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“What we have here is a failure to communicate.” While that is a line from the Paul Newman movie “Cool Hand Luke”, it is perfect when discussing taxes in the U.S. Before we go any farther, I want to make one thing perfectly clear. Our government does not have a revenue problem. It has a spending problem. In 1994, the Federal Government (FG) received $1.26 trillion in tax revenue from U.S. citizens, and the government deficit was $203 billion. In fiscal year 2023, just 30 years later, the FG confiscated $4.44 TRILLION from Americans, yet the deficit grew to $1.68 TRILLION!! Huh? While we have more than tripled the amount of OUR money sent to the FG, the deficit has grown more than 7-fold. Perhaps we could grit our teeth and fight forward if we knew that the FG was solving important societal problems. It is not.

There is a clear difference between the presidential candidates on the issue of taxation. Trump has a proven record as a tax cutter. He believes the American people are capable of making good decisions on how to spend their own money, so he made changes that resulted in our keeping more of what we earned. During his first term, he cut taxes for all citizens and corporations alike. His tax cuts benefitted over 90% of working people. For the first time in decades, the bottom 50% of wage earners saw their incomes grow at a faster rate than the top 50%. Because inflation remained below 2%, American workers actually saw their income grow, net of inflation, also the first time in decades. The economy was flourishing right up until the COVID pandemic hit. In short, Trump believes income belongs to the people who earn it.

On the flip side, Kamala believes the FG would do a better job of handling our money and will demand we give more of it to them. Socialists, Harris included, believe that our income belongs to the FG which will then decide how much of that income we can keep. Since she appeared on the national scene in 2019, Kamala has proposed numerous tax increases, or new taxes, to be borne by taxpayers. If you make under $400,000 you will not pay an additional penny in taxes, she promises. You can add this to the long list of her lies that I have documented in my last 3 blogs. She has promised to let Trump’s tax cuts expire next year. As mentioned above, that tax cut benefitted 90% of Americans. If they are allowed to expire, that will result in a tax increase on everyone. Thanks to the complicit press, she will not have to admit to raising taxes, even though she will have. She is the epitome of the untrustworthy politician.

When she said she will raise the tax on corporations from the current 21% to 28%, the uninitiated celebrated her “sticking it to the man”. Harris knows this increase will ultimately, in one way or another, become the responsibility of the consumer. You and me. She doesn’t care. You see, corporations don’t pay taxes, they collect them. When the FG raises their tax rate, CEOs have a few options if they intend to maintain profitable. 1. They can cancel, or delay, construction of new factories or not purchase new equipment. Workers can’t work in facilities that are not built, nor operate new equipment that isn’t purchased. 2. They can delay the increase of hourly wages, bonuses, and perks, to employees. That is not good for those who punch a time clock. 3. The option they are most likely to take is to raise the prices of their products. When corporations raise prices, it is their customers who end up paying the higher tax bill. 4. When corporate rates become uncompetitive, CEOs can move their operations to a more competitive country. In today’s world, money goes where it is treated best. Manufacturing jobs usually pay higher wages. There is simply no way we can grow manufacturing jobs in the USA if we are not competitive globally.

Kamala continues to demand that billionaires and corporations “pay their fair share”. I can’t imagine any taxpayer, including the rich ones, who would argue with that concept. I have made presentations in more than 20 states and debated countless proponents of the “pay their fair share” camp. The debates were in person, and online. At some point in the discussion, typically when I am tired of hearing inane platitudes, I ask the following question. “What, exactly, is their fair share”? I mean seriously, how much of the money earned by successful people is the FG entitled to? There are a lot of people who live in California, New York, New Jersey, Massachusetts, and others, who are currently paying over 50% of their income in Federal, State, and City taxes. Most of them are earning a significant salary, but are not billionaires. Is that not enough? Not if you are Kamala Harris. She wants to increase the top income tax bracket, the corporate income tax, the estate (death) tax, and the tax on realized capital gains. It should frighten every freedom loving American that Harris wants to remove assets from the productive private sector and turn them over to an ever more wasteful FG. There is no question that would reduce the growth of our economy, reduce job growth, and reduce our standard of living. If Harris truly wants to see that every American pays their fair share, she would be promoting some sort of flat tax. She won’t do that because a flat tax removes the ability of the FG to pick which Americans to favor. In other words, they lose control.

Finally, right out of the socialist playbook, Kamala wants to add a new tax. She wants to charge a 25% tax on “unrealized” capital gains. In other words, a wealth tax. Think about that for a minute. How would a wealth tax work? I’ll give you a couple of hypothetical examples. 1. You bought a house for $100,000 a few years ago. Today it is worth $200,000. You have a $100,000 “unrealized” capital gain on your house. It is unrealized because you still own the house. The tax that Kamala is championing would demand that you pay $25,000 on your unrealized gain. You don’t have $25,000 laying around? Figure it out. 2. On 1/2/2024 you bought 10,000 shares of NuScale Power Corp. (SMR) for $3.14 a share, paying $31,400. SMR closed on 10/1/24 at $11.88. Your investment is now worth $118,800. Hurray for you! You have an $87,400 profit. Not so fast my friend. Kamala’s wealth tax would have you forfeiting $21,850 of that gain to the FG. What would happen if the stock subsequently dropped back to the $3.14 a share that you originally paid? You could sell the stock and break even. Nope. You paid $3.14 and sold for $3.14 and would have lost $21,850. I don’t care if you are rich or poor, you know this is patently unfair. Her money grabbing plan would require that things such as privately owned businesses, farms, real estate, jewelry, and art and collectibles, be appraised every year. The cost of compliance would be outrageous. And it will stifle investment in the U.S. To be fair, Kamala has said her tax would only apply to those with a net worth of $100 million. That number will be a moving target as the FG’s need for additional revenue continues to grow. Either way, this is an invasive, intrusive, grab of American’s assets.

We must stop asking who needs to pay more of their hard-earned income to a grossly wasteful FG, and start asking, where the money we are sending them now is going. The failure to communicate occurs between the people who are working to earn the income that is taxed, and those who decide how to spend those tax dollars. We want the spenders to be responsible fiduciaries of our tax dollars. They want to provide handouts that will buy the votes they need to be reelected. It is our responsibility to deliver that message more forcefully this November. We must elect those candidates who believe in the intelligence of the American people. Those who want to reduce the size of the FG. Those of us whose taxes are providing benefits must begin to set limits. It is clear that those who receive those dollars, and those who give them away, have no limits.

Trump has announced that, if elected, he will form a government efficiency task force. The goal of which will be to provide a complete financial and performance audit of the entire FG. Can you imagine their discomfort when Cabinet heads, and bureaucrats, heard that announcement? (I have said in presentations, and wrote in my book, that we could reduce every government agency by at least 10% and nobody, other than the employees who were let go, would know it happened). He announced that he would appoint Elon Musk to head up the team. That caused the discomfort to turn to terror. Remember that, after purchasing Twitter, Musk reduced its work force by more than 50% and the company is doing just fine. Musk said: “I look forward to serving America if the opportunity arises. No pay, no title, no recognition is needed.” Trump is looking to be prudent with taxpayer dollars, while Harris is looking to add more costly layers of government on the backs of Americans. This alone should be enough to convince undecided voters who are also taxpayers to vote for Trump.

Thank you for reading my latest blog. I hope you felt it was interesting and informative. If so, please tell your family and friends about it. Bob