Hope your week is off to a great start. If you’ve been online the last few days I’m sure you’ve stumbled across the headline of Trump dropping out of the race.
If you’re short on time… No way. He’s definitely not dropping out.
However, during a recent interview on Meet the Press Trump discussed a scenario in which he’d drop out of the race.
“I’m not a masochist”… “And if I was dropping in the polls where I saw I wasn’t gonna win, why would I continue” said Trump.
Now this is something I wish all the candidates would consider. I know we’re still early in the process and things can change quickly. Though I believe a tighter focus on fewer candidates is where we want to be.
If more candidates drop out it allows us to identify the viable candidate with the most overall support.
Let’s take Rand Paul for example, as this is who Trump famously said should drop out in the last debate. If he drops out we can see where else his supporters might go next.
They may go with Cruz, Carson, Fiorina, or whomever. Rand Paul is currently polling at 2% and that 2% can make big difference to another candidate’s viability.
SIDEBAR: I personally like Rand Paul. His support is just so low I don’t see him coming through the other side with the nomination.
The same can be said for Mike Huckabee who is also polling at 2%.
We’ll see what happens, and like I said things can change quickly. We all remember how quickly the tide turned on Herman Cain and Rick Perry during the last cycle.
Now let’s move on to some reader feedback…
Before I begin with the feedback and my comments I’d like to say just one thing briefly.
If you’ve missed any of the letters that readers are commenting on below and would like to read them, you can email our support at and they’ll send you a copy (or you can check this website)…
Here’s one from yesterday’s letter titled, What’s wrong with This Country?
“Credibility is lost if you attribute a famous quote to the incorrect person. The quote that you attribute to Washington was spoken by Franklin. I stopped reading at that point.”
My comment: Dennis, thank you for your email. I was sent this comment early Monday morning from our customer support. I’m sure there will be at least a dozen more that come in to point out this gaffe. This made me cringe when I read it. It was a mistake on my end. This quote was definitely Franklin and not Washington. Sometimes the brain operates at a million miles a minute and mistakes are made.
I hope we didn’t lose you, but if so we wish you the best.
Next we have some feedback on my letter sent last Friday titled, “The Disturbing Liberal View on Wealth”
“VERY intelligent article! I especially like the part where you say, “Money has a homing instinct- it always flies home to its master.” How true! You either control your money or it controls you. Also, “You live in a capitalist system….You can either prosper by this fact or you can exist/suffer by it.”
Perhaps the best article in defense of capitalism I’ve read in a long time! I agree with every point you made in it, except that you imply that the corporate tax rate in America is low when, in fact, it isn’t. America has the about the highest corporate tax rate, if not the highest, in the entire world.
Even Canada’s tax rate is lower than our 35-40 percent. Theirs is only 26 percent. Why do you think that Burger King left for Canada? Because they just love cold weather?”
My comment: Thanks for your comments Alan. We appreciate all comments, but it’s always nice to receive encouraging letters like this one. With regards to the corporate tax rate you’re 100% right. My main point was acknowledging that all politicians know they can never make the corporate tax rate too high. Hopefully the next president will lower it substantially. I’ll discuss my thoughts on this in more depth when I reply to another comment I received later in this letter.
Moving on we had several comments from my letter last week on Trumps tax plan…
“I think the threshold for individuals not having to pay taxes should be $30,000. It’s difficult to live on less than that.”
My comment: I can see your argument. However the 0% tax rate needed to be cutoff somewhere. If it was set at $30,000 others would say why not $35,000 or $40,000.
“Re trump’s tax plan, I wish you would have reported on how it has done nothing to help the middle class. It is aiding the millionaires. This should be pointed out as part of your analysis.”
My comment: Joey thanks for your email. Trumps tax plan lowers the tax rates across the board; that includes the middle class. Plus the lowering of the corporate tax rate will be great for jobs which should also help the middle class. I can’t think of a better way to help the middle class than creating more jobs and allowing them to keep more money in their pocket.
“Trump’s plan is a starting point not the end point. I like my plan better. I call it my 10/15 plan. Everyone pays 10 %( even those receiving gov’t assistance, as they are receiving a gov’t PAYCHECK, and the corporate/business is 15% of their Gross. No one who works for a business that withholds $ from their paycheck would need to file anything as the employer would have already done it. Only self employed & businesses would need to file.”
My comment: I like the straight forward nature of your 10% plan. 10% is what we tithe to the church. So if God can get by with just 10%, certainly the US government should be able to as well.
The part I like most about your 10% idea is it could eliminate a large chunk of the IRS with millions less people filing. The government has already turned your employer into a tax collector. Though the tax laws are so complicated, currently, that each individual must file to determine how much of their stolen money they get back.
To me that’s one of the greatest tricks the government has ever pulled. They steal more money from you than you owe, and get everyone to cheer when they get their “tax refund”. That money should have never been withheld from you in the first place. It’s not a gift, it’s your money. Anyway, let me move on to your next point. I will cover this government scam in greater detail in a future letter.
Your second point on the 15% GROSS corporate tax rate is where you lose me. Most businesses have profit margins of less than 15%. So if they are taxed at this GROSS rate they will either need to dramatically raise prices or go out of business. For example, with this tax structure you can forget ever owning an affordable car or having reasonably priced gasoline. People often like to pick on the big oil companies for making billions. What most people don’t comprehend is that it’s a capital intensive business with profit margins of just 0.2%.
I can make the argument that the corporate tax rate should be 0%. Or at the very least, corporations with less than $10 million in revenue should be taxed at that rate.
I already hear the clicking of keys on the keyboard, “Are you crazy? Corporations make billions. Why should they pay no taxes?”
My reason is a corporation is not a person, it’s an entity created on a piece of paper. The taxes should only be paid by individuals when they are paid out as salaries, dividends, bonuses, distributions, etc.
Let me create an analogy to illustrate my point. There are 10 guys over my house to watch the super bowl. To make things interesting we do a little betting pool where each guy put’s in $10. This is America, so whoever wins the pool is obligated to pay tax on their winnings. The pool we created is the corporation. That corporation just collected $100 so must pay 35% corporate tax. The winner who collected the remaining $65 must then pay 30% tax on his winnings. That money was essentially taxed twice.
This is why the corporate tax rate is a killer for small businesses. Think about the guy who owns the pizza shop down the street. If the year ends and he has $100,000 in profit in the bank there are two choices. Take the money out as a distribution and pay personal taxes… Or leave the money in the business pay corporate taxes now and personal taxes later when he eventually takes it out. It kills small businesses by forcing them to take distributions to avoid double taxation.
If there was no corporate tax he could leave the money in the business and use it as working capital. Perhaps later on he’d use it to hire new staff, expand, or buy a new pizza oven.
The corporate tax rate is merely a duplication of taxes.
That’s all I got for today folks. I look forward to speaking with you all again soon.