Rick Santorum timed the wave perfectly and rode it to within eight votes of Romney in the Iowa caucuses. Whether it was timing or real support is not certain, but where does he go from here, and I don’t mean geographically?

In the 1964 Olympic 10,000 meter race there was an American named Billy Mills. Back in those days they ran on a cinder track and after a while the track would get chewed up and you would lose a little push on each step, sort of like how it feels running on the soft sand of the beach compared to the packed, wet sand down by the water. Toward the end of the race there was some jostling and Mills got bumped out a couple of lanes, but he found firmer footing there and started gaining ground, ultimately taking the gold medal. Rick Santorum in Iowa reminds me a bit of Mills. He chose to run on social issues, while the other candidate focused on economic issues. This gave Santorum some traction with those voters who felt strongly on those issues. But to quote former Clinton adviser James Carville, “It’s the economy, stupid.”

Santorum’s strategy gained for him one of the coveted “tickets out of Iowa.” Well done. But that strategy won’t carry him very far in the nominating process, and definitely not in the general election. He needs to shift his focus to the economy and come up with something bold, if he hopes to beat Romney. If you go to Santorum’s web site and dig a little he has some sensible economic proposals, but they are too timid. If he want’s to beat Romney he needs to put more daylight between him and his opponent’s plans.

For example, he calls for cutting $5 trillion over five years. Mathematically that may not be very different from Ron Paul’s cutting $1 trillion in one year, but if so, just say it. Who knows if Santorum will be around in five years if he was to get elected and in Washington all spending cuts seem to come at the back-end of any time period, while tax increases always happen now. It didn’t take Obama five years to find a way to add more to the national debt than every president since Washington, combined, so why should it take five or ten years to unwind that disaster?

On taxes, he needs to be bold. If you read the tax policies on his website, it is a tweak here and a tweak there. Cain, Gingrich, and Perry all had bold plans. Scrap the IRS and you will add hundreds of billions of dollars to the economy, without raising a nickel in taxes. It may increase unemployment among tax preparers, accountants and lawyers, but that will be more than offset by businesses adding jobs with resulting from their new-found windfall. Eliminate the payroll tax. Congress has revealed what a fraud that is by creating a payroll tax holiday and then saying the Social Security Trust Fund will not face any shortfall. Why have multiple tax structures and mechanisms and associated bureaucracy if Treasury will just shuffle the money around as they see fit anyway? Why not pick up Cain’s 9-9-9 plan? Cain is out of the race, but Santorum would almost immediately pick up Cain’s support and many of his followers. Hell, for that matter, he should be even bolder and ask Cain to be his running mate if nominated.

Without a stark choice, Romney will probably end up the nominee. If Romney doesn’t start convincing conservatives that he has mended his ways, they may choose to stay home, but if they do, I don’t want to hear any griping about Obama if he gets reelected. If Santorum is bold, it will force Romney to be a little bolder to protect his right flank. If nothing else, we need whoever is the nominee to be battle hardened for the general election. This one won’t be pretty.

That’s my opinion; I’d like to know yours. Please comment below.

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.

We can’t cut our way out of this problem. Why not? We spent our way into it. The worst annual deficit under Bush, who was also a big spender, was $485 billion. Under Obama it has been well over a $1 trillion every year. Some say it is the fault of the Bush tax cuts, but after they were implemented, the Treasury took in more money than at any time in history. Some say it is because of the bad economy, which is a contributor, but estimates that I have seen peg the impact of the economy on revenues at around $400 billion. Is it the two wars? They were there before Obama took office, and they are there now, but we are withdrawing forces from Iraq, so what accounts for the super-sized deficit? Spending. When your family is in a tight spot, you don’t spend your way out of it, you cut back. The government has no money of its own so it sucks it out of the private sector where jobs are actually created, to do what? pump it back into the private sector? Or it prints money, which will come back to ravage the country through inflation when the economy recovers.

Let’s Be Fair

So President Obama’s plan is to “tax the rich” in the name of fairness.  Is that a real plan or a slogan? A clue to the answer to that question can be found by asking your progressive friends how much they think is fair. The response you will see is a lot of mumbling and stumbling. Stuart Varney tried vainly to get Mary Ann Marsh, a Democrat strategist, to answer that simple question, “How much is fair?” He tried multiple times and her answers excluded state taxes, and then included them later, she simply dodged the question. He kept coming at her, and she kept dodging, because any reasonable person would know that it is bunk.

Is a system where 47% of Americans pay no federal income taxes, fair? Do they not benefit from the protection of our armed forces? access to our court system? having a common currency? mail service? Elizabeth Warren, who is challenging Senator Scott Brown in Massachusetts, told her supporters, “nobody every got rich by themselves.” She went on to say that the roads that a businesses, travel over are paid for by “all  of us.” Apparently not. If you look at the following chart that shows the share of the tax burden carried by income level, it would appear that the “rich” are the ones paying for the roads, while Ms. Warren’s “spread the wealth around” crowd get the free ride. Yes, they want to spread the wealth around, but not the expense.

If fairness is the goal, dump the tax code and the IRS and implement a flat tax. Make it a requirement that everybody pays something, and has some skin in the game. Get rid of the loopholes and deductions so that people can file their tax returns on a post card. But if you are just reaching for a class warfare slogan in an attempt to get yourself reelected, and continue the economic nightmare we are in, not for another fifteen months but for another five years, then for once, be honest with the American people and just say so.

That’s my opinion; I’d like to know yours.

Photo by aranami

An intervention is an orchestrated attempt by one, or often many, people (usually family and friends) to get someone to seek professional help with a serious problem. The term intervention is most often used when the traumatic event involves addiction to drugs or other items, such as spending. Intervention can also refer to the act of using a technique within a therapy session.

If you care about Tim Bishop, if you care about your fellow man, he needs our help. From people who know Tim Bishop they tell me he is a good man, a decent man. But he has a problem. He cannot seem to control his urge to spend, particularly other people’s money.

For those who don’t know him, Tim Bishop is a member of Congress representing the First District in New York. With Washington spending over a trillion dollars a year more than it takes in through tax revenues, everyone needs to pitch in to solve the problem, but the only thing that Tim Bishop has offered as a solution is a single tax break to five oil companies that may, or may not, bring in an additional $3 billion per year, which is about 500 times less than what we need to close the budget gap. More importantly, even this meager offering is not a spending cut, but a cry for more money to spend. We have to get tough with Tim. We need to gather around him, tell that we care for him as our fellow man, but if he doesn’t stop spending cold turkey, we will leave him.

The latest example concerns the US Postal Service. The US Postal Service lost $8.5 billion in 2010. As a cost cutting measure they are looking at closing underutilized post offices. In the 21st century we have tremendous growth in electronic communications, e-mail, online file sharing, cloud computing, even the venerable fax machine is going strong, resulting in a corresponding decrease in “snail mail.” So I wondered, two years ago, why my own local post office was putting an addition on the building? In Setauket, New York, the Postal Service announced that it was closing the post office branch there, one of 3,700 such post offices considered for closure. Tim Bishop to the rescue! We shouldn’t shut down an under utilized post office, after all, look at how pretty the building is! Here is what elected officials at a rally for the post office said.

The legislators said Congress should relieve the Postal Service of a requirement, mandated by the Postal Accountability and Enhancement Act of 2006, to prefund retirees health care costs. The Postal Service pays more than $5 billion a year into a retirement fund for current and future retirees, according to the Congressional Research Service. Bishop told the crowd of about 80 people gathered on the grass and sidewalk in front of the post office to push Congress for action on a bill that would relieve the Postal Service of its prefunding obligation. “Right now the bill’s not moving at all,” Bishop said. After the rally, Bishop said the bill “would provide financial relief to the postal service.” Englebright said after the rally, “The [Postal Service] is overfunding the pension system … it’s an artificial crisis.”

Boy, do those Democrats love calling things artificial crises. When President Obama wanted to slap another $2-3 trillion on top of the national debt and Republicans finally stood up (with Tea Party prodding) and said STOP, it was an artificial crisis. Just tell that to the IRS when they ask you to pay for it. Just send your tax payment in with artificial Monopoly money. Now closing some post offices to stem the hemorrhaging at the Postal Service is another artificial crisis. So Tim Bishop’s solution is to stop setting aside money for postal workers’ retirement. What a great idea! We can fix the problem when Tim’s no longer in Congress. Let’s make that date January 1, 2013.

That’s my opinion; I’d like to know yours. Please comment below.

Photo by Dovina is Devine

After negotiating a debt limit deal that included no tax increases, the ink was hardly dry on the paper before President Obama and Harry Reid started talking about what? That’s right, tax increases.

We hear it over and over again that the rich must pay their fair share. It is often parroted by the likes of Warren Buffet and Matt Damon. “I can pay more,” they say. I say, what’s stopping you? The Treasury has an account set up just for folks like you who feel you are not taxed enough. As Buffet has said, “I could give away 99% of my wealth and my family would still want for nothing.” Movie actors like Damon get paid tens of millions for a single film. It’s nice that the “I can’t spend it faster than I make it crowd,” volunteers that we all have to pitch in. But what happens when a sacred progressive program gets in the way?

Take rent control. In New York City, rent control is a sacred progressive program. “We need affordable housing for the middle class or they will be driven out of the city.” Rent control was responsible for many abandoned buildings in the 1970s and 1980s that turned into drug dens or were set ablaze, because landlords couldn’t raise rents to cover their costs so they just walked away. Tax revenue to the city walked with them. But don’t you dare challenge rent control and put those poor people on the street. Meet the defendant in case No. 7666/11, whose landlord claims she is not entitled to rent control on her apartment. Her name is Faye Dunaway. Yes, that Faye Dunaway. Her landlord argues that this is not her primary residence and that she lives, votes, and registers her cars in California. The rent stabilization rules require tenants to live in the apartment they are renting as a primary residence. Her rent for the one-bedroom walk-up is $1,048.72, but if allowed to rise to market rates it would probably be around $2,318 per month. Would Ms. Dunaway be forced to move to Queens if her rent increased?

How about former mayor Ed Koch. While he was given a mansion to live in, as all mayors are during their tenure, in his case twelve years, he never let go of his rent controlled apartment in Greenwich Village. How would he makes ends meet if he had to pay market rent? After all, isn’t that the purpose of the law to help rich white Democrats pocket more dough? Okay it wasn’t fair to single out white Democrats, how about Charlie Rangel? He had four rent controlled apartments. Three of them were adjoining, so he had some of the walls knocked down to make a really swell place. What about the fourth, you ask? Oh, that was for his district Congressional office. Rangel whose salary alone puts him squarely in the top 5% of all earners used to chair the committee that writes the tax laws, but seemed to have a problem remembering such things as income from a villa in the Dominican Republic so he didn’t exactly pay all his taxes. He’s still serving in Congress and not a guest of the IRS in prison. I guess he used the famous Steve Martin defense, “I forgot.”

Perhaps all the little people who the progressives argue need things like rent control would be helped if the rich Democrats would only get out of their apartments.

That’s my opinion; I’d like to know yours. Please comment below.

It wasn’t long after the Paul Ryan budget was released that the disinformation Democrats began trumpeting seniors being starved, being unable to afford health care, and the usual demogogic scare tactics. But doctors are dropping coverage, the key slices of the pie above are growing much faster than inflation, and the Democrats have no plan other than the age old cut benefits (reimburse doctors less) and increase taxes, just enough to kick the can down the road for someone else to deal with. Congressman Ryan had the guts to come up with a plan to actually fix the system by giving seniors a choice and they seem to like the idea. Why?

Obama wants to have yet another commission that will experiment with different ideas and basically control and dictate medicine from Washington. Experiment? Isn’t that the concept behind federalism? Let the fifty different states experiment with solutions that work for their population and geography. But a centralized bureaucracy? How can that experiment without wildly jumping from idea to idea and dragging all of us along with it?

Seniors know what government bureaucracy looks and feels like and they don’t want it to the power of ten. The idea that they could actually control their medical care and not run into some bureaucrat with a clipboard who says you can have this, you can’t have that.

Ryan is being honest with the American people that Medicare is heading for the rocks and a change in course is imperitive. The other point that must be emphasized before the main stream media drowns it out is that seniors, those over 55, will see no change the in status quo. What exists today will continue to exist. So don’t start pricing cat food to see how to fit it into grandma’s diet.

But what is it with this administration and the left when it comes to private enterprise. What is the love affair with the government and the antipathy toward greedy private business? If your life depended on getting a letter delivered tomorrow, who would you turn to, the post office or Federal Express? Who would you rather get a letter from Wells Fargo or the IRS? How many organizations in the book In Search of Excellence are private enterprises and how many are government agencies? We have Securities and Exchange attorneys looking at pornography on their computers all day instead of catching Bernie Madoff; we have air traffic controllers asleep on the job instead of privatizing the whole thing like Canada did. Wake up, America, and realize that life could be a lot better, and you could be a lot wealthier if we took more out of the government’s hands than making Washington bigger and more powerful.

That’s my opinion; I’d like to know yours. Please comment below.

I still find myself in awe of our Founding Fathers who created our form of government.  The competing ideas that they sifted through to come up with our Constitution and the safeguards in it is wondrous.  The designs upon it by the progressives is by equal measure disturbing.

The progressives envision a national government that they can dominate and that, in turn, will dominate us.  There is no activity over which they do not feel they can or should control.  Private property is a panacea, to keep the masses from open revolt, but they really believe that all wealth that is generated belongs to the government except for the portion they permit us to keep.  If you think that statement is unimaginable consider this.  How often do you hear, concerning the current debate over the Bush tax cuts, that we cannot afford them for the rich?  Think about it.  They say our government cannot afford to allow certain citizens of this country to continue to pay the same level of taxes in 2011 that they pay today.  That the government somehow has to pay for a tax cut, that actually isn’t even a cut but rather a continuation of what has existed for the last ten years.  How is getting less than you want a cost? If you awake on Christmas morning and do not find the present you have been hoping for under the tree, do you say, “Man, that’s gonna cost me?” Of course you do not.

A Massive Federal Government

Think about the many federal departments and agencies that exist today for which you will find no authorization in the Constitution: Education; Agriculture; Housing and Urban Development; Energy; Health and Human Services; Transportation.  Did they not have education in the eighteenth century? Are we more agrarian today than we were in 1789?  If not, why do we need a Department of Agriculture today, but the Founders didn’t see a need for it then?

The progressives are fighting for the continual concentration of functions at the federal level where the voices of the people are faint, but the voices of the special interests are robust and clear.  The branch of the federal government that is closest to the people is the House of Representatives.  But ponder how small your voice is in that chamber.  You are one of some 700,000 in your congressional district; your congressman or woman is one of 435 in the House of Representatives.  How do you get your voice heard at the federal level?  And yet Congress will tell you what kind of light bulb to buy or what kind of toilet you must flush.  Is this what our founding fathers envisioned?

The Bloody Revolution

To establish our country they fought a brutal revolution; a revolution where 50% of the mortal wounds were caused by bayonets.  Now that’s up close and personal.  It is not something they entered into lightly and a reading of the Declaration of Independence will tell you that they pledged their lives when they signed that document and their death warrants as well.  If captured by the British they surely would have been tried and executed for treason.

In designing our form of government they were very suspicious of strong central power and authority, having just thrown off one.  They did not trust government.  As Jefferson said, “When governments fear the people, there is liberty.  When the people fear the government, there is tyranny.”  Here is a simple test, do you fear the IRS or does the IRS fear you?

The Founders designed the Constitution to have strictly enumerated powers given to the federal government with all other powers retained by the states or the people.  They did not design a democracy, but a republic.  In that republic they built numerous checks and balances to prevent the accumulation of power. It has been the goal of the progressives to remove those checks and balances and put in place the tyranny that fears no people.

The Structure of the Federal Government

Among the balances they put in place was that the people would directly elect the members of the House of Representatives.  That is the body of government closest to the people.  If you recall the wording of the Tenth Amendment it speaks of the federal government, the states and the people.  The Senate was to be appointed by the state legislatures to represent their interests.  The president was to be elected, not by the people, but by the Electoral College.  Lastly, judges were to be appointed for life by the president with the advice and consent of the senate.  Why did they do this?  One reason is that they believed that if a proposed law had the backing of the majority of the people (House of Representatives) and a majority of the states (Senate) then it was probably a good thing, otherwise slow it down.  The fewer the number of laws, the greater our liberty.

The Progressives Attack

The progressives began their designs on the Constitution with the introduction of the income tax through the passage of the Sixteenth Amendment in 1913.  By allowing the government to tax incomes the government could now afford to greatly expand. However, to be able to expand it had to have the consent of the states, which was not likely to be granted.  So two months after the passage of the Sixteenth Amendment, the Seventeenth Amendment was ratified.  The Seventeenth Amendment called for the direct election of Senators, rather than having them appointed by the state legislatures.  The individual citizens picked up two more votes in the federal government, in most cases an even weaker voice than their Representative, and the states were shut out.

Do you think things such as unfunded mandates could pass in Congress if the states still chose the members of the Senate?  Social Security? Medicare? The Department of Education? The Department of Housing and Urban Development? And on and on?  Think of some of the more radical members of the Senate.  Do you think Al Franken would have been appointed by the Minnesota state legislature?  For many years in New York, the State Assembly was under the control of the Democrats but the State Senate was under the control of the Republicans.  The governorship passed back and forth between representatives of the two parties.   However, New York’s two Senators are Democrats and win reelection easily because of the concentration of Democrats mainly in New York City.  Could Hillary Clinton have moved into New York and immediately become its newest Senator with a Republican governor and Republican controlled State Senate? She was elected Senator from New York before she even moved out of the White House.  So instead of representing their state legislatures, Senate candidates focused on the population centers of their states to appeal directly to the people and to get elected and reelected.  The states were reduced from sovereign entities to subsidiaries of the federal government.

The Supreme Court

When Franklin Roosevelt was president he tried to pass his massive socialist programs but found that the Supreme Court was striking down many of his programs as being unconstitutional.  Roosevelt wanted to pack the court by increasing its membership from nine justices to fifteen.  He argued that the justices were old and over worked.  So he wanted to appoint a new justice for every existing justice that was seventy years or older.  His plan failed.  But when he broke with George Washington’s precedent and that of every president who followed him of serving no more than two terms, he was eventually able to appoint every justice to the Supreme Court.  So he got his way, it just took longer.

The Supreme Court can be considered the collateral damage of the Seventeenth Amendment.  The Justices of the Supreme Court are appointed by the president with the advice and consent of the Senate.  However once the Senators became directly elected by the people things changed.  Would a distinguished jurist like Robert Bork be treated as shamefully as he was by the lie filled speech of Ted Kennedy if Kennedy and Joe Biden weren’t doing the work of the pro-abortion lobby?  Would Clarence Thomas be subjected to the electronic lynching he faced if not for some Senators pandering to their special interest groups?  What we now have are potential Supreme Court justices who have learned that if you don’t want to get “Borked” keep your mouth shut during your confirmation hearings.  So we don’t know who we are going to get until a lifetime appointee is on the bench and then it is too late.

The 2000 Presidential Election

Who can forget the 2000 presidential election?  The Democrats still say Al Gore won, not because of Florida (he lost the election there, he lost the re-count, he lost the re-re-count) but because he won the popular vote.  The debates raged, why do we have an Electoral College?  The president should be elected by popular vote only. 

The argument follows the one made previously about the direct election of senators.  The Electoral College forces presidential candidates to campaign everywhere because everywhere counts.  There are at least three electoral votes to be had in every state.  The Founders were very concerned about balance.  They did not want the president just to be elected by the people of New York, Boston and Philadelphia, the large cities of that time.  Today, if the Electoral College was abolished the election would focus on the media  and population centers of New York, LA, San Francisco, Chicago and the large cities because that’s where it is easiest to get the message out and that is where the majority of the people are.  The progressives would put up pretty much the same candidates as they do today, perhaps more to the left.  This is their home turf and power base.  Instead of traveling around the country they could concentrate their time and money in a few large cities.  The Republicans would probably field candidates of a far more moderate stripe to not get hooted off the stage in New York.  Let me illustrate.

Electoral College vote Bush-Gore 2000

The Democrats claim Gore won in 2000 because he won the popular vote.  He lost in the Electoral College by five votes.  If you look at the breakdown of the states Gore won versus Bush, Gore took the Northeast, the Great Lakes area and the West Coast.  With the exception of New Mexico, Bush took everything else.

Let’s dial it down a level and look at who won at the county level.

Bush-Gore 2000 Winners by County

If you look at it at the county level, you could drive from the east coast to the west coast without entering a single county that Gore won.  You could do the same driving from Canada to Mexico.  But if popular vote was the metric, the man who won 80%-90% of the land mass of the United States would have lost.  Why should you not have a say, if you don’t live in a major population center?  It is not like Bush won in an Electoral College landslide and it is not like Gore absolutely trounced Bush in the popular vote.  The purpose of the Electoral College is to act as another brake on the tyranny of the majority.  

Where Do We Go From Here  

We are presently at a crossroads.  We have an electorate that is more knowledgeable, more aware, and more engaged than at any time in my memory.  We can continue to go down the socialist path toward a massive central government that takes all of our liberties for a measure of sustenance, or we can turn the tide and demand our liberties back.  

Let us begin by repealing the Seventeenth Amendment.

President Obama, during his 2010 State of the Union address, did the unprecedented, which I suppose should surprise no one.  He called out the Supreme Court, whose members were seated in front of him, and lambasted them on a recent decision called Citizens United v. Federal Elections Commission.  The outcome of the case was that free speech was not limited only to individuals but could include corporations, groups of individuals, etc.  As Justice Scalia pointed out in his concurring opinion, the First Amendment refers to speech not speakers.

Protocol suggests that you do not invite guests to your event and then mock them, to the standing ovation of fellow uncouth Democrats.  In the video of the event Justice Samuel Alito can be seen mouthing the words “untrue”

http://www.youtube.com/watch?v=k92SerxLWtc

The law President Obama urges Congress to pass became known as the DISCLOSE act.  Democrats only like free speech for their special interest groups and to bar those who might campaign against them.  Liberty’s Lifeline has always advocated for anyone, except foreigners,  to give any amount to any candidate as long as it was published on the Internet within a reasonably brief period of time, say, 48 to 96 hours.  Tim Bishop voted for the DISCLOSE act but who has been giving money to Tim Bishop?

Charlie Rangel the disgraced Congressman from Harlem who was chairman of the House Ways and Means committee that writes the tax laws, gave $15,000 to Mr. Bishop over the years.  It seems that the head of the tax writing committee has problems remembering to pay his own taxes and he also has not one, not two, not three, but four rent controlled apartments, despite having a base salary of $174,000 per year.  He says failure to pay his taxes was an honest mistake.  Try that defense with the IRS if you forget to pay your taxes.  When the scandal became more pronounced and calls came for Mr. Bishop to return the tainted funds, did he do it?  Not exactly.  Mr. Bishop made a decision.  He could have given back the funds, but what mileage could he have gotten out of that?  Instead he donated the funds to two veterans associations.  That would be a noble gesture if Mr. Bishop donated his private funds for that purpose.  In July, 2010 Mr. Bishop’s campaign blasted one of his challengers Christopher Cox for saying that Mr. Bishop pocketed the funds, when the campaign said it had already returned them.  However in the same article it says it gave the funds to the veterans group.  Well, which is the truth and which is the lie?  Did he give it back or did he give it away, to garner favor with another potential voting block?

Bishop has also been called upon to return contributions from Michael Malik, a Michigan resident who contributed the maximum amount to Bishop’s campaign, but who has been fined in the past for illegal campaign contributions, is a partner with the Shinnecock Indians in their efforts to build a casino, and was also involved in a ponzi scheme in Florida, according to Newsday.

Also listed as a contributor to Mr. Bishop is far left billionaire George Soros.  Recently Mr. Soros donated $1.8 million to National Public Radio and shortly after that donation, long time NPR employee and contributor, Juan Williams was fired for expressing his personal views on The O’Reilly Factor.  This is despite Williams having appeared on Fox regularly for a long time.  We will have to see if Mr. Bishop gets behind pulling NPR’s public funding.

It seems Tim Bishop wants to put limits on campaign funding provided it does not affect who funds his campaigns.  Liberty’s Lifeline agrees with full disclosure without picking and choosing who can and cannot contribute.

In the August 23, 2010, New York Times, Paul Krugman decries that if we don’t let the Bush Tax cuts expire and thus have a massive tax increase in the midst of a weak Obama recovery, it will be so unfair, so evil… 

First let’s look at how twisted the logic of the left has become.  Mr. Krugman says, “These same politicians are eager to cut checks averaging $3 million each to the richest 120,000 people in the country.” Er, not really, Paul, unless the richest 120,000 people are stupid enough, with all their financial advisors, to have that much tax withheld from their incomes.  You see, Paul, the only reason the government would have to cut them checks is if they paid too much in taxes during the year, and since the current rates are already in place it is unlikely that they would change their behavior to suddenly have an extra $3 million sent to Washington.  Here’s the problem with your thinking, Paul.  It is not your money, it is not my money, it is not the government’s money to begin with.  It belongs to the people who have earned it.  It is the people to provide revenue to the government.  It is not the government who gives money to those who produce.  Got it?

Like most on the left Mr. Krugman always associates tax cuts with a loss of revenue and tax increases with a gain in revenue, and ignores how people change their behavior with regard to these changes.

As this chart shows, at the end of the Clinton administration and the dot.com bubble the economy fell into recession.  The Bush tax cuts were implemented in 2001 and they were across the board tax cuts, not just for the wealthy.  A second set of tax cuts came in 2003.  As you can see revenues started to fall before the tax cuts, but bounced back sharply after the cuts in 2001 and 2003.  But Mr. Krugman would have you believe that if you cut taxes, revenues fall and if you leave them along or increase them, revenues increase.  You can also see that Clinton’s tax increase in 1993, didn’t have much effect in changing the rate of revenue growth, but when the Republicans took over Congress in 1994 and instituted tax cuts in 1997 you can see the slope of the curve bend upwards and it is even steeper with the Bush tax cuts.  So in the absence of the 2001 recession, revenues collected increased with tax cuts, not tax increases.

Let’s look at who is paying what share of the taxes.  The follow chart shows what percentage of the tax burden was paid by what percentile of the income earners by Adjusted Gross Income.

So even as the Bush tax cuts reduced tax rates across the board, the “evil” rich still ended up carrying a larger share of the overall tax burden than they did before the cuts.  So just what is Mr. Krugman’s beef? 

I argue that were are nearing a dangerous threshold politically, where the majority of voters may soon find they pay no taxes and the minority pays all.  If that tipping point is reached, what is to prevent this majority from voting for massive tax increases that will only affect the minority?  All Americans should carry some share of the cost of government.  It should not be a free ride for some and a minority pays the tab. 

To further emphasize the fairness issue look at the following chart from the IRS in 2004.  The brown bars show the share of the income that the percentile on the vertical axis earns.  The blue bar shows the share of the total income tax bill they pay. 

The problem folks is spending.  As the first chart makes pretty clear, we have not been suffering from a revenue problem, we have been suffering from a spending problem.  This administration and their instigators, like Mr. Krugman, have been urging reckless spending upon reckless spending and even decrying that the administration has not spent nearly enough.  Krugman is sloppy in making his case and tries to convince his readers that we will be carrying buckets of money to the wealthy when the truth is that he wants to open the spigot wider from those who produce in this country to the profligate government who can then spend it on more turtle crossings in Florida, and to prop up the unions, and bankrupt states.  Stop spending, cut taxes, shrink the federal beast, and we will be in good shape in short order.

As many people have said, “I never got a job from a poor man.”  In looking back at my own career, I have worked for several companies that were started by entrepreneurs and who became wealthy. Do I care if they were wealthy?  No.  Do I wish they were taxed to the eyeballs?  No.   If they were, those are jobs I would probably wouldn’t have had.  Opportunity is what made America the country where people around the world fight to get into, not bashing the successful.  All who stive to come here want to become those wealthy successful people and give the same opportunity to their children.

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.

Did anyone not see this coming?  An article in yesterday’s Wall Street Journal reports that new home sales plunged.  Why?  The government’s meddling tax credit for first time home buyers expired and gee, the trend didn’t continue?  What a surprise.  Meanwhile the government has another program, Making Home Affordable, to help homeowners refinance their home mortgages that they can no longer afford.  Instead of letting the chips fall where they may and have prices find a bottom and adjust, we have the drip-drip-drip torture of these programs and the recession drags on.

New home sales fell 32.7% from April to a record low seasonally adjusted annual rate of 300,000.  Compared to last year the sales fell 18.3%.  In addition the previously reported sales numbers for March and April were adjusted downward.

Here is what we have.  Our government is taking our tax dollars and giving them to people to help them buy a house.  You may be struggling to pay your own mortgage and instead of the government letting you keep more of your own money and perhaps make an extra payment on your own mortgage to lower your outstanding debt or increase spending which would help grow the economy, you are paying for your mortgage and your neighbor’s.  Instead of letting those who can’t afford their mortgage face that reality, the government steps in and drags out the process.  If government got out of the way, then the banks would have the incentive to negotiate in good faith rather than looking for a government bailout.  If a mortgage is salvageable, they should renegotiate with the homeowner and take a small loss rather than a big one.  If the mortgage is not salvageable, then foreclose or short sell it and be done with it.  The housing overhang on the economy would get quickly sorted out and we could return to a more stable housing market.  Get the government out of the way and let us keep our tax dollars.

In 1920-21 there was a steep and serious recession.  This was before the age of government intervention of Hoover, FDR and all who followed.  Businesses were able to cut wages and react to the circumstances in that freer market.  Unemployment peaked at 11.7%, almost 2% higher than we have now, but by the following year it was down to 6.7% and they year after it fell further to 2.4%.  We are a year and a half into the current mess and the current administration seems intent on matching FDR’s record of stretching this out for eight years.  We have a robust economy that can rebound sharply, if the government gets out of the way.  But this government keeps tinkering and the economy keeps bouncing along the bottom.  And let’s not forget fraud.

The Treasury’s Inspector General for Tax Administration, J. Russell George, reported that 19,000 filers for the first time home buyers credit hadn’t purchased a home and there were 74,000 filers had purchased a home but it was not their first.  In additiona there were 53 cases where IRS employees filed “illegal or inappropriate” claims for the credit and today we learn that $9 million was stolen by prisoners who were incarcerated when they filed for the credit.  So don’t worry folks your tax dollars are not only prolonging the recession, but they are being stolen as well.  Feel better about your benevolent government?  Aren’t you glad we live in a country where your government can forcefully take the fruit of your labor and throw it to the wind?

Government that governs least governs best.  Let’s cut the beast down to size.