Coping: Transfer Payments and Income Taxes

There was a very important piece in Peoplenomics Wednesday that I’d draw your attention to:

” Home Runs -About Them Borders: Two notables:

First is a DoJ report that says one in four in the federal iron bar hotels was born NOT HERE. ”


One of our brighter readers sent in a great comment – that in turn deserves a response:

“With the cost of incarceration at thirty to fifty thousand a year per resident of the Iron Bar Motel, shoot why just send our jobs overseas for the citizens to pay for. I suggest we use the NAFTA treaty and negotiate a stay in another country.. Like Mexico or turkey for any violent offenders with a proof of life clause for once a year checks.. then use a law similar to the ones used by Singapore (caning.) fine them first then put the repeat offenders in the middle of the mall live television for how ever many wacks it takes.. for one.. not to many would like to have their pearly whites smacked by some ninja.. and no violent offender wants to spend time in a jail in another country.”

It just so happens, as coincidences do, that my consigliere and I were talking about the pending changes to U.S. (corporate) income tax rates.

What most people don’t realize is that there are “transfer rates” that allow U.S. companies to build products overseas, then as long as they pay income taxes in a lower tax country, they can claim a much higher transfer cost when the goods come into the U.S.

Take a phone.  $100 throw-down phone, then.

Make it in china or Mexico and pay the income tax there.  But for transfer purposes, claim the cost of the phone is $90 on a transfer basis.

But the real cost of the phone was $30 overseas and since the tax rates are low there, maybe $4-7 dollars worth of corporate income tax would have been paid.  But the difference between the “transfer pricing” and the big profits is that the big profits have to stay offshore.

This means that some companies (Apple and their $250 billion of cash or whatever they are up to now comes to mind) are making a killing.

The most frequent abusers used to be the big three automakers.  They would source some components in the USA ($100 item) and then they would have other suppliers of the same thing (maquiladoras in Mexico) make the same thing for half the price.  But they would claim the Mexico price was equivalent to the U.S. goods.

So I asked him “WTF?  Why don’t we just end all this transfer pricing crap and charge a flat 15% and have a “tax holiday” so some of that Apple stash can come home (tax free) with the idea that it would be spent in the future in the U.S.A.?”

Sadly, the answer is that transfer payment and transfer cost rules are all wound up in Tariff and Trade Agreements that have been negotiated over years and years…so in a way, we have painted ourselves into a corner.

The cool thing about the reader idea is that it gives us a non-tariff way to charge-back countries that import goods to the US.

The problem is that the number of federal prisoners is only 189,000.

Using a more realistic price per inmate ($75,000 is probably closer to the truth) this would raise  $14.175 Billion.

That sounds like a huge deal (and it’s not chump change, for sure) but it would probably make as many problems as it solves.

Next door to our south, for example, such a charge would be just another nail in the coffin of a country (Mexico) which has become a marginal narco-state.  I figure it’s only a matter of time until we see a revolution in Mexico, but for now, systematic corruption is a muddle through for the country.

Point is, they would be more likely than any other country to be impacted.

But that’s only the start of “wild hare” ideas that might work..

For example, while it is against Federal law for states to charge tariffs on one-another’s goods, I’m not so sure that a “port tax” couldn’t be imposed by states.  Think in terms of a “prison tax” levied on goods from another country for housing and feeding their miscreants here,

Now, we’d be looking at a much larger dollar figure ($150-billion a year roughly) but the liberalistas would never stand for it, as evidenced by their Open Border madness.

As always, an inspection of America’s tax treatment of foreign nations is a depressing pursuit.  Toss in the fact ANYONE can buy property in America (many countries only allow their own citizenry to buy property) and we see how the long-term dismantling of America is almost “baked in the cake.”

Still worth thinking about how to bring some of that overseas corporate profit home, and all.  But in terms of action?

Do you think that a congress – living the Label Lie that it’s a Republican outfit at all – that can’t fix healthcare will be able to think outside the box long enough to fix some of our property and tax consequences?


Too much money from “outside the district.”  Until Congress limits itself to pure money raised in the home district for congressoids or State for senatoids, we will continue to have the same corrupt ménage of sell-outs as before.

Nothing will happen.  But as Obama proved with remarkable clarity, you can “run” on a “Change!” platform and get away with no change in fact once the office is attained.

Marketing of politics is amazing – because there’s product delivered except chrome plated excuses and blatherspeak.

Which leaves us in Ski Slope America…waiting for the next little slide down hill as we race to the icy bottom.

Cheery stuff, huh?

We really ought to have a contest:  See who can come up with 10-Ways to Save America.

A nd then send it to Washington where both houses of congressoids and even the WH have completely gone off the rails having forgotten the promises made in the heat of battle.

We could have comments, a vote on prioritizing…yeah, but who’d care, right?

Write when you get rich,

22 thoughts on “Coping: Transfer Payments and Income Taxes”

    • yes!
      here’s absolutely notice except some bytes – now give me $1573 for it…
      NOTHING is unhackable

      • What? Are there some typos or do I just understand Bitcoin terminology? I can’t decipher it.

  1. How about middle of the road and deport convicted illegal immigrants back to their own country. Taxpayers would save the cost of incarceration

    • Most countries won’t take those people back. They simply will not let them get off the plane. Remember the boat people from Cuba? The government did exactly that, opened the prisons and sent the worst criminals they had to the USA.

      Do you really think those “Arab” refugees arriving in the USA in the middle of the night on FedEx planes that are being given unmerited disability, free housing, AND USA PASSPORTS are the cream of the crop? Most of those young males (90% of immigrants) are former child soldiers who have been killing since they were 7-8 years old, and most have never known consensual sex, only rape. Just wait until they connect with the 33,000 violent gangs in the USA. Study Sweden for details, where the latest police station was built to fortress specifications and there are more than 30 no-go areas where police are afraid to enter.

      The historical solution for this is to simply kill them, but America is too politically correct to hear that yet. But when every American knows someone who has been subject to violence by police or immigrant, things will change quickly.

      • Exactly..they don’t want them..this sounds horrible but they come here because they see a gravy train at the citizens expense.
        If the living conditions were worse it wouldn’t be desirable. If the border patrol had a simple order shoot on sight who would want to try to cross or forced labor. Take the insane rulers? of the past and present.. there’s how many trying to escape the harsh rules of Syria the very ones they wish to impose here. Or who would even consider crossing the border into north korea. My bet is there aren’t very many. Saudi Arabia they won’t allow any refugee’s..
        I guess my point here we give them gaurantee of employment housing medical assistance food etc.
        I know someone that is American born and raised they are really down on their luck went to a free dental clinic got there at five o’clock am… (Woman) anyway when the door was open about ten of these down and out refugee’s shoved her out of their path (she’s a woman their culture doesn’t see them the same way we do) at the same time calling her name’s etc. She gets up to the window and they tell her they won’t see her because they had their limit..she explained to them the guys basically pushed her around d forcing her behind them.
        The receptionist gave her a lecture on she should respect their culture and try to understand it..
        Excuse me Americans should come first..

  2. The unfortunate situation we find ourselves in is that after 8 years of allowing a president to run amuck without any recourse for his failing to uphold the constitution and live within the law. We have a more divided states if America than ever. The establishment in Washington in both parties are so blind to the tensions that are building that it disgusting.

    It seems they want to have the next “revolution”, which will come once we replay the Great Depression. There are so many simple solutions to do many problems but nothing in Washington can be that simple, because then they look like morons for not doing the simple things first.

    The first suggestion at the top of my list; congress has to live by the same laws they impose on the people. Second, term limits for everyone of those people. Third, everyone of them is audited coming into office and leaving. If their income or net worth changed more than the cost of living increases the public gets a look at every transaction increasing their net worth or income. Anything tied to their position but not to their specific responsibilities goes back into the treasury or they go to jail.

    • I like your simple answers to the complex problems they have managed to create and fund. The answers are always simple, just to follow the constitution and rule of law, is simple, but you can count on them not following that, as those items were put in place to ensure liberty. We have lost our liberties, and they do not follow those old fashioned principles. they follow the God of money, and it is a sure-thing payer, on time, all of the time, and if they are lucky for them, their spouses, children, and maybe on into the next 2 or 3 generations. That God of money also turns on them occasionally and you see a murder or fallout. Like don’t you find it funny that Hillary could get $675,000 for a speech but Obama gets $400,000. Seems to me he needs to ask for a raise! Or maybe he is just getting started!

      But back to the topic at hand, yes all of the problems facing the USA are manufactured problems, purposeful problems, created problems, agenda driven problems, think tank and lobbyist generated problems, predictable problems with predictable outcomes. Remember Goober, how he tried to blame the passing of obamacare law on the ignorant and stupid citizens? Funny, he was up there lying about the law, and the media was not allowing any real in-depth discussion of the law, and there were never any seminars or summits with doctors, patients, human resource professionals, nor brokers along with the insurance cartels. So, how could citizens know what was being discussed in secret and passed as a skeleton bill so that the flesh of our premiums and deductibles could be hung on it later? Americans are not stupid, this ruling system has stealthily in-Lawed themselves into power and outlawed all the rest of us.

    • And just exactly who do you think is going to put those good ideas into law? The inmates are not only running the USA asylum, they have designed it.

      As George Carlin said, it’s a big club, and we ain’t in it. And your taxes are paying your salary, and now if you stop paying taxes, they will simply print the money necessary to stay in power.

      • That was my point, they have set it all up for their own success, which leaves out the citizens, so I think you know how this is all going to end. Yep, love George Carlin, everyone should go to you tube and hear his speech on the ‘It is a BIG club and you ain’t in it’. It is the finest example of the truth you will see in our generation.

        Here is just one clip, the actual speech is longer, so look around:

  3. … we see how the long-term dismantling of America is almost “baked in the cake.”

    Let us all abolish democrazy and make George U King. Problems no more ;-).

    P.s., and we declare ‘John on’ Grand Council in order to balance opinions.

    • We don’t need a balance of opinions we need the truth!

      Here is some truth for ya:

      But don’t stop there, read as many articles on this as you can as they all offer a little tidbit that the others don’t.

      Do you see mention of America’s oil independence? Any mention of our fracking and all that oil we are supposed to be unloading on the market?

      So, yes, George, the long-term dismantling of America is going on unabated. We were the last free frontier, on the spaceship called America. Those nasty klingons have been after us for a while, I guess they have finally paralyzed us with their pretty women from everywhere, lots of alcohol and drugs, only the finest afghan heroin and mexican mj, crack, and smack, fancy financial products and high credit card interest rates, scenty perfumes, heady head banging music, non-stop entertainment with nudity and violence for all, money for everyone – so you can get your kicks for free, no-one needs to work to make a living, a baby, or have a home, and non-stop sex appeal. They have netted us with our new-fangled bomb making and selling and planet bombing and takeover for democracy calling card! Now they are going to further the virus takeover of our motherboard, err, braintrust, err computer, err elected critters. Yee ha, where is our destination next??? Will we make it intact or will we be blown off the face of the deep?

  4. I think everyone who has looked, knows that the Fair tax or even a point of sale tax, would bring the bleeding to a halt by equalizing the effects of foreign v. Domestic production, but even then, so long as we have environmental quality and pay to defend other trading partners, it will be unbalanced.

    And Democrats will forever block the one key component: repealing the income tax amendment. Without that, we would be sticking our collective necks in a noose. So I think we will have a hard landing before there is enough political support for something that chokes off the parasitical parts of our economy, which is how this terrible cyclical process has worked throughout history.

    So to save America probably means we must spread Urban Survival memes to the mainstream, so that people take more care of themselves, participating less in the diseased body politic, and thus putting more of our personal resources into activities which the parasites don’t have their footholds in. Like gardening, or making cars last twice as long, or alternative health modalities, or other exits from the rat race.

    Since most humans worship authority and rarely look up, we shouldn’t hold our breath.

    • Good post. Already working on the items in your 2nd to last paragraph, from necessity. I also think that now that our elected leaders are compromised, meaning we all see full well, that they for sure, without a doubt, beyond question, completely positive, unabashedly THEY are NOT working in our, the USA citizens best interest (and have not for multiple decades), the only result can be real protestations. That is what is coming. The real Americans taking to the streets. When that happens, then the congress/elected suckers will back down, and some will leave the country, just like a coup in reverse, to save their skins. When we hit that rock bottom, we will rebuild everything. In the meantime, get ready for more wars, more citizens dying, higher taxes, more instability (food, gas, access to a doctor, jobs, more mandatory vaccinations, etc.), less justice, less law abiding behavior, more illegal and refugee immigration, causing more conflicts, and more crime. More citizens getting upset over seeing the takers get everything for nothing and they get turned away from avenues intended to help them over the short-term humps. Expect more self-inflicted deaths as the the country’s justice deteriorates. Expect more lies from the MSM and see how that affects people’s mental health. (This is just a small list of effects from our system.) I agree you can learn more from other people and alternative sites. There is a sickness making its way across the land. Just prepare for it, and you can, and you can do it with grace, and have fun, all the signs are there.

      • The sickness is already all across the land. And keep in mind that those in power will use force to maintain that power, backed up by law enforcement that is the most violent on the planet that has now been militarized.

        Americans are subject to more excessive use of force by police than by criminals. And what you really don’t want to hear is that they use this excessive force because they like doing it.

        Those folks running Guantanamo and the seven other prisons around the world where the USA tortures people like Assange don’t take jobs as Walmart greeters when they get out. They go for a job with a uniform, where they thrive on the power and love the opportunity for violence.

  5. IMO, the situation in DC is unfixable. We must keep an eye on what they are doing, but expect nothing good for us from it. Instead, focus what political energy you like on local as George did in his county. Again, don’t expect much, but it is easier to have an effect locally.

    We just may get the revolution when the hammer falls. Boy, what a mess we have on our hands.

    • Actually, the situation in the whole country is unfixable. Local governments hands are tied by federal regulations and addiction to federal money. Plus the rules are stacked against newcomers getting elected. George couldn’t even get himself on the local ballot because of the rules and the costs involved.

  6. If you want to cut back on the mega-corps and bring back small business, just make a law that requires all businesses to sell their products at a single price to any buyer. No volume discounts, no locking out competitors, no coupons, no rebates, no kickbacks. Set the price anywhere you want, but make it the same price whether you sell to a giant corp or a mom-n-pop grocer.

    The huge corps are paying for their pyramid of executives partly by slashing down the purchase price with volume as a justification. So the Mom-n-Pop grocer can’t buy a head of lettuce for the same price as Con-Agra. Fix that, and the Mom-n-Pops can beat Con-Agra-Big-Mart on price, as well as service. Jobs and money stay in the community–
    Of course, don’t hold your breath on that…

    • Exactly… Insurance companies charge one price per policy policy a policy b etc. Open the borders to negotiate price and open the borders for pharmacy.
      Or a state sales tax on any products made outside the USA. You have a penny here for restaurants a penny for alcohol why not a nickle tax per dollar on products made outside the USA..I am not sure but don’t think Congress can control state taxes

  7. “We really ought to have a contest: See who can come up with 10-Ways to Save America.”

    Meaningless exercise, because input from outside the pols’ advisors is never read inside the beltway.

    Republicans strive to hold seats; Democrats strive to hold power…

    “Politics” has become a sport. As such, the “team” is more-important than the action, and the “goal” less-defined than the “play.”

    The Repubs are already strategizing the ’18 Election, and because they have to fight both Dem challengers and the MSM, fear doing anything that the Media can make “sound bad.”

    The prime function of any bureaucrat is job preservation.

    “Politicians” are bureaucrats first and “team players” second. They never champion legislation which could jeopardize their job, and only support legislation when doing so would not hurt their “team.” Producing sound law, meaning legislation which would be of benefit to all Americans, only happens when such legislation doesn’t conflict with numbers one or two, above. Producing “good law,” that is: Legislation which is “concise, precise, well-written, and brief,” NEVER happens, because a Bill must contain sufficient obfuscation (George’s “weasel words”) that a Congresscritter of either team can claim during his(her) next re-election campaign that it doesn’t say, or do, what people think it says or does.

    • Congress either side will never make any beneficial changes as long as the puppet Master are in control. There was an action to try and limit donated money and gidts.
      Unfortunately when it was put before the supreme Court they made a ruling that it was unconstitutional to put restrictions on donations. Giving the puppet Masters total control.
      And with them literally working less than a month a year they don’t have time to read the bills that special interest groups write for them to vote on.
      There would have to be a complete change unfortunately that can’t be done without congressional approval

      • Article V Convention…

        “A Convention to propose amendments to the United States Constitution, also called an Article V Convention, or Amendments Convention, called for by two-thirds (currently 34) of the state legislatures, is ONE OF TWO PROCESSES authorized by Article Five of the United States Constitution whereby the Constitution, the nation’s frame of government, may be altered. Amendments may also be proposed by the Congress with a two-thirds vote in both the House of Representatives and the Senate.”

        We were only taught the second process when I was a lad, and probably for a hundred years before. I doubt EITHER process is taught today, rather, kids are probably all programmed to believe the Constitution is fluid (“…a living, breathing document”) which I accepted as “true” (after all, the Constitution can be changed, by amendment) until I learned the meaning of “living, breathing document” was: “Open to interpretation, to mean anything we want it to mean…” Now when I hear that phrase, I ask for an explanation from the speaker or writer, then ask: “The Constitution is a contract. It is the contract we have with our government which delineates the actions and responsibilities of each party, with respect to the other.

        Please tell or show me where, in the entire history of contract law, has ANY contract, once codified, EVER been open to interpretation?”

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