Nutter's Washington

Nuclear Option: Destructive, Sad and Small Minded

I want to make just a brief comment about the decision taken yesterday by the U.S. Senate to change the rules regarding about the “advise and consent” provisions of the Constitution for Presidential appointees.

The liberals in the Senate for the most part eliminated filibusters for nominations by presidents by changing a rule that has been in place for 225 years. It is a result of a short-term mentality by Democrats that undermines the rights, voice and ability of the minority party, whoever is the minority party at the time. It reflects the Obama doctrine of “we will just do what we want”, forget the law and make it up as we go along.  

The action taken is sad, pathetic, small minded and destructive.

I can at times see both sides of an issue where there are two sides. In this case, Democrats used a rare parliamentary move to change the rules so that federal judicial nominees and executive-office appointments can advance to confirmation votes by a simple majority of senators, rather than the 60-votes.

Senator Harry Reid, frustrated by the minority exercising their rights, threw a temper tantrum.  It is hard to imagine a worse Majority Leader, one who refuses by legislation and rule manipulation to allow the minority to offer amendments to legislation; fretting because the tactics used by the Republicans are the same as used by Democrats during the Bush Administration. What a hypocrite.

My view of the action is not political. If the political tables were turned, I would be saying the same thing.

Democracy took a huge blow yesterday. The power by Government to rule by fiat increased. The country is worse off today, the future protection of the rights of all citizens to be represented went to the side of the road like a sack of discarded garbage.

I do not think, Senator Reid cares, he just wants his way, and do the bidding of his White House masters. Those that may have a contrary view are simply in the way.

This change will come back and bite the Democrats. It will bite us all.  It puts more sour in what is served cold to the opposition. The Senate did a disservice to themselves and to all of us.

The growth of government, its interference in almost every aspect of our lives, its idiotic rules and dictates have reached a point where basic liberty is challenged and freedom of choice are no longer made by the individual.

The action yesterday is more of the same. It is a monumental event. Senator Reid defended the action by saying the Senate has changed.  Yes, indeed it has and he is a prime example as are his breathen. The country has not been served by able leaders.

 

 

International Corporate Tax Reform: More Dough for the Feds but a Start

 

There is a mounting interest in Congress, the business community and the Administration in tax reform, however it is defined. There is some legislative movement as retiring Senate Finance Committee Chairman Max Baucus (D-MT) released a proposal to change the way multinational corporations are taxed.

In general corporate tax reform is much needed.  The marginal rate is the highest in the world and international competition is driving the possibility of an update. In addition, policy makers are searching for any and all ways to help the lagging economy. However, the issue is very complicated and unlike the individual tax side, the choices are diverse.

The Baucus proposal is for the big international boys, nothing to do with neither Main Street nor those companies that use the individual side of the tax code, like Subchapter S, partnerships or Schedule C.

By way of background, the United States employs a worldwide tax system, meaning American companies are taxed on their U.S. profits, taxed abroad on their foreign profits, and then taxed again when those foreign profits are brought back home.

By contrast, virtually all-foreign companies are taxed under a territorial system in which they pay taxes on their home country profits in their home country and on their foreign profits in the foreign country. Foreign profits are not taxed a second time when they are brought back home. Thus, the double taxation of foreign profits is avoided.

To offset the advantage of a territorial tax system and to help level the playing field between American worldwide companies and their foreign competitors, the U.S. government employs a system of tax credits and tax deferral. Deferral, which has been in the Internal Revenue Code in various forms since the 1960’s, allows U.S. companies to delay paying tax on foreign earnings until that income is repatriated. For liberals, deferral is a nasty word, mainly because the system created all companies to make money and not share it with Uncle Sam.

Under the current system, all corporate earnings are supposed to be taxed at 35 percent. In reality, much business income is not. Profits abroad are taxed only when brought to the United States; so much of it never comes home.  Companies can move to low-tax havens, then sell into the American market.

The legislation, offered by Senator Baucus, would permanently exempt only some of the profits earned by American corporate subsidiaries in foreign countries, but it would immediately tax profits from goods and services sold to the American market from such subsidiaries.

Political Calendar is Moving Along: Many Issues, no Results

 

The calendar is moving right along these days. Christmas decorations have sprung up from greedy merchants everywhere. It is not even Thanksgiving yet but the stampede is on. Buy some useless piece of stuff, re-gift some piece of crud received last year, receive something you never wanted or would have in the house or wear. It spite of the meaning of Christmas, I find it more and more tedious.

However, the purpose here is not to humbug but to see what we know. Where are we in relation to the political landscape?

These are a few things we do know: 

The health care fiasco continues and will keep on going. Immensely unpopular and flawed, the Administration promise to have the insurance exchanges up and running by the end of the month is just another fib to mollify. The political announcement last week to allow- almost certainly not going to work- some individuals to keep their old medical insurance was a political move but not going to quell the cancellations.

The vote in the House approving the Upton proposal was also purely politics.

 The clock is also ticking on the employer mandate. Once companies start to drop their insurance or change it to comply with the law, the opposition against Obamacare will increase. Of course, the insincere and rare apology by the President will not change anything because the  liberals do not care. The goal was to nationalize the insurance market, make people rely on  government and take away choice. The goal is the same and the resolve has not gone away.

More of what we know and is coming up:

It is about 3 weeks or so until the Conference Committee on agreeing to a FY 2014 budget is  due to report. I am not holding my breath on this one.

The government will run out of Chinese money to spend on January 15, 2014. There will be no shutdown this time. Look for some agreement around the prior spending levels and go quietly into the night. Republicans have no need to fight over funding health care; they are winning that issue hands down.

 Debt limit will be hit sometime in the second week of February. Again, a big deal but probably not going to be as confrontational. The sequester will continue to squeeze in an un-artful way but for those wanting to reduce federal spending, it is a squeeze nevertheless.

The Chairman of the House and Senate tax writing committees have been promising real proposals for months to start consideration of serious tax reform changes. Not going to happen this year. The legislative session does not have that many days left. Although there has been lots of speculation, discussions and lobbying, there is no starting point yet. There is no agreement on structure and budget impact.

Maybe, next year but I am very skeptical politicians will want to take on some many sacred provisions. 

 So, lots going on, lots on the horizon but not really. Not yet.

 

 

Obamacare: Reap what you sow

 

-------for whatever one sows, that will he also reap.

                      Galatians 6:7

 

Democrats now seem to be reaping the harvest of the Affordable Care Act. It is a very meager harvest and one that has them concerned the political repercussions will be severe.

Passed in 2010 by questionable legislative maneuvering, delayed implementation for 3 years, liberals have been touting its benefits. Everything will be great. More people will get health insurance, it was be subsidized by the government and it will be cheaper and easy to get. A person can keep their doctor and their policy if they like it. Government will be expanded by increases in Medicare.

Seems none of that is true. In fact, it seems a massive deception was perpetrated on the county and coupled with incredible incompetency has created a political back lash against the Democrats and has driven the approval rating of Mr. Obama to an all time low. 

Democrats are not only trying now to distance themselves from Obamacare but are abandoning ship, turning on their President to save their own political hide. It is amazing to watch, particularly Senate Democrats up for re-election. Boy, do they have the fixes, advice to suggest now. These are the same ones that in an air of arrogance rammed the legislation forward without even a hint of bipartisan support.

As the President has said, an election has consequences and now so does what these leaders have done to us.  

There is no doubt the law is misguided and flawed. I thought it was unconstitutional as a bridge too far extension of government authority. Somehow, thanks to Justice Roberts, mandates turned into taxes and saved the day for its inevitable consequences.

A few weeks ago, Republicans were being blamed for the government shutdown, much of it as a show against Obamacare implementation. The government shut down part is for the most part forgotten as Republicans have been given the political gift that keeps on giving. Not that Republicans are doing much better, but less bad as they used to say than the Democrats and in the case of Obamacare, well, Democrats own it

Oh, more bad news, the web site will not be ready at the end of the month as promised by the tech surge. Oh and more, very few have signed up.

The other interesting part is as the Democrats scramble to try to do something, the question becomes do what? There is not much the Administration can do to address the problems; (other than get their botched website working) options are limited. Insurance policies that have been cancelled are just that--- canceled. Passing legislation that changes the interlocking assumptions dooms the entire structure.

Do you think Republicans are going to lend a hand? A hand that was chewed to bits by the liberals and the “I am not going to negotiate” President not so long ago? Oh yeah, they will act but the price paid by the Democrats will be steep, very steep and perhaps unacceptable to a President who either did not know what he was promising or did not care what he was promising. Making a half-hearted apology to cover up such ineptitude and deceit does not cut it in my book. The mistrust is everywhere.

In any event, this drama will be around for a long time. Unfortunately, the lives of million of Americans, the welfare of families, their ability to get health care and pay their bills has been adversely affected.

So, no tears here for the politicians, reap what you sow.