'Tommy Flanagan-Pathological Liar!' Should Run for President!

Old-timers will remember Jon Lovitz of 'Saturday Night Live' as 'Tommy Fla-NA-gan, Pathological Liar!'

Maybe he should run for POTUS sometime!



We are sure that both sides felt like 'the other guy' lied his pants off last night.  We don't have the time or the resources to go through and fact-check every single white lie, black lie or flat-out complete transgression committed last night in the second debate.

But we do know where to go to get some facts, as we hope we have proven to you over the last few years.  Here's some on the 'How Are You Gonna Pay for Your Tax Cut, Governor?' question put forth by President Obama simply because if we hear it one more time, we are afraid we might blow our brains out.

Here's a link to some very important information you ought to download and keep by your armchair at least for the remainder of this interminable presidential campaign.  (Regardless of who wins or loses on November 6, can we PUH-LEESE have a respite of at least 2 full years before we hear about Hillary Clinton going to Iowa or Marco Rubio planning a major speech in New Hampshire?)

We have done all the hard work for you and downloaded the entire Tax Expenditures chart put out by the OMB, the Office of Management and Budget in the White House each year under Republican and Democratic Presidents.

The numbers might have changed some over the years but for all intents and purposes, these estimates have been virtually the same for years.

Table 17–3. INCOME TAX EXPENDITURES RANKED BY TOTAL FISCAL YEAR 2012–2016 PROJECTED REVENUE EFFECT
	(In millions of dollars)
Provision	2012	2012-16
131 Exclusion of employer contributions for medical insurance premiums and medical care	184,460	1,071,210	(reduce deduction by 1/2)
58 Deductibility of mortgage interest on owner-occupied homes	98,550	609,180	(all by itself)
73 Step-up basis of capital gains at death	61,480	357,080
149 401(k) plans	67,590	356,260	713,340
62 Exclusion of net imputed rental income	50,640	302,800
172 Deductibility of nonbusiness State and local taxes other than on owner-occupied homes	48,640	292,290	595,090
77 Accelerated depreciation of machinery and equipment (normal tax method)	24,450	269,680
71 Capital gains (except agriculture, timber, iron ore, and coal)	38,490	256,280	525,960
125 Deductibility of charitable contributions, other than education and health	43,110	248,930
148 Employer plans	45,230	245,970	494,900
170 Exclusion of interest on public purpose State and local bonds	36,960	230,440
61 Capital gains exclusion on home sales	35,200	216,820	447,260
5 Deferral of income from controlled foreign corporations (normal tax method)	42,000	212,840
59 Deductibility of State and local property tax on owner-occupied homes	24,910	142,290
51 Exclusion of interest on life insurance savings	22,660	129,060	484,190
163 Social Security benefits for retired workers	21,830	129,040
152 Keogh plans	17,070	103,880
63 Exception from passive loss rules for $25,000 of rental loss	13,110	83,750
81 Deduction for US production activities	14,630	82,000
150 Individual Retirement Accounts	15,610	80,490
1 Exclusion of benefits and allowances to armed forces personnel	13,710	65,500	544,660
134 Deductibility of medical expenses	10,010	60,020
122 Child credit	10,580	49,200
161 Earned income tax credit	8,500	45,060
164 Social Security benefits for disabled workers	7,510	41,240
144 Exclusion of workers’ compensation benefits	7,410	40,940
132 Self-employed medical insurance premiums	6,690	38,840
64 Credit for low-income housing investments	6,290	36,070
7 Expensing of research and experimentation expenditures (normal tax method)	5,770	35,080
166 Exclusion of veterans death benefits and disability compensation	5,010	30,850
2 Exclusion of income earned abroad by US citizens	5,400	30,500
99 Lifetime Learning tax credit	5,530	28,620
110 Deductibility of charitable contributions (education)	4,900	28,300
98 HOPE tax credit	5,410	28,280
138 Deductibility of charitable contributions (health)	4,870	28,110	521,110
135 Exclusion of interest on hospital construction bonds	4,290	26,760
137 Credit for employee health insurance expenses of small business	3,440	20,640
4 Inventory property sales source rules exception	3,160	18,770
79 Graduated corporation income tax rate (normal tax method)	3,220	17,840
106 Exclusion of interest on bonds for private nonprofit educational facilities	2,840	17,710
165 Social Security benefits for spouses, dependents and survivors	3,270	17,390
84 Exclusion of reimbursed employee parking expenses	3,180	17,350
97 Exclusion of scholarship and fellowship income (normal tax method)	3,130	16,820
158 Additional deduction for the elderly	2,980	16,700
109 Parental personal exemption for students age 19 or over	3,400	14,690
74 Carryover basis of capital gains on gifts	1,990	13,860
133 Medical Savings Accounts / Health Savings Accounts	1,980	11,120
153 Premiums on group term life insurance	2,080	10,790
8 Credit for increasing research activities	3,080	10,320
104 State prepaid tuition plans	1,750	9,760
56 Exclusion of interest on owner-occupied mortgage subsidy bonds	1,490	9,300
15 New technology credit	1,740	9,250
156 Special ESOP rules	1,600	8,700
117 Employer provided child care exclusion	1,450	8,410
50 Exemption of credit union income	1,310	7,920
57 Exclusion of interest on rental housing bonds	1,270	7,920
123 Credit for child and dependent care expenses	1,710	7,900
173 Deferral of interest on US savings bonds	1,300	6,650
168 Exclusion of GI bill benefits	1,010	6,540
121 Exclusion of employee meals and lodging (other than military)	1,170	6,510
151 Low and moderate income savers credit	1,320	6,490
89 Exclusion of interest for airport, dock, and similar bonds	1,020	6,370
60 Deferral of income from installment sales	830	6,100
3 Exclusion of certain allowances for Federal employees abroad	1,070	5,910
10 Excess of percentage over cost depletion, fuels	1,120	5,820
102 Deductibility of student-loan interest	900	5,160
16 Energy investment credit	960	4,650
139 Tax credit for orphan drug research	650	4,630
127 Exclusion of parsonage allowances	750	4,310
105 Exclusion of interest on student-loan bonds	660	4,140
145 Exclusion of public assistance benefits (normal tax method)	710	3,860
35 Excess of percentage over cost depletion, nonfuel minerals	770	3,810
92 New markets tax credit	810	3,530
55 Exclusion of interest spread of financial institutions	550	3,450
36 Exclusion of interest on bonds for water, sewage, and hazardous waste facilities	550	3,450
46 Capital gains treatment of certain income	520	3,440
140 Special Blue Cross/Blue Shield deduction	680	3,120
119 Assistance for adopted foster children	530	3,030
85 Exclusion for employer-provided transit passes	520	2,990
91 Empowerment zones, Enterprise communities, and Renewal communities	570	2,940
114 Qualified school construction bonds	400	2,930
72 Capital gains exclusion of small corporation stock	290	2,730
80 Exclusion of interest on small issue bonds	200	2,470
9 Expensing of exploration and development costs, fuels	700	2,300
29 Credit for energy efficiency improvements to existing homes	2270	2,270
39 Tax incentives for preservation of historic structures	400	2,090
142 Distributions from retirement plans for premiums for health and long-term care insurance	330	2,020
126 Exclusion of certain foster care payments	410	2,010
154 Premiums on accident and disability insurance	350	1,810
160 Deductibility of casualty losses	320	1,800
23 Credit for investment in clean coal facilities	460	1,770
167 Exclusion of veterans pensions	300	1,770
19 Tax credit and deduction for clean-fuel burning vehicles	140	1,590
38 Expensing of multiperiod timber growing costs	290	1,540
143 Exclusion of railroad retirement system benefits	310	1,380
66 Discharge of mortgage indebtedness	1100	1,350
115 Work opportunity tax credit	680	1,280
33 Advanced Energy Property Credit	900	1,180
31 30% credit for residential purchases/installations of solar and fuel cells	220	1,150
20 Exclusion of utility conservation subsidies	220	1,070
53 Tax exemption of certain insurance companies owned by tax-exempt organizations	210	1,070
87 Exclusion of interest on bonds for Financing of Highway Projects and rail-truck transfer facilities	240	1070
44 Expensing of certain multiperiod production costs	150	860
107 Credit for holders of zone academy bonds	200	790
34 Expensing of exploration and development costs, nonfuel minerals	130	710
43 Expensing of certain capital outlays	100	610
90 Exemption of certain mutuals’ and cooperatives’ income	110	600
120 Adoption credit and exclusion	190	590
147 Exclusion of military disability pensions	110	550
47 Income averaging for farmers	90	470
41 Industrial CO2 capture and sequestration tax credit	30	450
101 Education Individual Retirement Accounts	80	450
25 Natural gas distribution pipelines treated as 15-year property	100	430
49 Expensing of reforestation expenditures	80	420
21 Credit for holding clean renewable energy bonds	70	350
13 Capital gains treatment of royalties on coal	50	340
37 Capital gains treatment of certain timber income	50	340
17 Alcohol fuel credits	130	330
27 Allowance of deduction for certain energy efficient commercial building property	90	300
75 Ordinary income treatment of loss from small business corporation stock sale	60	300
155 Income of trusts to finance supplementary unemployment benefits	40	300
11 Alternative fuel production credit	120	290
94 Credit to holders of Gulf Tax Credit Bonds	70	270
26 Amortize all geological and geophysical expenditures over 2 years	90	250
69 Exceptions from imputed interest rules	50	250
157 Additional deduction for the blind	40	240
42 Deduction for endangered species recovery expenditures	30	220
146 Exclusion of special benefits for disabled coal miners	40	200
52 Special alternative tax on small property and casualty insurance companies	40	200
14 Exclusion of interest on energy facility bonds	30	170
12 Exception from passive loss limitation for working interests in oil and gas properties	30	150
54 Small life insurance company deduction	30	150
32 Qualified energy conservation bonds	20	140
169 Exclusion of interest on veterans housing bonds	20	140
108 Exclusion of interest on savings bonds redeemed to finance educational expenses	20	120
96 Tribal Economic Development Bonds	30	110
45 Treatment of loans forgiven for solvent farmers	20	100
48 Deferral of gain on sale of farm refiners	20	100
83 Deferral of tax on shipping companies	20	100
88 Investment credit for rehabilitation of structures (other than historic)	20	100
113 Discharge of student loan indebtedness	20	100
124 Credit for disabled access expenditures	20	100
40 Exclusion of gain or loss on sale or exchange of certain brownfield sites	40	80
82 Special rules for certain film and TV production	30	40
86 Tax credit for certain expenditures for maintaining railroad tracks	30	40
159 Tax credit for the elderly and disabled	10	30
28 Credit for construction of new energy efficient homes	20	20
128 Employee retention credit for employers affected by Hurricane Katrina, Rita, and Wilma	10	10
6 Deferred taxes for financial firms on certain income earned overseas	0	0
18 Bio-Diesel and small agri-biodiesel producer tax credits	0	0
30 Credit for energy efficient appliances	0	0
70 Treatment of qualified dividends	0	0
95 Recovery Zone Bonds	0	0
100 Lifetime Learning tax credit	0	0
103 Deduction for higher education expenses	0	0
111 Exclusion of employer-provided educational assistance	0	0
112 Special deduction for teacher expenses	0	0
116 Welfare-to-work tax credit	0	0
118 Employer-provided child care credit	0	0
129 Exclusion for benefits provided to volunteer EMS and firefighters	0	0
130 Making work pay tax credit	0	0
141 Tax credit for health insurance purchased by certain displaced and retired individuals	0	0
162 Exclusion of unemployment insurance benefits	0	0
171 Build America Bonds	0	0	458,380
TOTALS OF REVENUES LOST TO TAX BREAKS	$1,101,060	$6,465,280	Estimated 10-year cost
			equals $14 trillion
22 Deferral of gain from dispositions of transmission property to implement FERC restructuring policy	-150	-520
68 Cancellation of indebtedness	-130	0
93 Expensing of environmental remediation costs	-140	-640
24 Temporary 50% expensing for equipment used in the refining of liquid fuels	520	-1700
136 Refundable Premium Assistance Tax Credit	0	-2540
78 Expensing of certain small investments (normal tax method)	-710	-3290
67 Credit for homebuyer	-2160	-5190
65 Accelerated depreciation on rental housing (normal tax method)	-1580	-5640
76 Accelerated depreciation of buildings other than rental housing (normal tax method)	-13750	-74470
Totals of Revenue Gainers in Tax Code due to Tax Expenditure Policies	-18,100	-93,990

On the right side are the expected revenue effects (loss of revenue to the Treasury) caused by each specific tax break. Note how many of them are targeted to the general middle-class of America, not just the top 1% President Obama and the Democrats always seek to demonize.

If you want to look for people who are 'taking advantage of the tax code', look no further than your own mirror if you have a mortgage you deduct interest on or a company who pays for your health care coverage and then deducts it from their taxes as 'part of doing business' nowadays.

The second to the right column is the one-year effect of the tax break.  The next is the 5-year accumulated budget effects of the tax break (as in 'lost revenue to the Treasury').

The notations in the far right are our running summaries of the amounts of the tax breaks that would have to be reduced or eliminated to 'pay for' the 20% tax cut that Governor Romney is talking about.  For example, if the tax breaks such as the ones afforded to the labor unions for their Cadillac health care plans were reduced by 50%, the bulk of the savings for paying for the 20% tax cut would be 'paid for' (as if anyone in Washington cares about PAYGO anymore.  This Obama Administration certainly has not.)

Or we could just eliminate the mortgage interest deduction and that would 'pay for' the 20% tax cut all by itself.

Now, getting both of these through Congress would be next to impossible, we understand that given the political popularity of both tax break programs.

One thing to take a look at, however is this juicy morsel:

'If you take the last 128 tax deductions and eliminate them in toto in terms of size of lost revenues to the federal budget, those would pay entirely for the 20% additional tax cut Mitt Romney has proposed.'

Here's an exercise you can do all by yourself on the link to the Google spreadsheet noted above this chart:

'Go in the tax code yourself and figure out which tax breaks can or should be eliminated, curtailed or cut in order to pay for ALL the tax cuts Mitt Romney has proposed or President Obama HAS PROPOSED HIMSELF!

Remember:  President Obama has proposed extending the Bush Tax cuts as well, except for the higher income people. He wants to increase the deficit by close to $3.4 trillion....and has never shown how he would pay for it to be revenue-neutral either. Ever.

The revenue generated by the hike on the top 1% would amount to about $680 billion over 10 years.  Hardly a drop in the bucket when you consider we have $16 trillion of debt to service, including $6 trillion President Obama has signed into law in his first 4 years.

If you want to extend the Bush tax cuts forever, as many want to do, you can simply eliminate EVERY SINGLE DEDUCTION listed above....and our deficits will not explode and the national budget deficit will flat-line.  Plain and simple.

However, if you want to pick and choose, be our guest.  Consider this your chance to be on the various cooking channel shows where someone throws a basket of stuff at you and expects you to concoct a gourmet meal in 30 minutes and win $10,000.

Contact us if you have any questions or need any clarifications.  We know that this stuff is as clear as the mud-filled Mississippi River.

After taking a look at this, if you are not totally convinced that the US tax code is broken beyond repair and needs to be completely thrown out and replaced with one simple consumption tax at time of purchase, then we really don't know what else to tell you.

Except as Tommy Fla-NA-Gan would say: 'You must be the smartest person in the universe!  Yeah, that's the ticket!'

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