A Big “Christmas” Hoax

Mid-day on December 20, DJT tweeted, “We are delivering HISTORIC TAX RELIEF for the American people!” That was followed by a GIF showing a present opening with the words “Tax Cuts for Christmas!” bursting out of a box. This, I contend, is all a big “Christmas” hoax.

An Early Celebration

DJT and the Republicans in Congress celebrated “Christmas” five days early, after passing the “Tax Cuts and Jobs Act.” Then on Dec. 22, DJT signed the massive bill into law.

The vote on the tax reform bill was 51-48 in the Senate—all the Republicans against all the Democrats. In the House, the vote was 224 to 201 with all the Yes votes being by Republicans and the No votes being by all the Democrats and 12 Republicans.

How in the world could there be 249 Congresspeople opposed to what is touted as a wonderful Christmas gift to the USAmerican people? And why do most polls show that more Americans oppose the newly enacted bill than approve of it?

Yes, the “tax cuts for Christmas” were celebrated by DJT and the GOP days before Christmas this year. But one wonders how much celebration there will be by most USAmericans by next Christmas or in the years following.

Who Celebrates?

It is evident that there are reasons for some to celebrate this new tax bill. Corporations are jubilant over the reduction of their tax rate from 35% to 21%, a huge drop—although many corporations already pay around 21%, or far less (see this report).

The wealthiest people in the land also celebrate the passing of the tax bill for several reasons. “Final Tax Bill Includes Huge Estate Tax Win For The Rich” is the title of a Dec. 21 article on Forbes.com.

Among other super-rich people in the country, DJT and the Trump family are, no doubt, celebrating their personal gain as well as their political gain from this bill. “Trump stands to save millions under new tax measure, experts say,” is a recent article in the Washington Post worth noting.

Last Wednesday DJT said, ““I promised the American people a big, beautiful tax cut for Christmas. With final passage of this legislation, that is exactly what they are getting.” Well, that’s at least true for Donald, Jr., Ivanka, and others of the Trump clan. They certainly have reason to celebrate. But many do not.

Who Won’t Celebrate?

There are many serious problems with the newly-passed tax bill, including (1) most likely a large increase in the national debt, (2) an increase in taxes for the poorest 1/3 of U.S. taxpayers, and (3) a large decrease in the number of people who have health insurance and a large increase in the cost for many who do have insurance.

While the numbers for the final bill are likely slightly different, the CBO Report of Nov. 26 indicated that the Senate version of the bill would show an increase in taxes for people (units) with income of less than $30,000—more than 1/3 of the taxpaying units.

By contrast, those with incomes of more than $100,000 –fewer than1/4 of filers—would get tax reductions of from 10.6% to 27.5%.

Those figures are for 2019. They get much worse for the poor and much better for the wealthy by 2025. (Here is the link to the PBS NewsHour article consulted.) 

So, yes, the new tax bill seems to be a “hoax” as a Christmas present, especially for the poor. But the wealthy will fare well, as is cleverly depicted by this cartoon by Pulitzer Prize winning editorial cartoonist Jack Ohman:  

Carnegie and the "Death Tax"

Andrew Carnegie, the industrial giant and philanthropist, was born on this day (Nov. 25) in 1835. His life and legacy is somewhat of a conundrum: he was both a hard task-master and cruel industrialist as well a warm-hearted, benevolent man who greatly wanted world peace—and who favored an inheritance tax.

The Coming (?) Change is the “Death Tax”

As of this writing, the both highly touted and highly criticized tax reform bill currently being considered by the U.S. Congress is still in flux. But the present estate tax provision will most likely be unchanged in the final version of the bill, which possibly will be signed into law. DJT is promising this will be done before Christmas.

The opponents of the current estate tax provision, which seem to include most Republican legislators, are wont to call it a “death tax.” Further, they emphasize how unfair it is to the families of hard-working people who wish to pass their accumulated wealth on to their descendants.

So, changing this provision is one of many changes in the tax reform bill, which has already passed by the House. The Senate version, yet to be voted on, currently has the same projected estate tax change as the House bill.

Misleading Claims about the “Death Tax”

Sam Graves is the U.S. Representative from the district where I live. In his Nov. 15 email newsletter to people in his district, Rep. Graves decried the estate tax, writing that “a tax that kicks in when you die is absurd.” His main point: “Farmers are hit especially hard by the death tax.”

What Rep. Graves failed to mention is that currently $5,490,000 is exempted from the tax that he thinks is so despicable. (I wonder how many farmers in north Missouri have an estate worth more than that.)

According to the Center on the Budget and Policy Priorities (see here), in 2017 only two out of every 1,000 estates will owe federal estate tax—5,500 out of the nation’s 2,700,000 estates (about 0.02%); only 80 of those (0.003%) are small farms and businesses.

The tax bill already passed by the House doubles that exemption immediately and eliminates it completely after six years—and this in the name of tax reform for the benefit of the working middle class.   

But guess who benefits from this change in the estate tax? The wealthiest people in the land, of course—including the Trump children who will potentially gain as much as $1.4 billion if the tax reform bill is signed into law by the President.

Carnegie’s Surprising Support of Estate Tax

Many of you perhaps read my article about the questionable philanthropy of Andrew Carnegie and two other wealthy people. (You can read/review that article here.) In reading about Carnegie before writing that article, I was surprised at what he said about the need for an estate tax.

In a June 1889 article titled “Wealth,” Carnegie wrote,

Of all forms of taxation, this [the estate tax] seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. By taxing estates heavily at death the state marks its condemnation of the selfish millionaire's unworthy life.

Near the end of that article, Carnegie asserted that the person who dies rich “dies disgraced."

When Carnegie died in 1919, he had already given away over $350,000,000 (over $5 trillion in 2017 dollars) of his wealth. After his death, his last $30,000,000 was given to foundations, charities, and to pensioners. 

Kudos to Carnegie!

DJT and the Heritage Foundation

A year ago this week Donald J. Trump was elected the 45th President of the United States. Two days after the election, an article in the Washington Examiner began, “The Heritage Foundation might be the biggest winner of 2016.”

Introducing the Heritage Foundation 

The Heritage Foundation (HF), founded in 1973, is a conservative think tank that according to one ranking organization is the third most influential of the nearly 2,000 think tanks in the U.S.

The HF was established largely due to the work of Paul Weyrich (1942-2008) who, incidentally, was also co-founder (with Jerry Falwell) of Moral Majority in 1979—and the one who coined that name.

From the beginning a major funder of the HF was Joseph Coors, Sr., (1917-2003) of the Coors Brewing Company. Coors also was a generous donor to Moral Majority and other Christian Right organizations and movements.

According to their website,

The mission of The Heritage Foundation is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

While it is no longer on their website, I noted in my 2/20/11 blog article that the Heritage Foundation was then making the following appeal for new members (and for funding):

Become a Member: Donate to Heritage – Join Rush Limbaugh, Sean Hannity and more than 710,000 conservatives in fighting liberals and advancing conservative principles as a Heritage Foundation member.

Influence of the Heritage Foundation 

In a May 2017 article in Marketplace, Atlantic staff writer Molly Ball related that soon after Reagan was elected President in 1980, the HF presented him with 2,000 ideas in a 20 volume package. Reagan handed out those ideas to every member of his Cabinet in their first meeting. 

By the end of Reagan’s first year in office, the HF estimated that 60 percent of those ideas had in some way been put into practice by the President.

Through the years the HF has been characterized as a right-wing think tank seeking to abolish civil rights laws, minimum wage laws, environmental laws, affirmative action, rights for the handicapped, and arms control.

The strongly fiscal conservative stance of the HF was seen in its selection of sitting S.C. Senator Jim DeMint, a leading figure in the Tea Party Movement, as its new president in 2013. He served in that position from 2013 until May of this year.

Influence of the Heritage Foundation on DJT 

Without question the HF has sought to influence DJT as it did Reagan. A statement they released on March 24 announced, “Trump Administration Budget Looks a Lot Like Heritage’s Plan.” 

The HF also seems to have had considerable influence on the tax cut plan long promised by DJT. On Oct. 17 he spoke to the HF and called for them to support his tax reform efforts. That seems to have been a redundant appeal, for many of the reform proposals were the HF’s suggestions to begin with.

The House version of the tax plan released last week—and crafted only by the GOP—will likely be altered in multiple ways before the final vote is taken. And it still may not pass. But as it stands now, it definitely seems to provide “an enormous bonanza for the wealthiest” people in the country. (See “Shameful GOP Tax Plan Taxes Reality,” posted on 11/2.)

Moreover, this tax overhaul plan would also allow churches to endorse political candidates, a position favored by the HF’s DeVos Center for Religion & Civil Society.

We citizens of the U.S. who don’t like the way the country is going under DJT need to be aware, and beware, of the Heritage Foundation.

Taxation and Representation

When I was in Washington, D.C., this month, once again I saw many license plates with the words “taxation without representation” on them. The newest plates with those words look like this: 

The issue, of course, is that the citizens of D.C. must pay federal income tax just as all U.S. citizens do, but they do not have representation in Congress. The words “taxation without representation” were first used on some D.C. license plates in 2000—but, as you know, it was expressing a sentiment from long ago.

A Boston pastor used the phrase “no taxation without representation” in a sermon as early as 1750. After the Stamp Act of 1765 it became common for the colonists to exclaim that “taxation without representation is tyranny.”

Have you seen the new U.S. postage stamps that were issued on May 29? They commemorate the 250th anniversary of the repeal of the Stamp Act in 1766. These new “forever” stamps are sold only as souvenir sheets of 10 stamps and are $4.70. 

The USPS website explains: “The commemorative stamp art depicts a crowd gathered around a ‘liberty tree’ to celebrate the repeal of the Stamp Act.” Such “liberty trees” were “found in a number of cities throughout the colonies, and were popular gathering spots for community meetings, political discussions, celebrations and more.”

The new British legislation required American colonists to pay a tax on a wide array of paper materials, such as newspapers, legal documents, mortgages, contracts—and even playing cards. A revenue stamp embossed on those papers indicated payment of the tax.

Many colonists were not happy with the new tax, to say the least. Accordingly, the USPS website also says that the Stamp Act, which was passed by the British Parliament in March 1765, “proved historic in galvanizing and uniting the American colonies, setting them on a path toward independence.”

The first chapter of The Beginnings of the American Revolution (1910) by Ellen Chase is sub-titled “Stamp Act Causes Riot,” and then the second chapter is “The Colonies Unite Successfully for Repeal.” Thus, actions resulting from the negative reaction toward the Stamp Act was a major impetus toward the colonists’ declaration of independence from Great Britain on July 4, 1776.

The tax levied by the Stamp Act was not exorbitant; it was the principle that rankled the colonists. As Chase says, “The exception was not taken to the tax in itself. . . . The objections rose solely from Parliament’s assumption of supremacy in the Colonies’ internal affairs” (p. 23).

For a long time after independence from Great Britain, however, U.S. citizens mostly had representation without taxation. There was an excise tax placed on whiskey in 1791—but that led to the Whiskey Rebellion in 1794.

The first personal income tax resulted from the Revenue Act signed into law by President Lincoln in August 1861. He who wanted government “of the people, by the people, for the people” needed to raise money to pay for the Civil War activities of the Union.

The first permanent income tax in this country, though, was not established until 1913—and the first general sales tax not until 1930.

In D.C. now, though, there is taxation but no representation on the federal level. Statehood for the District is one possible solution to the problem.

However, the “party of Lincoln” that freed the slaves in spite of strong objection by the Democratic Party then does not want to grant statehood now to a territory that would most probably send Democrats to the U.S. Congress. As I wrote earlier, the Parties have switched positions.

Taxation: Theft, or Support of the Public Welfare?

It has been ten days now since Tax Day 2015, but I am still thinking about taxation because of what I saw/heard in the media in the days following April 15.

While driving around town on the 17^th, I listened to some of the Chris Plante Show. Since February, that program has been broadcast from 9 a.m. to noon weekdays on one of the two Kansas City talk radio stations.

Plante’s home base is WMAL in Washington, D.C., and his programs are available on their website. WMAL touts their station as the place “where Washington comes to talk.”

I had heard bits and pieces of Plante’s program before, but I didn’t really catch his name until last week. And I was very negatively impressed with what I heard.

One repeated emphasis of Plante that day was on taxation being “theft.” That’s nothing new for talk radio, it seems, for I remember first hearing that opinion expressed by Mike Huckabee a couple of years ago.

Plante likened taxation to the way the Nazis stole the wealth of Austrians in the new movie “Woman in Gold.” And he decried the way the Democrats want to “steal” wealth of people when they die rather than allowing their descendants to inherit it.

The government is there “to steal everything,” Plante warned.

Just the day before, the U.S. House voted to repeal the estate tax. That has long been the goal of Republican legislators—in spite of the fact that currently the first $5,430,000 of any estate is exempt from taxes.

The anti-estate tax rhetoric speaks about descendants having to sell their inherited farms in order to pay the taxes. But in 2013 only 0.6% (1 out of every 167) of the estates of farmers owed any estate tax at all.

And overall, only 1 in every 553 inheritances owed any estate tax. It is true that the President wants to lower the estate tax exemption to a mere (!) $3,500,000 and to increase the taxation rate from 40% to 45%. But, still, that is a far cry from trying “to steal everything.”

On that same program, Plante also criticized the President for not doing enough to fight Islamic terrorists. But months ago it was estimated that the U.S. bombing strikes against ISIS had exceeded $1,000,000,000 and is currently costing at least $10,000,000 a day.

Where is that money coming from, if not from taxes? How can a reasonable person possibly vilify taxation as theft and then criticize the administration for insufficient military activity?

In great contrast, during the week of April 15, Sister Simone Campbell, the “nun on the bus” (about whom I wrote here), was promoting a Facebook/Twitter movement dubbed #TaxPayerPride.
 
According to a HuffPost article, her desire is to remind people of the good work their tax money can accomplish.

Sister Simone says too many politicians focus on cutting taxes "at the expense of the good of our nation." Instead, she wants to celebrate how taxes make America a "stronger, more humane country"—by helping to support health care, education, food and transportation.

As you might guess, I am in considerable agreement with Sister Simone and in complete disagreement with Chris Plante.

On April 13, June and I paid far more in federal and state income tax than our entire yearly income was back when we were first married. And though I don’t like my taxes being used for warfare  and support the Religious Freedom Peace Tax Fund Act, I am happy to pay taxes for support of the public welfare.

What about you?

The Tea Party -- Then and Now

The Boston Tea Party occurred 240 years ago, on Dec. 16, 1773. Some say it was the actual beginning of the war for American independence. At the very least, it was an important precursor of the Revolutionary War, which officially began in April 1775.

As is widely known, the issue was taxation. More specifically, it was about taxation without representation. The colonialists didn’t mind paying taxes as such. They just didn’t want to send the money raised to King George and a government in which they had no voice.

A large majority of the colonialists were from Great Britain, and they liked their tea. The British, though, levied taxes on the tea they shipped to the Colonies—three pence per pound (equivalent to about $1.15 now). That may not seem like a lot, but the colonialists were consuming well over a million pounds of tea a year.

On that December evening in 1773, some 5,000 people met in the Old South Meeting House to debate British taxation. That gathering-place was the sanctuary used by Old South Church, which was founded in 1669; the church constructed their new facility in 1729 and in the 1770s it was still the largest auditorium in Boston.

After the meeting some of the protesters, many disguised as Indians, boarded three British ships in Boston Harbor and threw 342 chests of tea into the water. (The value of that tea would be worth about $1,700,000 today.)

That happening is what came to be known as the Boston Tea Party, although that term was not used until the 1820s.

A 1846 lithograph by Nathaniel Currier (1813-88), half of the Currier & Ives combo

In 1973, the U.S. Post Office commemorated the 200^th anniversary of that act of protest against Britain by issuing a set of four first-class (8-cent) stamps, together making one scene of the Boston Tea Party.

More recently, in 2009 grassroots political protest spawned what came to be termed the Tea Party movement. That movement is credited with electing 28 U.S. Representatives in 2010, helping the Republicans take control of the House.

At the beginning of this year, there were 48 Representatives who were members of the Tea Party Caucus, chaired by Michelle Bachmann. All are Republicans, including two of the eight Representatives of Missouri (where I live).

While there are numerous economic matters that are of great concern to the Tea Party movement, one of their main concerns is not raising taxes. In fact, they want to reduce the size of government and lower taxes as much as possible.

Even though there is a similarity in name, these modern-day “patriots” are quite different from those who participated in or supported the 1773 Boston Tea Party with the slogan “no taxation without representation.”

The current Tea Party seems to want representation with no (or at least very little) taxation. Those are two widely different matters.

The efforts of the original Tea Party in 1773 meant the loss of revenue for the British government, but it didn’t mean lower taxes for the colonialists.

The contemporary Tea Party movement works so their members, and many other U.S. citizens, would pay some less in taxes. And it is mainly the poor and needy who are the losers, with cuts in “food stamps” and now soon in unemployment benefits.

So, in looking back at the Boston Tea Party that took place 240 years ago this week, let’s be careful to note that its purpose and consequences differed greatly from those of the current Tea Party movement.