Curbing use of offshore havens solves nothing

In recent years more American businesses and wealthy individuals have moved their money into offshore havens and foreign banks to escape the tax consequences at home. The Obama administration sees this as a big problem -- possibly more of a "fairness" issue rather than a tax issue -- and will soon release extensive plans to curb such tax avoidance practices.

The White House clearly understands this phenomenon of an outward flow of American dollars from multinational corporations and wealthy people. But instead of understanding the root cause, it chooses to punish further this legal albeit unpopular way of keeping money by avoiding to pay American taxes.

The U.S. tax code is several inches thick and not even our Treasury Secretary can explain it. (He's not known as "Tax Cheat Timothy" for nothing.) There will always be a way to find a loophole no matter how the code is patched up. These corporations and individuals have the means to hire a team of accountants and lawyers to find a way. Trust me.

So American businesses and folks want to keep more money in their bank accounts, but the IRS takes too much. The solution? CUT TAXES! DUH. It's not to make new laws to prevent tax havens and spend money enforcing them. It's that easy. So easy that I bet the liberal Democrats in the W.H. and Congress don't even see it.

What will the President's plan accomplish? Will it raise more money for the country? Not quite. History has shown that such a plan will have a reverse effect on increasing the treasury. Only when taxes are cut there has been significant fattening of the treasury's coffers. Additionally, more taxes means less work and less competitiveness. America's auto industry has already been decimated, what's next? Will tech giants like IBM and Cisco fall next? Or will it be G.E. and Coke?

It's unfortunate, but the President is in for an unpleasant surprise, a surprise that's well-known to anyone who's studied American economic history.

Beyond tea parties... FairTax!

If you're a reader of this blog, I assume you already know about the Tax Day Tea ("Taxed Enough Already") Parties organized across America on April 15. This is a grassroots movement of citizens to protest the irresponsible spending that's coming from Washington under the Obama administration and Democratic Congress. Concerned citizens realize that although we are in a recession, we believe the recent government economic measures prolong the suffering and we do not wish for our future generations to pay for this administration's expansion of power and path to socialism.

The mainstream media, as always, refuses to acknowledge the growing angst among not just conservatives, but any ordinary citizen. I bet you will not see a lot of news coverage about these tea parties. Why? Because in the MSM's minds, these protests are pro-Republican and anti-Obama. They have failed to understand that these tea parties are not about partisan politics. It is about America's principles and the attacks thereof from the current administration.

The hope is that these tea parties will send a clear message to Washington and wake Americans up. But I hope to see the momentum continue on April 16, the day after. America is the least productive from January 1 to April 14 because of Tax Day. Will the tea parties also educate the public about America's ridiculous tax code? Each year Americans spend countless hours filing their tax returns. It's a necessary evil, nobody likes to do taxes -- not even accountants. American corporations are losing competitiveness because of the tax code. Companies and talents are going overseas to build businesses. Something has to be done or we no longer stay as a global economic power.

The FairTax is a good answer and deserves more attention in this recession. It's no coincidence that supporters of the FairTax are also going to tea parties. The FairTax bill, sponsored by Rep. John Linder (GA-7), and endorsed by many other leading policitians and conservatives (e.g. former Gov. Mike Huckabee, talk show host and author Neal Boortz, etc.) is attracting more eyes in Congress as the word is spreading among constituents. People are fed up with taxes!

Take a closer look at the characteristics of a strong nation. It needs a powerful military and a strong economy. Look eastward to Asia and you'll find the Chinese economy and military rival ours. The only difference? China is ruled by communists and Beijing in recent years have been undermining America's military and diplomatic efforts. So it's fitting to say that a strong economy is even a matter of national security.

No one expects the tax code to be revised or the IRS abolished overnight. But now more than ever is a good time to start thinking about how to restore America's economic might again by way of a new tax system.

Obama cabinet nominees would've been better off with FairTax

How come nobody is talking about how ridiculously complicated and ineffective the U.S. tax code is in light of the tax troubles from Tom Daschle and Tim Geithner? Oh wait, Ken Hoagland is.

If we had gotten rid of the IRS and implemented the FairTax, then Senators wouldn't bother with vetting nominees on unpaid taxes and these hearings would've been more pleasant. Okay, less of a circus.

Obama-nomics means thinner wallets

Sorry, but Manisha Thakor and Sharon Kedar have drank the Obama Kool-Aid in their Huffington Post piece. Their list of three top favorite long-term proposals from the Obama campaign:

1. UNIVERSAL MORTGAGE CREDIT that will broaden the financial benefits of homeownership - People often say home ownership is so wonderful because of the "tax benefits." Yet at present the mortgage interest deduction only kicks in if you ITEMIZE your tax return. Alas, 2/3rds of Americans take the standard deduction and thus miss out on this benefit. Team Obama supports a universal mortgage credit available homeowners who do not itemize. If you buy a home you can afford, this means YOU'LL participate in the American Dream not the American Scream.

I get the feeling that people who don't itemize of their tax returns aren't paying much taxes anyways and aren't likely to be homeowners. So good luck with buying a "home you can afford."

2. CREDIT CARD BILL OF RIGHTS that will protect consumers - Team Obama supports such steps as eliminating the universal default clauses (which allow lenders to increase your interest rate if you are late on any of your bills), prohibiting interest charges on late fees, and requiring the prompt crediting of cardholder payments. This means if you use your credit card responsibly, by paying off the balance each month on time and in full - it can once again be YOUR friend and not your foe.

Wonderful -- tip the scale in favor of irresponsible consumers and screw the credit card companies. Even though I have disagreements with some credit card companies' policies, especially those "bait and hook" practices and aggressive marketing to teenagers, I don't want to see them forced by government law. They are in the business of providing credit to those who are worthy and those who should already be paying off monthly balances. It is fair for them to penalize those who misuse and abuse the credit given to them. If such proposed legislation goes through, then it'll actually hurt consumers in receiving credit, especially for those who needs it most.

3. SIMPLIFYNG THE TAX FILING PROCESS so there are fewer headaches in April - Team Obama has also stated an intention to simplify the tax filing process, so that millions of Americans can do their taxes in less than five minutes. By enabling the IRS to use the same information it is already getting from banks and employers, taxpayers would have the option of accessing pre-filled tax forms that they can verify, sign and return. Experts estimate that this proposal will save Americans up to 200 million total hours of work and mental angst. And YOU can use that extra time to set a realistic budget & reassess YOUR asset allocation.

One word: FairTax. It simplifies the tax filing process by eliminating it (and the bloated IRS, too)!