer leave you uninsured regardless of ability to pay.
The ACA also has serious flaws which need addressing. Insurance premiums are exploding and many markets have few, and in some cases no, insurance choices.
Eight years ago I explained to anyone who would listen that President Obama was making a mistake when he addressed healthcare first while the economy is what really needed attention. Fix the economy and the money would be there for healthcare reform, even a single payer option so coveted by the Democrats.
Donald Trump ran on a platform promising four key things: immigration reform, repeal/replace the ACA, tax reform and infrastructure investment. All four areas need attention, no doubt.
President Trump addressed immigration with executive orders which ended up bogged down in the courts. And there was no wall erected. The wall was a stupid idea anyway. We don’t need a wall. Remember President Reagan? “Mister Gorbachev, tear down that wall.” The Republicans should have been listening to their leader.
Then came the real first attempt at legislation. Tax reform and infrastructure would have to wait (and wait and wait) regardless how necessary legislation was needed. Health care, and more to the point, repeal of President Obama’s key piece of legislation, was first on the list. Once again it was a stupid idea with expected results.
Obama was lucky. With the economy in dire straits he was able to muster the votes to pass the ACA. With a large part of his political capital spent and the midterm elections costing the Democrats the majority in the House, any additional major legislation was impossible. To hell with the American people, not to mention the world economy.
Time to Play Trump
Time to let President Obama enter the history books and play the Trump card. Obama is no longer President and has no hand in passing future legislation.
The issue here isn’t politics. Your opinion of Trump doesn’t matter. He is the President and if things are going to get done he has to take the lead.
By picking repeal and replace (or just repeal) of the Affordable care Act it was inevitable the President’s agenda would struggle in the deep quagmire of mud the runs down the halls of Congress. It was also the worst choice Trump could make.
Trump watched Obama spend every drop of political capital on health care while the Federal Reserve was the only game left in town to deal with the economic issues punishing the country. It was a bad choice then; it’s a bad choice now.
Since it is always easier to play armchair President, I will share what Trump should have done to save his Presidency. (Obama should have taken the exact same path and he would have kept the House and passed serious additional legislation of his liking.)
Trump has it all backwards. He is right about the issues needing attention. Health care and immigration are important. Tax reform is beyond desperate need. And infrastructure is embarrassing the nation as our roads and bridges crumble like those of a Third World nation. We can do better.
If Trump would have hired me I would have advised a different approach, one that would have given his entire agenda a fighting chance of being passed.
My advice to the new President would be this: Turn the whole process around. Attack infrastructure first. A trillion dollars of infrastructure spending would have caused an economic boom with plenty of good paying jobs here at home. The increased economic growth would not stop at the jobs dealing with the infrastructure. High-speed transportation (once again so we can join the 20th Century—you read that right), better roads and updated airports would increase productivity.
Business would boom for decades. Trump would be an easy two-term President with this single change of policy. The advantages to the economy would continue into the foreseeable future.
The tax revenue would pour into the government coffers! Now you have the money to fund health care initiatives and tax reform. Who would argue with a President who produces such success? He would have been a demagogue! (Opps! That part he covered himself already.)
Think about it. The only way to move forward in this country is to start doing things differently. President Clinton wanted to tackle health care out of the gate and went nowhere. Obama managed massive legislation on health care at the expense of the remainder of his agenda. Trump is nearly out (if he isn’t already) of political capital.
Trump’s only chance to save his Presidency is to do a 180 degree about face, dropping all issues save infrastructure.
The Republicans might actually go along with it; the Democrats would salivate over the prospect. The Republicans are so desperate for a win (or any legislation to pass Congress) this crazy idea might just work.
An Open Letter to President Trump
Mister President, it is time to stop screwing around. Stop hiring idiots with no training or idea on how to run the U.S. government, the largest organization on the planet. Stop draining the swamp! The swamp is there for a reason. Get rid of all the wetlands and the wildlife dies! Time to let the swamp do what it does best. Use that to your advantage.
Focus on infrastructure. Provide massive financial support to each state to fund projects of their choosing. Also demand certain projects get attention. The trillion dollars of spending is spread out over many years. The increased tax revenue will lessen the impact on the deficit, but make no mistake, the deficit will go up to pay for this.
We need high-speed rail and other advanced forms of transportation to compete with the world. It is time to pull out heads out of our arses in this matter. Time to act like a world leader instead of playing catch-up all the time. Use your unique way with words to get Congress to do the right thing this time.
Part of infrastructure is rolling out an overhaul of the electric grid and converting our society to renewable sources of energy. We can always sell our oil to countries less enlightened. We will lead the world once the transformation is complete with the lowest costs of production. Jobs will be outsourced around the world to the United States as we will be the best choice for business.
Solar and wind energy must be part of the mix. Considering the entire infrastructure program, solar and wind installations will be a small part of the expense. Battery storage and transmission lines must also be including in the process. This will bring down energy costs for the American people and businesses.
Tax incentives for businesses and homeowners to invest in battery storage technology and energy production will power the economy forward without the government footing the entire bill. Citizens and businesses will be partners with the government in transforming this great nation of ours.
The rapidly growing economy will be the envy of the world. The expanding tax base and increased government revenues will allow for tax reform, and (gulp!) dare I say it, tax cuts.
Health care will be easier to tackle once the real problem has been addressed. Hard to get emergency medical care when the road is so bad you can’t drive on it or the bridge is out.
Immigration is the least issue, but does require attention. We don’t need a wall; we need an effective partnership with our neighbors so they have opportunities at home. There is nothing wrong with allowing people from around the world (even Mexico!) to dream of coming to America. Isn’t that what it is all about?
Gives you that warm and fuzzy feeling, doesn’t it, Mister President? And it is all yours if you can find a way to put the swamp to work productively. You do know how to make deals, don’t you?
Or, if you prefer, we, the American people, can sit around all day and complain about your performance.