GUALFIN, ARGENTINA – Trump! Great guy!
Big, dumb, hopeless. Menacing. Reckless. And completely loveable.
Here’s The New York Times’ list of “winners” from his tax proposal:
Businesses with high tax rates. The plan would cut the 35% corporate income tax to 15%. While few businesses pay the full 35% rate, those that pay something close to it are in line for a huge tax cut.
High-income earners. The plan would reduce the top rate on individual income tax – now 39.6% for income over around $470,000 for a married couple – to 35%.But that’s only part of the gain for high-income earners. It also would eliminate a 3.8% tax, used to help fund Obamacare that applies to investment income over $250,000 for a couple.
People with creative accountants. The 15% business tax rate could open a huge loophole for people to receive business income through a limited liability company or other pass-through entity instead of as wages…
Multimillionaires who want to pass money to their heirs tax-free. The plan would eliminate the estate tax, which currently applies to individuals with estates of $5.5 million or couples with estates worth $11 million.
Whom do these things describe?
“You and me, bro.”
Yes, President Trump has proposed a tax rework that would save him… and your editor… a lot of money.
For example, we know from the two pages of his 2005 tax returns that were leaked to MSNBC that eliminating the alternative minimum tax would have saved “The Donald” $31 million.
And the 15% business tax rate would cut our taxes in half.
“CEOs Salivate Over Trump’s Tax-Cut Plans,” reports Bloomberg. And here we are. Drooling like a madman.
The plan is as bold as his Trump Airlines. As refreshing as Trump Ice. As nourishing as Trump Steaks. As learned as Trump University. As good a deal as a Trump Mortgage. As exhilarating and entertaining as the four casinos and hotels he has led to bankruptcy…
…and with about the same chance of success. Still, some elements may survive… as we will explain.
According to one estimate, Mr. Trump’s plan would add more than $6 trillion to the U.S. debt over the next 10 years.
And therein hangs a tale.
Because U.S. debt is already expected to grow to $30 trillion by 2027. Add another $6 trillion, and you’re talking real money.
And that is before any of the dopey spending increases the Trump team proposes.
Our friend David Stockman served as President Reagan’s budget chief. He has analyzed these figures in great detail (yet somehow manages to keep his wits about him). And he believes the combined effect of Trump’s tax and spending plans, revealed by day 97 of his administration, would add $20 trillion to the U.S. debt.
President Obama, he points out, doubled U.S. debt from $10 trillion to $20 trillion. Trump seems to be angling to do it again.
And this poses a moral dilemma for your editor. On one hand, the Trump plan would help him personally. Yugely. But on the other, it would hasten the bankruptcy of the empire.
Should we throw our bantam weight behind the president in search of personal gain? Or should we put on our Good Citizen lapel flag and rally round to save the country’s finances?
Hey, we’ve gotten harder questions in a blood test.
In the first place, it doesn’t matter what we think. The U.S. is in the middle to late stages of a degenerate empire. It’s going to go broke – or worse – sooner or later.
Empires don’t back up. They don’t “come to their senses.” They don’t reform themselves.
The government is controlled by a group of unelected insiders, also known as the Deep State.
These people don’t suddenly say, “Oh, I don’t need so much money.” Or, “I think people ought to be able to do what they want.” Or, “I’m not interested in politics anymore. It’s just too grubby.”
Nope. They continue doing what they are doing until they can’t do it anymore.
We never met a tax cut we didn’t like; we especially like the ones that cut our own taxes.
But this is a tax cut we can also support for unselfish, patriotic reasons: It will balloon the national debt… destabilize the financial system… and hasten the end of the Deep State’s empire.
But little of the Trump tax plan will pass Congress. Not a single Democrat will touch it. And many of the Republicans, those with a residual interest in financial integrity, will also back off.
That will leave the tax plan in the same place as the O’care repeal and foreign policy makeover – nowhere.
But this is probably a good place to illustrate how the math of the Deep State system works… why public policy, generally, is a scam… and why Trump, Mnuchin, et al. think they can get away with such an obviously self-serving move.
Let’s say you have a business that makes $10 million a year. You are in the 50% tax bracket (state taxes, alternative minimum tax, etc. included).
Along come Steve Mnuchin, Gary Cohn, and… oh, yes… the president… with a plan that will save you $2.5 million a year.
Over 10 years, you’ll save $25 million. If only the plan would pass! So you and your fellow cronies get to work. You decide to “invest” just 2% of your projected gains – $500,000 – to lobby for the measure.
Now, imagine there are a thousand businesses across the country in the same situation – not to mention the investors, financiers, stockbrokers, gamblers, bankers, and hustlers who stand to gain.
You’re soon talking about half a trillion dollars available to help members of Congress understand how this tax plan will make America great again.
Remember, people are neither always good nor always bad. But they are always subject to influence.
Would they like a little help with campaign financing? Would they like to join a prestigious think tank when they leave Congress? How about a job as a highly paid lobbyist?
How quickly people can learn when they are properly incentivized!
The man on the street hardly cares; it has little effect on him. He won’t devote a minute of his time or a dollar of his money to understanding this tax fight.
But if the insiders can pull it off, the winners win big.
How to Protect Yourself From the Next Financial Meltdown
By Nick Giambruno, Editor, International Man COMMUNIQUÉ
By Nick Giambruno, Editor, International Man COMMUNIQUÉ
Editor’s Note: Investors often diversify assets to protect themselves from market troubles. But too few people diversify other aspects of their lives. Today, our colleague Nick Giambruno shows you three ways to hedge against total financial collapse.
Everyone should aim for political diversification. Though it’s especially critical for those who live under a government sinking hopelessly deeper into financial trouble. That means most Western governments. The U.S. in particular.
To get started, there are three core areas to consider: your savings, your citizenship, and your income.
It’s crucial to place some of your assets beyond the easy reach of your home government. It keeps that government from trapping your money if and when it implements capital controls or outright asset seizures. Any government can do either without warning.
You can diversify your savings in several ways:
Foreign real estate is especially helpful. I call it a diversification “grand slam” because it accomplishes a number of key goals at once.
Owning real estate in a foreign country moves a good chunk of your savings into a hard asset. One that’s outside of your home government’s immediate reach. Ideally, it’s located somewhere you’d enjoy living.
Unlike digital financial assets, it’s probably impossible your home country could seize your foreign real estate.
Owning foreign real estate is one of the very few ways you can legally maintain some privacy for your wealth. In that sense, foreign real estate is the new Swiss bank account.
Foreign real estate often opens up other diversification options. In many cases, owning property in a foreign country makes it easier to open a bank account in that country.
It can also put you on the road to obtaining residency in a foreign country. It can even put you on a shortened path to citizenship in some cases.
Lastly, owning foreign real estate gives you a second home, vacation hideaway, or place to retire. It’s an emergency “bolt-hole” should you need to escape trouble back home.
One way to diversify your citizenship is with a second passport.
Unfortunately, there is no route to a second passport that is simultaneously easy, fast, cheap, and legitimate. But that does not decrease the benefits of having one.
Among other things, having a second passport allows you to invest, bank, travel, live, and do business in places you wouldn’t otherwise be able to.
There’s another important reason to get a second passport.
No matter where you live, your home government can revoke your passport at any moment under any pretext it finds convenient. Your passport doesn’t actually belong to you. It belongs to the government.
Having a second passport means that you can always escape your home country without having to live like a refugee.
Income diversification means structuring your cash flows so you’re less dependent on any one country for your income.
The goal is to create multiple sources of revenue from international investment opportunities and trends.
Bonus diversification points if you do all this through your own offshore company domiciled in a favorable jurisdiction.
— Nick Giambruno
Four Obstacles for Trump’s Tax Plan
Trump has announced an ambitious overhaul of the American tax code. But enacting it may be harder than repealing Obamacare. Here are four reasons why.
1 in 10 Americans Have More Than $100,000 in Debt
Bill has often written about the dangerous level of debt in America… and it’s only getting worse. Today, 1 in 10 Americans will likely die in debt.
How to Vanish With $1 Million
If you were forced to flee your home, how would you bring your life savings? Colleague Greg Wilson shares a new technology that can “teleport” your wealth in an instant.
Today, readers respond to Bill’s reaction in yesterday’s Diary to Trump’s proposed tax plans…
I certainly enjoyed the kind words you had today for President Trump. It struck me as unusual coming from you of all people. For as any reader knows, you have said hundreds of negative things about our soon-to-be-great president. So even though I enjoyed today’s kind words, positive energy, uplifting platitudes and all of the seemingly positive rhetoric, I am also certain it will be cancelled out by tomorrow’s Diary…
– B. Meyers
Bill understands business, so what is he not telling us? Corporate taxes are an expense of doing business. Like all business expenses, it is cooked into the price of the product.
Corporations write the check to the IRS, but the consumers pick up the tab. corporate taxes don’t “tax the rich”, they are hidden taxes on all of us. If the government abolished corporate taxes and billed us individually and directly, there would be bipartisan rioting in the streets.
– P. Anthony
Thanks for your continuing thoughts. All I can say is I’ll drink to that. Let’s just give beer a chance. Let’s just make beer great again!
– C. A.
A friend of mine thinks Donald is doing God’s work. I asked him if he is sure Donald isn’t working for the other guy…
– C. Burton
You neglected to mention the main reason for Trump’s proposed tax cuts, namely that he will benefit, personally, to the tune of tens of millions of dollars, annually. And, since American law stupidly exempts the president from conflicts of interest, it’s perfectly legal for him to do whatever he wants that will increase his own wealth. Wish I could do that! I think I’d just give myself all the gold in Fort Knox!
– D. Armelin
You talk sense. What I don’t get is how the insiders benefit? They have to pay tax too surely? Also, can you give us an alternative system to paying tax, one that doesn’t involve coercion?
– A. Donald
Meanwhile, other readers weigh in on Bill’s unusual solution to the continuing troubles at his Argentine ranch…
So, you’re an originario now! Good for you. I hope your ploy works. I’m sympathetic to the plight of indigenous people, the world over. Their ancestors suffered terribly at the hands of European conquerors and the injustice and racism of those times continues to this day. For proof, look no further than any Native American reservation in America.
That said, the situation down there in Argentina is way out-of-hand. It has deteriorated into absurdity. There has to be a better way to deal with indigenous land rights. Unfortunately, I don’t have the answer.
– D. Armelin
My other half is from Buenos Aires. She left decades ago and ended up here in the USA (legally), after the generals threw her father in prison because he wouldn’t turn over ownership of one of his residential hotels to one of them.
After all why rent, when you can own? The father got out of jail after a couple of months but lost the hotel (and much of his health) in the process. I guess the generals were the “originarios” of the time.
– M. Nunan
Yesterday, cryptocurrency bitcoin traded at an all-time high. Bitcoin is up almost 200% in one year.
What’s causing the surge in cryptocurrencies like bitcoin?
Our colleague Teeka Tiwari has been researching these new currencies for years. Now he believes he’s found an answer. Hear from Teeka himself right here.