William Thien

Archive for the ‘Tax Deductions’ Category

While watching Chuck Todd interview Senator John McCain (R-AZ) this morning on Meet the Press Todd asked McCain if he thought the current administration’s flip-flopping from campaign positions to his current positions had something to do with Trump “being sucked in by the Washington establishment?”

McCain’s answer was to chuckle and say, “well, I hope so.”

To me this is proof that not only IS there a Washington establishment, it is proof that our elected know there is a Washington establishment and that perhaps our elected even provide support materially and vocally (obviously McCain supports it vocally in his response to Todd) to the Washington establishment.

Other elected officials were asked about Trump’s positional re-orientations throughout the week and the most common response was, “maybe he is ‘growing’ into the position.” Growing into the position? What a load of b.s.

To be sure, Trump doesn’t have to change his campaign positions. Something is forcing him to do so and it’s not that he “growing into the position.” He is there to implement the will of the people, not to “grow.” He isn’t on a weekend retreat. He is now the President of The United States.

I wrote earlier that it would only be a matter of time before Trump switched his campaign positions due to the Washington establishment and we see now that is exactly what is happening. You can read that post here: What’s Next for Conservatives?

The most disgusting aspect of the “Washington establishment” is that what it means is that those entrenched there in Washington are there to ensure that whomever is elected cannot implement the will of the people without the express consent of “the Washington establishment.”

Ultimately what a “Washington establishment” means is that the will of the people has been effectively thwarted, seemingly in perpetuity, by a bureaucratic element entrenched in our nation’s capital and that there is nothing, either voting for a Republican or voting for a Democrat, that the people can do about it.

What is the solution?

The two major parties take great pains to make sure the public is nearly equally divided (we see this in the election results) right down the middle when it comes to major elections and national issues. The parties talk about the base of the Republican party and the base The Democratic party in their political calculus.

Maybe it’s time that the bases of both parties come together for a new political calculus, disregarding the respective party apparatus so the country can really “drain the swamp” as Trump promised during the election and take care of the needs of the people and not that of “the Washington establishment,” which is what he is now doing.

There are common goals among the bases of both parties. Maybe it’s time we come together and focus on those common goals primarily and forget about our differences, such as abortion and gun rights for example, just once, and see what happens.

Maybe we can set those and other differences aside in order to bring the changes the country requires. Or maybe “the Washington establishment” can deal with that, too. And you know what that means? Think about it.

Because we now have proof that there is indeed a “Washington establishment” and it is working against us, working against us all.

Copyright © William Thien 2017

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One of the greatest myths about a flat tax is that a flat tax unfairly burdens the poor. The argument you will hear is that a flat tax of fifteen percent, for example, on a person making twenty-thousand dollars per year would be $3,000 dollars while the same tax on someone who makes $100,000 per year would be $15,000, and the argument against the flat tax then goes on to suggest that three thousand dollars to the person making twenty-thousand dollars per year means a lot more than $15,000 dollars does to the person making $100,000 per year.

But you never hear the person who makes $20,000 a year complain that such an arrangement would be unfair. I have never heard anyone from that income bracket say they think it is unfair that people pay the same level of taxes at all income levels. Never. Ever!

But you will hear the very wealthy suggest a flat tax is unfair to those earning poverty wages. You would think the very wealthy were looking out for the poor when they make their argument against a flat tax.

The problem with that perspective is that people making middle-income and lower-income wages often pay quite a bit more in taxes as an effective tax rate than the very wealthy. Why? Because those who make such middle and lower-income wages do not have all of the tax loopholes to apply to their income that the very wealthy have when tax time arrives.

While reading the local newspaper today where I reside I came across an article concerning one of the wealthiest women in America, a model self-made woman as described by Forbes Magazine to which the article referenced. The article also revealed that for the last five years the model self-made woman has only paid income taxes during one of those five years.

The self-made woman, a billionaire, must have used umpteen loopholes to avoid paying income taxes for four of those five years, eighty percent of the time she was earning income during the subject period, and while avoiding income taxes it was of course easy to be one of the wealthiest self-made women in America because everyone else was paying the “self-made” woman’s taxes for her while she skated off. How self-made is that?

No wonder there is such a strong sentiment against a flat tax. A flat tax would ensure that people actually pay their fair share. There is, by the way, a component of fairness when it comes to taxation. If you disagree with me, read on.

Now, I do not state here that I favor a flat tax but the scenario I’ve described demonstrates one of the strongest arguments favoring a flat tax.

I am a conservative. I believe in keeping control of taxation. But everyone has to pay taxes if they are earning income. It’s only fair, and the tax code must be fair otherwise it should be subject to the application and exercise of public grievance.

The scenario I have described to you about the woman is by the way really just “socialism.” Such tax loopholes enable people to become what I call “Supersocialists.” The woman has been able through most likely a series of tax loopholes to foist her tax burden on to the public and avoid paying income taxes altogether. And that, ladies and gentlemen, is a redistribution of wealth, socialism, communism, what have you. That’s not capitalism, that’s socialism. We see here then in this example that the tax code has significant socialist structure to it, something I’ve been saying for many years now.

Do not be fooled by the argument that a flat tax unfairly burdens the poor. The poor are the most likely beneficiaries of a flat tax as a flat tax would generate added revenue, that which a substantial portion of the population has quite obviously been able to avoid paying, revenue the country desperately needs.

How someone who is on the Forbes list of wealthiest people in America can go four out of five years without paying any income taxes whatsoever to me indicates the US Tax Code is a criminal act upon the American public.

Copyright © William Thien 2016

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For quite some time now I’ve been talking about how unfair and complex the tax code is. Some essays have been well received such as America’s Unfair Tax Code and The Brown Headed Cowbird or other observations suggesting that the tax code is a form of economic genocide and indentured servitude, particularly for singles with no children or property. I provide examples and often use my own circumstances to support my position.

Here is another rather blatant example of how overly complex the tax code is and this might unsettle you a bit if you haven’t completed your taxes, yet. First, let me preface this observation with the fact that aside from the overly zealous tax collector, I don’t forsake The I.R.S. for pursuing taxes. The tax code originates in the elected body and The I.R.S. is merely tasked with enforcing it, sometimes perhaps a bit too energetically. If we have a gripe about the level of taxation, it must be directed at our elected officials to bring relief.

With that said, I recently completed my taxes. I use an online web site that we’ve all heard of and I’ve been using it for a number of years. My taxes aren’t overly complicated in and of themselves and I’ve had fairly decent success completing my taxes using the web site. This year I had some income that was unexpected and I was not quite certain how to treat it. So, not only did I use the online web site, which is free for federal taxes, I went into one of the offices associated with the web site and had an accountant (C.P.A.) complete my taxes. I also had a friend do them who is an accomplished accountant. I was interested in getting the best outcome and hoped that one would be better than the other.

What I discovered upon receipt of the results from my friend the accountant astonished me. All three of methods achieved completely different results. When I showed the taxes completed at the office of the online service to the accountant friend of mine, he concluded that they were completed correctly. The results from the office associated with the online service did not provide a return and instead required that I send a check to The US Treasury and to my state department of revenue, which I’ve done already of course. My accountant friend believed the taxes he completed himself were done correctly as well. The only method that provided a return was the online version of taxes.

Conclusion?

The tax code is overly complex. The tax code is in fact blatantly unfair and unnecessarily complex. The tax code needs to be simplified and restructured.

Not one candidate is talking about the tax code during the primary season. Not one. Coincidence?

No, it’s not a coincidence because not one of them plans on doing anything about the tax code. Keep that in mind when you go to the ballot box, especially if you are single.

Copyright © William Thien 2016

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As tax time approaches once again I wanted you to read one of my most popular essays, America’s Unfair Tax Code and The Brown Headed Cowbird. I have debated often about socialism and communism in The United States and how socialism and communism are implemented through the tax code and in that way their effects are less obvious, though still pernicious. I will be talking a lot about America’s tax code in the next couple of months. To my friends and colleagues who utilize the tax breaks I speak of, I say, use them. Don’t feel guilty for my meager commentary on what is unfair about them. Were I in your shoes, I would do the same. But know they must change. The tax code must be made fair. It was in fact the unfair tax code during colonial times that led to the formation of this country and I don’t see that things should ever change in that regard.

America’s Unfair Tax Code and The Brown Headed Cowbird

An associate of mine was telling me that he had received a substantial tax refund this year and when comparing it to mine I was rather surprised as it was many thousands of dollars more. During the time that we have worked together, he has received close to a year’s salary in total tax refunds more than I. That’s substantial and a bit of an insult to me since we have the same position and are paid exactly the same. We are not businessmen so we do not have a large number of operating costs we can write off. We both make the same amount of money. He is married, I am not, but that was only a minor difference. The major difference between his tax return and mine was that he has five children.

On his tax return each of his children represented a large deduction to his earnings and as a result, he received a substantially larger tax refund than I did. At first I thought, OK, raising children is expensive these days, why shouldn’t he get some help from the government (that’s us the taxpayers, by the way)? But then the thought occurred to me (I didn’t tell him and I hope he doesn’t read my blog) that his children are going to public schools and at times he has used public services for medical support of his family. Again, there is nothing wrong with that. It is good that we offer the best public education in the world and can provide medical support to families in need.

But to give him a tax break substantially larger than mine when in fact he uses more public services than I do, uses more services in a substantially greater amount than I do, seems like foolish and definitely unfair tax policy. What is essentially happening is that I am paying for his children to attend school and to obtain free health care. The tax break, the deduction that he receives is possible because I do not receive the tax break. In essence I am paying to raise his children. That’s how they offer him a tax break. They take it from me in some way or another and give it to him in the form of a deduction.

In the region of the country where I live there is a bird that lays its eggs in the nests of other birds and then lets the other birds rear their young. The name of the bird is The Brown Headed Cowbird. It sneaks up to another bird’s nest when the other bird is away foraging and deposits its egg in the other bird’s nest. When the bird that is out foraging returns to the nest, more often than not they simply begin incubating the Brown Headed Cowbird’s egg along with their own and then they rear the fledgling as if it was their own. Sometimes the host bird can’t raise its own and is only able to raise the fledgling of the Brown Headed Cowbird due to diminished resources in that vicinity and the voracity of the Cowbird fledgling.

It occurs to me that much like the unwitting bird who is rearing the Brown Headed Cowbird’s egg, the invader’s egg, a parasite as defined by ornithologists, I am paying to raise the children of others. If you ask me, that is unfair tax policy. Some might say, well that’s just the way it is, and I myself, I’m not certain I have a problem with that really.

But perhaps many of the problems we have with balancing governmental budgets, many of the problems we have with massive abuses of the huge system of entitlements we have in this country stems from the perception that people have originating from the tax code. Can we afford to have another child? Heck yea! It’s a tax break! And as families have more and more children using more and more government services, we as a country are at a loss for how to pay for those services used because we in fact give people a tax break for using them. In a sense, that is what is happening. And similar tax policies apply to corporations as well for conducting certain types of business or using certain types of resources, natural resources even.

No business in their right mind pays people 100 percent of the cost of their products to purchase their products. You will not find one truly successful business that says, “we will give you five dollars for every hamburger you buy from us.” Instead of you paying us, we will pay you. Sounds like a pretty good deal, right? Until of course it comes time to pay all those people behind the counter, the servers, the ones cooking the food, the maintenance people. Where is the money? Well, boss, we gave it to the customers. Well, where are they? Get the money back! They are at the restaurant across the street eating with the money we gave them. Well whose harebrained idea was it to give them the money in the first place?

It seems to me that if we want to balance the country’s budget and the budgets of all of the states and municipalities we need realistic tax codes and policies that address budget disparities, tax policies that somehow seek payment for services used and not payment to the users, particularly the Brown Headed Cowbirds of America.

It’s only fair.

Or, how about this? Do you have a Brown Headed Cowbird living in your back yard? Check this box for your standard Brown Headed Cowbird deduction, and if you are a corporation, double the deduction.

Copyright © William Thien 2012, 2013, 2014, 2015

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If you examine who benefits the most from America’s tax code, I think you could conclude that it needs to be “cleaned up.”

So many corporate tax breaks and other tax maneuvers for all kinds of special interests, not to mention the dependent tax deduction, demonstrate that the tax code is unfair across the board and needs to be cleaned up.

A working stiff with a family of four shouldn’t need to contact an accountant or even a tax preparer to have his taxes done. But if both parents are working and own their own home, that is likely the case these days.

But politicians make promises to special cross sections of the population that they know will vote for them if they promise certain tax breaks. It’s dirty politics in a sense in that some segments of the population are eligible for the tax breaks while others are not. Dirty politics have led to a “dirty tax code.”

The tax code IS dirty and it is time it is cleaned up so that it benefits everyone equally and does not only favor special interests or certain marital arrangements.

That is why I believe a flat tax is the most fair. Everyone would be equally invested in seeing that the tax rate is held in check and that the dispersal of taxes levied is fair.

As it is today, one group does not care about the other and doesn’t mind if one group gets saddled with the tax burdens derived from the behaviors of the others.

The next candidate that comes out in favor of a flatter, more fair tax code will definitely get my consideration.

Copyright © William Thien 2014

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One of the primary problems with the tax code is that certain people, companies, and corporations are increasing their wealth substantially through the tax code.

People should not become wealthy because they know how to manipulate the tax code, people and companies should gain their wealth through innovation and creativity, from experience, not from some set of tax loopholes in what is clearly an unfair tax code.

Furthermore, I believe the tax code is undermining American industry. I believe the tax code causes businesses to focus less on that which has made American industry great, such as new technologies and industrial methods for example. The tax code instead causes companies and corporations to expend huge amounts of financial resources insuring they are situated in the most advantageous position with regard to the tax code, when they could instead be spending those resources on research and development and capital acquisition.

It’s time to deal with the tax code once and for all, with an emphasis on “for all.”

Copyright © William Thien 2014

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Oh no! Not another communist/socialist redistribution of wealth in the form of a tax break. “Oh yes,” they say, though they may know not what they do. Or do they? Let’s have a look.

This week I entered into a rather heated exchange on the local newspaper’s web site over the issue of tax breaks for Public Education at the K-12 level. Where I reside, there was a discussion about legislation concerning tax breaks for those who send their children to private schools. Like all such programs, tax breaks in this case, this one is nothing other than a redistribution of wealth, a redistribution of wealth indeed for those with children, and at first I wasn’t so skeptical of the idea. Kids are expensive.

But lo and behold, something occurred to me about the idea. Parents already receive a substantial write-off for each and every child they have. Nothing wrong with that really except for the fact that they made the choice themselves and it was nobody’s idea but their own to have the children and nobody else gets the tax break. But that is only an ancillary part of this observation.

OK, so…now that they already get the tax break where I reside, in many areas the parents can also receive a voucher (cash) for sending their children to a private school instead of a public one, something that was fashioned a while back by a former Governor of my state. In fact, if I’m not mistaken the idea was first implemented here where I reside. My state was a sort of laboratory for the idea. It was called “School Choice” I believe, something to that effect. It’s a program that is expanding currently in my state.

So, now not only do you receive a deduction for dependent children, you can also obtain a cash voucher for sending your child to a private school. Hmmmn. Even though I myself am not a parent, I can understand the desire to have more educational choices for your children.

But there is a serious flaw with the entire concept in how it is administered. You are giving the parents a deduction for having the child in the first place, a child that is going to use more educational services, and now you are giving the parents cash as well.

Oh no, but it doesn’t stop there. Now, they want to give parents a tax break for sending their children to private schools on top of all that, or beside it. Maybe they use the vouchers, maybe they don’t.

I can hear somebody singing, “Wooo-hooo, we’re in the money. We’re in the money.” Really?

But whose money is it? I have even had people tell me they time the birth of their children just so that they can take the tax deduction on their income tax that year for their new child. It’s no accident. Children are had just to improve peoples’ tax circumstances, you can be sure. And who can blame them? Like I hear all the time, children are expensive. Tell me about it, I reply. I don’t even have any and I’m paying for them.

The net effect of all this money flowing around, whether it be in the tax code or from wherever is that it artificially drives up the cost of all education because that’s what happens when you put money into any market, it buoys prices. And that is why lobbyists for private education are lobbying our elected officials, to do just what I describe. They want THE MONEY! Thhhhheeeeee Moooooooney, get it? Let’s spell it out in front of the little ones so they don’t hear what we are talking about. The M-O-N-E-Y. Oh yeah, now I get it. It’s about the money, it’s not about religion. Hmn. Maybe they do know what they are doing.

But ultimately, due to the unfair tax code folly that enables all of those tax breaks I’ve described, there is never enough money to pay for the services those people use, use more of because they are having the children and taking the tax breaks. Public education is always scrounging for more money. Private educational institutions shun the needier, special education students and push them back into the public realm, driving the cost for public systems up. I argued those points. All of them. But they don’t care. They are not the conservatives they claim to be.

So not only do private and religious educational institutions often shun the needier students and push them back into public education, which raises the cost of public education, the private institutions are lobbying for more money and getting it, which is also driving up the cost of all education. They say the devil is in the details, but I won’t elaborate on that any more. I think it is rather obvious. Yet, they used to tell us, make us go to war, sacrifice your sons and daughters in wars with “The Godless Communists.” That’s what the war in Vietnam was all about. They used to tell us day in and day out that communism didn’t have a God. What?! Kind of looks like they found one, or many, depending on which type of religious school is taking the cash. Oh yes, now you see that the devil is indeed in the details, don’t you ladies and gentlemen? Yes, I think you do.

So I responded to a number of ignorant people who came out of the tax code darkness whose eyes were filled with ignorance and I did the math. First, we are giving the people a tax break for having the child. Then we are giving them cash to send their child to a private school, and thirdly, we are thinking about giving them a tax break for sending that child to the private school where either they can or can’t use the voucher? It’s insane. It’s criminal. It’s communism.

That is nothing more than tax code nonsense to get people elected and to increase the size of private school enrollment at the same time and it’s all being done on the backs of those with no children and those ineligible for the tax break. It is totally unfair tax policy and foolish to boot as you are giving a tax break to those who are using all of the services in the first place. And you wonder why they keep cutting services?

It is my opinion that offering a tax break for sending your child to a private school is a non-starter (but it passed in the legislature where I reside), a no go in terms of tax ideology for the two primary reasons that those who are using the services should not receive the tax break and it’s one more tax break of three that nobody else is eligible to obtain because it only effects those who have children. It’s totally unfair to those without. It makes tax surrogates, servants indentured permanently by the tax code out of those with no children because the money to cover the cost of those tax breaks comes from those who can’t take the deductions.

Oh, but it doesn’t stop there. Where I reside students also receive a bus ride on the taxpayer to private religious schools, too. Yes, it’s true.

So, not only are we giving the parents several tax breaks, but we are letting that money go to what is often a religious institution, breaking the caveat in the Separation of Church and state clause in The U.S. Constitution. We are paying at substantial taxpayer expense for their ride to break that clause in The U.S. Constitution.

It’s too late to turn back the clock on these matters. The nefarious politician has often ridden into office on just such an issue as taking tax money from some and giving it to others in the form of a tax break, for whatever reason, whether it be the noble one of education or any other. But it’s still wrong.

It’s still communism, it’s just that in the case of private religious schools, it’s something that should have never have happened, because it’s communism in the name of God and they told us communism didn’t have one.

Copyright © William Thien 2014

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