Tag Archive for: ChuckSchumer

A Little Reality About the New Spending Bill

Estimated Reading Time: 4 minutes

The Democrats are masters of misnaming the intended purpose of bills they offer up to disguise what is really happening. It is indicative of how gullible they believe we are. The Inflation Reduction Act of 2022 will do nothing to reduce inflation. The main reason is that revenues will not be achieved to offset the expenditures.

This column has a ban on using definitive terminology. I do not use words like Never, Always, or Every. That is because those terms are rarely applicable. However, here is a truism. Whenever there is a projection of revenues that will be produced from a new tax increase, they never come to fruition. Here is another truism. Whenever there is a reduction in tax rates, they always produce increased governmental revenues. I know this because I have both studied and written about it for over 40 years.

This ridiculously named bill has a few major elements of the supposed increase in revenue. Please do not believe the eventual scoring by the Congressional Budget Office (CBO). The CBO is rarely correct because they do their scoring based on whatever Congress tells them to do. Just think about this: if Schumer named this bill which he did, do you think he gave the CBO realistic numbers on which to do a projection?

The first element of this bill’s increased revenues has to do with money flowing in from audits because of new hires at the IRS. This is an agency that cannot even answer their phones. This is an agency that cannot even process their tax returns – the current estimate is they are twenty million behind, but who really knows? I believe they have finally processed all the 2020 tax returns. They are now digging into the unprocessed 2021 returns. This is an agency that is currently auditing a client of mine and they are having a problem because neither the computer of the auditor nor his supervisor can read a thumb drive I sent them. They cannot read any thumb drives.

Yes, the IRS needs an increased budget to tackle its basic problems which include a wholly inadequate computer system. Agents communicate this regularly. It is compounded by allowing agents to work from home which has significantly impacted IRS production because of these inadequate systems. If the system does not work well when they are sitting in front of their office screens, how well do you think they operate remotely?

Until they fix these problems, how are they going to hire a slew of new people to perform audits? And where are they getting all these new personnel to work at the most reviled agency in the country? We cannot get people to work at our restaurants, car repair shops, or appliance stores. So how is the IRS going to get qualified personnel to work their audits? How many people graduating college with an accounting degree are going to work for the IRS when there is a shortage of personnel at accounting firms with a much more attractive environment and future? They may be able to hire people with sociology or geography degrees who can only get jobs as bartenders. How long do you think it will take them to get prepared to audit your tax return? How long to audit Amazon?

I can say if you should get audited by these people, the process will take at least twice as long as it should because they will be inexperienced. A professional CPA will need to walk them through everything about which they have no clue. So, you tell me, is this $80 billion spent over the next ten years going to bring in an additional $204 billion from all those supposed tax cheats out there? And will spending an additional $8 billion a year on the IRS for the next ten years do anything to reduce inflation in 2022, 2023, or 2024? I think you know that answer.

Then there is the big lie of this bill. It repeals the Trump “rebate rule.” This was a vague rule that has to do with Medicare Part D that was never implemented by Trump, has not been implemented by Biden, and the regulation never going into effect. This is a magical savings of $120 billion that was never implemented and thus becomes “mystery savings.”

Last, we must confront the corporate minimum tax of 15%. Sounds nice. I have read a substantial number of analyses of these corporations that supposedly pay no taxes. We hear this kind of malarkey all the time. I will get a call from a client. They will tell me they spoke to someone, and they were paying no taxes. “Why am I paying so much?” My answer is always they are full of ———. You fill in the blank. Then I tell them to get a copy of the tax return for analysis. And that is the problem, the Left-wing analyses of these “non-paying entities” never include a full analysis of the reasons why these entities are not paying taxes.

They may be getting research credits which Congress created to encourage companies to spend money on research and development with the idea that these companies will maintain or increase their position to be competitive in the world economy. They may be buying Low Income Housing Tax Credits which encourages the development of affordable housing. They may be getting credits for tax paid to foreign countries based on income made in foreign countries just like you may be getting on your investments. If we limit that tax offset, these companies will be paying a lot more than a minimum tax of 15% since they pay tax in America on their worldwide income.

This is the ultimate act of industrial policy initiated by the Democrats. They are throwing money at the computer chip industry and anybody who spends money on their questionable green policies. They want to pay for it by reducing deductions at a group of other companies. Those companies have been allowed to deduct the expense for new equipment and other purchases as opposed to writing them off over seven years or more. That encourages those companies to expand, improve efficiency and safety and hire more Americans. These tax and spending plans are used to steal the money directly from you and me. Now they have lurched into full bore Socialistic government planning policy as if that has worked anywhere.

Remember the age-old truism. Corporations do not pay taxes; they just pass the tax onto their customers or cut jobs.

And the fact that a large portion of the tax increase will come from a group President Biden has stated he would not raise taxes on – those couples making under $400,000 a year. Senators Schumer and Manchin said nothing about that.

The Democrats got their wish with new spending of over $750 billion between the Chips bill and the Inflation Will Continue Unabated Bill. They are never going to get their revenue offset. Mr. Manchin, how naïve you must be.

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This article was published by Flash Report and is reproduced with permission from the author.

It Doesn’t Get Much Worse Than ‘Build Back Better’

Estimated Reading Time: 2 minutes

Sen. Joe Manchin and Majority Leader Chuck Schumer just struck a deal on a massive spending package they call the Inflation Reduction Act of 2022. In all important respects, the legislation is no different from the Democrats’ long-running social spending plan known as Build Back Better.

Americans should be alarmed. The bill has the potential to handcuff innovation in one of the most critical and successful sectors of the American economy.

The plan would allow unelected federal officials to “negotiate” with drugmakers over the price Medicare will pay for an ever-growing list of brand-name prescription drugs.

In practice, these “negotiations” are federally mandated price controls. Under the plan unveiled by Democratic leadership in early July, the government would have enormous power to name its own price for an increasing range of advanced medicines, and drugmakers would have little choice but to submit.

The cost to patients would be disastrous. That’s because the main consequence of these price controls will be to destroy the research-and-development system that makes America the world leader in medical innovation.

Developing medicines is already a risky business. It costs, on average, nearly $3 billion over 10 to 15 years for each approved new medicine. That’s partly due to the direct expense of the research-and-development activity itself — and partly because only 12 percent of potential medicines entering Phase I clinical trials ultimately win approval. Private investors are willing to take such risks because a successful drug has the potential to earn back those costs and then some.

But if the government successfully puts itself in charge of drug prices, the chances of recouping a medicine’s development costs would plummet, and investment in new research would dry up quickly. Everything from cancer breakthroughs to new treatments for Alzheimer’s disease, COVID vaccines and heart medications would become rarer.

This predictable consequence will leave the innovative biopharmaceutical industry in no position to compensate for the investment loss. A recent review led by University of Chicago economist Tomas Philipson notes that studies consistently show a 1 percent reduction in industry revenue leads to a 1.5 percent reduction in research-and-development activity. He finds this legislation would reduce industry revenue by 12 percent through 2039 and R&D activity by 18.5 percent, or $663 billion. He estimates the result will be 135 fewer medications being developed in that period — a crippling shortfall that will also be measured in lives lost.

Families worldwide rely on research and innovation from the American health and science industries to bring new lifesaving medicines to their loved ones facing diseases lacking cures. The Build Back Better plan will obliterate future breakthroughs and any hope that comes with them instead of providing real solutions.

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This article was published by AIER, American Institute for Economic Research, and is reproduced with permission.

The Inflation ‘Reduction’ Act – Really?? Are You Kidding?? Calling Senator Sinema

Estimated Reading Time: 2 minutes

The $739 billion Inflation ‘Reduction’ Act of 2022 – really?? Are you kidding?? Joe Manchin, Chuck Schumer and Joe Biden are attempting to rapidly hoist this Senate bill on America before the coming recess to reduce inflation!

Does any sane American (sane = common sense, attached to reality) actually believe this totally partisan and desperate legislation arriving months before the November 8th reckoning will reduce the Biden inflation caused by uncontrolled federal spending and the attack on energy in America?

After appearing as a rare, sane and pro-American Democrat, Manchin now claims his elevation to the world’s oldest profession from the political profession, a close second.

This legislation, to be passed by reconciliation (50 votes plus the Vice-President), will be economically devastating to Americans and make the economic crisis in America much worse as recession deepens and severe inflation goes higher.

The bill includes a higher tax burden on all classes of taxpayers and small businesses (where American jobs are created), hundreds of billions for the Green New Deal, over $250 billion taken from Medicare and a host of other hostile provisions hurting the working folks and producers in the nation. The enviro-left-Democrat base is cheering the Democrat Senators on to ‘save the planet’.

Who is left among the Senate Democrats to stop this assault on economic and energy policy, in effect a crushing of the middle and lower classes? There is one person – the one who previously stood with Joe Manchin against eliminating the Senate filibuster, against packing the Supreme Court, against spending 5 trillion dollars on Build Back Better, etc., etc.

It is Kyrsten Sinema of Arizona. Contact her now and be loud and clear – her political future is at stake and she may be the only Senator who can actually stop this craziness and threat to America’s future.

She is on the ballot in 2024 and has billed herself as an independent, maverick styled politician. Remind her that Arizonans reject this damaging, partisan election year legislative stunt and will reject her if her name is on it.

Let Senator Sinema know that her name is now the only important name – she is the one Senator who can kill this bill at a time of recession and galloping inflation. The state she represents is polling decidedly against the Inflation Reduction Act of 2022 and a vote for it by her will not be forgotten or forgiven.

See the TAKE ACTION link below to contact Senator Sinema and inform her of the consequences of caving to Chuck Schumer and Joe Biden.

Although Senator Mark Kelly is a predictable and loyal shill for Chuck Schumer and does what he is told, he is on the ballot this November and is very vulnerable. Delivering the same message to Kelly is appropriate and might be helpful even if his vote is quite predictable.