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BK to Tim G. – “Prove it!”
John Bellows over at the Treasury department wrote a Blog that called for a return of the Build America Bond (“BAB”s) program. He used some "facts"
to make his point. I don’t think he has the facts at all. I’ll let you
decide. I’ll also ask the Treasury department for a clarification.
This is the sentence that I’m calling them on:
The President’s Budget proposes to make the BABs program permanent at a 28 percent subsidy rate, making the program revenue-neutral compared to tax-exempt bonds, meaning it will not have any effect on the Federal Budget deficit.
The 28% cited is the critical issue. If the IRS collects income from
BABs bond holders that equals the 28% that is rebated back to the states
then the statement made be Treasury is correct. If the IRS collects less than the 28%, the Treasury statement is incorrect.
I have maintained from the get-go that BABs bonds went to tax free
hands. Insurance Cos., pension funds, foreign investors and tax
protected individual accounts were all big players
I can’t prove the actual IRS tax collections, but neither can Treasury. I wrote about this back on 3/15/11 (my link). At that time I had inquired directly with the IRS. They confirmed to me (in writing) that they do not keep records of BABs related tax income. The IRS response:
In
response to your request for the percentage of tax collections from
bonds associated with Build America Bonds, we will not be able to answer
your request. Unlike tax-exempt bonds build America bonds are taxable,
but the IRS Tax-Exempt area collects no data on the tax obligations associated with them.
What might be the actual IRS receipts related to BABS? Once again the
IRS gives us some answers. Assume the most optimistic case for the
Treasury Department. Assume that not one penny of the BABS bonds went to
tax protected hands. Assume that the IRS collected the effective
marginal rate on every penny of income related to BABs interest
payments. In this extremely unlikely scenario the net tax
receipts would be equal to the marginal tax paid by the income group
that owned the bonds. The answer is that the marginal Federal rate for
all income groups is substantially below the 28% claimed by Treasury.
The IRS information:
In the rediculously unlikely case that 100% of all BABs bonds
went to the top 1% of earners it still would only generate 24% versus
the 28% that is claimed in the Blog.
Bottom line:
Treasury does not have the data to back up its claim. Their own
organization (IRS) has proved that. In addition there is no reasonable
claim that the estimate for the BABs tax collections are even close to
28% (IRS data). A much more reasonable claim would be that the level is below 20%. BABs make no economic sense at a rebate level of 20% or below. That is why the 28% is critical.
So why is Treasury pushing so hard on this? Why are they willing to fib and play fast and lose with important numbers? That’s easy to answer:
The big names in this lobbying effort? Surprised?
SIFMA
(Securities Industry and financial Markets Association)
ABA
(American Bankers Association)
Goldman Sachs
Citi
BoA
Treasury’s big push for BABs has nothing to do with good economics or solid budgeting and forecasting. It's about the money. In this case it's about money for re-election campaigns and bankers pockets.
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You know Bruce, it's a strange thing, this graph seems to be missing from ALL your commentaries on the U.S. National deficit. You know what Bruce??? I'm gonna do you a BIG favor, and include it in every one of your deficit/debt posts from here on. You like that Buddy???
http://2.bp.blogspot.com/-8LVw3-YXt_A/TdWj8nQyUkI/AAAAAAAAQ1w/wGI39TSyuj...
What Inflation
So raise taxes until you get the 28%. I fail to see the problem since they control both sides of the equation. If they get the 28% then it's revenue neutral. If they sell them all to Imelt or some other cronny (the most likely possibility) and get 4% then it's a disquised subsidy. If they get 30% then they make a profit.
Keep the faith that law and reason have any meaning.
"There to two kinds of people in this world. Those with guns and those that dig, you dig."
-The good, the bad and the ugly.
http://www.youtube.com/watch?v=JXn5-r8mj-s
Very good article. Concise, supported by evidence, shows an important broader point in addition to the BAB issue per se.
I hope they answer.
nice followup Bruce. Unfortunately, 99% of our politicians are soul less, selfish wolves in sheep's clothing out only for themselves and their banking masters. Corruption rules and rules deep to the core in a deliberately constructed complex system: simplify everything and you gain transparency, meaningful regulation and fairness.
America has all ready " BEEN BUILT". I have seen " first hand ' the WHITE ELEPHANT projects that were funded by and built with some of the " AMERICAN RECOVERY and REINVESTMENT" act monies - talk about bridges to NOWHERE !!!
While you are absolutely correct, your actions are moot. Well, unless you get too much attention, and are fond of hot-tubs (then there could be consequences).
As you should know, you'll never, ever get a politico to admit he is lying, or even incorrect.
At best you'll get a non-answer answer. Most likely though, you'll just be ignored.
You mean to tell me there is no free lunch - I thought they had figured out the monetary equivalent of a free energy machine.
Come on, Bruce, what's wrong with a little loan-sharking among elitists?
CREEP: Committee to RE-Elect the President In Action
facts are just acts with the "f" attached
The old TeeVee comedian Steve Allen used to say:
So what is new. Virtually EVERY Government program is not what it claims and does not achieve its stated purpose.
Head Start - did it raise the academic achievement levels of low income students?
Various student loan programs- Did they make college more affordable?
Food Stamps- improve the nutrition of low income people? Take a look at adult diabetes rates and the percentage of obese people in the US compared to earlier times.
In program after program the real beneficiaries are those managing or providing the goods or service the program supports.
The real reason they want BAB to keep going is that was their way to keep the STATES afloat. God forbid Meredith Whitney be right......
Be careful Bruce. What are the odds you get one of those friendly audit letters from the man in response to your request.
Bruce is a Swiss citizen and may have an escape plan ... he may need to leave all his US property behind, but he very likely has a significant part of his stash over the US border.
On the other hand, Bruce's sharp edge may be getting the Powers That Be angry enough at him, that they will pull some stunt with false evidence and get him locked up on his property wearing an electronic bracelet and awaiting trial and sentencing, without the ability to get the escape plan in motion.
For all his sharpness, Bruce may yet be a little naive about 'the system' in which he lives, I think he still believes there is some legitimacy to the US regime and lawyers and courts and doesn't think about how many of the USA's 2.3 million prisoners may be innocent and railroaded, including a few former 'critics' like himself ... victims who always have media media and Wikipedia articles slandering them, to fool everybody else ... plus those who meet up with 'accidents' 'sudden illnesses' and 'suicides'.
Indeed I am surprised that Bruce just doesn't get the hell out of the US altogether ... whatever the nostalgia and personal ties he has in the US, he should know it's better and hugely safer to be in Europe now.
-98%- I wouldn't mess with those people at all; Bruce is a brave guy.
The real reason they want BAB to keep going is that was their way to keep the STATES afloat. God forbid Meredith Whitney be right......
Forwarding this story to my Senator.
This will allow them to further kick the can down the road for a few weeks more.
YouTube's Harisebon7777777 should be commended for his work on measuring the radiation levels in Tokyo. The device he uses costs about $1000, which I am sure he has paid out of his own pocket to provide us with the truth of what is really going on in Japan.
It is eerie to watch his videos. Typically, his hand is shown holding a geiger counter in some public place with people walking all around him as if there was nothing of importance going on; while all along, the geiger counter in his hand reveals what is really happening. Harisebon is documenting the slow irradiation of the Japanese archipelago. A visual unfolding of a tragedy.
While watching these videos. it is hard not to wonder how many of the folks one sees walking down the street will come down with cancer in 10, 20 or 30 years.
Go to Harisebon's YouTube channel and give him a shout-out. He deserves it.
http://fukushimadisaster.blogspot.com/2011/05/radiation-harajiku-omotesa...
Slipperdick, stop the spamming!!!!!!!!!!!!!!!! Geesh, how many threads are you posting this crap on? Stop it already!!!!
DaddyO
Those videos are less than useless given there's no way to tell where he is, or how high the levels are.
Oh, and stop fucking spamming you asshole. There will be another Fukushima post by ZH soon enough, post this BS there.
Agreed
Are they looking at marginal tax rates vs average tax rates??
I think Timmay would do the society a greater good and apply his theories to cold fusion....
If he just put his head completely in a bucket of water for 13 minutes it would do society a "greater good", too.
Just Think
If Timmay Jeethner's father Peter had not hired Obummer's mother at the CIA front Ford Foundation all those years ago...
We wouldn't be having this conversation now...
Crony Capitalism at its best...
yeah, we'd be talking about two different megalomaniacal socipathic psychopaths...
http://slv.collective2.com
Or finish his tax returns...
Yes, especially in California. Finally, Bruce is back doing real investigative, useful stuff.
You got 'em Bruce, fair and square. "It;s the best little government money can buy"; lobbyist's money, that is.