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IRS Targeted Donors To Tea Party Groups
- Thread starter AAAintheBeltway
- Start date
I mean, we both make 100k, but you give 10k to the TEA party and only have to pay taxes on 90k. I spend all my money on beer and cigarettes and I have to pay taxes on the whole 100k. How is that fair?
(not to mention all the extra alcohol and tobacco taxes I pay to support your corrupt government who you are bitching about because they won't give one party the same breaks they give another party.)
But that's not the point. These were contributions that were not tax deductible. The IRS wanted to impose a gift tax on them. The Supreme Court had already ruled they couldn't do that because it would be burdening people's First Amendment rights.
Also look into all the success of tax increases and spending cuts during the recession and the "recovery" for the past 5+ years.
This is of course goes to the crux of the matter. The Reality versus "Austrian School" economic theory. Logic would tell you that if you are in debt, and your debt is growing rather than shrinking, you need to cut spending. (Certainly that's the case for those of us who can't link the bonds we issue, mortgages, car loans, etc., to a currency that we can talk others into using.) But governments and countries in recession, if they have their own currency linked to a bond, have other options.
Keynes pointed out that they're was a strong psychological factor feeding recessions, and if you did not do something about that, the simple equations that tell you to cut spending, raise revenues, or both, in recessions, would not, in practice, yield the expected result.
Richard Koo, the Nomura economist, has coined a term to describe what happens to people in debt during recessions. The term is "Debt Trauma", and I think it describes in two words why recessions get even worse when your cut spending and raise taxes.
It was on this point that Hayek and Keynes initially disagreed. Keynes recognized the role that debt trauma played, whereas Hayek did not. However Hayek later realized that he was wrong and modified his views. He came around to accepting that one should not raise taxes in a recession, nor cut spending, but he never fully accepted Keynes idea that spending should actually increase to stimulate consumption during a recession.
With all of the experience we have had with recessions, it is now clear that Keynes approach is much better, and that is why most, but not all, Central Banks and Treasuries follow, if they can, Keynesian economics during recessions.
We can see a modern version of the Hayek-Keynes debate taking place right now in the EU. Drahgi (the MIT, Ph.D. Economist who heads the ECB) is a Keynesian, Schauble (The Freiburg-Hamburg trained Lawyer and politician who is German Finance Minister) is Hayekian (is that a word?). After meeting with Schauble in 2012, Tim Geither described Schauble's plan to kick Greece out of the EU as "frightening". We shall see now how things turn out.
The most dramatic example of economic stimulus being used to lift an economy out of deep recession, and it happened during Keynes lifetime, was the rise of the Third Reich in Germany. This wasn't Keynesian in every respect, since there was no stable monetary system at the beginning, but the truly remarkable and stunningly rapid revival of the German economy under Hitler was accomplished with thoroughly Fiat "money," truly created out of nothing, a form of i.o.u.'s actually! Keynes is dead now, so sadly we can not ask his opinion, but I can't imagine he would have approved of the majority of the German stimulus being spent on armaments -- nevertheless the German economy of the late 1930s supports what Keynes often joked about. He was known to say that in a recession it really didn't matter what the government spent on, just so they spent.
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Roberk, here is a great article from last Fall in Bloomberg that your son will be able to read and comprehend. http://www.bloomberg.com/bw/article...rd-keyness-theories-can-fix-the-world-economy
Incidentally, although Walter Heller was correctly quoted in the article, Heller was wrong. It wasn't Kennedy who was the First President to apply Keynesian economics, It was Roosevelt. Very late in the depression, and after Roosevelt made the mistake of making cuts and raising taxes at exactly the wrong time, he reversed his position. He realized his error, after meeting with Keynes by the way.
The object of economic policy should be to produce as much as possible and to live within the means of that production. It's only common sense.
Politicians continually tell us that 'IT'S NOT FAIR' when business is unobstructed and 'IT'S NOT FAIR' that consumers can't have everything they want. So they hamstring business and make promises to consumers.
This creates a problem. You now have businesses producing less and consumers wanting more. What to do? There are only two choices, or a combination of the two. Borrow money from the future or print up the money. This is how they fill the void between the lack of production and the fulfilling of promises the politicians have made to consumers that they can have 'more'.
Now that there are only two choices, how do they sell those choices to sound reasonable and not like carnival barkers? This is where the university phd economists come in.
They find new economists to write brand new white papers. They give the new policies to borrow money and print money new names. Like 'aggregate demand theory' or something like 'modern monetary theory'. These are just contrived attempts to fool the ignorant into believing they have something new, when the simple fact is, is that they are promoting borrowing from the future or printing money, which, once again, are the only two choices. But they now have pretty new names to these theories, they get awarded a Nobel prize, and the politicians get to pretend that they're on very solid theoretical ground to grow the economy.
But all they're doing is the age old thing of borrowing money or printing money.
It's all a giant flim flam.
You grow an economy by producing. Not by borrowing consumption from the future and not by the broken window fallacy of printing money and devaluing your currency.
And the really sad part is, after we've destroyed the economy with this flam flam economics, the perpetrators will then say that the problem was caused by free market economics.
Politicians continually tell us that 'IT'S NOT FAIR' when business is unobstructed and 'IT'S NOT FAIR' that consumers can't have everything they want. So they hamstring business and make promises to consumers.
This creates a problem. You now have businesses producing less and consumers wanting more. What to do? There are only two choices, or a combination of the two. Borrow money from the future or print up the money. This is how they fill the void between the lack of production and the fulfilling of promises the politicians have made to consumers that they can have 'more'.
Now that there are only two choices, how do they sell those choices to sound reasonable and not like carnival barkers? This is where the university phd economists come in.
They find new economists to write brand new white papers. They give the new policies to borrow money and print money new names. Like 'aggregate demand theory' or something like 'modern monetary theory'. These are just contrived attempts to fool the ignorant into believing they have something new, when the simple fact is, is that they are promoting borrowing from the future or printing money, which, once again, are the only two choices. But they now have pretty new names to these theories, they get awarded a Nobel prize, and the politicians get to pretend that they're on very solid theoretical ground to grow the economy.
But all they're doing is the age old thing of borrowing money or printing money.
It's all a giant flim flam.
You grow an economy by producing. Not by borrowing consumption from the future and not by the broken window fallacy of printing money and devaluing your currency.
And the really sad part is, after we've destroyed the economy with this flam flam economics, the perpetrators will then say that the problem was caused by free market economics.
My recollection of this is that the disagreement between the IRS and the Republican Party had nothing to do with the "gift Tax". My understanding is that the IRS concluded that these political PACS, both Liberal and Conservative, did not qualify under the section of IRS code they were seeking status under, because in the opinion of the IRS they were not bonafide "Social Welfare Organizations", but rather section 527, tax exempt, political organizations. Under section 527 their donors names would have to be revealed. This was the crux of the issue: Whether or not the donors names would be revealed, and that had to do with what section of the code they were allowed to file under. The issue was further muddied by the ratio of conservative to liberal political organizations attempting to file as social welfare organizations, being roughly 30 to 1. This made it appear as though the the IRS was "targeting" conservative "social welfare organizations" since the ratio of IRS investigations of these phoney social welfare organizations was heavily skewed toward the conservative groups.But that's not the point. These were contributions that were not tax deductible. The IRS wanted to impose a gift tax on them. The Supreme Court had already ruled they couldn't do that because it would be burdening people's First Amendment rights.
(Of course the IRS, in their inimitable fashion, thoroughly fucked things up by pre-qualifying some organizations on the basis of trumped-up estimates of how the organizations revenues would be spent. These estimates, after the election!, turned out to be wildly wrong. On top of that the IRS had a political zealot, as it turned out, in charge of the IRS office that was to determine under what section of code these organizations qualified. The investigation quickly deteriorated into mud slinging and wild accusations, and veered off into questions of whether the chief witness, the political zealot, Louis Lerner, should be held in contempt. Nothing was ever settled, but politicians on both sides used the opportunity to grandstand on television. The IRS subsequently reviewed their procedure for qualifying organizations for social welfare status, and has revisited those sections of the code under question.)
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You're firing on all cylinders today, piezoe, this post and the other re Keynes v. Hayek.My recollection of this is that the disagreement between the IRS and the Republican Party had nothing to do with the "gift Tax". My understanding is that the IRS concluded that these political PACS, both Liberal and Conservative, did not qualify under the section of IRS code they had filed under, because in the opinion of the IRS they were not bonafide "Social Welfare Organizations", but rather section 527, tax exempt, political organizations. Under section 527 their donors names would have to be revealed. This was the crux of the issue: Whether or not the donors names would be revealed, and that had to do with what section of the code they were allowed to file under. The issue was further muddied by the ratio of conservative to liberal political organizations attempting to file as social welfare organizations, being roughly 30 to 1. This made it appear as though the the IRS was "targeting" conservative "social welfare organizations" since the ratio of IRS investigations of these phoney social welfare organizations was heavily skewed toward the conservative groups.
(Of course the IRS, in their inimitable fashion, thoroughly fucked things up by pre-qualifying some organizations on the basis of trumped-up estimates of how the organizations revenues would be spent. These estimates, after the election!, turned out to be wildly wrong. On top of that the IRS had a political zealot, as it turned out, in charge of the IRS office that was to determine under what section of code these organizations qualified. The investigation quickly deteriorated into mud slinging and wild accusations, and veered off into questions of whether the chief witness, the political zealot, Louis Lerner, should be held in contempt. Nothing was ever settled, but politicians on both sides used the opportunity to grandstand on television. The IRS subsequently reviewed their procedure for qualifying organizations for social welfare status, and has revisited the those sections of the code under question.)
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Thank you.You're firing on all cylinders today, piezoe, this post and the other re Keynes v. Hayek.
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1. odd that the sequester worked and that GDP rose faster than anticipated. That fact was so problematic the cronies that got the republicans to surrender the entire sequester for virtually nothing.
2. Also odd that Piezoe gave some great info... but it was almost all a strawman. The issue has been does cutting taxes allow you to grow your way out of recession. Leftists try to disparage that as "supply side" yet... Keynes himself said...
"Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more--and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss."
3. And didn't the IRS admit it targeted conservatives in front of the election... and is not the weaponization of govt and the IRS... the real very scary issue here? not whether deductions should be allowed?
2. Also odd that Piezoe gave some great info... but it was almost all a strawman. The issue has been does cutting taxes allow you to grow your way out of recession. Leftists try to disparage that as "supply side" yet... Keynes himself said...
"Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more--and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss."
3. And didn't the IRS admit it targeted conservatives in front of the election... and is not the weaponization of govt and the IRS... the real very scary issue here? not whether deductions should be allowed?
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its a bullshit measure of prosperity when you make G bigger and biger.. but it is a damn good measure that the sequester worked if you cut the G part of the GDP and yet the GDP grew faster than expected.
are you going to tell us what GDP would have been using bullshit models again?
are you going to tell us what GDP would have been using bullshit models again?
Lmao, this from the guy who says GDP is a bullshit statistic. And the estimates for how much GDP growth was suppressed by the sequester are readily available from multiple sources.