Archive for Treasury Department

Tax Reform - DBA: Dead Before Arrival

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Tax Return

We're heading into March, that month where everyone starts to realize they need to do that annual chore that we all hate. No, not spring cleaning. It's the annual financial paper round up, commonly referred to as tax prep. As with spring cleaning, we tend to put it off, find and make excuses to postpone the inevitable. It's got to get done and a deadline approaches.

Part of the ritual is to look for deductions, anything we can even remotely justify as a write-off no matter how tenuous the link may be to our reality. Anything, and I mean anything to lower our reported income to limit the damage inflicted upon us by the IRS. Hey, we have to pay the piper, but that doesn't mean it isn't painful.

Trying to make things easier and even more fair is the House Ways and Means Committee, chaired by Chairman Dave Camp (R-Mich.). Yesterday the Republican-led committee released the framework of a complete overhaul of our tax laws to make this process easier. When the dust settled, we got 1000 pages of reform.

Even before this one grand of pages were released, the GOP party came out against it. They obviously hadn't read it because it hasn't been published but they knew they were against it. And the Democrats took a similar stand because "rumors" were that it would touch the third rail, figuratively speaking. It would cap the write-off for mortgage payment interest paid. That's generally the single largest write-off for individuals.

So the bill went from let's look-and-see to DOA. Actually DBA - dead before arrival.

I've got an alternative. Something so easy it's sure to be defeated, but let me offer it anyway. It's the old flat tax plan. A ten percent tax on all earnings. It can even be taken right out of your paycheck. And wait until you see your weekly take-home net received go up. You'll be smiling. Everyone pays the same percent as everyone else, rich and poor.

Oh, and did I add, thanks to Citizen's United where personhood has been blessed upon corporations, they too lose all of their "business related" write-offs. If they're people too, then they get no favored treatment. A straight 10% of revenues received are taxed. If some say that's unfair, a millionaire would be paying more than a pauper, it's all in the way you look at it. Right now a millionaire gets much more favored treatment - they get more write-offs. So that argument falls flat. This doesn't hurt incentive as the more you make, the more you net. And no more phony-baloney write-offs for corporate jets, holiday outings that are really vacations and no incentive to pay executives huge bonuses to lower the tax burdens for companies. They no longer get special treatment. They're people like us. And places like Verizon and GE who paid no taxes would be contributing 10% off the top.

Now wouldn't that increase our tax coffers! You want roads, bridges, modernized energy grids and more military spending. We'll have the funds to to do that and more. And think of all the trees we're saving that we use to make paper for the tax returns. Even our ecological systems will be improved by a simple one page form.

The people whom this hurts most are the accountants and IRS employees. We won't need as many. My answer to that is let them re-train. Isn't that what the GOP has been telling all of those out of work employees whose jobs the Republicans shipped overseas? Retrain the CPAs. Teach them  new skills. And if that's good for the "factory or lower skilled workers" today, why not the accountants and tax men for tomorrow?

Look, collecting tax revenue doesn't have to be hard or complicated. And think of all the cheats and phony write-offs that we won't be shouldering.  We'll actually be getting more revenue and might even be able to lower the tax rate from 10% to something even smaller.

Confession: This idea isn't just mine. It's been around for years. But to make my point more valid, even the most conservative of right wing conservative causes agrees: The Heritage Foundation.

The current tax system discourages saving. It discourages investment. It discourages entrepreneurship. It causes decision makers to misallocate the nation’s resources, limiting productivity gains, wage gains, and the nation’s overall level of international competitiveness. And, it is far, far too complicated. The New Flat Tax is the remedy. It replaces every major tax collected by the federal government. For non-seniors, it is as easy as one, two, three—one rate, two credits, three deductions. For seniors on Medicare, one of the two credits—for health insurance—is replaced by an extra deduction. The New Flat Tax is simple, revenue-neutral, and will allow America to achieve its full economic potential.

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Will FBI's Win Streak Stop At 150-0 Or Does Their Cheating Continue?

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FBI Badge

"Nobody is supposed to be above the law in this country," says Rachel Maddow. "Even the FBI." That sounds pretty solid in my book. Yet a few months ago the New York Times reported about 150 FBI shooting incidents which the Bureau internally reviewed and found that all 150 incidents were wholly justified. None were found to be accidental, negligent or criminal. None. 150 cases heard and all 150 determined to be "good" shootings.

That's amazing. A perfect record. In professional football if you go 16-0 you go down in the record books. In the modern NFL football era, it's only happened twice, and they only have 16 regular season games. In baseball it's never happened. Not in the NBA either. Or Hockey. Add basketball to the list of an elusive perfect seasons. When you play more than a handful of games, perfection is just not something that happens. Not even once.

So how is it the FBI has a perfect 150-0 record? Watch Rachel Maddow discuss this below. And what's even more interesting than the perfect record itself is the secrecy and conspiracy necessary to make this happen. Arresting innocent people so their visas expire allowing the government to expel witnesses to FBI shootings from our shores to keep them quiet. Taking innocent people and unarmed people and blowing them away or deporting them to Russia where they disappear, just so they can't testify against the FBI. If you think this is another installment of Robert Ludlum's Jason Bourne adventures, it's not -- so far. But Hollywood can't be very far behind with a film treatment of this expose. They may start with the Boston Magazine story which comes out in a few days: The Murders Before The Marathon.

If you can't wait to read it or rather watch it revealed by none other than Massachusetts resident, Rachel Maddow, here you go.

WARNING: But be prepared for some graphic, disturbing images... and some moral outrage.

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Treasury & Education Secretaries Drop Their Balls On Sallie Mae

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Drop the ball

Senator Elizabeth Warren is at it again, taking on the Treasury Department, the Education Department -- the division that oversees student loans and Sallie Mae--the nation’s largest student loan company. Her questioning was quite simple and direct, "Where are the government's promised return benefits or as the expression goes, "Show me the money!":

HUFFPO:

...because of the enormous benefits the government has provided Sallie Mae,” Warren said, ticking through a list that includes hundreds of millions of dollars in federal contracts; $600 million in profits off selling loans to the Education Department in 2009 and 2010 under the Ensuring Continued Access to Student Loans program, known as ECASLA; and special taxpayer-backed credit facilities that enabled the company to borrow billions of dollars at “astonishingly low interest rates.”

All she's asking is where is the US return for giving this program such huge profits. The answer she's gotten so far from Sallie Mae is that there is very little profit. The reason is criminal neglect. So who's going to take the fall?

Then she (Senator Warren) turned the attention to Education Secretary Arne Duncan, asking him whether the agency would terminate its contracts or level a fine against Sallie Mae if it’s found to have violated the service members law.That seemed like a reasonable question the cabinet member. It is his department which sets and oversees policy.

Warren also asked Duncan to detail whether the agency has ever used its authority to fine companies up to $35,000 for individual violations, and whether the department has ever fined or penalized Sallie Mae, investigated the company or determined that it has violated federal contracts.

Someone get caught with their pants down:

pants down

Evidently Secretary Duncan was too tongue-tied to respond. That of course didn't stop Senator Warren from pressing the case on our behalf:

 (Senator Warren) demanded to know under what circumstances the Education Department would feel justified to terminate a contract with a law-breaking company, if Sallie Mae’s past actions have not warranted an end to its federal contracts. Warren sits on the Senate Banking Committee and the Senate Health, Education, Labor and Pensions Committee.

The fact is Sally Mae, the largest provider of student loans has NEVER faced sanctions by either the Treasury or the Education Department .

It all boils down to why not? Senator Warren deserves to know. We all deserve to know.

What the hell is going on in our financial institutions? The Republicans want to save money? Why not look into the proper running of the current programs they're already supervising. One senator is for sure. Go E.W.

Letter from Senator warren to Jacob LewClick image above for entire letter from Senator Warren to Sec. Jacob Lew, Treasury Department and Sec. Arne Duncan, Department of Education. See if this doesn't boil your oil.

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This Time Darrell Issa's Gone Too Far

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God

U.S. Representative Darrell Issa has stepped over the line this time. He's just subpoenaed God.

Yup, you heard me right. The chairman's demanding The Chairman, God, come before him and his congressional committee. God'll be sworn in to Himself -- after all, who's He going to swear the truth to if not Himself -- So help him self -- then He'll be expected to answer some questions?

But first you have to contact God. You can't just expect God to stop his busy schedule and show up because Issa snapped his fingers. We have rules and that means contacting the witness directly and ordering Him to appear. Fortunately, Issa has his ways. And even more fortunate for us, the NSA hidden spying operation picked up this exchange (a warrant-less interception) on the Issa-God subpoena notification. Using one of my many contacts on the inside, I was able to get a copy. See for yourself how it went down. (it starts at around 0:32 seconds in)

Upon his arrival on Capitol Hill, God was seated and interrogated by the chairman of the House Oversight and Government Reform Committee. Ranking member, Elijah Cummings, was present as well for this closed-door hearing on Obamacare.

A little back story on how this bold move came about. This began when Issa wasn't satisfied with the documents provided to the committee from the treasury department. These were records Issa sought relating to the implementation of the Affordable Care Act. Tired of the Obama administration's stalling tactics, the chairman sought a higher authority. He's skipped right over Treasury Secretary Jack Lew's boss, President Obama, and went straight to God.

(Just a thought, if Issa serves a snack at the hearing, do you think it'll be Hebrew National Kosher hot dogs? They too answer to a "higher authority.")

Back to the closed door hearing. Surprisingly God agreed to answer Issa's prayers and appeared. You gotta hand it to God to put all of His work aside to meet with the committee. It's a miracle that this God person, with so much on His plate, would put aside feast and famine, joy and sorrow, sickness and health and even put new life and death on hold for this.

While awaiting the official transcripts from this closed door hearings preliminary information was leaked:

Issa: Mr. God... What should I call you?

God: Whatever you like. I answer to all.

Issa: Yes, well, Mr. God. I know you're busy, so I'll get right to the point. We all know Obamacare is bad for us.

[pause]

God: Oh, is that a question? I never said that.

Issa: We wouldn't want to put words in your mouth, but you did gave the idea of Obamacare to the Democrats. I assumed if it was good for us, you'd have given the idea to the GOP first. After all, we're just one letter off from G-O-D.

God: I did give it to you first. Remember the '70s when you and your brother were stealing cars? Do the names Richard Nixon, Bob Dole and Bill Frist mean anything to you?

Issa: They're all dead?

God: One for three. Go ahead. Forget I asked.

Issa: Yes. Now about Obamacare specifically. The text of the Affordable Care Act refers to subsidies flowing through exchanges "established by the state." I assume that to mean it limits the subsidies to state-based exchanges, and not the federally run marketplaces.

God: There you go with assume again.

Issa: The Treasury and the IRS say Congress intended for federally run exchanges to take the place of state-based marketplaces in the states that chose not to set up their own. Lawmakers and the Congressional Budget Office generally assumed during the legislative debate that subsidies would be available in all 50 states.

God: Well you know what they say about assume. It makes an ass of u and me.

Issa: Then Obamacare is good?

God: I wouldn't say it's perfect. But I wouldn't say it's bad either.

Suddenly God snaps his fingers and Chairman Issa suddenly goes up in flames.

spontaneous combustion

Elijah Cummings: Oh my God, you just destroyed Darrell Issa? Why?

God: Two reasons. One, I work in mysterious ways.

Elijah Cummings: And two?

God: No one calls you and me an ass and gets away with it. Now Elijah, I've got a world to run. You keep Obamacare funded and I'll go see about making some peace in Egypt.

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Quickie- U.S. January budget surplus $3 billion

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Basic CMYK

No clue what this means in economic terms, but it sounds good.

WASHINGTON (MarketWatch) -- The U.S. government ran a budget surplus of $3 billion in January, the Treasury Department reported on Tuesday, the first monthly surplus since September 2012. The surplus was driven by a 16% increase in revenues compared to January 2012, including from the expiration of a temporary payroll-tax cut at the end of 2012. For the first four months of fiscal 2013, the U.S. ran a deficit of $290 billion, $59 billion less than the same period in fiscal 2012. The government's fiscal year runs from October to September.

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Quickie- Tim Geithner "confident" he won't be serving a second term

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Today's Quickie:

I'm glad he's so confident about this.

Via the L.A. Times:

Treasury Secretary Timothy Geithner says he's "confident" he won't be serving a second term, even if President Obama is reelected.

"He's not going to ask me to stay on, I'm pretty confident," Geithner told Bloomberg Television on Wednesday. "I'm confident he'll be president. But I'm also confident he's going to have the privilege of having another secretary of the Treasury.

That was today's Quickie. Was it good for you?

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Timothy Geithner to stay at Treasury

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Via Politico:

Treasury Secretary Timothy Geithner will stay at his post through the fall and President Barack Obama’s reelection campaign, the Treasury Department announced Sunday.

Via Paul Krugman:

You won’t be surprised to hear that I am very much in sympathy with Drew Westen’s lament about Obama’s unwillingness or inability to change the narrative. I went back to look at my own reactions to the inaugural speech; I’m sorry to say that my misgivings at the time have proved all too justified.

The one thing I might say is that we shouldn’t really wonder what happened to Obama — he is who he always was. If you paid attention to what he actually said during the primary and the election, he was always a very conventional centrist. Progressives who flocked to his campaign basically deluded themselves, mistaking style for substance. I got huge flack for saying that at the time, but it was true, and events have borne it out.

Via me:

I've been saying the same thing as Krugman just pointed out since 2007.  That said, I was a huge supporter once President Obama won the primary. I will vote for him, because the alternative is unthinkable, but I never once thought he was anyone or anything different than the president many are complaining about today. Well, except for that "look forward, not backwards" thing.

He's a good man with whom I disagree often, and also greatly appreciate in a number of ways. But there was never a doubt in my mind that he was and is a centrist.

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