A Few Thoughts on 2023 State of Union Speech

President Biden’s State of the Union speech was well done. I expect every president to use the opportunity and the data to the best of their advantage. I thought President Biden did that.

We can agree that many good paying jobs have been sent overseas. How many left because Americans didn’t want those “dirty” jobs in this country? How many left because the cost of meeting the ever-increasing regulations made it uncompetitive to stay? Perhaps we can pay to have them come back or give tax incentives (which help offset the cost of the regulation) to get them back.

Which brings us to corporations paying their fair share of tax. If we give tax breaks to corporations to incentivize them to do what we want, how can we also expect them to pay their fair share? Is it fair to take advantage of every tax-give away to lower taxes to zero? Isn’t that what we wanted? Isn’t that fair?

While talking about fairness, look at social security. Both employers and employees pay social security based on a 6.2 percent tax on the employee’s wages up to $160,200. Why the cap? Is it fair that those in the highest wage brackets pay less? In my opinion, it is only fair if you believe that social security is a forced retirement account. In other words, the federal government is forcing you to pay 6.2 percent and forcing your employer to pay 6.2 percent into a government account to pay for your benefits. That is not the way it works. Social security is an insurance program. In fact, FICA stands for Federal Insurance Contributions Act. It is a tax that we all pay so those who need it can benefit. If we remove the cap and stop paying benefits to the top 5 percent of wage earners, would the system be in danger?

I am opposed to allowing people to pay less in FICA tax to fund their retirement. You fund your retirement after the tax.

Now return to corporations not paying their fair share. Corporations are paying 6.2 percent of their employees wages into FICA. That is never zero.

Continuing with fairness, is it fair to tax those earning less than the poverty line? If we would remove FICA taxes on those below the poverty line and increase the standard deduction to the poverty line, we would increase the amount of potential take home pay by over 24 percent (12.4 percent for FICA and 12 percent for income tax). That would be a huge benefit for those on the bottom end of the wage spectrum.

What about taxing billionaires? According to the AFL-CIO, “In the past 10 years, CEO pay at S&P 500 companies increased by more than $540,000 a year to an average of $18.3 million in 2021. Meanwhile, the average U.S. worker saw a wage increase of $1,303 per year over the past decade, earning on average just $58,260.” However, when I look at the actual salaries, the top is Peter Kern at Expedia. Although his compensation is listed as over $296 million, according to Salary.com, his base pay was only $849,999. (Which makes me wonder, why not an even $850,000?) He would only pay W2 tax on the base pay. Point is to get to billionaires; we must look at total compensation. That is well beyond base pay or what we call W2 income.

Should we also tax money used to buy back corporate stock? When the corporate tax rate was lowered, more cash was left for corporations to invest. Buying and retiring their own stock certainly did nothing to help anybody but the shareholders who held onto their shares and the few shareholders that could make a profit by selling. Business did not expand. More workers were not hired.

What about the idea that sending out more agents brings in more money? That might be true. At one point in my life, the IRS sent me a number of letters to collect a few thousand dollars. Once I got half a return mailed back and told I hadn’t filed a complete return. A friend of mine decided not to purchase a practice and office building. He had claimed a depreciation expense. The IRS went after him for the increased taxes and forced him into bankruptcy. At the same time, an accountant went to negotiate with the IRS on behalf of a client and the agents reduced the tax by half (tens of thousands of dollars) as an opening negotiation position. Seems to me that the wealthy get special treatment while those of us who can’t afford to fight continue to be harassed. With reduced staff, it would seem to only make sense to go after the wealthy, where the big money is. More agents will mean more of us will be audited.

Those are just a few thoughts after listening to the 2023 State of the Union speech. I’m for tax reform. I’m for fairness. I’m for incentives for businesses to benefit Americans. I’m in favor of helping the disadvantaged. I’m also for truth. Can we have it all?

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About Me

I’m a retired chiropractor, real estate broker, married for 45 years with 4 children, 6 grandchildren. I completed the MBA and pre-med curriculums and worked for IBM for 3 years before going back to chiropractic college.

Now I spend my time taking care of grandkids, reading, thinking, teaching, and speaking. I enjoy helping others succeed.


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