Fighting to Preserve Liberty in America
Long Island’s own Peter King (R) plans to introduce legislation that would make it illegal for someone to knowingly carry a gun within 1,000 feet of certain high-ranking federal officials, including members of Congress. Before I take on the nuttiness of the law itself, I have to ask, “What makes them so special?”
In an interview on Bloomberg radio yesterday, New York Lieutenant Governor Richard Ravitch talked about the perilous state of New York’s economy. Mr. Ravitch was a key player in the rescue of New York City from the brink of financial collapse in the 1970s. He talked about bankruptcy being an option and how New York City’s possible bankruptcy really brought banks to the negotiating table. He also talked about how important the financial services industry is to New York as a source of tax revenue. Then he let the cat out of the bag.
After watching some of the Sunday talk shows and hearing the tough talk from House Democrats and learning more about the tax bill getting loaded up with subsidies it’s time for Republicans to put their hands up and slowly back away from this putrid mess.
The seven way gubernatorial debate was held last night at Hofstra University on Long Island. I happened to catch a live broadcast at a candidate’s forum in Manhattan. Watching the debate was somewhat entertaining, but when it was over you had to realize it wasn’t a movie, even though it was watched, projected on a movie screen. Then the sad reality set in that we actually have to pick one of these people to be our governor. In one of the most dysfunctional state governments in the nation it’s hard to decide whether to laugh or cry.
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.
Money for Nothing
The Commerce Department released the second revision to first quarter GDP and it is the second time it was revised upward. Originally it was reported that GDP fell by 6.1%, not much different that the fourth quarter’s 6.3%. Subsequently it was first revised to 5.7% and the last report pegs it at 5.5%. So what does this mean?
The Economy Bottomed in 4Q08
These figures point to the economy hitting bottom in the fourth quarter of 2008, which means the economy was already on the mend before President Obama took office. Since President Obama didn’t take the oath of office until 2/3 of the way through January, and rushing through the stimulus package that nobody read took until the mid-point of the first quarter, the economy improved without any help from the new president.
Medicine or Poison?
With the massive government spending that the Obama Administration and the Democratic Congress is heaping on us, the other economic data bears watching. The inflation rate nearly doubled to 1.6% in the first quarter from 0.9% in the fourth quarter. The unprecedented borrowing that the government is undertaking will drive up interest rates and inflation and may likely kill the recovery. Again, since the Obama effect has not yet kicked in, we haven’t seen anything yet.
Today, the House of Representatives is poised to pass the most massive tax increase in history with Cap and Trade. Energy costs will skyrocket so that global temperatures will be curtailed by 0.2 degrees Celsius over the next 100 years. I’m feeling better already.
Money Down the Drain
$787 billion is being spent to stimulate an economy that is recovering on its own, spread pork across the land, and saddle us with unnecessary debt. That works out to $2,300 for every man, woman, and child in America. Add in health care at $1 trillion to $1.6 trillion ($4,700 per man, woman, and child), Cap and Trade that will double the cost of gasoline, heating your home, cooking your food, etc. When will this stop? If you still believe that no couples making under $250,000 will see any increases in their taxes, snap out of it! We do not have enough rich people in this country to cover the bill even if we tax them at 100%.
At the state level we are already seeing the mobility of the wealthy. Maryland slapped a new tax on the rich and then discovered that 1/3 of the rich moved out of the state of Maryland. So you say, “What are the rich going to do? Move out of America?” While you giggle over that one, ask yourself this. Why did the Beatles all move to America? If you don’t know the answer to that one go read the lyrics to their song, The Taxman. It was to avoid the crushing tax burden in the U.K. Don’t think that trend can’t reverse itself.
I’ll see you at the next Tea Party.
