It seems impossible to stay away from financial and tax news this week.
First, there is the battle In congress over lifting the debt ceiling and moving along the Democrats’ hoped-for spending bill. I have previously written about some of this in this space because the spending bill is going to have to include new tax measures to pay for it. It has seemed almost inevitable since President Joe Biden took office, but now we are in October and things look less inevitable than they did at the beginning of the year, and it is difficult to say what any of this is going to look like by the time we reach the journey’s end.
Second, there is the release of the Pandora Papers, which show how some vast swaths of wealth are being handled to avoid taxes and creditors. The total numbers involved in these stories tend to stretch the mind. Billions are thrown around casually, but when you stop to take a moment to think about it, it is a LOT of money.
My main take on the Pandora Papers, though, is that this is not a huge expose of illegal activity. One can be upset that rules exist that allow the very wealthy to avoid paying what they ‘should,’ but they are just using the rules that exist to their advantage. If some rules changed (which would not be easy, since there are international entanglements in the story) then what they needed to pay would change. Until that happens, though, they are just using the situation to their advantage.
Whether this should happen or not, however, is a debate best had in different forums. But if the rules changed, those people involved would be okay. They may be held more accountable in new ways, but they would find their spot in the novel rules without their fortune suddenly disappearing.
That idea of new rules, though, goes back to the fight in Congress. Yes, there are going to be taxes raised on someone at some level to pay for what is attempting to be passed. But remember what happened when Democrats last passed tax rules? Chances are you don’t. For when these things do change, the impact is immediately seen, some feel a bit of a new pinch, then they adapt and ease into the new rules.
Again, this is not the place to debate over what is the actual best and/or most equitable tax policy. But that is a debate that has be had somewhere. What this is then is a plea to accept whatever happens without rancor. If you disagree with those in power, you can show that by voting. Until then, though, you will find the way through whatever rules you must follow, and we will be there to help you travel that path in the way that most helps you.
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