Tax Cuts and Discounts are Really the Same Thing

by: Brent Smith at the Common Constitutionalist

Scroll Down for Audio Version

As the tax debate in Washington heats up, we’re hearing the same tired old refrain of, “The rich don’t deserve nor do they need a tax cut.” It’s an absurdly populist statement. However, this time it’s coming from both the dems and republicans.

In defense of tax cuts for all, the rich included, let me first quote some boring facts and figures. Then I will attempt to inject some business sense into an otherwise senseless argument.

Tax cuts will in fact grow the economy, yet I heard the leftist billionaire Tom Steyer say that since the 1980’s, the top tax rate has been cut from 70% to under 40%. He adds that during that time wages for workers have stagnated. I won’t argue that point here.

I heard him say he got rich on Wall Street, so he knows all about the economy. If this is so, and we’ll assume it is – it would mean he’s lying by omission and knows he is. But he knows most aren’t schooled enough to catch him in the lie.

In fact the economy did grow massively after Reagan’s huge tax cuts. But wages are just a portion of economic growth. And wages, like almost everything else, do not occur in a bubble. Other things affect wages – not just growth, or lack of it.

First, would you rather have a job at slightly lower wages, or no job at all, which occurred during the Carter years? And of course wages often don’t tell the whole story. read more

Mayor de Blasio’s City-State

by: the Common Constitutionalist

 

New York City mayor Bill de Blasio is upset at the New York State government for not rubber stamping his progressive agenda. He evidently feels his city should be effectively unpinned from the state government allowing him to form, as Frances Martel at Breitbart describes, his own “City-state”, like ancient Athens.

 

De Blasio’s agenda is beginning to look like Bloomberg on steroids. He has been in office only a couple of months and has sought to institute a tax on the city’s wealthy, which he claims will pay a citywide universal pre-kindergarten boondoggle.

 

I have mixed feelings about this. Not the bogus pre-kindergarten indoctrination factories. I know that’s a worthless money pit. No, it’s the tax hike on the wealthy. On one hand I don’t wish anyone’s taxes raised, but on the other, I think he should raise them until it hurts. After all, these are the same upper West side pompous rich leftist elitists who undoubtedly voted for the commie mayor.

 

Gov. Cuomo is none too pleased with the Mayor. Fox news reported that Cuomo called the idea of making rich neighborhoods fund themselves separately from the rest of the state “repugnant”.

 

 

Oh, and I almost forgot. The Mayor also wants to raise the minimum wage in the city, separate from the rest of the state.

 

Where is my head at. I also forgot to mention de Blasio’s plan to give criminal aliens (illegals) city government issued ID cards, allowing them to access city services and open bank accounts and the like. read more

France Taxes the Rich

Socialists are socialists, the world around.

Legendary actor Gerard Depardieu is to give up his French passport in protest of huge tax hikes imposed by the country’s Government.

Depardieu, 63, star of films including Green Card and Cyrano de Bergerac, is furious at socialist French President Francois Hollande for several of his policies aimed at taking money away from the rich, including a top rate of income tax of 75 per cent.

The actor is now set to move to Belgium after putting his £40million ($65 million)mansion on Paris’s Left Bank up for sale.

Leaving: French actor Gerard Depardieu has put his Paris mansion up for sale and will leave France in protest at tax hikes imposed by the government  French actor Gerard Depardieu has put his Paris  mansion up for sale and will leave France in protest at tax hikes imposed by the  government

In an open letter to prime minister Jean-Marc Ayrault today, Mr Depardieu said: ‘I am leaving because you consider that success, creation, talent, anything different, must be punished.’

Mr Depardieu said he has paid 85 per cent of his income to the Government this year, and estimated that he had paid more than £130 million ($211 million) in total since he started work on leaving school aged  14.

New financial measures: French President Francois Hollande has imposed a top rate of income tax of 75 per centFrench President Francois  Hollande has imposed a top rate of income tax of 75 per cent

Mr Ayrault had earlier branded Mr Depardieu ‘pathetic’ and ‘unpatriotic’, but the actor wrote in an open letter in the  Journal de Dimanche: ‘Who are you to judge me like this, Mr Ayrault? I ask you, who are you?’

‘Despite my excesses, my appetite and my love of life, I am a free man.’

‘I am not asking to be approved of, but I could at least be respected. All of those who have left France have not been insulted as I have been.’

‘At no time have I failed in my duties. The historic films in which I took part bear witness to my love of France and its history.’

The actor is not the first wealthy French resident to signal their intention to leave since Mr Hollande came to power back in May.

Bernard Arnault, chief executive of the luxury goods group LVMH and France’s richest man, is among those who have applied for Belgian residency, although the billionaire denies it is for tax reasons.

It came as an Ifop poll released in France over the the weekend put Mr Hollande’s public approval rating at just 37 per cent, with Mr Ayrault on 35 per cent.

MailOnline reported last week how Depardieu had moved to a new ‘tax exile’ mansion just 800 yards from the French border in Belgium.

The actor’s lavish home in the village of Nechin – on a street known as Millionaire’s Row – is less than two minutes drive from the French town of Roubaix.

Attribution: Steve Nolan, Mail Online

The Folly of Taxing the Rich

President Barack Obama has proposed raising taxes on the rich to put America’s fiscal house in order, but critics say federal spending is so massive that the wealthy don’t have enough money to cover the nation’s unprecedented debt.

In an interview with MSNBC’s Andrea Mitchell, Rep. Tom Price (R-GA) said President Barack Obama’s plan to raise taxes on the wealthy would only generate enough revenue to fund the federal government for eight days.

“The president’s plan to increase taxes on the upper two percent covers the spending bytax_the_rich this federal government not for eight years, not for eight months, not for eight weeks but for eight days. Eight days only,” said Mr. Price. “It’s not a real solution. So, again, I’m puzzled by an administration that seems to be more interested in raising tax rates than in gaining economic vitality.”

The problem is that the rich don’t have enough money to put so much as a dent in America’s $16 trillion national debt. “If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion,” writes John Stossel. “That’s only a third of this year’s deficit. Our national debt would continue to explode.”

Still, Mr. Obama’s supporters persist in proposing tax hikes on the wealthy. On Sunday, billionaire Warren Buffett proposed a minimum tax for America’s top earners. “We need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that.”

There’s just one problem with such an approach, says author Mark Steyn:

obama-and-the-buffett-ruleIf you took every single penny that Warren Buffett has, it’d pay for 4-1/2 days of the US government. This tax-the-rich won’t work. The problem here is the government is way bigger than even the capacity of the rich to sustain it. The Buffett Rule would raise $3.2 billion a year, and take 514 years just to pay off Obama’s 2011 budget deficit.

Indeed, even Mr. Buffett seems to concede that he and the president’s “soak the rich” proposals are more an act of political theater designed to generate an emotional response than serious solutions: Mr. Buffett told Matt Lauer he believes his proposal would boost the “morale of the middle class.”

From the Common Constitutionalist: The facts are the facts. No matter how much spin Obama puts on it. The republicans, not wanting to try to educate the public, are jumping on the “Revenue” bandwagon. (Always remember, revenue equals tax increases).

Moderate republican Lindsey Graham told ABC’s This Week on Sunday, “Republicans should put revenue on the table. We’re this far in debt. We don’t generate enough Lindsey Graham revenue.” Rep. Cole said on Tuesday, “I think we ought to take the 98 percent deal right now,” and allow taxes to go up for higher income earners.

Rep. Peter King told NBC’s Meet the Press on Sunday, “[The]  bottom line is we cannot have sequestration. We can’t go off a fiscal  cliff. We have to show the world we’re adults. … I think everything  should be on the table. I myself am opposed to tax increases.”

It appears to me Obama and the democrats have already won. A crisis has been created, on purpose, I might add, and the republicans will do what they always do. Whether it’s the end of the world scenario of TARP, the stimulus, the debt ceiling or this. They keep giving ground and the dems keep taking.

Let me put this “Tax the Rich” nonsense into further perspective. The federal government currently spends 9.5 billion dollars per day. Are you getting the magnitude of that number.

Now lets reinject John Stossel’s number. If we took every dime the rich makes it would total $616 billion. That would fund the government for about 65 days. What do you do on powerballthe 66th day? You’ve already taken all the income.

Let’s put some more perspective on it. We all heard about the huge Powerball jackpot this past week. Those 2 lucky winners are now rich beyond their wildest dreams. The cash payout for each is about $160 million give or take. That’s a lot of money unless one is trying to run the government. That whopping $160 million could run the federal government for less than a 1/2 hour. How’s that for some perspective.

This problem cannot and never will be solved until the size of government is slashed. Not just the fat trimmed, but cut to the bone. The only way to do that is to starve it of revenue.

We are going over the fiscal cliff, one way or the other. It’s just a question of when at this point.

You best prepared.

Trickle Down and Tax Cuts

By Walter E. Williams

Dr. Thomas Sowell’s “‘Trickle Down Theory’ and ‘Tax Cuts for the Rich'” has just been published by the Hoover Institution. Having read this short paper, the conclusion you must reach is that the term “trickle down theory” is simply a tool of charlatans and political hustlers.

Sowell states that “no such theory has been found in even the most voluminous and learned histories of economic theories.” That’s from a scholar who has published extensively in the history of economic thought. Several years ago, Sowell, in his syndicated column, challenged anyone to name an economist from any economic school of thought who had actually advocated a “trickle down” theory. To date, no one has quoted any economist who ever advocated such a theory. Trickle down is a nonexistent theory. Those who use it simply argue against a caricature rather than confront an argument actually made.

President Barack Obama recently criticized Mitt Romney and Paul Ryan for trying to sell a tax plan, which he called “trickledown snake oil.” Criticizing tax cuts as trickle down is a way not to confront the argument; however, there’s empirical evidence about the effects of tax cuts. Sowell shows that during the Warren Harding administration, in 1921, Secretary of the Treasury Andrew Mellon advocated tax rate cuts, which were enacted into law by Congress. Afterward, there was rising output; unemployment plummeted; and the resulting higher income produced greater federal tax revenues, even though the tax rate had been lowered (see: The Great Depression). There were somewhat similar results in later years after high tax rates were cut during the John F. Kennedy, Ronald Reagan and George W. Bush administrations.

The facts about the 1920s tax rate cuts are unmistakably clear for those who bother to check the facts. In 1921, when the tax rate on people earning more than $100,000 a year was 73 percent, the federal government collected a little more than $700 million in income taxes, of which 30 percent was paid by those earning more than $100,000. By 1929, after the tax rate had been cut to 24 percent on incomes higher than $100,000, the federal government collected more than $1 billion in income taxes, of which 65 percent was collected from those with incomes higher than $100,000.

In 1962, Democratic President John F. Kennedy pointed out that “it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.” Both Presidents Ronald Reagan and George W. Bush made similar arguments, and the tax rate cuts had the effect of stimulating economic growth while increasing federal tax revenue and shifting a greater percentage of the tax burden on to wealthier individuals.

One very insightful part of Sowell’s paper is the discussion about what Mellon called the “gesture of taxing the rich” — namely, tax-exempt securities that he tried unsuccessfully to put an end to. Tax-exempt securities and other tax breaks are valuable tools in the politics of class warfare and envy. Politicians have it both ways. They get votes by raising taxes on the wealthy — or threatening to do so — and at the same time provide the wealthy with a way out of high taxes through tax-exempt securities. This explains how President Obama can raise tens of millions of dollars in campaign contributions from Hollywood millionaires and Wall Street’s rich and powerful. “Tax cuts for the rich” demagoguery is simply the height of deceit perpetrated on gullible people and useful idiots.

You can bet that the White House has people reading every bit of the news, including this column and Dr. Sowell’s article. You can bet some people in the news media will read it, as well. Despite the facts that Sowell has marshaled, they will continue to use trickle down theory and “tax cuts for the rich” demagoguery, even though they now have hard evidence to the contrary, because they can count on widespread gullibility and inability to do critical thinking.

Does Legal = Moral?

Immoral Beyond Redemption

by: Walter E. Williams:

Benjamin Franklin, statesman and signer of our Declaration of Independence, said: “Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters.” John Adams, another signer, echoed a similar statement: “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” Are today’s Americans virtuous and moral, or have we become corrupt and vicious? Let’s think it through with a few questions.

 Suppose I saw an elderly woman painfully huddled on a heating grate in the dead of winter. She’s hungry and in need of shelter and medical attention. To help the woman, I walk up to you using intimidation and threats and demand that you give me $200. Having taken your money, I then purchase food, shelter and medical assistance for the woman. Would I be guilty of a crime? A moral person would answer in the affirmative. I’ve committed theft by taking the property of one person to give to another.

Most Americans would agree that it would be theft regardless of what I did with the money. Now comes the hard part. Would it still be theft if I were able to get three people to agree that I should take your money? What if I got 100 people to agree — 100,000 or 200 million people? What if instead of personally taking your money to assist the woman, I got together with other Americans and asked Congress to use Internal Revenue Service agents to take your money? In other words, does an act that’s clearly immoral and illegal when done privately become moral when it is done legally and collectively? Put another way, does legality establish morality? Before you answer, keep in mind that slavery was legal; apartheid was legal; the Nazi’s Nuremberg Laws were legal; and the Stalinist and Maoist purges were legal. Legality alone cannot be the guide for moral people. The moral question is whether it’s right to take what belongs to one person to give to another to whom it does not belong.

Don’t get me wrong. I personally believe that assisting one’s fellow man in need by reaching into one’s own pockets is praiseworthy and laudable. Doing the same by reaching into another’s pockets is despicable, dishonest and worthy of condemnation. Some people call governmental handouts charity, but charity and legalized theft are entirely two different things. But as far as charity is concerned, James Madison, the acknowledged father of our Constitution, said, “Charity is no part of the legislative duty of the government.” To my knowledge, the Constitution has not been amended to include charity as a legislative duty of Congress.

Our current economic crisis, as well as that of Europe, is a direct result of immoral conduct. Roughly two-thirds to three-quarters of our federal budget can be described as Congress’ taking the property of one American and giving it to another. Social Security, Medicare and Medicaid account for nearly half of federal spending. Then there are corporate welfare and farm subsidies and thousands of other spending programs, such as food stamps, welfare and education. According to a 2009 Census Bureau report, nearly 139 million Americans — 46 percent — receive handouts from one or more federal programs, and nearly 50 percent have no federal income tax obligations.

In the face of our looming financial calamity, what are we debating about? It’s not about the reduction or elimination of the immoral conduct that’s delivered us to where we are. It’s about how we pay for it — namely, taxing the rich, not realizing that even if Congress imposed a 100 percent tax on earnings higher than $250,000 per year, it would keep the government running for only 141 days.

Ayn Rand, in her novel “Atlas Shrugged,” reminded us that “when you have made evil the means of survival, do not expect men to remain good.”

Wanted – An Honest Politician

Big Lies in Politics

By Thomas Sowell

The fact that so many successful politicians are such shameless liars is not only a reflection on them; it is also a reflection on us. When the people want the impossible, only liars can satisfy them, and only in the short run. The current outbreaks of riots in Europe show what happens when the truth catches up with both the politicians and the people in the long run.

Among the biggest lies of the welfare states on both sides of the Atlantic is the notion that the government can supply the people with things they want but cannot afford. Since the government gets its resources from the people, if the people as a whole cannot afford something, neither can the government.

There is, of course, the perennial fallacy that the government can simply raise taxes on “the rich” and use that additional revenue to pay for things that most people cannot afford. What is amazing is the implicit assumption that “the rich” are all such complete fools that they will do nothing to prevent their money from being taxed away. History shows otherwise.

After the Constitution of the United States was amended to permit a federal income tax, in 1916, the number of people reporting taxable incomes of $300,000 a year or more fell from well over a thousand to fewer than three hundred by 1921.

Were the rich all getting poorer? Not at all. They were investing huge sums of money in tax-exempt securities. The amount of money invested in tax-exempt securities was larger than the federal budget, and nearly half as large as the national debt.

This was not unique to the United States or to that era. After the British government raised their income tax on the top income earners in 2010, they discovered that they collected less tax revenue than before. Other countries have had similar experiences. Apparently the rich are not all fools, after all.

In today’s globalized world economy, the rich can simply invest their money in countries where tax rates are lower.

So, if you cannot rely on “the rich” to pick up the slack, what can you rely on? Lies.

Nothing is easier for a politician than promising government benefits that cannot be delivered. Pensions such as Social Security are perfect for this role. The promises that are made are for money to be paid many years from now — and somebody else will be in power then, left with the job of figuring out what to say and do when the money runs out and the riots start.

There are all sorts of ways of postponing the day of reckoning. The government can refuse to pay what it costs to get things done. Cutting what doctors are paid for treating Medicare patients is one obvious example.

That of course leads some doctors to refuse to take on new Medicare patients. But this process takes time to really make its full impact felt — and elections are held in the short run. This is another growing problem that can be left for someone else to try to cope with in future years.

Increasing amounts of paperwork for doctors in welfare states with government-run medical care, and reduced payments to those doctors, in order to stave off the day of bankruptcy, mean that the medical profession is likely to attract fewer of the brightest young people who have other occupations available to them — paying more money and having fewer hassles. But this too is a long-run problem — and elections are still held in the short run.

Eventually, all these long-run problems can catch up with the wonderful-sounding lies that are the lifeblood of welfare state politics. But there can be a lot of elections between now and eventually — and those who are good at political lies can win a lot of those elections.

As the day of reckoning approaches, there are a number of ways of seeming to overcome the crisis. If the government is running out of money, it can print more money. That does not make the country any richer, but it quietly transfers part of the value of existing money from people’s savings and income to the government, whose newly printed money is worth just as much as the money that people worked for and saved.

Printing more money means inflation — and inflation is a quiet lie, by which a government can keep its promises on paper, but with money worth much less than when the promises were made.

Is it so surprising voters with unrealistic hopes elect politicians who lie about being able to fulfill those hopes?

A BOSS Farmer

From Jason Mattera of Human Events:

Bruce Springsteen is a man of the people. He stands up for the little guy. A regular blue-collar Joe. A union man. A bona fide working-class hero.

And, when he’s not busy being all that… he’s a tax-dodging liberal hypocrite worth over $200 million who pretends to be a farmer to save hundreds of thousands of dollars on his property taxes that would have otherwise funded the welfare programs he pretends to care about.

That’s right. Mr. “Union Man, Blue Collar” Springsteen is a total fraud, as I explain in my brand-new book Hollywood Hypocrites: The Devastating Truth About Obama’s Biggest Backers.

Recall that Springsteen actively campaigned for Obama in 2008, hosting free concerts that attracted tens of thousands of people in key battleground states. Springsteen’s song, “The Rising,” became a campaign staple for Obama’s speech venues and culminated in him playing for Obama’s Inauguration. And this time around, the White House plans on using the aging rocker’s new politically-motivated track, “We Take Care of Our Own,” to warm up crowds as the re-election bid kicks into high gear.

So does The Boss live by the same prescriptions he and Obama wish to inflict on the rest of America?

Consider the following.

In 2011, perhaps wanting some local free press, Springsteen decided to write a letter to the editor of his town’s newspaper. In response to an article about tax cuts and aid to entitlement programs, the Boss wrote in to praise the piece for being “one of the few that highlights the contradictions between a policy of large tax cuts, on the one hand, and cuts in services to those in the most dire conditions, on the other.”

Furthermore, Springsteen wrote, “your article shows that the cuts are eating away at the lower edges of the middle class, not just those already classified as in poverty, and are likely to continue to get worse over the next few years.” Then, with his well-honed “everyman” touch, he signed the letter along with his oh‑so-common-man-sounding town name, “Colts Neck.”

A year earlier, the Boss echoed similar concerns while emphasizing his support for Obama’s constant naggings to tax the rich.

“The biggest problem we have now is almost 10 percent unemployment, but we also have the disparity of wealth,” Springsteen told London’s Sunday Times. “You can’t have an American civilization with the kind of disparity of wealth we have. It will eat away at the country’s heart and soul and spirit.”

Now, all this would be just fine and dandy. But there’s one small problem with Springsteen’s anti-tax-cut posturing: the man is a first-rate tax evader.

Bruce Springsteen pays over $138,000 a year in taxes for his three-acre home in Colts Neck, New Jersey. He owns another 200 adjoining acres. But because he has a part-time farmer come and grow a few tomatoes (organic, of course) and has horses, his tax bill on the remaining 200 acres is just $4,639 bucks. Do the math. By being a fake farmer, the working-class zero Springsteen is making a mint by robbing New Jersey of the antipoverty program funds he says they desperately need.

“I think it is unfair to our other property taxpayers that if you are a fake farmer, and that you don’t legitimately farm, that you are getting a property tax break and forcing your neighbor to pick up your tab,” said state senator Jennifer Beck. “That was not the intent of the law. It’s a violation of the public trust.” When Fox 5 New York reporter Barbara Nevins Taylor asked a lawyer for the trust that owns Springsteen’s land to comment on the Boss’s lucrative fake-farming tax breaks, predictably, the lawyer had no comment.

The tax loophole comes from the New Jersey’s Farmland Assessment Act of 1964. Originally the provision was created to help preserve agriculture in New Jersey. To qualify for the tax break, landowners must own at least five acres of land and produce just $500 a year in goods in order to qualify. Anyone who can meet those minimum standards can reduce their farmland tax bills by an astounding 98 percent.

Now, no conservative begrudges anyone—not even a die-hard Obama Zombie like Bruce Springsteen—from lowering their tax burden by taking full advantage of every tax break available to them. That’s legal and fine. But for a guy who makes hundreds of millions pretending to be a guardian of the working class, and who vocally supports Obama’s attempts to tax the rich at higher rates, to then turn around and utilize obscure tax loopholes to pocket hundreds of thousands of dollars that would otherwise go to his beloved social programs . . . well, that’s just flat-out Hollywood hypocrisy.