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The economy seems to be heading either into another recession of a lost decade such as Japan experienced. President Barack Obama is about to ask Congress for new stimulus, which involves spending.

The problem is that in  2010, the voters gave the Republicans control of economic policy--they got control of the House and a even stronger veto in the Senate. In 2011, the Republicans repeatedly exercised their power to prevent job creation and cut programs that help ordinary people. By preventing growth, they will almost guarantee winning the presidency in 2012.

Obama needs to remind the voters that the Republicans are now in the driver's seat. If the economy is in trouble, it is because the Republicans blocked positive action.

 If the president is to get any new stimulus spending, it will come in return for painful cuts in programs that help ordinary folks. Under the debt ceiling compromise, only 2% more can be cut from Medicare, so look for huge cuts in Medicaid and Social Security.

Obama should be proposing ways to raise revenue by closing tax loopholes and rooting out tax fraud. In 2003, the gap between taxes owed and txes collected was $200 billion--not chump change.

Raising revenue by taxing the rich will not pass. Besides, the so-called "millionaire taxes"  in Maryland and New York prompted the rich to leave those states and/or simply go on strike, even though that was contrary to their economic interests. A VAT structured to help exports and reduce the income tax is the long-term option, but the public will require a great deal of preparation. It might not become law without Republican sponsorship plus huge tax benefits for the rich.

Obama's best move is to note that tens of billions--really much more-- are lost through tax fraud carried out by corporations and people at the top of society.

Here are some ideas for rooting out fraud. Even honest Tea Baggers might accept some if they are the populists they claim to be. It could well be that very few of them are  honest or open to new ideas.

1. Revise the rules governing charitable trusts to prevent any part of  donated assets from reverting to the estates of deceased donors. Don't let charities be partners in fraud.

2. Repeal legislation shielding foreign corporate earnings from U.S. taxation.

3, Repeal legislation enabling U.S. corporations to move intellectual property to foreign subsidiaries.

4. Make it illegal for U.S. entities to deduct as operating expenses payments to their foreign subsidiaries for the use of intellectual property. Likewise, make it illegal to deduct the expense of moving jobs overseas.

5. Make it illegal for those involved in corporate law or accounting to be structured as "limited-liability" partnerships and corporations. Those arrangements encourage people to close their eyes to fraud and law-breaking.

6. Repeal the 1997 law that prohibited the IRS from looking for tax evasion among people whose lifestyles were inconsistent with the income they claimed. Al Capone would never have been nailed if our present procedures existed in his day.

7. Require every company and corporation to annually file in a public document how much each of its executives gets in deferred compensation.

8. Repeal the rule that allows the recipient of a free plane ride to count it as a coach seat on a commercial airliner. Count it as a seat on a commercial Lear jet.

9. Repeal provisions of the Alternative Minimum Tax that are triggered by the number of human tax exemptions someone claims.

10. Rewrite the 1998 law that makes available many techniques to derail an audit by filing charges against the auditor.

11. Require audits of business arrangements in which a company, partnership, or corporation has a tax-exempt parrtner to whom half or more of profits are assigned.

12. Repeal laws preventing the IRS to monitor credit card numbers. Right now, people with money parked in foreign tax havens draw down their accounts through credit cards. It caqnnot be traced.

13. Today, accounting firms and others sell tax dodges to individuals and people. Individuals pay to hear the pitch. If they buy, they sign a confidentiality agreement, and they also get documentation written by accountants and lawyers explaining why their tax dodges might be  legal. Require all such documents--"opinion letters"-- be turned over to the IRS for vetting. Prohibit the IRS from forgiving penalties in cases where the tax dodger had this documentation and did not give it to the IRS.

14. Make it impossible for owners of securities to separate ownership from  control of such securities.  There should be no distinction betwen legal ownership of securities and economic control of them.  Couple that reform to legislation requiring all transactions involved in tax situations be matters of reql econ9omic substance and consequence.

15. Phase out legislation that permits companies and individuals from counting foreign taxes as if they were paid the U.S, government. A partial exception might be permitted when foreign taxes were reqlly payments for natural resources.

16. Prohibit the use of the US military, law enforcement agencies, and courts from protecting the assets of corporations who have moved their headquarter from the United States to a foreign land. If a Bermuda-based US corporation gets into trouble, let Bermuda protect it.

17. Repudiate tax treaties with tax shelter nations that can be used by corporations and invididuals to avoid US taxes.

18. Eliminate the tax law provision that permit corporations to push onto shareholders, through recognized capital gains, the tax obligation of the exit tax.

19. Prohibit American subsidiaries of corporations of firms with mail box headquarters abroad from obtaining any US government contracted.

20. Repeal the tax law provisions that permit employers to count future Social SEcurity benefits as though those funds were being paid to the retired employee by the employer as a pension benefit.

21. Restore the number of IRS auditors to the number of auditors per 100,000 citizens in  1988. Earmark half a percent of money recovered from new audits for hiring of new auditors or consultant fees for experts who unearth new tax dodges.

All of this requires thinking beyond simple bumper sticker slogans. These measures deal with how people and coprorations at the top of society shift tax buirdens to ordinary ordinary people. It will take time to get ordinary folks to ponder such matters. But until they do, progressives will usually go down the tubes in elections dominated by misinformation and hot button issues.

This is a matter of simple justice. It makes as much sense as going after the annual $70 billion in Medicare fraud before cutting recipient benefits.   Feww talk about this either. Indeed, the voters of Florida elected a governor who was found to be ripping off Medicare. So many voters are pathetic. But we must educate the rest.

Our political system depends on having educated voters. Now we are in a serious crisis, and many voters will believe any claim against an African-American president.

  Stamp out the fraud as a means of raising revenue and easing the pain that ordinary folks are going to exeprience as a result of any deal that Congress makes with the president.

If the fraud is not eliminated, it can truly be said that some of the cuts the Republicans want are intended to replace revenue lost to fraud.

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Comment Preferences

  •  We don't need "revenue enhancements". (1+ / 0-)
    Recommended by:
    PatriciaVa

    We need J.O.B.S.  And if Republicans aren't going to do anything about jobs, the public needs to know about it as often and as loudly as possible.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White

    by zenbassoon on Sat Sep 03, 2011 at 08:16:50 PM PDT

    •  And trading jobs for cuts is a no winner scenario (1+ / 0-)
      Recommended by:
      PatriciaVa

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Sat Sep 03, 2011 at 08:34:16 PM PDT

      [ Parent ]

    •  Revenue enhancements will bring the money to (2+ / 0-)
      Recommended by:
      zenbassoon, bluegrass50

      pay for infrastructure jobs.   and energy alternatives jobs, and jobs that just give people something to do.   One of the biggest reasons the job picture is so horrible is that government at all levels is so strapped for cash.

      It is a round feedback situation.   Lower tax income, cut jobs-less tax income-cut jobs because we can't afford them-cut jobs............ That bottom is nasty and jaggedy.

      Every job fuels other jobs through spent income.

      Government revenue enhancements are essential to bring back needed jobs which will fuel other public sector jobs and other private sector jobs which will provide money and demand for other jobs.....

      It isn't hard.   The Republicans understand it very well, which is why they are so insistent on NOT helping supply money for any public sector jobs, or private sector jobs.   They also want to do whatever they can do to kill off already appropriated money.

      Think transportation bill.......

      “Nothing in the world is more dangerous than a sincere ignorance and conscientious stupidity.” Martin Luther King, Jr.

      by maybeeso in michigan on Sat Sep 03, 2011 at 08:59:45 PM PDT

      [ Parent ]

  •  Words trigger thoughts. (1+ / 0-)
    Recommended by:
    maybeeso in michigan
    These measures deal with how people and corporations at the top of society redistribute tax burdens to ordinary ordinary people.

    -- We are just regular people informed on issues

    by mike101 on Sat Sep 03, 2011 at 08:29:51 PM PDT

  •  Deductions and exemptions are at a 50 low. (0+ / 0-)

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Sat Sep 03, 2011 at 08:33:10 PM PDT

  •  0. DON'T LOSE REPRESENTATION (1+ / 0-)
    Recommended by:
    PatriciaVa

    you fucking morans.

    From the day after inauguration all we heard was "We don't have the votes to fix anything --but pipe down you asshole liberals, because we always lose votes in the midterms, and then we'll have even less votes."

    I must congratulate our party leaders and cheerleaders, you delivered exactly what you promised for 2010, a loss of votes, in fact a century-beating victory in the amount of loss you delivered us.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sat Sep 03, 2011 at 08:42:27 PM PDT

  •  This is good stuff but none of it is going to pass (2+ / 0-)
    Recommended by:
    maybeeso in michigan, PatriciaVa

    either. Simply b/c it's useful House will not even consider it.

    •  The median wage has stagnated for a Decade (0+ / 0-)

      It has actually decreased during President Obama's term.

      The last thing the US needs is a national consumption tax.

      That said, I will recommend the diary, for its recommendations, with the exception of the VAT.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

      by PatriciaVa on Sat Sep 03, 2011 at 09:09:54 PM PDT

      [ Parent ]

  •  legalize drugs (0+ / 0-)

    the effects of which would be multifold in both savings and revenues.
    We don't have any more chance of that than your proposals. They will look good on the rebel manifest when the revolution begins.

    "HAPPINESS IS A CHOICE" , bumpersticker on a burning Subaru

    by tRueffert on Sun Sep 04, 2011 at 04:51:14 AM PDT

  •  tea-bagger nonsense (0+ / 0-)

    I think the tea-baggers in Congress seem a bit too entrenched in their ideology (whatever that even is anymore) to consider thoughtfully, or even remotely seriously, ideas of this kind. Very good ideas for cutting out some fraud, all the same.

  •  Good to have you on-board Big Chuck (0+ / 0-)

    As Sister Dorinda mentioned to you, we hope you get a chance to read the proposal and give us feedback.

    But I tell you this much, we are in the same page and I'm happy to see you going more detailed / specific. Hope you authorize or even better, after reading the proposed plans, you can suggest sections of your diary we could use (It would go a long way in saving time by not having to do the work you have already done)

    Thank your your efforts, very, very much appreciated.  Looking forward to more of your writings.

    We can do it.

    Tranny, AKA Cihuamexica, Aurora

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