Feeding the Hand That Bites You

Buyer's remorse may be setting in.

June 3 (Bloomberg) -- Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.

“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”

Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.

U.S. tax rules let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the U.S.

Microsoft reported an overall effective tax rate of 26 percent for 2008 in its last annual report. “Our effective tax rates are less than the statutory tax rate due to foreign earnings taxed at lower rates,” the report said.

For every action, it is said, there is an equal and opposite reaction, and unless you actually know something about economics -- and it's arguable whether the president and most of his men do -- you are going to be quite surprised at the unexpected, and unintended, consequences.

Most delicious irony of all is that Microsoft and its employees overwhelmingly donated to the political campaigns of Democrats in 2008. One source I saw put it at 71 percent Dems, 28.4 percent GOP.

How's that "hopey-changey" thing working out for you guys?

Let's Test the Competency of Congressmen, Not Accountants

The surprise is that it took so long for someone to think of this:

IRS may seek licenses for tax preparers

WASHINGTON (AP) - The IRS is working on new rules that could require paid tax preparers to be licensed in hopes of reducing mistakes and combatting fraud, IRS Commissioner Doug Shulman announced Thursday.

Eighty percent of taxpayers get help with their returns, either from paid preparers or computer programs, Shulman told a congressional subcommittee. Tax preparers currently don't have to be licensed, unless they represent clients in proceedings before the Internal Revenue Service.

Shulman said he wants better leverage to make sure tax preparers act ethically, not only to improve enforcement, but to ensure that taxpayers get quality help in preparing their returns.

"Paying taxes is one of the largest financial transactions individual Americans have each year, and we need to make sure that professionals who serve them are ethical and ensure the right amount of tax is paid," Shulman told the House Ways and Means Subcommittee on Oversight.

The only problem I see with this idea is that each year we are treated to stories in the media where the IRS personnel can't give a straight answer to individual taxpayers as to what the tax laws mean and how much money is owed.

The track record of private accountants and tax services is not that bad, actually, or else the "I Love Government" media would be treating us to the same stories about tax preparers.

Personally I swear by TurboTax. But that's me.

Shulman said he will seek suggestions from the industry and consumer groups before making his proposals to President Barack Obama by the end of the year. The proposals could include new regulations or laws.

"I want to enter this with an open mind," Shulman said. "For me, everything's on the table."

Rep. Xavier Becerra, D-Calif., welcomed Shulman's announcement, saying professional tax preparers should be required to show competency.

"All sorts of people are being paid" to prepare taxes, Becerra said. "There's no clear standard."

Why doesn't the IRS solicit opinions from the people paying the bills: the taxpayer? Why go to the "industry" or "consumer groups" -- who are we talking about on this one?

And as for Mr. Becerra, D-Calif., I have a better idea. Why don't we have some sort of test for Congress-persons to show their competency.

After all, all sorts of people are being paid to pass legislation in Washington.

And there damn sure is no clear standard.

The Good Times Just Keep on Coming...

Do you think these two stories might be linked in some way?

Obama asks Volker to Lead Panel on Tax Overhaul

White House to Hunt for New Tax Revenues

A few details from Story No.1:

President Barack Obama is putting former Federal Reserve Chairman Paul Volcker in charge of a tax- code review aimed at closing loopholes, streamlining the law and generating revenue, budget Director Peter Orszag said.

Volcker, 81, who heads the president’s Economic Recovery Advisory Board, is being asked to take a look at the laws in an effort to rebalance the tax system.

Orszag said the review, given a deadline of Dec. 4, is being ordered to make recommendations on steps to simplify the code, built over the last 96 years, in ways that would reduce tax evasion and what he called “corporate welfare.”

“There are hundreds of billions of dollars in uncollected taxes each year,” Orszag said in a conference call. The Volcker board “will be examining ways of being even more aggressive on reducing the tax gap.”

Do you suppose members of Congress will actually get to read any of these tax law changes before they are stampeded to vote for them at some point down the road?

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said the tax reform panel should “outline core principles” and leave to lawmakers the task of drafting a tax code overhaul. “We’re the Congress,” he said.

Is this where they will eliminate the mortgage deduction for "the rich" -- or the rest of us, if they decide that they need the money?

Details from Story No.2, which mentions the Volcker task force:

WASHINGTON -- The White House said it would launch a search for new tax revenues, as Congressional leaders moved to scale back proposed spending increases and tax cuts in President Barack Obama's ambitious budget. [snip]

Lawmakers also were effectively excluding several middle-class tax-cut pledges that Mr. Obama made in his budget, including long-term relief from the Alternative Minimum Tax, and even long-term extension of his Making Work Pay credit. Extending AMT relief and the Making Work Pay tax credit could run around $200 billion each over the next five years. Both are in effect now but expire soon.

The proposals giveth, the actual legislation may taketh away.

If you voted for Mr. Obama, or anyone in Congress who said they would be fiscally responsible, did you think that meant ramp up your taxes?

Tim Geithner: Tax Cheat & Climate Expert

Is Tim Geithner Secretary of the Treasury or the Environmental Protection Agency?

His testimony in the past two days before Congress would seem to leave the question in some doubt. For instance, yesterday:

... the Treasury secretary acknowledged that consumers could face higher electric bills because Obama would impose fees on greenhouse gas producers, including power plants that burn fossil fuels, by auctioning off carbon pollution permits. The goal is to reduce the emissions blamed for global warming while raising a projected $646 billion over 10 years.

"Now, if people don't change how they use energy, then they will face higher costs for energy," Geithner said.

Did you get that last bit? If we do not change how we use energy, we are going to face higher energy costs. I don't know about your place, but at Casa Oklahomily we've trimmed our heating and cooling costs big time, and there just isn't a whole lot more we could do unless we move to a cave somewhere. I resent like hell this tax cheat lecturing the representatives of the American people on our wasteful tendencies and insinuating that we deserve to pay higher energy bills because of this mad cap and trade tax scheme.

But Geithner was just getting warmed up.

WASHINGTON, March 4 (Reuters) - U.S. oil and natural gas producing companies should not receive federal subsidies in the form of tax breaks because their businesses contribute to global warming, U.S. Treasury Secretary Timothy Geithner told Congress on Wednesday.

It was one of the sharpest attacks yet on the oil and gas industry by a top Obama administration official, reinforcing the White House stance that new U.S. energy policy will focus on promoting renewable energy sources like wind and solar power and rely less on traditional fossil fuels like oil as America tackles climate change.

Great. Attack the people who provide the energy that powers our economy, our cars, our standard of living, on the basis of an unproven theory of man-made climate change, especially now in the face of new evidence that global warming seems to have stalled out.

Just more evidence that Tim Geithner was chosen as much for his willingness to carry the water for his Obamamasters as he is for any real expertise in crafting economic policy. It also gives witness to the lie that this administration wants to get off foreign oil.

This is about taxes and power. Pure and simple.