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Congressional Politics: Legislation & Tax Code Changes
Proposed Legislation and the Repealed Section 501 (c)20
Infrastructure and it's financing have bi-partisan support, because it is a non-partisan issue. Yet, a plan and method of financing has yet to be enacted. GRIP addresses this and with the intent/emphasis of doing so without raising federal taxes & and the National Debt, while also making it possible for all from the largest institutional investors to the individual taxpayer to participate and to profit.
One of the major advantages of GRIP is that it uses existing legislation and Titles 12 & 26 of the U.S. Code Statutes.
However, there are things that Congress can do to enhance GRIP, bolster economic success and to enhance the protections of investors and taxpayers.
A few of these tax and U.S. Code recommend changes are as follows:
1. Repeal of the $10K cap and restore the SALT (State and Local Taxes) deductions for taxpayers, that were limited for the average taxpayer by the Trump 2017 tax plan, which only benefited large corporations and the mega-wealthy. This tax plan followed and was founded upon the "trickle-down economics" theory/model, which has been touted by many for years, because it has consistently failed. Trickle-down economics can be stated in one (1) word . . . Feudalism! Back in 1776, a group of colonists decided they would reject such an economic model, so why would we embrace it in 2019?
2. Review and enhance 26 U.S.C. § 103 (Interest on State and Local Bonds) and 26 U.S.C. § 142 (Exempt Facility Bond) to include that earnings/withholding of taxpayers' income placed in GRIP accounts are deducted from the gross earnings of the taxpayer.
GRIP accounts can only be accessed by the taxpayer to pay their Federal, State & Local taxes ONLY. After maturity of the GRIP ( minimum of a 2-year term 'bond'), the taxpayer has access to the GRIP instrument, which can be in increments of $1K, $5K, $10K, $20K, $50K, or $100K. However, as it qualifies as a security (as defined by the Securities Act of 1934), a GRIP can be used as collateral for traditional bank loans.
As existing law provides that these 'bonds' GRIP are tied to the interest earnings yields and are tax-exempt, this provision in the law remains and is applied to the GRIP.
3. Reverse the trend of reducing 26% tax credits for renewable energy migrations. This not only includes solar panels and electric vehicles, but also to extend to similar investments for energy efficiency.
4. Clarify, by statute and tax law changes definition, conditions, and regulatory controls for establishing P3-SPE/SPV (GRIP), with ROI yield a rate commensurate to 10 yr. Treasury Note Bench Mark to insert at 26 U.S.C.§ 501(c)(20), which codification became vacant with the repeal by the 14th. Congress, other Title 26 changes/amendments, and corresponding annotations to the C.F.R.
5. A review of 26 U.S.C. (Subchapter G) §§ 531 - 565 (Corporation Used to Avoid Income Tax on Shareholders) for potential amendments and clarifications may prove wise, given there will be those infrastructure project using P3 (Public-Private Partnership) and SPE/SPV corporations, who will finance the infrastructure project by selling stock/GRIP.
6. A review of 26 U.S.C. (Subchapter H) §§ 581 - 601 (Banking Institutions) for potential amendments and clarifications may prove wise, This is certainly true for 26 U.S.C. § 582 (Bad debts, losses, and gains with respect to securities held by financial institutions) and 26 U.S.C. § 585 and § 593 (Reserves for losses on loans for banks).
These provisions (2 - 4), in addition to those in Title 12 of the U.S.C. (Banks & Banking) will help safeguard and consumer protect investors, so that banks not using the GRIP approach to evaluate infrastructure projects feasibility and management, cannot defraud or misrepresent the value and stability of an infrastructure project. Otherwise the potentials for a repeat similar to that of the sub-prime mortgage scandal of 2007-2008, leading to the "Great Recession" and more recently the distribution of PPP and other provision in the 2020 CARES Act may be significant.
7. A review of 12 U.S.C (Chapter 2) §§ 21 - 216d (National Banks); 12 U.S.C. (Chapter 4) §§ 531 - 561 (Taxation); 12 U.S.C. (Chapter 17) §§ 1841 - 1852 (Bank Holding Companies); 12 U.S.C (Chapter 18) §§ 1861 - 1867 (Bank Service Companies); 12 U.S.C (Chapter 24) §§ 2281 - 2296 (Federal Financing Bank); 12 U.S.C. (Chapter 46) §§ 4501 - 4642 (Government Sponsored Enterprises); 12 U.S.C. (Chapter 47) §§ 4701 - 4750 (Community Development Banking); and 12 U.S.C. (Chapter 52) §§ 5201 - 5261 (Emergency Economic Stabilization) are all areas where a review of statutes and the assurance of compliance are necessary, certainly where infrastructure projects are financed using the GRIP method and where the 'bank within a bank' concept is employed.
These are necessary and already incorporated into the GRIP method, certainly if GRIP are used as a security, transferred and exchanged for T-bills and other financial instruments.
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