It is another of those mornings that defines the New Normal. Lovely day for an early walk; the fading silver disk of the full moon hanging in a bluing sky.
I was on foot early, since the electronic prompt on the dash of the Hubrismobile has been scolding me with the count-down to “A”-level service for the last month. It is something I knew was coming, scheduled with the American Service Center, and delivered on time this morning.
I have no idea what is in “A”-level service. It will be somewhere between a few hundred and a few thousand dollars, the same sort of fuzzy math they do on the Hill. It does not matter- I had to stop the harsh Germanic scolding from the dashboard.
There is a lot of Germany in the New Normal. I got a call from my Swedish financial counselor at the end of a frantic day in The Hague. The report was bizarre: apparently American officials fear that if German Chancellor Angela Merkel does not “act more decisively,” bank lending could freeze up and the result would be another sharp financial downturn.
If US banks are too exposed to Euro losses, we could get bit on the ass again, chilling the markets and throwing us into turmoil.
Counting on Germany to do something decisive used to make everyone nervous. Some wags have been saying that Mrs. Merkel, who grew up in the old GDR, has focused too much on protecting her political standing inside Germany, placing her position as Chancellor above the need for bold, risk-taking leadership to rescue the European currency zone.
That is on par with those on this side of the Atlantic who are saying The American Jobs Act is designed to protect only one: Mr. Obama’s.
I think that is tremendously unfair. The jobs bill has a bunch of cool stimulus stuff in it. Just because it didn’t work last time in much larger amounts, doesn’t mean it won’t not work again, you know?
The President has been accused of making good speeches, but providing little in terms of specifics about what he actually proposes. That must have stung. This time, he actually has a Bill to propose, and it confirms that all the goodies are paid for.
In addition to the provisions we heard about, the First Responders and Teachers, there is a section on increasing Public Spectrum Bandwidth access and auctioning off more of the electromagnetic ether that was, in theory, absolutely free before the government claimed it.
That was a huge deal for us when I worked at the phone company, and we were opposed by the Big Broadcasters. They didn’t want to give up what they had, selfish bastards, any more than Big Oil and the evil commercial jet owners, or those asshole millionaires and billionaires who make more than $250,000 a year. Or, as I was surprised to read this morning, what that means is:
(A) $250,000 in the case of a joint return within the meaning of section 6013,
whatever that might be;
(B) $225,000 in the case of a head of household return, which I think I am, though I am not sure;
(C) $125,000 in the case of a married person, heterosexual or not, filing a separate return.
Or, (D) $200,000 in all other cases. That makes me nervous.
That is the almost exact quote from the section titled “Offsets” in the American Jobs Act. The last time I looked, my older son and his girlfriend could probably qualify as millionaires and billionaires under section (C), so I am glad we have finally identified the oppressors, and defined them in the Bill.
I don’t want to leap to conclusions, and will have to study on this.
I mean, I don’t mind paying the taxes I do, which amounts to around half of what I make. I don’t mind that most Americans pay little or no Federal Income Tax; it only seems fair, since the rest of the tax structure is so oppressively regressive.
I don’t mind if Warren Buffet thinks he pays too little in the way of taxes, and there is nothing at all I would do to stop him from writing another check to the Treasury if he thought it would do anything at all against the sea of red ink.
I wouldn’t even mind if there was something like a National Emergency Fund, for which there would be a temporary, directed and specific purpose. But there isn’t. There is just more of everything, just like there was last time.
Let’s do this, shall we? Let’s read the bill. Some pals think I am crazy to not trust the government, and accuse me of being a secret sycophant of the reviled Grover Norquist.
Here is what I am not. I am not a Republican, since those bastards were on watch when this catastrophe began.
I am certainly not a Democrat, since they have become so tone deaf that they cannot accept criticism of their wanton spendthrift ways without accusing the rest of us of extremism.
Here is what I am: an American citizen who is scared as shit of what is coming.
Here are exactly the words from The Bill. I defy you understand it, and that is precisely the problem with our tax code.
Some folks- I hate to use that word, since that is what the leadership does when they are lying the hardest- have said that the “Millionaires and Billionaires” rhetoric is part of a strategy to incite class warfare, and bolster the progressive ideal of “spreading the wealth around.”
I think we are all concerned about the increasing gap in wealth in this country; my deep concern is that I am on the wrong side of it.
Not that it is going to make much difference if Chancellor Merkel does not display bold action, save the Euro, splinter her fragile coalition of support and lose her job.
I am mostly concerned that the government has declared war on us, like Mr. Hoffa and his Teamsters did in Detroit last week.
Have you seen what the EPA is doing to ranchers? Hay and dust have been declared pollutants, and family businesses are being forced out of business.
What the Fish and Wildlife Service is doing to poor Gibson Guitars? Legally imported wood for fretboards has been confiscated and millions in fines levied.
Crucifying Boeing for having the temerity of attempting to open a new plant in Georgia when not a single Union job in Washington was at stake?
I did not bother to include all the provisions here, but you have to see what is in the bill for those bastards who actually produce the oil and gas we use to drive around and keep our houses warm.
Read the Bill. The President wants us to. Then he wants us to tweet our legislators. Read ‘em and weep.
From the American Job Act:
TITLE IV – OFFSETS
SUBTITLE A — 28 PERCENT LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS
SEC. 401. 28 PERCENT LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS.
(a) IN GENERAL.—Part I of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
‘‘SEC. 69. LIMITATION ON CERTAIN DEDUCTIONS AND EXCLUSIONS. “(a) IN GENERAL.—In the case of an individual for any taxable year, if—
(1) the taxpayer’s adjusted gross income is above—
(A) $250,000 in the case of a joint return within the meaning of section 6013,
(B) $225,000 in the case of a head of household return,
(C) $125,000 in the case of a married filing separately return. or (D) $200,000 in all other cases; and
(2) the taxpayer’s adjusted taxable income for such taxable year exceeds the minimum marginal rate amount, then the tax imposed under section 1 with respect to such taxpayer for such taxable year shall be increased by the amount determined under subsection (b). If the taxpayer is subject to tax under section 55, then in lieu of an increase in tax under section 1, the tax imposed under section 55 with respect to such taxpayer for such taxable year shall be increased by the amount determined under subsection (c).
“(b) ADDITIONAL AMOUNT.—The amount determined under this subsection with respect to any taxpayer for any taxable year is the excess (if any) of—
(1) the tax which would be imposed under section 1 with respect to such taxpayer for such taxable year if ‘adjusted taxable income’ were substituted for ‘taxable income’ each place it appears therein, over
(2) the sum of—
(A) the tax which would be imposed under such section with respect to such taxpayer for such taxable year on the greater of— (i) taxable income, or
(ii) the minimum marginal rate amount, plus
(B) 28 percent of the excess (if any) of the taxpayer’s adjusted taxable income over the greater of—
(i) the taxpayer’s taxable income, or
(ii) the minimum marginal rate amount. “(c) ADDITIONAL AMT AMOUNT.
(1) The amount determined under this subsection with respect to any taxpayer for any taxable year is the additional amount computed under subsection (b) multiplied by the ratio that—
(A) the result of—
(i) all itemized deductions (before the application of section
68), plus
(ii) the specified above-the-line deductions and specified exclusions, minus
(iii) the amount of deductions disallowed under section
56(b)(1)(A) and (B), minus
(iv) the non-preference disallowed deductions, bears to–
(B) the sum of—
(i) the total of itemized deductions (after the application of section 68), plus
(ii) the specified above-the-line deductions and specified exclusions.
(2) If the top of the AMT exemption phase-out range for the taxpayer exceeds the minimum marginal rate amount for the taxpayer and if the taxpayer’s alternative minimum taxable income does not exceed the top of the AMT exemption phase-out range, the taxpayer must increase its additional AMT amount by 7 percent of the excess of—
(A) the lesser of—
(i) the top of the AMT exemption phase-out range, or (ii) the taxpayer’s alternative minimum taxable income, computed—
(I) without regard to any itemized deduction or any specified above-the-line deduction, and
(II) by including the amount of any specified exclusion; over
(B) the greater of—
(i) the taxpayer’s alternative minimum taxable income, or (ii) the minimum marginal rate amount.
“(d) MINIMUM MARGINAL RATE AMOUNT.—For purposes of this section, the term ‘minimum marginal rate amount’ means, with respect to any taxpayer for any taxable year, the highest amount of the taxpayer’s taxable income which would be subject to a marginal rate of tax under section 1 that is less than 36 percent with respect to such taxable year.
“(e) ADJUSTED TAXABLE INCOME.—For purposes of this section—
(1) IN GENERAL.—The term ‘adjusted taxable income’ means taxable
income computed—
(A) without regard to any itemized deduction or any specified
above-the-line deduction, and
(B) by including in gross income any specified exclusion.
(2) SPECIFIED ABOVE-THE-LINE DEDUCTION.—The term ‘specified above-the-line deduction means—
(A) the deduction provided under section 162(l) (relating to special rules for health insurance costs of self-employed individuals),
(B) the deduction provided under section 199 (relating to income attributable to domestic production activities), and
(C) the deductions provided under the following paragraphs of section 62(a):
(i) Paragraph (2) (relating to certain trade and business deductions of employees), other than subparagraph (A) thereof.
(ii) Paragraph (15) (relating to moving expenses).
(iii) Paragraph (16) (relating to Archer MSAs).
(iv) Paragraph (17) (relating to interest on education loans). (v) Paragraph (18) (relating to higher education expenses). (vi) Paragraph (19) (relating to health savings accounts).
(3) SPECIFIED EXCLUSION.—The term ‘specified exclusion’ means— (A) any interest excluded under section 103,
(B) any exclusion with respect to the cost described in section
6051(a)(14) (without regard to subparagraph (B) thereof), and
(C) any foreign earned income excluded under section 911.
“(f) NON-PREFERENCE DISALLOWED DEDUCTIONS.—For purposes of this section, the term ‘AMT-allowed deductions’ means all itemized deductions disallowed by section 68 multiplied by the ratio that—
(1) a taxpayer’s itemized deductions for the taxable year that are subject to section 68 (that is, not including those excluded under section 68(c)) and that are not limited under section 56(b)(1)(A) or (B), bears to
(2) the taxpayer’s itemized deductions for the taxable year that are subject to section 68 (that is, not including those excluded under section 68(c))
“(g) REGULATIONS.—The Secretary shall prescribe such regulations as may be appropriate to carry out this section, including regulations which provide appropriate adjustments to the additional AMT amount.
”
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning on or after January 1, 2013.
SUBTITLE B — TAX CARRIED INTEREST IN INVESTMENT PARTNERSHIPS AS ORDINARY INCOME
SEC. 411. PARTNERSHIP INTERESTS TRANSFERRED IN CONNECTION WITH PERFORMANCE OF SERVICES.
(a) MODIFICATION TO ELECTION TO INCLUDE PARTNERSHIP INTEREST IN GROSS INCOME IN YEAR OF TRANSFER.—Subsection (c) of section 83 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:
“(4) PARTNERSHIP INTERESTS.—Except as provided by the Secretary— “(A) IN GENERAL.—In the case of any transfer of an interest in a partnership in connection with the provision of services to (or for the benefit of) such partnership—
“(i) the fair market value of such interest shall be treated for purposes of this section as being equal to the amount of the distribution which the partner would receive if the partnership sold (at the time of the transfer) all of its assets at fair market value and distributed the proceeds of such sale (reduced by the liabilities of the partnership) to its partners in liquidation of the partnership, and
“(ii) the person receiving such interest shall be treated as having made the election under subsection (b)(1) unless such person makes an election under this paragraph to have such subsection not apply.
“(B) ELECTION.—The election under subparagraph (A)(ii) shall be made under rules similar to the rules of subsection (b)(2).”.
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to interests in partnerships transferred after December 31, 2012.”
++++++++++++++++
There is a lot more. An awful lot more. I invite you to read it and see what you think.
I sure as hell am glad I don’t manufacture jet aircraft, or extract oil or gas, though I am confident this will go a long way to ensuring that there is less of all three. They all used to produce jobs, too.
http://s3.documentcloud.org/documents/243547/whitehousejobsproposal.pdf
Copyright 2011 Vic Socotra
www.vicocotra.com