Fighting to Preserve Liberty in America
Photo futureatlas.com
With several proposals to overhaul the tax code on the table, it will be interesting to hear how the Obama team will respond. In the plans put forth by Cain, Perry, and Gingrich, people grasp the flat tax part pretty easily. With Herman Cain’s 9-9-9 plan, a common sticking point is the last nine, the national sales tax. Whether intentional or not, it seems to me that they don’t understand it.
photo by chasingfun
It is no surprise to anyone that we have a government that is out of control with spending. We have the Tea Party and OWS agreeing that crony capitalism is out of control. So what does this have to do with the tax code?
Photo by No Nein
President Obama has a plan to pivot toward jobs, after nearly three years on office. After spending boatloads of our money on a stimulus program that failed, according to his own standard of capping unemployment at 8%, he wants to spend more. He claims that he is also cutting spending, but when you drill down into the details, it is a myth.
When does the decent interval end? When does the clock run out on giving the president the benefit of the doubt and when is it time to call it as you see it, no holds barred?
I am currently working on the cover design for my forthcoming book, which will also be called Liberty’s Lifeline, and on the cover will be a drawing of the Statue of Liberty. When the artist drew it, they left the tablet in Lady Liberty’s left arm blank. My advisors suggested that I come up with something that describes the nature of the book that can fit on the tablet. It’s not much of a canvas, especially when it is drawn to fit on the cover of a 6”x9” book.
For years Daniel Patrick Moynihan, one of the most thoughtful and erudite public servants we have had, published a document New York and the Federal Fisc that described the flow of dollars from New York and the great imbalance on the return trip. Steve Israel seems to have taken up that mantle but his votes in the House are baffling.
Tim Bishop continually bashes his opponent on the topic of outsourcing jobs. One of Mr. Bishop’s brilliant solutions, brilliant because it was conceived of in the halls of academia and Congress rather than at the helm of a company, is to raise taxes on companies foreign operations.
At the same time Mr. Bishop and his fellow travelers rail against businesses that are sitting on piles of cash rather than hiring and investing. Since he probably doesn’t know how to read a balance sheet, I will enlist the aid of John Chambers, CEO of Cisco Systems and Safra Catz, President of Oracle who spell it out in the Wall Street Journal.
An article in today’s New York Times is just one more, “Don’t let a crisis go to waste,” move from this administration. The article, titled “As Oil Industry Fights a Tax, It Reaps Billions From Subsidies,” uses the same tired talking points to justify another tax increase that will ultimately be passed along to consumers.
The article talks about how the oil companies take advantage of tax credits and breaks and then it also talks about how many oil based companies re-incorporate in countries like Panama, the Marshall Islands, the Cayman Islands, and Switzerland because it will lower their taxes. When with the Statists get it? If you raise taxes both corporations and people will change their behavior to lower their taxes. Impose a millionaire’s tax in Maryland and Maryland discovers they have one-third fewer millionaires a year later and hundreds of thousands of dollars in less revenue. Impose among the highest tax rates in the developed world on businesses and businesses will move to where the taxes are lower. Create tax breaks and then somehow the Progressives are surprised that companies took advantage of them.
The initial thrust of the article was that the tax on oil companies was necessary to pay for the cleanup of the oil spill in the Gulf. Pardon my confusion, but didn’t the government just get BP to pony up $20 billion into an escrow fund for this purpose? Hasn’t BP said from day one that they will pay the cost for the clean up? So why are the Progressives in Congress rushing to put a new tax in place other than to take advantage of a crisis to reach into your wallet?
Another unintended consequence of our onerous tax policy is that when companies incorporate in other countries, those countries often have lower engineering and environmental standards.
I am no fan of corporate welfare so why don’t we take the IRS code and run it through a shredder? Get rid of the tax breaks across the board. Lower the tax rate to a fixed number that is on par with other developed countries. According to the Heritage Foundation, the freest economy in the world is Hong Kong, which oddly enough is located in Communist China. The Chicoms were smart enough to leave well enough alone when Hong Kong reverted to their control from Britain in 1997. Their individual tax rate is progressive ranging from 2% to 17% or an option for a 15% flat rate depending on which liability is lower. The top corporate tax rate is 16.5%. Their five-year compound annual GDP growth rate is 5.7%; unemployment is 3.5%; and their inflation is 4.3%. By comparison, our top corporate tax rate is 35%, more than double that of Hong Kong; our five year compound annual GDP growth rate is 2.2%; unemployment is 9.4% (at the time of this study); and inflation is 3.8%.
If we could implement real tax reform it would not only simplify our lives, save several hundred billion dollars in compliance costs, reduce uncertainty for business, create jobs, and grow the economy. With a larger pie, overall tax revenues will also increase.
In that Heritage study the United States has the eighth freest economy in the world, down one place from the year before; not the direction we should be going. Imagine if we set a goal to become the freest economy in the world. Americans like a challenge so let’s set our sights on becoming number one. The first three to concentrate on passing are those directly in front of us: Canada, Switzerland and Ireland. On this Fourth of July, let’s plant our flag and get to work.
“A surplus became an excuse to transfer wealth to the wealthy” — President Barack Obama, Feb. 24, 2009
There you have the liberal philosophy in a nutshell. Transfer wealth to the wealthy? Transfer from whom to the wealthy? The government? The context of this question came regarding taking more in taxes from the wealthy to pay for all the new goodies, Obama and Pelosi are handing out, by letting the Bush tax cuts expire. But what really happens with a tax cut? It basically means that an individual gets to keep more of their own money that they have earned. After all it is the income tax. So where is the wealth transfer Obama speaks of? Is President Obama really trying to say that everything we earn belongs to the federal government and that by letting us keep any of it, it is a transfer of wealth from the rightful owner, the government, to the unworthy and greedy individual? If that’s not straight out of Karl Marx, I don’t know what is.
“Tax cuts alone can’t solve all of our economic problems — especially tax cuts that are targeted to the wealthiest few.” — Obama, Feb. 24, 2009
This is his other gem. What tax cuts were targeted to the rich? The fundamental difference between liberals and conservatives regarding tax policy is the same difference throughout their respective philosophies. Liberals believe in groups, conservatives believe in individuals. Perhaps that is why President Obama is so confused.
Conservative tax policy is that a tax cut should apply to all individuals who pay taxes. By reducing the tax burden there is an incentive to invest and grow the economy. If you make more you get to keep more. At the same time, under Bush, many low income people were removed from the tax rolls altogether.
Liberal tax policy, like all of their policies, depends on to which group you belong. If you are in a group that has a low income, you have to get something, so you get tax money whether or not you pay taxes (aka welfare). If you are in a group, that has a high income, regardless of how much of the tax burden you are already carrying, not only do you get nothing, you have to pay more. That’s targeting. The Bush tax cuts were not targeted they applied across the board. We’re all Americans, we all get a break. Even after the Bush tax cuts, the wealthiest Americans carried a larger share of the total tax burden than before the cuts, but that is not enough for the liberals. They want it all, but they’ll settle for as much as they can get away with.
We Need a Dose of Honesty
The more President Obama speaks, the less honest he is with the American people. He makes statements like the above that are misleading at best, outright lies at worst. He does not include the role of government in creating the economic mess we are in, when he speaks of how we got here. Without addressing the role of government, what they did wrong cannot be fixed, and just like if you ignore a leak in your roof, it’s not going to get better over time.
President Obama promised a new beginning in Washington, but so far he is selling the same old tired ideas, brightly dressed up in his impressive oratory. It is only he has left the stage and the lights have dimmed that people start scratching their head and wondering, “Did he really say that?”
President Barack Obama
“Can’t Anybody Here Play This Game,” is what Casey Stengel reportedly said while watching his team, the New York Mets. The same could be said of the Democrats when it comes to paying taxes. The Democrats are the ones who rail against tax cuts for the rich. They don’t believe in lower tax rates to stimulate the economy, but if these wealthy Democrats find taxes problematic, they just don’t pay them.
We now hear of another nominee, Tom Daschle, former Senate Majority Leader, has a $140,000 tax problem. $140,000! Most Americans would like to make that in income, let alone owe that in taxes. This follows on the heels of Treasury Secretary Timothy Geithner paying back taxes of $34,000 and Charlie Rangel, Chairman of the House Ways and Means Committee that writes the tax laws, paying $10,800 in back taxes. We’d probably have a balanced budget if all these rich Democrats only paid the taxes they owe rather than fighting against tax cuts for everyone.
Here’s Daschle’s excuse for his tax problem:
“Mr. Daschle told committee staff that he had grown used to having a car and driver as Senate majority leader and didn’t think to report the perquisite on his taxes, according to staff members.”
Two things come glaringly into view here. First is the overall arrogance that these “public servants” feel they deserve privilege. They have no concept that in the real world not everyone has a car and driver provided by their employer. In this case the employer is all the Joe Sixpacks out there. The second thing is that these problems were discovered and fixed, in the cases of Daschle and Geithner, only after they were nominated for positions in Obama’s cabinet. So, what if they weren’t nominated? Do you think that this tax revenue that is legally owed to the government (you and me) would still be in their pockets?
We have the chairman of the committee that writes the tax laws failing to pay his taxes. We have the Treasury Secretary who oversees the Internal Revenue Service failing to pay his taxes. We have the former Senate Majority Leader who ran the senate that passes all laws failing to pay his taxes. Do you think it’s too hard to figure out how to comply with our tax code?
It’s time to scrap the tax code and go to a simple flat tax that you can file your return on a post card. Let’s put the $200 billion that Americans spend each year on tax compliance back into the economy. Let’s make sure that all these rich Democrats pay the taxes they owe. Do these two things and we probably won’t need a stimulus package.
