Loop Holes

The latest buzzword from the liberal left is "loopholes". As they attack the job creators, our media and liberal and/or ignorant politicians constantly make reference to closing the loopholes that the so called wealthy take advantage of in lowering their taxes. This latest warpage of the facts has a very interesting history while screaming with hypocrisy. What do I mean? Let's start with a simple view...who do you think creates the so called "loopholes"? Well its not the wealthy. Nor businesses. It is in fact the legislatures. That's right, loopholes, and the negative image the word conjures up, are ONLY created by legislatures. The first hint how unqualified people like Obama are to assert that "loopholes" are a problem is in the very fact that if he is criticizing loopholes, he is in fact criticizing himself. Think about the most well known "loophole"(sec. 179) that was encouraged and celebrated by Obama and company less than 2 years ago as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. But it wasn't called a loophole then. It was wrapped up in the buy it now (and job creation) message that accelerated depreciation and binus depreciation provides to every business person in America. What is accelerated depreciation? It allows a business to accelerate the write off of certain business assets faster than the typical lifetime. In offering accelerated depreciation, the government is saying loud and clear (and in front of the cameras), WE WANT BUSINESS TO SPEND MONEY NOW. Accelerated depreciation becomes a so called job creation stimulus. Starting to sound familiar? That's right, 2 years ago, Obama stood up in front of the cameras to take credit for extending accelerated depreciation rules in order to "create jobs". And guess what, many businesses took advantage of it while doing EXACTLY what Obama asked business to do. INVEST. Oh, but it didn't work so good when looking at the budget mess, since businesses that take advantage of this so-called loophole, and invest, also lower their taxes. And that has now become a problem since Obama needs tax revenue to fund his socialistic policies. The real point here is that "loopholes" are created by legislatures to accomplish certain objectives, rightly or wrongly. And just about every business in America whose basis is capitalism, looks to the tax code for ways to lower their taxes because their duty is to their shareholders, employees, and suppliers to increase profits. Keep in mind, a profitable business is the best and most safest way to have job security and provide a basis for job creation. PROFIT is not a four letter word!!!.And avoiding taxes legally is the most capitalistic and American thing you can do for your business. So when businesses comply with the law, and thereby do what the legislatures asked them to do, they should not be vilified and accused of using loopholes. They should be encouraged to do so in the spirit of creating jobs. And for those of you that think loopholes are unfair or should be eliminated. I would agree subject to re-doing and simplifying the current code! Just re-do the tax code - i.e lower corporate income taxes to a lower flat rate, and we will create even more jobs while eliminating all the wasted jobs of compliance and enforcement with the current tax code. I am not defending the code today, just pointing out to you all that it was created by the very legislatures that now claim there are too many loopholes. We all know that you can't speak out of both sides of your mouth. Or do we?