ANTI-DESANTIS AD

 

AN ANTI-DESANTIS AD CLAIMS HE SUPPORTED 23% SALES TAX. The truth is that DeSantis supported the Fair Tax several years ago.  I did too.  It would replace the entire income tax with a 23% tax on retail sales, but every person is sent a government check each month for 23% of about $40,000 (1.3 times the poverty rate).  Add these two and the result is people who are low income then pay no net tax while those who are upper incomes pay nearly 23% tax on things purchased.  Very low income people get a bigger check than the amount spent on the sales tax—hence a benefit.  Meanwhile the rich would gladly accept a 23% tax rate. No tax forms to fill out--businesses who already fill out state sales taxes would find it only a minor burden to fill out another for federal. Frugal seniors who don’t buy much, pay far less tax. Everybody wins with a Fair Tax. But the lying asses who made the ad against DeSantis don’t tell the whole story, claiming that he only wanted to raise sales taxes to 23%.

   In 2019 I and a few others successfully introduced a plank in the State Republican Platform to replace state income tax with Fair Tax.  To cover the amount raised by state income tax it would require about 2.5% increase of sales tax.  The people who really hate a Fair Tax are the people who have a fabulous exemption and pay little or no state income tax—big shots for whom the legislature has written narrowly targeted exemptions in the past. It’s a corrupted system. Oklahoma has by far the most tax exemptions of any state. Those of us who pay state income tax, are just suckers, I guess.

Why bring this up? When I was young I concluded that when I retired there likely wouldn’t be any social security for me.  I was wrong—but not by much. And unlike other young people in the anti-war era, I had a lot of sympathy for seniors—people who had worked very hard and if they had savings, inflation reduced it constantly. Worse, in order to cash out their savings they have to pay Uncle Sugar high taxes. Didn’t seem fair.  Nor is it fair to make tax arguments that are simpleton and wrong. Here’s facts about seniors.

     Most recent census, nearly half (43%) of seniors have no savings.  Some have pensions, but about 1 out of 4 have nothing but Social Security.  Seniors spend avg. $4000 per month but avg. SS is $1800 per month. Next time you are in a room of gray heads, just count, 1,2,3, 4^th one has nothing but SS to live on. 11% over age 75 are still working. Avg. future long term care costs are $120,900.  Now you can say, “People didn’t save like you did, Dave!”  True but financial planners say you need 10 X annual salary saved to maintain that lifestyle.  That’s about $700,000 per typical household. But median retirement account for retirees is $104,000, down from 134K since Biden.

    It will take years or a rough recession to flush inflation out of our system. I guess we’ll have to live with this and defeat Biden and socialist Dems.  But I wish the Republicans will remember the serious lessons of inflating long after that, instead of making circular firing squad, jib-jab campaign cartoons.

A HIDDEN STORY OF HOW YOUR TAXES WILL CHANGE NEXT YEAR.

 

IRS will require 1099K’s be issued for all purchases over $600 next year.  This has been the formal requirement by the feds ever since Obamacare, but if one’s accounting is faithful, it makes no difference in federal revenue, thus has rarely been don by businesses for small purchases.  It applies only to business transactions. But with the 87,000 new agents, IRS now wants to require it for all transactions over $600.  This will generate a mountain of paper with almost every transaction of certain businesses required to provide a 1099. The reason this came about with Obamacare was that it was perceived as a way to pay for it. But then IRS quickly yelled uncle because of the tons of paper that would be coming their way. 

            Whywas this part of Obamacare? Democrats believe that most small businessmen, tradesmen and farmers are crooks hiding income. After all, they vote 90% Republican. A small subset of them actually are petty tax cheats. By requiring 1099s Dems hope to find  more money.  But think about this.  If a return and accounting are honest, the 1099 (a note to the govt that you’ve paid someone some money) is unneeded.  It generates zero federal revenue. 

            So in 2023 if you go to Walmart and buy a TV for $601, will you have to remit a 1099 to Walmart? Yes, if any portion of its use is for business. A car repair? Yes, if the car is used for any deduction or business. (Keep your fuel receipts handy too.) What if you mow your neighbor’s lawn while he’s gone and he mows yours in return?  Technically, you are both engaged in a service business and must record fair market value for the services.  But of course, it will be hard to catch people doing such things. And what if a business buys something for nominally $601 and agress to 2 payments of $302? Then there is no 1099.  Do you see how this gets complicated? Is a staggering burden for small biz?

            The fed govt dreams of block chains.  That is, a crytodollar being used.  There will be no cash allowed.  Instead of transactions being secret, by lack of ID like they are in current crypto currencies, everyone’s business will be viewable by govt.  But we aren’t there yet.

            Think of the consequences of 2023.  A voter rebellion may be in store. Or bartering may occur.  Currently, stuff gets bartered—say, a dozen eggs for a haircut—by some very small players, often on welfare or with no visible means of support.  The origin of currencies came when a guy went to town with his load of firewood to barter for something else like flour.  It’s very cumbersome to haul your load of wood around town.  So a guy with a warehouse says, “Park it in my warehouse and I’ll give you a note to say you own so much wood.”  You could then go to the miller and agree on a rick of wood for a bushel of flour.  You give a claim note on your load, and he gives you one on his load of flour in the warehouse. And you both go to claim your stuff.  But maybe he needed milk more than firewood and traded the firewood note to a dairyman.  Eventually people got to the point where they were trading their notes.  And who verified the purchases? The guys sitting in the town square on benches “banks”.  They were often Jews making coins out of gold.  So notes and coins became a currency.  And states or businesses also made their own currencies from ancient times.  Multiple odd currencies were found all the way up into the 1950s. What would happen if the mafia wanted secret transactions after crypto dollars were put in place?  They’d devise their own secret notes/currency.  And maybe others would like handling this new “cash” so they would also trade mafiabucks.  In fact, this might happen even without crypto dollars, simply because govt has made the system too burdensome or too surveilled. 

            2023 is going to be an interesting year.