Before we can ever expect any real and meaningful tax reform, first we will need congressional reform. But before congress can be reformed, congress must first reform the federal election and campaign finance laws --- and amend the constitution to repeal Citizens United. But will they? I seriously doubt it.
How can we ever expect any reforms at all if congress refuses to first reform itself? Harry Reid had a chance to reform the filibuster, but he didn't...and why not? It's most likely because, members of congress (on both sides of the aisle) are perfectly satisfied with the current status quo. And the Democrats have just been feigning Republican obstructionism --- with both sides taking turns being "the bad guys".
Sure, the Republicans and Democrats may act like ardent enemies, but only for sound bites when they're pontificating on the floor of congress --- or posturing for the TV cameras. Harry Reid and Mitch McConnell might sometimes appear to be enemies in public, but in private they're actually friends. Whenever Harry Reid takes Mitch McConnell and the Republicans to task, it's usually just for show.
So how can we ever expect any real and meaningful tax reform, especially when half of congress are millionaires themselves, and benefit from their own legislated tax loopholes? Congressman Paul Ryan, in addition to his annual congressional salary of $174,000, earned $50,000 in one year in capital gains, but proposed that capital gains should not be taxed at all --- just like the fox guarding the hen house.
Electing a president was the easy part; but getting our leaders in congress to do the will of The People is the really, really hard part.
A former UBS banker came forward with tales of how he helped wealthy Americans evade taxes --- including the smuggling of diamonds inside tubes of toothpaste. The IRS launched an investigation, and came up with a list of 52,000 names it wanted from the Swiss banking giant.
A settlement followed, and then came a new U.S. law. Now foreign banks have to cooperate with the IRS or face fairly tough penalties. Starting in 2013, the Foreign Account Tax Compliance Act (FATCA) is supposed to put the burden on foreign financial institutions to look for, and report, American account-holders --- or face a 30% withholding tax on American investments.
Also, just last week, Senator Bernie Sanders introduced a bill to end offshore tax havens for corporations --- and next week, the Democratic leaders (e.g. Harry Reid) might also introduce a much weaker bill, touching on IRA accounts that are also used as tax havens.
The Republicans, under George W. Bush, gave the tax cheats amnesty. In November of 2009 the New York Times reported that the federal U.S. tax amnesty was granted to more than 14,700 American taxpayers ("American taxpayers" being an oxymoron).
Supposedly bolstered by the investigation of UBS (Union Bank of Switzerland) the Justice Department and the I.R.S. were to expand their scrutiny of other banks that offered questionable offshore accounts, not just in common tax havens like Switzerland and Liechtenstein, but other places like Hong Kong as well.
Last year the IRS commissioner, Douglas H. Shulman, announced that their effort topped $5 billion. He said, “We have now gained access to thousands of taxpayers and bank accounts that we have never had before." But that sounds rather puny when compared to the $385 billion that is lost to tax evasion.
Mr. Shulman had also said that the criteria being used to release the names of those suspected of offshore tax evasion at UBS, will be those who had unreported accounts of at least one million Swiss francs --- or about $1.09 million USD.
That tells me, that theoretically, I can still have 100 unreported Swiss accounts, each with $1.08 million in each account (Romney had several numbered accounts). Read these two comprehensive articles from Forbes (and all their related links): With Indictments, IRS Will Get More Data From Swiss and Judge Gives IRS Access To More Accounts At UBS.
UBS was also supposed to disclose a list of Americans who were the owners of secret offshore sham-company accounts with at least one million Swiss francs, covering tax years 2001 through 2008 --- during The Bush Tax Cuts Years.
Although, acquiring a complete list and gaining public access to those records (the naming of names) will most likely be impossible, even under the Freedom of Information Act. So who are these Americans with Swiss-bank accounts? But more importantly, who are these tax amnesty benefactors? It sure isn't grandma, unless her last name is Walton.
But both prior to, and afterward the last tax amnesty, the Republicans have continually claimed that tax evasion is a reason to cut taxes --- their rationale being, "If we don't tax them as much, they won't cheat as much". (Yeah, right.)
But the Republicans have also made IRS budget cuts that have laid-off tax attorneys, thereby reducing tax audits, and allowing the ultra-wealthy and large corporations to cheat even more; although both parties in congress and the media have all seemed complicit in this scam. This article says it all: What's Romney Hiding? It's the Amnesty, Stupid! - "Why does the press feign puzzlement about what Romney is hiding by not revealing his 2009 tax returns?"
Mitt Romney's tax return was over 500 pages long --- about the size on a New York Times #1 best seller. Romney's disclosure of his 2010 tax return omitted information about his Swiss bank account at UBS. Why didn't the press demand a W-9 form and Romney's FBAR form?
UBS was fined $760 million for putting Americans into abusive tax shelters and were forced to reveal more than 4,450 Americans who banked with them under numbered accounts --- and at the same exact time that Mitt Romney closed his own UBS account. Coincidence? I think not.
Who are those 4,450 Americans --- those tax cheats with foreign bank accounts? According the I.R.S, at one point those accounts held $18 billion.
The Romneys (just like many others on the Forbes Fortune 400 List) have blind trusts (although Mitt also admits that "a blind trust is just a ruse") with offshore accounts in Switzerland, Bermuda, Luxemburg and the Cayman Islands -- not to mention an almost comically large IRA account. None of this is supposed to be illegal, but why not? The question isn't that Mitt has an IRA, the question is, how does he have $102 million in his account and why? There are limits as to how much someone can put into their IRA, and for a long time (for everyone else), that was capped at only $2,000 per year.
The question about Mitt Romney's (and others) Swiss bamk accounts is that until the IRS demanded the information, we didn't know they had Swiss bank accounts, and that they were hiding their money to avoid paying U.S. taxes. The revelation about Mitt Romney's Swiss bank accounts on his tax return could have been part of George W. Bush's tax amnesty program --- and Mitt had just paid a paltry fine for hiding his money --- but as the same time, he also had his identity protected.
Why was this provision made for self-reported tax cheats in exchange for amnesty? Was it a compromise between the Democrats and Republicans for I.R.S. budget cuts and laying off tax auditors? In my post Mitt Romney's ties to the IRS Commissioner (Douglas H. Shulman) I raise the same questions.
- We need to hire more tax auditors. The IRS estimates that for every additional dollar we spend on enforcement brings in about $4 to $5 dollars of additional revenue.
- The capital gains tax was created in 1921 for wealthy individuals. Rather than taxing them at the same progressive rate as regular wages, they are taxed at the much lower rate of 20% for single filers with incomes above $400,000.
- Deferred interest (Romney's income) and SWAG investments (silver, wine, art, and gold) should also be taxed as regular wages. Police, firefighters and teachers earning a middle-class wage of $50,000 a year pay a higher tax rate than Warren Buffett, Bill Gates and Alice Walton.
- Major corporations are taxed at a much lower "effective" tax rate, rather then the "statutory" rate of 35%, mostly because of loopholes, and many pay no corporate taxes at all.
- Deductions should be limited. Mitt Romney writes off more than $17,000 a year for a show horse as a "medical" expense --- and some wealthy people have their own private emergency rooms costing $1 million.
- The $113,700 income cap on Social Security taxes should be eliminated because most of us pay this tax on 100% of our earnings.
- Capital gains should also be taxed for Social Security --- $1 trillion a year in personal income is not taxed at all for Social Security.
- Hire more people to investigate and prosecute Medicare fraud, instead of cutting benefits to our elderly.
- Pass the Buffett Rule, so that anyone earning over $1 million a year (from ANY source of income) must pay a flat tax of 30%. Currently, with the expiration of the Bush tax cuts, Warren Buffett's secretary is still paying a higher tax rate than her boss.
If you've read my post The White House Correspondents Dinner - The Top 1% Parties Like it's 1929!, you would probably think the same thing that I do --- that the top 1%, along with both parties in congress, as well as all the major media outlets, are all in cahoots with one another --- and for years, they have just been putting on a big dog-and-pony show for the rest of us.
I propose that congress and the media puts on more dog-and-pony shows, by holding six 30-minute debates this year on nothing else but tax reform:
- One debate between Harry Reid and Mitch McConnell on Fox News with Bret Baier moderating
- One debate between Harry Reid and Mitch McConnell on CNN with Ali Velshi moderating
- One debate between Harry Reid and Mitch McConnell on MSNBC with Lawrence O'Donnell moderating
- One debate between John Boehner and Nancy Pelosi on Fox News with Shepard Smith moderating
- One debate between John Boehner and Nancy Pelosi on CNN with Fareed Zakaria moderating
- One debate between John Boehner and Nancy Pelosi on MSNBC with Ed Schultz moderating
Then have Harry Reid and Nancy Pelosi draft a bill for tax reform, and have Mitch McConnell and John Boehner draft another bill --- and have each bill posted on the internet for one week --- and then have both bills go before the House and the Senate for a straight up-and-down vote (with no amendments or earmarks).
Otherwise, how can we ever get these "ardent enemies" in congress to ever agree on tax reform, when the complicit mainstream news media (with the exception of people like Ed Shultz) won't properly and repeatedly report this travesty in our tax code.
My other tax related posts:
- Why Congress Refuses to Tax the Rich
- $385 Billion a Year Lost to Tax Evasion
- Tax Evasion and Tax Amnesty
- As Romney Dodged Taxes, Our Net Worth and Pay Declined
- 280 Corporations are "Too Big to Tax"
- Massive Tax Evasion: Blame Politicians & Banks
- Feed the Rich! Tax the Poor!
- Tax Rates during the Fabulous Fifties
- Low Wages Kills Jobs, Not High Taxes
- $1 Trillion in Personal Income not Taxed for Social Security or Medicare
- Warren Buffett - "Tax Me Dammit!"
- GOP Claims Tax Evasion as Excuse to Cut Taxes
- Don't like Corporate Taxes? Then Un-incorporate!
- Corporations & Banks Now Sit on $3.6 Trillion
- How Mitt Romney & the 1% Evades Taxes
- Mitt Romney: Mister 15% and Platinum Parachutes
- Simple Tax Reform - Tax Millionaires Like Everybody Else
- Lowest Income Earners Always Get Screwed the Most
- Should we tax Kim Kardashian and Paris Hilton
- The Uber-Rich Must Pay!
- You and Millionaires - Let's Compare
- How the 1% bilks the 99%
- How Corporate Tax Dodgers Hoarded $2 Trillion
- Obama Tax Plan vs. Mitt Romney's
- General Electric (GE), Freeloaders, and the Bush Tax Cuts
- Millionaire Tax Hurts Small Businesses - DEBUNKED!
- CEO Pay, Low Tax Rates & Tax Evasion
- Historical Tax Rates on the Rich (1862 to 2011)
- Subsidies for the Rich and Famous
- Mellon:The Banker Who Rigged the U.S. Tax Code
- The GOP Tax Plan - Ignorance, Insanity, or Greed?
- We have a Revenue Problem, Not A Spending Problem
- You Pay Hidden Entitlements for the Rich
- Mom Pays More Taxes Than Bankers!