When Tax Reform Isn’t-What Congress Giveth It Taketh Away-Podcast 676

They call it Tax Reform. A Jobs Bill. That’s what it must be, right? Journalists and commentators are playing the same old game. Argue a proposed piece of legislation on its merits. Time to reset the boundaries in When Tax Reform Isn’t-What Congress Giveth It Taketh Away-Podcast 676.

Freedom Of Choice

While listeners to The Bob Davis Podcasts always have the freedom to choose what they think is right, I want to introduce the concept of marginal improvement. Legislators on both sides of the political spectrum talk big about ‘reform’. Usually though they make what really are marginal changes. This is especially relevant when we’re talking about the tax code.

The Real Football Game Is Congress

Team Red moves the ball back to the Blue thirty yard line. It’s hailed as a great victory. Team Blue moves the ball back to the Red twenty yard line a few years later. These are what both sides call marginal improvements. Meanwhile, as economist Milton Friedman famously suggested, they keep getting elected by making the tax code more complicated.

Budget Neutrality Isn’t A Thing

Enter a legislative concept called Budget Neutrality. The idea every expenditure must be ‘paid for’ with tax increases, or budget cuts. You think Tax Reform means lower taxes. What they’re really doing is taking away tax deductions and loop holes, and increasing our overall tax. The sad part is, it’s not their money, it’s our money. In When Tax Reform Isn’t-What Congress Giveth It Taketh Away-Podcast 676.

What Is Real Reform?

If you want real reform. The end to this kind of corruption? Then the power of the federal government to tax our incomes and our property must be permanently eliminated. Should corporations be taxed at all? Do you have property rights if you pay property taxes? How does government pay for the wonderful things both sides wants it to provide? We talk about it in When Tax Reform Isn’t-What Congress Giveth It Taketh Away-Podcast 676.

Already Socialists

So called conservatives like to argue the merits of capitalism versus socialism. It seems like I’d be on pretty safe ground if I suggested the United States has been collectivist for decades. Our economic system is not so much capitalist as it is a controlled market economy. Our elected Kings and their privy courts control our behavior and our futures with regulation and a tax code so complex, were it to be proposed as a single law in its present form, it would cause a revolution.

(Editor’s Note: While the first actual income tax in the United States was levied during the Civil War, it was later repealed as ‘unconstitutional’. Several attempts were made to establish an income tax through the late 1800’s which were unsuccessful, until the 16th amendment, ratified in 1913.)

Sponsored by Ryan Plumbing and Heating of Saint Paul and Reliafund

When Tax Reform Isn’t-What Congress Giveth It Taketh Away-Podcast 676

Podcast 595-Money

Money and Controlling the Media Battle Space

Money. Money. Money! Everything the new President says and does is controversial. The latest eruption concerns Trump’s executive order regarding immigrants from several war-torn countries in the middle east region. A handful of court rulings challenging the order are centered on whether due process can be denied people allowed into the United States legally. The court rulings do not suggest the President cannot use executive orders to control departments in the executive branch but whether if the executive orders deny legal rights without due process.

This is just another in a series of actions and comments by President Trump and his administration that have received wide comment and coverage in the media. While protesters protest and media outlets gas-bag about the latest affront to society, Trump and his people throw another rock into the lake creating new ripples that have to be protested against and reacted to by the already too reactive media. This is a tactic or strategy known as an OODA Loop. Trump is forcing the media and his opponents to react to him. When they react his team observes their reaction, decides on a new initiative and then acts, restarting the loop. In this way the administration controls the media battle space.

About the Money

In Podcast 595-Money: When it comes to Money, once the initial spate of executive orders and stunts at press conferences passes, Congress and the President will get down to work on legislative initiatives to address the moribund economy of the United States. Podcast 595-Money wonders whether what has been talked about by this president on the campaign trail and in the media will indeed, make America Great Again.

No Growth

The United States has grown less than 3 percent a year roughly for the last eight years. Those old enough to remember the early 80’s know that the experience of robust economic growth in that era was real. People didn’t worry so much about getting jobs. As inflation came under control and interest rates came down and as unemployment started to come down, optimism took hold. We have not had that kind of feeling in the United States for a long time.

The question is whether the things Trump wants to do will actually produce economic growth. Middle Class taxes are already historically low. Cutting corporate taxes may result in higher profits which is good for Wall Street but may not translate to jobs. Some parts of clearing out the thicket of Federal Regulations can be done by executive order but most of it will require congressional action. Will a Trillion Dollar Stimulus package to build roads and bridges spur economic growth?

A Republican Stimulus?

President Obama’s Trillion Dollar stimulus was supposed to stimulate economic growth and didn’t. Part of the problem with big federal stimulus efforts is the money has to be block granted to states and the spending becomes political. Another issue is the fact that most people in the United States are employed in services rather than construction trade. Aside from the fact that government spending doesn’t ‘create’ jobs, putting people to work in a small swath of the population usually doesn’t result in a high multiple. This is why the Obama Stimulus produced dubious results.

Another problem is Trump’s Trade Protectionist sentiments. While the trade unions love the idea generally the United States has been a free trade nation. Trade agreements are negotiated because most of our trading partners are trade protectionists. The agreements generally break down borders to our trade. The fact certain kinds of manufacturing is cheaper in Latin America and Asia has actually benefited Americans in the form of cheaper goods. Putting up barriers to manufacturing overseas also means goods in the US will become more expensive.

Most of the jobs lost in the last decade or so have been lost due to information technology, robotics and automation. New manufacturing plants are much more automated these days which means they will not produce the manufacturing jobs expected. When one considers completely automated warehouses like Amazon’s and robotic manufacturing like Elon Musk’s showplace plant, don’t expect ‘bringing manufacturing back to the United States’ means jobs at the factory for Uncle Mike.

If you believe the economy is the sum total of individual’s transactions then an economy can be considered a force of nature. This is the first time in recent memory a ‘conservative’ president has endorsed trade protection and big government spending. Two of the biggest problems economically in the United States are the ongoing budget deficits and the total public debt. One wonders how the cornerstones of the Trump economic policy will produce enough growth to reduce the deficits and public debt.

Finally in Podcast 595-Money, the proof will be in the pudding. With all the other controversies swirling around this president after just two weeks if his policies fail to produce the promised economic growth republicans will have real problems in the 2018 and perhaps the 2020 cycles, especially for the politicians that endorsed Trump. Be careful what you pray for.

Sponsored by X Government Cars and Ryan Plumbing and Heating of Saint Paul.

 

Podcast 506

Future Shock. As the 24 hour news media and talk radio fixate on gorillas and high school election antics, its hard to get a conversation going about the future. Is the future potential leaders want the future we should have? Is it the future we want? There are developments almost everyday now with autonomous cars, robotics, materials, aviation, and communications; the building blocks of a future wave that will leave nothing untouched and unchanged. A series of stories from today’s headlines shedding a light on one potential future and a question; Planners and government officials are  diverting resources to bring about a vision of the city of tomorrow, which is really the city of the early 1900’s. Is this what you want? Will the driverless car, autonomous software and machines, robotics, and other developments make trains, buses and the standard bureaucracy heavy city, state and federal government ‘obsolete’? If so, why is so much time, effort and authority expended to see that we plan for and create a urban spaces, and that suburban villages and towns conform to a vision of a city that probably never existed and never will. Driverless cars will render the amount of space needed for freeways and parking ramps obsolete. Remote technology, robotics and other technologies may mean that people will not have to travel to large office complexes for their work, with increasing freelance employment. What are our so called leaders talking about? Minimum wages, government controlled health insurance and trains. Trains. Why are we planning for 1940’s Chicago when reality could be closer to Jefferson’s vision than Robert Moses? The old world is being torn down and a new one is being built that will be very different from what we know. Do our leaders understand this? Future Shock. Sponsored by Ryan Plumbing and Heating of Saint Paul and X Government Cars.

Podcast 447

Ted Cruz In Saint Paul. This podcast takes you inside a political event in Saint Paul on a cold winter night. From heading out in Mobile Podcast Command Unit 8, to making coffee in Mobile Podcast Command, parked with the media trucks, to trying to sneak into restricted meetings, interviews with Cruz Minnesota Organizer Mandy Benz, State Representative Cindy Pugh, an unidentified (by her choice) Cruz advance planner, to 2nd District Congressional Candidate and old friend Jason Lewis, put headphones on and follow me. The brand new media story line is that Texas Senator and candidate for the Republican presidential nomination Ted Cruz is running second to Donald Trump and therefore ‘could be the guy’. Two months ago the Senator sent his father, this time he came in person, with reporters clustered around the door he was supposed to walk through, while technicians set up cameras on a riser in the back of the small Harriet Island indoor pavilion. As people filled the room, a giant screen showed campaign videos complete with all your favorite national talk show hosts talking about how great Ted Cruz will be when he becomes president. An introduction from a local preacher, more videos, and finally the main event…Senator Cruz throwing ‘red meat’.  Boy, can he sling it! From rescinding Obama’s executive orders, to ‘utterly destroying ISIS’, this crowd loved it. Cruz’ strategy is to organize and concentrate on winning the Iowa caucuses, and use that momentum to win in enough key Super Tuesday states in the mid south, out west and along the eastern seaboard to gain the momentum to win the nomination, and the presidency. Can he do it? Or is he the new flavor of the month. We’ll know when people start to vote in roughly a month. Sponsored by X Government Trucks and Ryan Plumbing and Heating of Saint Paul

Podcast 424

Retail Politics. The 2016 presidential election cycle isn’t yet in the primaries, but campaigns have locked in their rhetoric. Speakers are throwing out red meat at small gatherings of potential voters and political actives across the country, especially in the early caucus and primary states. This podcast takes you inside a political event in Minnesota where a surrogate for the Ted Cruz For President Campaign — The Senator’s Father — makes a speech. Sorry? Did you think these events would include substance, discussion of the issues, details on how to achieve goals, and detailed analysis of opponents? Media focus, polling, ‘cattle call’ debates, a desperate need for money to fuel bare bones campaigns, and propel candidates to the top of the heap before a single vote has been cast, has all but destroyed ‘discussion’ and ‘substance’. It may be early, but it’s already all about firing up the hopeful, the political active, getting the contribution, getting people on the email list, jumping on the plane or bus, and heading to the next event. Even local supporters and state legislators at the event are ‘on message’. The problem with retail politics and red meat is, do people have any better idea of what the candidates actually will do? What is a conservative? What is the plan for the country and why? What do Republicans stand for? Listen and find out. Sponsored by X Government Trucks and Pride of Homes and Luke Team Real Estate. 

Podcast 395

Simple Solutions. On the campaign trail, it all sounds so easy. ‘Take the fight to ISIS’, ‘Take from the rich, give to the poor’, ‘Make America Great Again’, ‘Fix the economy!’, and so on. Lots of barnstormers mostly rolling through Iowa hayfields, standing at picnics, throwing out bromides and quick fixes for whatever ails the nation. With so many politicians, suddenly all our problems seem, well solvable. We want our foreign policy ‘problems’ and economic problems solved as quickly as we reorder a latte, or another salad with the right dressing. When things don’t work smoothly, we throw a tantrum and demand fixes right now. In political theater we want sound bite solutions and we want problems solved preferably before the end of the show. There isn’t anything a podium pounding politician or talk show host can’t solve, dammit! Just send in the special forces, give everyone a tax cut, shut down the border, open up the economy, light up the Russians and the Chinese and well, make American Great Again. Right? The latest ‘truth tellers’ don’t really propose any solutions, they propose more rhetoric. Who’s to blame? We are. We don’t want to know how complex our problems might be. We don’t want to know how difficult they are to solve, when it comes to corralling 435 Congressmen, 100 Senators, countless cabinet secretaries, experts, lawyers, Supreme Court Justices, and the media. We just want someone to tell us what we want to hear. Send in a few hundred ‘special forces guys’ to take care of ISIS, or a B-1 Bomber. Fix the economy. Cure the moral character. And shut those liberals up while you’re at it. What this country needs is a businessman! What this country needs is a General! What this country needs is (fill in the blank). What this country needs is a grown up electorate. Given a steady diet of onion rings, Fox News (or CNN), or the Daily Beast and Buzz Feed, what are the chances that will happen? Sponsored by X Government Cars

Podcast 365

Protecting Your Rights. One example of how the government protects your rights (which is what it is supposed to do) and one example of how government tramples your rights. Ok, maybe more than one example of government trampling your rights. In Garland, Texas, extra security and police at a ‘Draw Muhammed’ contest protected the rights of Americans to think and express what they feel so well, two knuckleheads who called themselves ‘terrorists’  and warriors’ are dead. The mother of one of the dead ‘terrorists’ said, “He wasn’t violent” and, “He wasn’t a terrorist”. Unfortunately mom, he was. Good riddance. God’s work. The officer who took on the two ‘terrorists’ with rifles, with his pistol has not been identified. The Islamic State has ‘claimed’ the bungled attempt at a mass shooting. Beware though, these kinds of attacks may become common. IS claims to have 71 ‘warriors’ ready to go in the US. All the more reason businesses in Minnesota should remove those stupid, so and so “bans guns in these premises” signs. They should say, “Carry Permit holders welcome”. In the case of Garland, Texas … the government protected our rights. The Trans Pacific Fast Track Trade authority republicans want to grant the President is another thing entirely. It is reported that only members of Congress can read the trade agreement, and at that a page or two at a time, in the basement of the Capitol and that it is being considered in secret. No republican or democrat should support anything congress is asked to pass without the American people being able to see and read what it is beforehand. Mitch McConnell should be ashamed. No one likes the IRS these days, but we can all stop beating this dead horse, or so the alternatively whiny and arrogant IRS Head John Koskinen says. Nothing to see here, people. New measures have been put in place to see to it that the agency will not be used as a political cudgel against groups, um, someone we will not name, doesn’t like. This is not an admission we did such things before, you understand. Or is it? Is it a coincidence they found a bunch more emails from Lois Lerner? Why weren’t these kinds of controls put in place decades ago? The answer is, the IRS has been used as a kind of political praetorian guard for the White House since God was a boy. It’s time for a simple, flat tax with no loopholes for individuals and corporations, so simple that John Koskinen and a coffee maker can collect taxes and that’s all they do. Finally, do you like Christmas? Apparently the federal government is very concerned that your crazy uncle, who puts Santa and the Reindeer up on the roof of the house in Saint Louis Park every December could hurt himself and we wouldn’t want that would we? Well, now Christmas decorations will be regulated by the Consumer Protection Agency, since there have been two hundred some deaths from such things since 1980. What about Roller Coasters and Power Drills, or for that matter, treadmills? Yet another example of how the government does not protect our rights. Sponsored by Ryan Plumbing and Heating of Saint Paul

Podcast 318

Your Dog Understands You. Updates just ahead of the weekend. The bloated and unresponsive Internal Revenue Service and its arrogant bureaucrat in chief have apologized to small businesses that have had their assets seized after running afoul of byzantine regulation. It seems if you deposit over ten thousand dollars in a bank account, the IRS thinks you’re a drug dealer. If you deposit less than ten thousand dollars, guess what? You’re a drug dealer too. Or something. Anyway, that means they can seize your assets and ruin your business. Especially if your business is selling guns, as one gun dealer and Iraq War Vet discovered last year. Today John Koskinen, IRS head apologized. Meanwhile, Wisconsin Senator Ron Johnson says his investigators have uncovered thousands of emails between Tea Party hater and former IRS manager Lois Lerner and the White House. Hmmm. Aside from the VA, this is the one agency that is the poster child for incompetence, bloat and poor management. The US needs a twenty first century tax system that doesn’t require thousands of government employees – earning twice what the average private citizen earns while they go to conferences in luxury hotels on the tax payer’s dime. Don’t try to pass it while President Obama is in office. Make it an election issue. Two Civil Rights leaders were recently invited to participate in a police training simulation of high pressure situations which might require deadly force. In both situations the civil rights leaders fired their weapons. One said he just kept pulling the trigger. Did the suspect have a gun? “I didn’t even look”. It was an eye opening moment for both of these gentlemen who discovered its easy to criticize what cops do, from the outside. This is a program which should be put in place across the country. In Minnesota, the Southwest Light Rail project is stalled amid fighting between the Minneapolis Park Board, an unelected Met Council and a governor who is worried the project will lose federal favor and funding. At issue is whether the LRT will pass over a bucolic foot and bike bridge by Cedar Lake, or pass through a tunnel. Rich people in Kenwood and around Cedar Lake are opposed. Everyone else who doesn’t live there, and the fat cats who’ve bought up the land along the corridor in Saint Louis Park and Hopkins are all for it. Its wonderful when the left beats itself up. The latest political story line? If the Republicans win the presidency in 2016 (far from a lock) the United States will be a  ‘one-party-state’. What about democrats now serving in legislatures, as governors and in the House and Senate? They don’t count? And yes, your dog can read your emotions and understands your words. Sponsored by Baklund R&D

Podcast 314

Global Warming Hot Air. The ‘Climate Change Community’ thanks Brian Williams for making up stories, stealing coverage from what could be the biggest scandal in scientific history; It appears the US Government has been cooking the books when it comes to temperature data. Actual temperatures posted from weather stations in Paraguay, Northern Canada and Siberia have been altered (gasp) to show higher readings…for years. A midwinter meltdown would ensue, if this story was actually taken up by the news machine, but they’re too busy with Dirty Laundry from Brian Williams right now. Meanwhile billions of dollars are being spent on wind and solar, and electric car subsidies. Not to mention the legislative roadblock ordered up by Obama Crony Warren Buffett on the Keystone pipeline, due to concerns the EPA has over its environmental ‘impact’. Carbon Credits anyone? Hot Air indeed. More bad news for the IRS and for taxpayers. Thousands of taxpayer numbers and social security numbers have been hacked, and have been used by hackers to file early returns. People are discovering the problem when they file their taxes and get the message, “Your return has already been processed”. The actual taxpayer then has to go through the process of ‘proving’ to the IRS that they have been the victim of identity theft. This, with an agency that is so poorly run they don’t answer the phone, or even respond to letters, and sometimes when they do, they get confused. Solution? Give them more money. Oh Hell No! The solution is a new tax system that does away with the byzantine tax code and the poster child for government inefficiency; The Internal Revenue Non Service. Minnesota Governor Mark Dayton has kicked up a firestorm after giving his commissioners huge raises. The head of the unelected Met Council now earns well over one hundred thousand dollars a year. Other commissioners will make as much as $155,000 a year. Dayton says these people need this money to take care of their families. Keep in mind the average Minnesotan earns somewhere around forty eight thousand dollars a year, with no pension. State employees can double dip pensions, and their pension is based on their income. Remember, taxpayers pay their salary and fund their pensions. Governor Dayton catches a break though. It was revealed this week that the average dock worker on the west coast earns $147,000 a year, plus benefits paid by the employer and an eighty thousand dollar a year pension. What’s in your wallet? Sponsored by Baklund R & D

Podcast 167

Economy News. The US Economy Contracts 2.9 Per Cent. The ‘economy’ is back at the top of the page as final revised numbers for the 1st quarter indicate a shocking contraction in US GDP. Will the second quarter be better, the same or worse? If you listen to the mainstream media, the White House and the  financial channels, you’d think it’s all because of the polar vortex and the long winter. Is it? Or is it due to reductions in investment, the creation of part time jobs, Obamacare, higher corporate taxes, new tax policy implementation and generally misdirected or confused economic policy by President Obama and the Democrat Congress before 2010? What kind of economic policy does the US need to achieve dynamic and rapid economic growth? How are democrats and republicans off in the weeds, with seemingly no idea how to achieve such growth. What do voters need to do to get things righted in 2014? It’s all here in one little podcast! Sponsored by Baklund R & D