During my real job, I have plenty of time to listen to talk radio be it sports or politically related which tends to provide some interesting perspectives on the world we now live in. This morning while I was heading to my appointment in Orlando I listened to the first hour of the Glenn Beck Show and his rant about the proposed IRS rules buried in the multi-trillion dollar Democrat pork fest.
As I enjoyed his antics, the key point that Glenn and his sidekick Stu missed is one I think everyone has ignored. I don’t blame anyone in particular, the origins of the program were proposed some 13 years ago during the peak of Federal Reserve Chairman Bernanke’s and President George W. Bush’s ineptitude as the financial crisis worsened by the hour.
Deep and buried in the recesses of history, only one major radio talk show host addressed this issue and it was none other than the Godfather, Neal Boortz. He decided to address this because at that time, his big push was for the Fair Tax which sadly is now a deader than dead idea. But what was the issue that relates to today’s Democrat party vile proposal?
The banks began failing left and right as mortgage delinquencies accelerated. The line of the Democrat Party leadership was that this was corrupt capitalism and the wealthy exploiting the “poor” by giving them homes they could not afford. The only way to correct that was to re-balance the taxation system to make life “fair” to all and keep the rich from taking advantage of the loopholes inherent in the income tax system of the time.
Naturally the two individuals who plotted a new plan were none other than Speaker of the House Nancy Pelosi and Congresswoman Maxine Waters. Their idea was so insidious that it shocked some inside their own party, but the plan was shelved as they were instructed to allow the GOP to implode during the 2008 Presidential Election.
The plan was simple; to begin the taxation of imputed income. Just what does that mean to those unaware of the plan? Let’s explore this together in the current era as conceived by the socialist left:
Example 1. Jack and Jill buy a home in 2020 for $250,000. In 2021 due to the great inflation, the home is assessed at $325,000. According to the Pelosi-Waters plan, an imputed capital gain of $75,000, though unrealized, was taxable. The idea being that they exempt the first $50,000 then tax the remainder at a 25-27% rate.
Example 2. John Galt buys a F-350 for $75,000 (no, I never would buy another Ford). A dealership who is short of inventory offers John $82,000. This imputes a capital gain of $7,000 but due to the household income of John, he is not eligible for the $50,000 exemption and thus must pay the 25-27% imputed capital gain tax.
Example 3. Jill Galt buys Bitcoin in 2018 because Jay Powell told her to at a the bargain price of $11,000 per coin. The closing price in 2021 at the end of the year is $111,000. Jill is no liable for an imputed capital gains tax on $100,00 unrealized profit at a a 27% rate.
Of course these are all fictional, but what does this have to do with the current IRS proposal for monitoring all transactions for accounts active with over $600 as originally proposed or now $10,000 per year?
Once a monitoring system is implemented, manned, enforced, and functioning properly two types of taxes can be imposed on companies, sole proprietorships, and individuals.
- The Value Added Tax (VAT) – As any entity engages in a transaction which is believed to add a value or gain in capital, the tax originally would be applied via a monthly, quarterly, or annual reporting mechanism as determined by Congress and the IRS.
- The Imputed Tax – The discussion above explains the concept but not the collection. By creating a transaction monitoring system the foundation for creation of a taxation mechanism in real time is now feasible.
Why are these important? Because once a monitoring system is created and validated via real time testing on entities without their knowledge, the next step is to create a regulatory structure or law allowing the IRS to collect the taxes from said entities in real time. Taxes could be imposed in collected on a daily, weekly, or monthly basis after an eligible transaction is completed.
Now think about that for a minute and let this sink in. If one owned a home which appreciated in value and the IRS determined that just fourteen days after the property assessment indicated an imputed gain which was taxable, the Federal government could collect the tax or file a lien until it was paid in full. Thus leaving the individual entity to prove the impossible as it is the government which sets the valuation and tax rates on said property:
That the property was not increasing in value at the rate that the tax assessor and IRS claimed it is thus not leaving one liable for said taxes. If anyone has ever had dealings with local property tax assessors or the IRS then they would understand why I would say “good luck with that.“
Thus any transaction, be it a purchase of gold, silver, stock, non-government bonds, derivatives, cryptocurrency, vehicles, collectibles, real estate, etc. would be come a viable taxable entity for which any gain, realized or not, becomes taxable at whatever rate the government sets.
If that doesn’t scare the crap out of everyone who still treasures freedom and capitalism while fearing the Great Reset, I do not know what will.