A fresh Wall Street Journal review of IRS audits…

This is Your IRS at Work

Official audits show a record of incompetence. Democrats are still giving the tax agency an $80 billion raise.

By The Editorial Board | Aug. 19, 2022

The new Inflation Reduction Act has many damaging provisions, but for sheer government gall the $80 billion reward to the Internal Revenue Service stands out. The money will go to hire 87,000 new employees, doubling its current payroll. This is also doubling down on incompetence, as anyone can see in the official reports of the Treasury Inspector General for Tax Administration (Tigta).

We’ve read those reports for the last several years so you don’t have to, and the experience is a government version of finding yourself in a blighted neighborhood for the first time. You can’t believe it’s that bad. The trouble goes beyond the oft-cited failures like answering only 10% of taxpayer calls, or a backlog of 17 million unprocessed tax returns. The audits reveal an agency that can’t do its basic job well but will terrorize taxpayers whether deserving or not.

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Consider the agency’s chronic mishandling of tax credits. By the IRS’s own admission, some $19 billion—or 28%—of earned-income tax credit payments in fiscal 2021 were “improper.” The amount hasn’t improved despite years of IRS promises to do better.

• A January Tigta audit found that an estimated 67,000 claims—totaling $15.6 billion—for the low-income housing tax credit from 2015 to 2019 “lacked or did not match supporting documentation due to potential reporting errors or noncompliance.”

• A May audit found that 26% ($1.9 billion) of its American opportunity tax credits for education expenses were improper in fiscal 2021, and 27% ($541 million) of its net premium tax credits (ObamaCare) were improper in fiscal 2019 (the most recent year it estimated). The same May audit said the IRS acknowledged that 13% ($5.2 billion) of its enhanced child tax credit payments were improper.

• How did it handle $1,200 stimulus checks, the sick and paid family leave credit, or the employee retention tax credit? Unknown, since the agency didn’t estimate failure rates—for which Tigta rapped its knuckles.

• A September 2021 audit found the IRS in 2020 issued 89,338 notices to taxpayers insisting that “balances were owed even though the taxes were not actually due.” Why? Because the feds had extended the filing deadline amid Covid but the IRS apparently didn’t notice.

• A February audit found the IRS department responsible for ensuring retirement-plan tax compliance suffered a 23% decline in the quality of its examinations from fiscal 2018 to fiscal 2020. In the past seven months, Tigta has issued searing reports on IRS mismanagement of everything from its partial-payment program for delinquent taxpayers, to its auditing of partnerships, to its struggle to handle internal employee misconduct.

• This ineptitude extends to programs Democrats insist will now raise revenue—those targeting higher earners. In 2010 Congress passed the Foreign Account Tax Compliance Act, which was supposed to identify wealthy Americans using undisclosed foreign accounts. Congress’s Joint Committee on Taxation said this would raise some $9 billion in revenue by fiscal 2020. Yet an April Tigta audit noted that while the IRS has spent $574 million to implement the law, the agency has drummed up only $14 million in compliance revenue.

• A July 2021 audit related the failure of the IRS small-business/self-employed division’s strategy, which began in 2010 to examine more returns from “high-income individual taxpayers.” The IRS defines high earners as those with income greater than $200,000. Yet from fiscal 2015 to the end of fiscal 2017 (when the strategy was shut down), 73% of returns targeted by the strategy fell below $200,000.

Democrats say a turbocharged IRS won’t pursue taxpayers earning less than $400,000, but don’t believe it. Middle-income Americans are easier marks, as they are more likely to write a check than engage in years of costly litigation.

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The Tigta site shows the IRS is good at one thing: punishing those who resist its demands. A March audit chastised the IRS for using lien foreclosure suits to confiscate “principal residences” from delinquent taxpayers, a process that does “not provide [taxpayers] the same legal protections as seizures.”

A March 2017 report related the agency’s crackdown on businesses flagged as potentially evading a law that requires financial institutions to report currency transactions exceeding $10,000. The IRS took to seizing property from its targets before even conducting interviews. Tigta reports that even when interviews were conducted, the IRS failed to advise the accused of their rights or the purpose of the interview, and failed to consider “realistic defenses or explanations.” Tigta found that “most” of those targeted (owners of gas stations, jewelry stores, scrap-metal dealers, restaurants) had not committed crimes, though many were never able to regain their property.

This is the IRS that Democrats are now arming with more money and manpower to unleash on Americans. The $80 billion is a demonstration of their priorities, and further proof of the rule that failure in government is invariably rewarded with a bigger budget.

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Republicans in Washington, who, by the way, do not have any type of broadly-defined ‘Vision for Restoring the American Dream,’ and never seem to have a superior alternative to offer the American people when Washington Democrats push to expand big-government’s power to expropriate wealth and limit freedoms for working-class Americans – should sit up and take notice….

The Leviticus 25 Plan is a powerful, and manifestly superior, plan to expanding IRS powers – and defining a bright new vision for America.

All U.S. citizens participating in The Leviticus 25 Plan will forego their tax refunds for the initial five year activation period (2023-2027).

Benefits – Federal Income Tax Recapture
The scoring model assumes that 80% of U.S. citizens will participate in The Plan.
Participants must give up their tax refunds through the Plan’s recapture provisions for the 5-year target period (2023-2027).

According to 2021 IRS Filing season statistics, through Dec 3, 2021: 129,841,000 total refunds were paid out for a total of $365.499 billion. The estimated refund total
for the full year, through December 31st: $365.5 billion.

The Leviticus 25 Plan would reduce the number of refunds each year (2023-2027) by 80%, effectively dropping the gross number of refunds in need of processing, reviewing, and potentially auditing, from approximately 130,000,000 down to about 26,000,000.

The IRS would NOT need to hire the additional thousands of employees, and they would NOT be put in the bind of having to pay $3.3 billion in interest payments on unprocessed refunds.

And the IRS would NOT need “$45.6 billion for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” “digital asset monitoring” and a new fleet of tax-collector cars.“

The Leviticus 25 Plan, by virtue of its Federal Income Tax Recapture provisions, will increase U.S. Treasury Department net tax collection revenue by $1.592 trillion over a 5-year period – all without spending one additional dollar on IRS collection efforts.

The Leviticus 25 Plan – Federal Income Tax Recapture

The scoring model assumes that 80% of U.S. citizens will participate in The Leviticus 25 Plan.

Participants must give up their tax refunds through the Plan’s recapture provisions for the 5-year target period (2023-2027).

According to 2021 IRS Filing season statistics, through Dec 3, 2021: 129,841,000 total refunds were paid out for a total of $365.499 billion.  The estimated refund total for the full year, through December 31^st:  $365.5 billion.

Refund totals have increased by ~$44 billion over the past five years, from $323.9 billion (2017) to a current (estimated) $365.5 billion (2021), representing an average increase of $8.32 billion / year. 

A conservative estimated average of $8 billion per year (2023-2027) will be used for this recapture calculation.

2021: $365.5 billion

2022: $374 billion

2023: $382 billion

2024: $390 billion

2025: $398 billion

2026: $406 billion

2027: $414 billion

Total: $1.990 trillion

Total recapture X 80%:  $1.990 trillion X .8 = $1.592 trillion

Total recapture per annum (2023-2027): $1.592 trillion / 5 = $318.4 billion

Source: https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-december-3-2021 

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. cirizen – Leviticus 25 Plan 2023 (4158 downloads)

A perfect trade – ‘paper’ for ‘farmland.’

And farmland is the gift that keeps on giving, with the types of government subsidies which particularly benefit billionaires.

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MarketWatch – Mar 13, 2021:

Bill Gates and Warren Buffett should thank American taxpayers for their profitable farmland investments

By Vincent H. Smith and Eric J. Belasco

Bill Gates is now the largest owner of farmland in the U.S. having made substantial investments in at least 19 states throughout the country. He has apparently followed the advice of another wealthy investor, Warren Buffett, who in a February 24, 2014 letter to investors described farmland as an investment that has “no downside and potentially substantial upside.”

There is a simple explanation for this affection for agricultural assets. Since the early 1980s, Congress has consistently succumbed to pressures from farm interest groups to remove as much risk as possible from agricultural enterprises by using taxpayer funds to underwrite crop prices and cash revenues.

Over the years, three trends in farm subsidy programs have emerged.

The first and most visible is the expansion of the federally supported crop insurance program, which has grown from less than $200 million in 1981 to over $8 billion in 2021…

The second trend is the continuation of longstanding programs to protect farmers against relatively low revenues because of price declines and lower-than-average crop yields….

The third, more recent trend is a return over the past four years to a 1970s practice: annual ad hoc “one off” programs justified by political expediency with support from the White House and Congress. These expenditures were $5.1 billion in 2018, $14.7 billion in 2019, and over $32 billion in 2020, of which $29 billion came from COVID relief funds authorized in the CARES Act. An additional $13 billion for farm subsidies was later included in the December 2020 stimulus bill.

If you are wondering why so many different subsidy programs are used to compensate farmers multiple times for the same price drops and other revenue losses, you are not alone.

Our research indicates that many owners of large farms collect taxpayer dollars from all three sources. For many of the farms ranked in the top 10% in terms of sales, recent annual payments exceeded a quarter of a million dollars.

Farms with average or modest sales received much less. Their subsidies ranged from close to zero for small farms to a few thousand dollars for averaged-sized operations.

Thus for almost all farm owners, and especially the largest 10% whose net equity averages over $6 million, as Buffet observed, there is little or no risk and lots of potential gain in owning and investing in agricultural land. 

While many agricultural support programs are meant to “save the family farm,” the largest beneficiaries of agricultural subsidies are the richest landowners with the largest farms who, like Bill Gates and Warren Buffet, are scarcely in any need of taxpayer handouts.

Vincent H. Smith is director of agricultural studies at the American Enterprise Institute, a Washington, D.C. think tank, and professor of economics at Montana State University. Eric J. Belasco is a visiting scholar at AEI.

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Mr. Buffett also used a sizeable portion of his funds to buy into the mobile home sector… and this has not been working out so well for many of the mobile home owners in America.

Warren Buffett, Slumlord – Predatory Loans, Kickbacks & Preying On The Poor  

ZeroHedge, Apr 6, 2015 – Excerpts:                                                                  

Buffett’s mobile-home empire promises low-income Americans the dream of homeownership. But Clayton [controlled by America’s second richest man, billionaire Warren Buffet], relied on predatory sales practices, exorbitant fees, and interest rates that can exceed 15 percent, trapping many buyers in loans they can’t afford and in homes that are almost impossible to sell or refinance, an investigation by The Seattle Times and Center for Public Integrity has found.

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The Leviticus 25 Plan will balance the books on these matters – by granting U.S. citizens the same direct access to liquidity that was so generously provided by the Federal Reserve and U.S. Department of Treasury to Wall Street’s wealthy elites during financial crisis years, 2008-2010.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (4156 downloads)

Thank you, Hank Paulson, Tim Geithner, and Ben Bernanke, from the bottom of Warren Buffett and Bill Gates’ hearts.

The U.S. government responded to critical liquidity shortages within Wall Street’s financial sector and a crumbling U.S. economy during the 2008-09 financial crisis, by funneling trillions of dollars in direct cash transfers, emergency loans, credit guarantees, and balance-sheet-clearing toxic mortgage debt purchases – to many of America’s premier financial institutions.

Billionaire Warren Buffett lobbied hard for the massive bailouts…. and with good reason. At least eight of these companies receiving billions of dollars of taxpayer bailouts were owned by Mr. Buffett’s Berkshire Hathaway.

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Buffett’s Betrayal: Rolfe Winkler | Reuters /

Aug 4, 2009 – Excerpts:
A good chunk of his [Warren Buffett’s] fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.

Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.

To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee.

[Note – the figures below are the dollar value in millions. Example – Berkshire Hathaway holdings in Goldman Sachs: $8,800,000,000]

Without FDIC’s debt guarantee program, even impregnable Goldman would have collapsed.

And this excludes the emergency, opaque lending facilities from the Federal Reserve that also helped rescue the big banks. Without all these bailouts, the financial system would have been forced to recapitalize itself.

Banks that couldn’t finance their balance sheets would have sold toxic assets at market prices, and the losses would have wiped out their shareholder’s equity. With $7 billion at stake, Buffett is one of the biggest of these shareholders.

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Mr. Bill Gates, who joined the Berkshire Board of Directors in 2004, also benefited handsomely during the period immediately following these bailouts – by virtue of his own Berkshire holdings (91.9 million shares):

Bill Gates – Berkshire Hathaway, Inc. – Class B

Source:  https://stockcircle.com/portfolio/bill-gates/brk.b/transactions

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Summary:  The Fed ‘created’ trillions of dollars in ‘new money’ in their “Secret Liquidity Lifelines” to bail out Wall Street’s financial sector – ‘lathering up’ not only the ultra-wealthy, upper-level management teams of these American and European banking behemoths, but also their major billionaire shareholders like Warren Buffett and Bill Gates.

____________________________________

It is now high time to level the playing field – by granting U.S. citizens the same direct access to liquidity that was so generously provided to the likes of Goldman Sachs, Bank of America, Citigroup, Wells Fargo, Morgan Stanley JP Morgan, State Street, Barclays, Deutsche Bank, UBS AG, BNP Paribas, Royal Bank of Scotland… and others.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (4155 downloads)

Democrats in Washington are all set to pump $79 billion of new money into the Internal Revenue Service (IRS), in large part to hire as many as 87,000 additional employees – and thereby ‘grow’ this agency into the largest in all of government. As the plan unfolds over the coming 10-years, the IRS will “employ more bureaucrats than the Pentagon, State Department, FBI, and Border Patrol combined” (Washington Free Beacon, Aug 6, 2022).

The projected benefit from this massive new government expansion plan: $204 billion over 10 years.

Washington Republicans, aside from voting ‘No’ on this government-expanding extravaganza, shamefully have no plan of their own to offer a ‘better, more powerful, more efficient, and more prosperous way forward for America.’

Washington Republicans, furthermore, have made no statement about ‘defunding’ this massive IRS expansion.

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WSJ:  The IRS May Soon Get Bigger Claws

By Laura Saunders, Aug. 6-7, 2022 – Excerpts:

“If Congress passes the Inflation Reduction Act, Americans should expect more IRS audits—especially on filers making more than $400,000 a year…. includes provisions adding $79 billion to Internal Revenue Service funding over the next decade. More than half of it would boost enforcement, while $30 billion would be to improve operations and technology, and $3 billion would go for taxpayer service.”

“According to the Congressional Budget Office, the expanded IRS funding is expected to raise $204 billion over 10 years. By this analysis, says Mr. Watson, the IRS will raise $2.50 for each additional dollar invested, because the $79 billion phases in and the agency needs time to ramp up. In the past, the IRS has estimated a return of $5 to $9 for each added dollar once hiring and training are complete.”

“Former Treasury secretaries, IRS commissioners, and tax-policy specialists across the political spectrum have endorsed the funding proposals. But the American Institute of CPAs has expressed reservations, given the massive backlog of more than 17 million unprocessed paper returns.… “Given the historic low level of taxpayer services, we are concerned about a possible imbalance between funding for taxpayer services and enforcement,” the group said in a letter to Congress.

_________________________________________ 

Washington Republicans may be ‘dead in the water,’ but Main Street America Republicans do have a plan.

The Leviticus 25 Plan, by virtue of its Federal Income Tax Recapture provisions, will increase U.S. Treasury Department net tax collection revenue by $1.592 trillion over a 5-year period – all without spending one additional dollar on IRS collection efforts.

The Leviticus 25 Plan – Federal Income Tax Recapture

The scoring model assumes that 80% of U.S. citizens will participate in The Leviticus 25 Plan.

Participants must give up their tax refunds through the Plan’s recapture provisions for the 5-year target period (2023-2027).

According to 2021 IRS Filing season statistics, through Dec 3, 2021: 129,841,000 total refunds were paid out for a total of $365.499 billion.  The estimated refund total for the full year, through December 31^st:  $365.5 billion.

Refund totals have increased by ~$44 billion over the past five years, from $323.9 billion (2017) to a current (estimated) $365.5 billion (2021), representing an average increase of $8.32 billion / year. 

A conservative estimated average of $8 billion per year (2023-2027) will be used for this recapture calculation.

2021: $365.5 billion

2022: $374 billion

2023: $382 billion

2024: $390 billion

2025: $398 billion

2026: $406 billion

2027: $414 billion

Total: $1.990 trillion

Total recapture X 80%:  $1.990 trillion X .8 = $1.592 trillion

Total recapture per annum (2023-2027): $1.592 trillion / 5 = $318.4 billion

Source: https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-december-3-2021 

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (4149 downloads)

“Democracy extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”  – Alexis de Tocqueville

Washington Democrats are getting set to enact another ‘big government’ entrenchment scheme by expanding the scope and power of the IRS – to better bludgeon U.S. taxpayers.

There is a better way to streamline the tax code and shrink the IRS’ footprint…..

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The IRS Is About to Go Beast Mode

The Schumer-Manchin bill has $45.6 billion to audit the middle class.

Wall Street Journal, Aug. 2, 2022 – Excerpts:

Progressives want Joe Biden to unleash what they call “beast mode” executive power, and the Schumer-Manchin tax bill supplies the cash to turn the Internal Revenue Service into Wolverine.

The pact between Sen. Joe Manchin and Majority Leader Chuck Schumer includes $80 billion in new funding for the tax man. Democrats claim this “investment” will yield more than $200 billion in revenue. That estimate is highly speculative, but if it’s anywhere close to right IRS auditors will soon be coming after tens of millions of Americans.

The $80 billion is more than six times the current annual IRS budget of $12.6 billion. The money will be ladled out over nine years and comes with few strings attached. The main Democratic command is for the tax agency to bring the hammer down on taxpayers.

The bill earmarks $45.6 billion for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” “digital asset monitoring” and a new fleet of tax-collector cars. The result will be far more audits, civil suits and criminal referrals.

The main targets will by necessity be the middle- and upper-middle class because that’s where the money is. The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000.

The IRS knows the super-wealthy employ lawyers and accountants who make litigation time-consuming and risky. It also knows that Democrats would howl if the agency pursues fraud in the earned-income tax credit program, despite what the IRS has estimated are $18 billion in improper payments each year.

Despite all this new money, Americans shouldn’t expect better IRS service. The agency in the 2022 filing season answered a mere 10% of its phone calls. The Taxpayer Advocate Service revealed in June that as of May 31 the IRS was still sitting on 21.3 million unprocessed paper tax returns, with millions of taxpayers “waiting six months or more to receive their refunds.” Yet the Schumer-Manchin bill devotes only $3.2 billion for “taxpayer services.”

The bill does, however, provide $15 million to study a bad Elizabeth Warren idea. An IRS task force will have nine months to deliver a report on the feasibility of the IRS running its own “free direct efile tax return system.” America has a voluntary tax system that lets taxpayers determine their correct amount of tax before the IRS checks it.

Sen. Warren wants to create what would be a federal H&R Block that assesses tax liability for taxpayers. Taxpayers would presumably have to appeal if they disagree, and who knows how long that would take.

All of this is likely to be made worse by what seems to be the increasing politicization of the tax agency…..

The federal government isn’t starving for revenue. Congress wants more tax revenue because it can’t control its appetite for spending. That’s why it wants a tax agency in beast mode.

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Republicans in Washington, who, by the way, do not have any type of broadly-defined ‘Vision for Restoring the American Dream,’ and never seem to have a superior alternative to offer the American people when Washington Democrats push to expand big-government’s power to expropriate wealth and limit freedoms for working-class Americans – should sit up and take notice….

The Leviticus 25 Plan is a powerful, and manifestly superior, plan to expanding IRS powers – and defining a bright new vision for America.

All U.S. citizens participating in The Leviticus 25 Plan will forego their tax refunds for the initial five year activation period (2023-2027).

Benefits – Federal Income Tax Recapture
The scoring model assumes that 80% of U.S. citizens will participate in The Plan.
Participants must give up their tax refunds through the Plan’s recapture provisions for the 5-year target period (2023-2027).

According to 2021 IRS Filing season statistics, through Dec 3, 2021: 129,841,000 total refunds were paid out for a total of $365.499 billion. The estimated refund total
for the full year, through December 31st: $365.5 billion.

The Leviticus 25 Plan would reduce the number of refunds each year (2023-2027) by 80%, effectively dropping the gross number of refunds in need of processing, reviewing, and potentially auditing, from approximately 130,000,000 down to about 26,000,000.

The IRS would NOT need to hire the additional thousands of employees, and they would NOT be put in the bind of having to pay $3.3 billion in interest payments on unprocessed refunds.

And the IRS would NOT need “$45.6 billion for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” “digital asset monitoring” and a new fleet of tax-collector cars.“

The Leviticus 25 Plan is a powerful solution to expanding the IRS’, and it is loaded up and ready to go – setting forth a dynamic ‘Vision for America’ for decades to come.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (4144 downloads)

The Mind-Blowing Stupidity Behind The $280 Billion ‘Chips For America Act’

Authored by Rob Smith via RealClearMarkets.com, Monday, August 1, 2022

Excerpts:

Congress and H.R.7178, the Chips For America Act.

Has the Congressional Budget Office ever been even close to right in its projections? Was Anthony Fauci right about anything? Have you ever read the Congressional Record concerning the 1935 Social Security Act? How about the trillion dollars spent in the Middle East to turn barbaric tribesmen into Jeffersonian idealists via nation building?  The formation of the Department of Education in 1979 sure turned out well. $68 billion/year is being spent and our nation’s youth can’t find the United States on a map of the world…

It works like this. The government ignores the fact that individuals can look out for themselves and that markets work. Thus, it enacts legislation to fix a perceived problem, but the legislation does not fix the problem. It creates much bigger problems (see the American health care system). Then to fix the much bigger problem that it created, it enacts more legislation and [on and on]..

All of this is on full display with Congress about to pass H.R.7178, the Chips For America Act. ….

The reason there were no chip supply line shortages pre-fake-pandemic is because millions of “invisible hands” from all over the world provided the needs for a world-wide market. It’s the miracle of markets, and each year the government did not intervene “by trying to help the chip market,” the better the chips and the cheaper the chips became per unit of processing power….

Now what’s going to happen now that the U.S. government has stuck its nose into the semi-conductor market. Remember when the United States had restrictive tariffs and limits on foreign cars. Everything made in Detroit was a pile of junk; think “Plymouth Duster.” Once Detroit had to compete with Japan and Germany, American cars got a whole lot better and much cheaper as better cars produced 2 to 3 times more usable miles and lasted longer.

So what’s to become of the price and quality of semi-conductor chips? This bill carries a $280 billion cost.  Doesn’t this crowd out private investment?  Isn’t it better to leave money in the private sector such that overall investment can flow to its most productive use? What are the potential pitfalls and unintended consequences of this legislation? When has a government industrial policy, picking winners and losers ever worked? Why can’t Congress simply get out of the way, reduce its regulatory burden on business and let the market solve the chip shortage? By the time this Leviathan Legislation begins to bear any fruit, won’t market forces have already fixed the chip shortage?

The opening paragraph of the “Chips Act” states that it “establishes investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security.” Government investment in preferred industries! Yeah, that worked real well with Solyndra, the Synthetic Fuels Corporation, the Clinch River Breeder Reactor and I could go on…

…This isn’t private sector research and development, this is government research and development, which means politicization to control the thoughts and actions of the chosen recipients. These recipients don’t have any skin in the game as they do not own the chip companies…

$80 billion is going to the National Research Foundation, the sister entity of the National Institute of Health. You know, the same think tank of brilliant scientists that told us the vaccines worked and wouldn’t kill people! The same government experts who created the chip shortage via its advice to ruin the world economy.  This bill is completely unnecessary, the chip shortage problem will solve itself. $280 billion will flow towards a protected class of government sycophants in a “scratch my back I’ll scratch your back” corrupt system of political patronage.

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It is time for America to rise up and demand a ‘citizen-centered’ reset.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (4142 downloads)

Thanks to Washington Democrats in the U.S. Senate, ‘big government’ just got a whole lot bigger and more deeply ‘entrenched.’

Senate Democrats passed a $740 billion budget reconciliation bill, calling it “The Inflation Reduction Act.” 

The Wall Street Journal has a more accurate name for the 725-page bill, calling it “The Business Investment Reduction and Distortion Act.”

Washington Republicans, of course, opposed the bill.  But do they have a legitimate, politically viable economic plan of their own to: 1) Get the federal budget deficits back under control?; 2) Materially improve financial security across the board for all of America’s hard-working, tax-paying U.S. citizens?; 3) Revitalize free market dynamics and economic liberty for all Americans?; 4) Set America back on track for long-term economic growth?; and 5) Safeguard the U.S. Dollar’s status as the world’s reserve currency?

Answer:  5 times, “No.”

Shamefully, Washington Republicans have no countervailing plan – other than to lightly ‘tap the brakes’ on Democrat initiatives to grow government and control the masses.

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WSJ: The Schumer-Manchin Tax and Subsidy Pact

New taxes and price controls to pay for green corporate welfare for the politically favored.

WSJ The Editorial Board, July 28, 2022 – Excerpts:

“Mr. Manchin is selling the deal as deficit reduction and a rescue for fossil fuels. If he believes this, he hasn’t thought through the impact of the 725-page bill. A more accurate name would be the Business Investment Reduction and Distortion Act since that will be the result of its $433 billion in climate and healthcare spending, and $615 billion in new taxes and drug price-control “savings.”

Start with the 15% minimum tax on corporate book income over $1 billion, which Democrats claim will raise $313 billion through 2031. This new alternative minimum tax will slam businesses whose taxable income is lower than the profits on their financial statements owing to the likes of investment expensing, tax credits and business deductions.

…….

Businesses will have more incentive to sink money into green ventures whether or not they are the best uses of corporate capital. This will magnify investment distortions created by the bill’s $369 billion in climate spending, most of which is corporate welfare.

Companies will get tax credits for spending on wind, solar, critical minerals, biofuels, hydrogen, carbon capture, nuclear, “sustainable” aviation fuel, lithium-ion batteries, electric-vehicle charging stations and more. Auto makers will get $20 billion in cheap federal loans for building “clean vehicle” factories.

The Biden Administration is using regulation to essentially mandate that auto makers churn out electric vehicles. Now taxpayers will subsidize that cost, on top of the $7,500 EV tax credits so affluent Americans can buy more Teslas. The bill removes the 200,000 manufacturer cap for the $7,500 EV tax credit, which GM, Tesla and Toyota have hit and Ford soon will.

……

All of this will steer private investment into green energy at the cost of reduced investment in fossil fuels. Wind and solar subsidies are already creating distortions in power markets that make the electric grid less reliable and energy more expensive. The expansion of subsidies will compound these problems.

Most climate spending also comes with prevailing wage and domestic content requirements that will drive up project costs. How will this help reduce inflation?

The Schumer-Manchin deal is also a raid on drug companies. The bill will require the Health and Human Services Secretary to “negotiate” Medicare prices—i.e., impose price controls—for dozens of drugs. But the $288 billion in putative savings are fanciful. Manufacturers will hedge potential future losses by launching drugs at higher prices.

Generic manufacturers say price controls will dampen their incentive to develop copycats, which will result in higher prices for all drugs down the road. The bill will also discourage investment in innovative treatments that could reduce future healthcare spending.

Democrats plan to use the phantom savings to extend sweetened Affordable Care Act subsidies for three years. The subsidies are sure to be extended again in 2025, and their cost will grow as insurers raise premiums to pocket the larger payments.“

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Main Street American Republicans do have a powerful citizen-centered plan that will provide a dynamic ‘recharge’ to the U.S. economy and restore economic liberty in America – and reduce America’s debt and protect the long-term viability of the U.S. Dollar.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (4139 downloads)

“But our society — unlike most in the world — presupposes that freedom and liberty are in a frame of reference that makes the individual, not government, the keeper of his tastes, beliefs, and ideas; that is the philosophy of the First Amendment; and it is this article of faith that sets us apart from most nations in the world.”  -Justice William Douglas, Paris Adult Theatre v. Slaton

“Our whole constitutional heritage rebels at the thought of giving government the power to control men’s minds.”  -Justice Thurgood Marshall, Stanley v. Georgia

“The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by men better than himself.”   –John Stuart Mill

Rising Interest Rates Will Crush the Federal Budget – The interest costs of Treasury debt are about to soar while revenue from capital-gains taxes will plunge.

By Red Jahncke, President of the Connecticut-based Townsend Group International LLC.

June 29, 2022 – Excerpts:

The Federal Reserve’s policies of increasing interest rates and quantitative tightening—reducing its $8.9 trillion balance sheet—will increase the volume and cost of federal government borrowing, slamming the federal budget and exposing the consequences of decades of deficit spending.

Since February 2020, publicly held U.S. Treasury debt has exploded, growing from about $17 trillion to $24 trillion. Almost half of the increase has wound up at the Fed, whose Treasury holdings have ballooned from $2.5 trillion in February 2020 to $5.8 trillion.

Quantitative tightening is a big initiative. In May the Fed announced plans to reduce its Treasury holdings by $330 billion by the end of the year, and by $720 billion annually thereafter until its balance sheet shrinks to a yet-to-be-determined size. The Fed can reduce its balance sheet, but that doesn’t mean the federal government can reduce its balance of outstanding debt.

Given the extraordinarily low interest rates on new federal debt issued during the recent economic shutdown, federal interest costs barely increased despite the $7 trillion increase in Treasury debt. Over the last three federal fiscal years ending on Sept. 30, 2021, total gross interest cost was $573 billion, $523 billion and $562 billion. (Net interest, after accounting for interest income primarily in government trust accounts, is $150 to $250 billion lower.)

That is changing. Short-term rates have risen 1.5% following the Fed’s 75-basis-point rate increase in June and smaller increases in March and May. By the end of 2022, additional rate increases will bring cumulative rate increases to 3%, according to the Fed’s official guidance. The Fed projects short-term rates averaging 3.4% in December and rising thereafter.

As this additional 3% works its way into the refinancing of maturing Treasurys, federal interest costs will skyrocket. There are about $3.7 trillion outstanding Treasury bills, which mature in less than a year. In 12 months the 3% increase in rates will generate roughly $111 billion in additional annual interest expense on these Treasurys.

There are $2.4 trillion of Treasury notes, which are issued with maturities of one to 10 years, maturing within a year, according to the latest Monthly Report of the Public Debt. The weighted average interest rate on these notes is 1.3%, and the weighted average original maturity is 4.7 years. The current yield on five-year Treasury notes is about 3.25%—1.5 points higher than the high end of the fed-funds-rate range. If these maturing Treasury notes roll over at the same spread over the projected year-end fed funds rate of 3.4%, they will bear interest at 4.9% and cost an additional $86 billion.

Total federal gross interest cost over the 12 months ending on May 31 was $666 billion. If we include the impending extra interest on Treasury bills and the maturing notes, that figure rises to $863 billion. This is a staggering cost. National military spending was $746 billion over the past 12 months; Medicare spending was $700 billion.

With the federal government in perpetual deficit, where will the Treasury find money to make extra interest payments? New taxes? Lower spending? Fat chance. In all likelihood, it will have to borrow to pay interest.

Who will buy Treasurys?  Under quantitative tightening, the Fed isn’t planning to reduce its holdings of Treasury bills, only of longer-term notes and bonds. Buyers—especially of long bonds—face an uncertain inflation outlook. The high pace of the Fed’s reduction of its Treasury holdings will require a fast-paced refinancing program. It will be challenging and costly to find buyers to replace the Fed.

The revenue side doesn’t look much better. The sharp selloff in equity markets will severely depress capital-gains tax revenue, which averages more than 10% of federal individual income-tax revenue. Such revenue is now reversing from a historic peak in 2021. The shortfall in 2022 could be as much as $250 billion. Almost inevitably, this revenue loss will have to be made up with more federal borrowing.

Fed policy changes will have other significant effects. In 2021 the Fed generated nearly $108 billion in profit. Big banks make big money. The Fed is required to remit most of its profits to the Treasury. As the Fed shrinks, it will remit less.

Under current Fed policy, the federal government’s annual gross interest expense could reach $1 trillion, causing federal borrowing to continue to grow rapidly. As rates rise and federal borrowing increases, a vicious circle will produce ever more interest expense and ever more borrowing.

This dire outlook has been long coming. The current debate about inflation and whether the Fed’s monetary moves have been too late or too aggressive misses the point. The U.S. has been on an unsustainable fiscal and financial path for a long time. We are beginning to see the inevitable result.

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Meet America’s Blockbuster Budget Balancing Solution: ‘Main Street America’ has an economic acceleration plan that will provide a dynamic ‘recharge’ to the U.S. economy and restore economic liberty in America – and reduce America’s debt and protect the long-term viability of the U.S. Dollar.

The Leviticus 25 Plan will generate $583 billion federal budget surpluses for the initial 5 years of activation (2023-2027), and completely pay for itself over the next 10-15 years.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America 2023

Economic Scoring links:

·  The Leviticus 25 Plan 2023 – $583 billion Federal Budget Surpluses (2023-2027), Part 1: Overview, Deficit Projection

·  The Leviticus 25 Plan 2023 – $583 Billion Federal Budget Surpluses Annually (2023-2027), Part 2: Federal Income Tax and Means-Tested Welfare Recapture Benefits.

·  The Leviticus 25 Plan 2023 – $583 Billion Federal Budget Surpluses Annually (2023-2027), Part 3: Medicaid/CHIP and Medicare Recapture Benefits

·  The Leviticus 25 Plan 2023 – $583 Billion Federal Budget Surpluses Annually (2023-2027), Part 4: VA, TRICARE, FEHB, SSDI Recapture Benefits

·  The Leviticus 25 Plan 2023 – $583 Billion Federal Budget Surpluses Annually (2023-2027), Part 5: Subtotals, Interest Expense Savings, Summary

Website:   https://Leviticus25Plan.org

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Preview 1:

The Leviticus 25 Plan provides a $90,000 credit extension, direct from the Federal Reserve, to every participating U.S. citizen:  $60,000 into a Family Account (FA) and $30,000 into a Medical Savings Account (MSA).

Example:  Qualifying family of four would receive $240,000 in their FA, and $120,000 in their MSA.

Primary goals:  Massive debt elimination at family level: mortgage debt, consumer debt, student loan debt.  Federal budget surpluses.

Eligibility:  U.S. Citizen.  Job history, credit history requirement (similar to traditional credit checks for bank loans).  Clean recent drug history.  Clean crime history.

Requirements:  Forego all federal and state tax refunds for 5-year period.

Forego selected means-tested welfare benefits – for minimum 5-year period.

Forego all income security program benefits – for minimum 5-year period.

Forego new federally-subsidized ‘Family Medical Leave’ benefits – for minimum 5-year period.

Forego Child Tax Credit benefits – for minimum 5-year period.

Forego enhanced federal rental forbearance/assistance – for minimum 5-year period.

Forego SSI and SSDI for minimum 5-year period.

New $6,000 deductible on primary care access to: Medicare, Medicaid, VA, TRICARE, FEHB – for minimum 5-year period.

The Plan assumes that the elite-wealthy will not participate, because their refunds are too valuable to give up over the requisite 5-year period.

The Plan also assumes that many who heavily depend on social welfare benefits will also choose not to participate, because the overriding value of those benefits, vs foregoing them, over the 5-year period.

Preview 2:

The Leviticus 25 Plan grants the same direct access to liquidity, through a Fed-based Citizens Credit Facility, similar to the credit facilities that were created by the Fed to transfuse trillions of dollars in direct transfers and credit extensions to Wall Street’s major banks, credit agencies and insurers during the great financial crisis. 

The following facilities were created and activated by the Fed for this massive Wall Street bail out operation: Term Auction Facility (TAF), Primary Dealer Credit Facility (PDCF), Term Securities Lending Facility (TSLF), currency swap agreements with several foreign central banks,  Commercial Paper Funding Facility (CPFF), Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), Money Market Investor Funding Facility (MMIFF), and the Term Asset-Backed Securities Loan Facility (TALF), and access to the Fed’s Discount Window.

Additional perspective:  SIGTARP, the oversight agency of the Troubled Asset Relief Program (TARP), in its July 2009 report, vetted by Treasury, noted that the U.S. Government’s “Total Potential Support Related to Crisis” (page 138) amounted to $23.7 trillion. While this figure represents a backstop commitment, not a measure of total potential loss, it is nonetheless an astounding degree of support, in the form of liquidity infusions, credit extensions and guarantees, various other forms of assistance for financial institutions and other business entities affected by the financial crisis.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. cirtizen – Leviticus 25 Plan 2023 (4135 downloads)