photo by cliff1066

Just because Democrats are statically stuck on stupid, why do they think everyone else is? What I am referring to is static analysis of changes to the tax code. Democrats always want to have any potential changes statically scored. In other words if Democrats raise rates 10%, naturally, the government will get 10% more revenue. If on the other hand you cut tax rates 10%, a very bad thing, tax revenues will fall 10%. The problem is that they have been proved wrong every time. In other words, Democrats believe that if they raise tax rates you will be too stupid to change your behavior in response.

The evidence is in that when capital gains tax rates were cut, revenues poured into the Treasury. When the Bush tax cuts went into effect in 2003, by 2007 the Treasury took in more revenue than at any time in history.

Federal Government Revenue over Time

So why, do we have massive deficits. There are two reasons and neither of them have to do with the Bush tax cuts. The first is the housing bubble bursting. This put us into a recession and when economic activity slows, tax revenues fall as well. As the economy recovers, tax revenues will increase. This bedrock principle is what the Democrats deny exists. The second reason is spending. We are spending an enormous amount of money. If you want to see the deficits shrink, stop spending, and stop attacking businesses.

The Latest Dustup

The much ballyhooed debt committee that is supposed to come up with their recommendations by Thanksgiving has reached another impasse. The Republicans put $500 in additional revenues by locking in lower tax rates, and closing $250 billion worth of loopholes. The resulting growth in the economy would add another $200 billion and another $40 billion would come by adjusting the tax brackets for inflation. I thought the Democrats were agreeing with Herman Cain when they said, “Nein, nein, nein!” until I realized they were speaking German. To the Democrats lowering the tax rates has no effect on the economy, so the $250 billion in loophole closures will only generate $250 billion.

So as the clock ticks down, you can expect the committee to remain stuck on stupid, and our military to take a big hit as mandatory, pre-negotiated cuts kick in. Isn’t it gratifying to pay a bunch of people $174,000 a piece to have them accomplish absolutely nothing? Isn’t that how it is where you work?

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

For all the grandiose talk of cutting $4 trillion which will remain undefined, or $2 trillion which is not bold enough, President Obama proves once again when faced with a real solution, he will do anything to kill it.

The House of Representatives plans to vote on Cut, Cap, and Balance tomorrow and what an evil plan it is. Here’s what they actually want to do:

1.   Cut - We must make discretionary and mandatory spending reductions that would cut the deficit in half next year.

2.  Cap - We need statutory, enforceable caps to align federal spending with average revenues at 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached.

3.  Balance - We must send to the states a Balanced Budget Amendment (BBA) with strong protections against federal tax increases and a Spending Limitation Amendment (SLA) that aligns spending with average revenues as described above.

That’s awful! Actually cut our $1.6 trillion deficit to a mere $800 billion deficit in one year! Hmmm. let’s see, the worst deficit under Bush was less than $500 billion. So we seemed to be able to spend our way into this mess in only two and a half years, why can’t we get half way back to the seemingly restrained Bush presidency in one?

To stay out of this mess we need to cap spending. Since revenues have historically come in at about 18% of GDP regardless of how high or low you make marginal rates (and actually they climbed to 18.2% with the Bush tax cuts, but don’t tell anyone that), if we don’t limit spending to what we take in, we will continue to pile up more debt. Gee, only spend what we take in? What a concept. I’ll bet even Joe the Plumber knows about that one.

Balance the checkbook, balance the federal budget. Why not?

Threatening a veto if it reaches his desk and we know that Harry Reid will fight to the death to prevent it getting that far, only proves that this president will not stop spending until he destroys the freedoms put in place by the founding fathers and turns us into the next failed socialist basket case.

Go ahead. Make America’s day. To my fellow patriots I urge you to call your Congressmen and Senators today and tell them to support Cut, Cap, and Balance or go look for another job.

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

The Tea Parties sprang to life after seeing cyincal politicians advance their own agenda that most Americans knew wouldn’t work, but damn the people, the politicians plowed ahead. It was about the time of the great stimulus program that we were told (and didn’t believe) the program would cap unemployment at 8% for the mere cost of nearly $1 trillion. If we didn’t act, the politicians somberly pronounced, we would face the dire situation of 9% unmployment.

New York Congressman Tim Bishop has introduced “The Big Oil Welfare Repeal Act,” which could be said is cynicism on steroids. Let’s start with the title. Does Mr. Bishop really believe that oil companies are receiving welfare? Welfare as most honest people know is where the government gives people money who are not working. It takes little questioning to figure out that is not happening in the case of the oil companies but, hey, lying works. Tim Bishop just ran his entire reelection campaign on personal attacks on his opponent rather than running on his record, so lies and distortion are his specialty. Let’s break it down.

What he wants to do is eliminate a tax break, not a subsidy, that the oil companies receive which equates to 6% of the income they get from domestic oil production. I am all for simplifying the tax code and eliminating all loopholes and at the same time reducing tax rates so on balance it is revenue neutral. But why stop with the five biggest oil companies? What about eliminating subsidies for ethanol? Wind? Solar? Crops? Electric cars? Mortgages? Uh, those wouldn’t be cool with the people Bishop needs to reelect him, but Big Oil, yeah everybody can hate Big Oil!

Bishop goes on to say that the extra revenue from the oil companies by eliminating the tax break will reduce the deficit by $13 billion over ten years or doing the math about $1.3 billion for one year which is 0.08% of the current one year deficit of $1.6 trillion. So, Mr. Bishop is cyinically trying to show he is concerned about the debt, and yet he voted against the Ryan budget proposal that would save $6 trillion; deficit reduction to Tim Bishop has to be symbolic not serious or real.

Lies, Lies and more Lies

Mr. Bishop, on his own website, says the following:

• I’m outraged that at $4 a gallon, Americans are still paying twice for gas: once at the pump and once on tax day,” said Congressman Bishop.  “Borrowing money to pay Exxon-Mobil to drill for oil they have every incentive to drill for already is Exhibit A for wasteful government spending.”
• Repealing the oil industry’s tax subsidies will not impact gas prices for American consumers.
• Bishop unveiled the bill at the Patchogue Village Department of Public Works facility on Waverly Avenue, which houses the gas pumps used by village, school, and fire district vehicles.  He was joined by Village Mayor Paul Pontieri, who described the effect high gas prices have on the Village’s budget.

These three bullets were from the same post on his website! He begins by saying he is outraged by the price of gasoline at $4 a gallon. He then says that his proposal will not affect gas prices. Then he uses the poor Patchogue Village mayor as a prop, to unveil his plan that Bishop  says won’t do a damn thing to solve the mayor’s problems. Do you wonder why Americans hate politicians?

Bishop is right about the gas prices. Exxon makes a profit of about $0.07 per gallon of gasoline. Bishop’s proposal will affect 6% of the profits they make on domestic production. It doesn’t take a mathematician to figure out at 6% of $0.07 is about half a cent per gallon. So why all the hoopla other than to create a false impression that this congressman is actually earning his $176,000 salary. That’s why Americans hate politicians.

Let’s move onto the next lie, paying the oil companies on tax day. With Memorial Day approaching we will be seeing a lot of sales from merchants. If you go to Lowe’s to buy that new grill and they advertise 10% off for Memorial Day, does the cashier reach into the drawer, take out some cash and give it to you? No. Ten percent off means you pay ten percent less. You do not come home with a grill and more money in your pocket than when you left the house. The same applies to taxes. Any tax break means you pay less in taxes, the government doesn’t pay you. The government doesn’t have any money except what it gets from you. That’s how it works. So tax cuts are where you get to keep more of your own property. It is not a payment from the government, it is not a cost to the government, IT’S NOT THE GOVERNMENT’S MONEY, it’s your money.

Okay, gas is expensive, so what do we do about that? Many on the right have said we should increase domestic production. So what does Tim Bishop do? His proposal is to remove a tax incentive on domestic production. That seems counterproductive. He also said he just voted against expediting domestic drilling permits. It would almost seem that Bishop wants to increase our dependency on foreign oil. He then goes on to say in a C-SPAN interview that domestic production is at an all time high, and that the oil companies have plenty of leases and they should just drill on the leases that they have.

The problem is that it takes about sixty leases to get one with a productive discovery of oil. What Mr. Bishop only mentions in passing is the value of the dollar as a contributing factor in the price of gasoline. I suggest that it is a more serious relationship than that and who has been destroying the value of the dollar by printing money and spending it like crazy? It was Tim Bishop who voted for the stimulus that accomplished nothing. Nancy Pelosi ran up the debt $5 trillion during her tenure as Speaker and Tim Bishop voted with her 97% of the time. Now he proposes meaningless legislation just to get some campaign sound bites, because attacking Big Oil is good politics. That’s why Americans hate politicians. They want their elected representatives to do things that work, not things that get the politicians another two years on the government’s payroll.

Here Mr. Bishop let’s his fig leaf slip and reveals his socialist leanings:

He noted that while continuing to enjoy the subsidy, the largest five oil producers have directed the lion’s share of their profits into dividends and stock buy-backs.

Think about the local green grocer. If he has a good year and he makes a profit, maybe he decides to put that profit into the bank. Would Tim Bishop object to that? Okay, who owns the oil companies? The stockholders. Mr. Bishop is basically saying that the people, maybe even a certain green grocer, who invested their hard earned money are not entitled to any of the profits from the oil companies they own in the form of dividends. They are not allowed to sell some of their stock back to the company in the form of a stock buyback so they can invest their money elsewhere. Perhaps some of those oil company owners are retirees who bought the oil company stocks for the dividends and because they believed the oil companies will be around for some time to come. Perhaps they don’t believe that Social Security is such a swell deal; few ponzi schemes are. Mr. Bishop takes exception to them getting a dividend increase now and then. In his twisted understanding of economics or lack thereof, the oil companies should be taxed more, its owners receive no profits, plow all profits back into exploration and development, and sell their product for less money, while he and his cohorts spend every last dollar that this country produces, to keep themselves in office, and have a claim on everything you own, except that which Mr. Bishop decides you can keep. But whatever you do, don’t call them socialists.

And that’s why Americans hate politicians.

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

I received an e-mail from my congressman introducing his new “Big Oil Welfare Repeal Act”. It was one of those proposals that was either a political ploy or demonstrative of the potential damage that can be done by politicians who spent their lives closeted from the real world in either the ivory towers of academia or as life long members of the ruling class. I wrote a reply:

April 29, 2011

Congressman Tim Bishop

306 Cannon H.O.B.

Washington, D.C. 20515

Dear Congressman Bishop,

I received your e-mail today regarding tax subsidies for oil companies. Your e-mail began:

“’With oil at more than $50 a barrel, by the way, energy companies do not need taxpayer-funded incentives to explore for oil and gas.’  So said President George W. Bush in, 2005.”

If I am not mistaken, Congressman, you were in Congress in 2005 and your party was in the majority from 2006-2010. What did you do to fix this for the past six years? If President Bush was in favor of ending the subsidies, and you were in favor of ending the subsidies and the Democrats held both houses of Congress why did you fail to act? Bringing this up now, sounds not like leadership but cheap political posturing.

I am no fan of subsidies for any companies, but let’s not kid ourselves. Corporations build their tax liability into their prices. They don’t pay taxes; they collect them from their customers. So if you somehow believe that by taking away the subsidy and making oil companies pay more in taxes that the price of petroleum products like gasoline will not increase, you are deluding yourself.

Your next statement says that your effort “is not about punishing oil companies; it is about making smart choices with limited resources.” I am mystified by your statement that “Right now, Americans are paying oil companies at the pump and on tax day. I hope you agree that gas is far too expensive to pay for it twice.” We don’t pay the oil companies on tax day. A tax break means they pay less, not that we pay them. You seem to embrace the statist concept that all wealth belongs to the government and the government takes what it wants and give us the rest, rather than we give money to the government. Second, Exxon makes about seven cents profit on a gallon of gasoline, so if you raise their taxes, what do you suppose they are going to do? That’s right, raise the price of a gallon of gas.

If you really want to bring down the cost of gasoline, rather than scoring political points here are some suggestions:

1. Abolish the federal gasoline tax which is $0.184 per gallon. Abolish the Department of Transportation while you are at it and let each state raise the revenue they need for their infrastructure and roads. It may mean they reinstate part of that tax at the state level, but it will also put pressure on them to perform better.
2. Reduce the number of different blends of gasoline required by the EPA. We haven’t built a new refinery in this country in over 25 years and we have to keep changing over the formula to meet the EPA requirements which curtails output.
3. Eliminate subsidies for ethanol. If we’re cutting energy subsidies let’s do it for wind and solar as well. If they are not economically viable, why should the taxpayer pay for someone’s hobby?
4. Increase the drilling for our own oil and natural gas. The less we depend on foreign oil the less they can play with the spigot to make exploration projects here unprofitable at a whim.

You and your party had four years in power. Now all we seem to hear from your side is demagoguery of every idea the Republicans put forth. If you don’t like them, fine, come up with your own ideas and then debate them. But the demonizing of every idea they put forth has to stop.

Sincerely yours,

William R. O’Connell

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

Maybe it was because he was trained as a medical doctor that Rand Paul knows that if you are going to lift something heavy you have to bend your knees and keep your back straight. Contrast that to the other members of Congress who stand on tiptoes, with their legs straight, bent at the waist leaning far over and picking through the $1.6 trillion deficit using only their thumb and forefinger, to find some morsel that they can extract from the budget, crying all the while “It’s too heavy, it’s too heavy.”

While Chuck Schumer on one side and John Boehner on the other side squabble over $61 billion to cut versus $4, or $6 or $10 billion to cut, Senator Rand Paul has put on the table $500 billion in cuts and to balance the budget in five years. The progressives are apoplectic. But even with a $500 billion cut there will still be a deficit of $1 trillion. Senator Paul explains:

http://www.youtube.com/watch?v=Q6Y_Dvzng-4

The progressives had no problem spending nearly $ 1 trillion in one year for the failed stimulus program. They had no problem spending nearly $1 trillion for TARP. Nancy Pelosi had no problem adding $5 trillion to the national debt since 2006 where it took over 230 years to accumulate a mere $8 trillion in debt. So why is it impossible to cut $500 billion?

In looking over Senator Paul’s plan (click here to view it), what struck me is the number of areas of the government that are completely ineffective that Senator Paul rightfully says should be eliminated. Some examples:

• Eliminate the Government Printing Office: “In 2010 alone, GPO spent nearly $30 million in taxpayer dollars to provide Congressional offices with the rarely read Congressional Record, and in September they released their first-ever comic book, ‘Squeaks Discovers Type,’ meant to teach children ‘why printing is important.’”
• Eliminate the Agriculture Research Service: “Most American industries fund their own research and development programs. The agriculture industry is a notable exception. USDA spends about $3 billion annually on agricultural research, statistical information services, and economic studies.”
• Eliminate the Department of Housing and Urban Development: This department has no constitutional basis for existing. “Rather than providing a one-time stop for families on their way out of poverty, public housing has largely been a failure. Public housing projects have become havens of crime and dysfunction, driving away the very business investment and homeowners that would revitalize a city block.”
• Eliminate the Bureau of Reclamation: “Owning a majority block of energy and water resources is not the business of the federal government. Water rights should be controlled by the states and agreements can be made between the states to ensure water supply to all.”
• Eliminate the Bureau of Indian Affairs: “For far too long, the Bureau of Indian Affairs has swindled and mismanaged billions of dollars in Indian trust funds. Former Special Trustee Thomas Slonaker in 2004 testified that the Department of the Interior and the BIA were incapable of reform and were unwilling to hold people accountable for their actions. In addition, Paul Homan also has testified before Congress saying that a “vast majority of upper and middle management at the BIA were incompetent. Instead of wasting taxpayer funds throwing money into a bureau of corruption and incompetency, eliminate them and allow the tribes to manage their own trust funds independently without government intervention.”
• Eliminate the Office of Justice Programs: “The Office of Justice Programs does not directly carry out law enforcement or justice activities, rather OJP performs studies on the pressing crime-related challenges that confront the justice system and provides grants to try and help cities and counties reduce their crime rates. In effect, OJP has evolved into a multi-billion dollar subsidy to the budgets of local governments.” “Each state, county, and city communities and police departments are forced to address many different forms of crime. The federal government can set guidelines on how to address criminal issues, but only the states and local communities can determine what the best way to counter and deter violence and crime.”
• Eliminate Amtrak Subsidies: “Created by an act of Congress in 1970 to provide passenger rail service, Amtrak has yet to turn a yearly profit. During its first 35 years, federal assistance amounted to approximately $30 billion. Yet from FY2007 to FY2010 that number has increased by $7 billion. Of the 44 routes and 21,000 miles of track the trains travel over, only 625 miles are actually owned by Amtrak. Congress has forced freight rail companies to allow Amtrak to use the lines the freight rail companies own and maintain. We need to allow the states to have a greater say in trail service between their cities. To provide better service, Amtrak must learn to make the difficult decisions on routes and coverage to develop a sound business model, which will push them toward becoming profitable.”
• Repeal Davis-Bacon Act (and watch the unions attack): “In 2008, for metropolitan areas, Davis-Bacon prevailing wages rates for all projects were 62.4 percent higher than the average hourly wages reported by the Occupational Employment Statistics (OES). Davis-Bacon forces government contractors to pay wages that are higher than they normally would. These wages increase the cost of the federal construction project, without increasing the labor productivity, quality, or timeliness in completing the project.”
• Affordable Housing Program – Eliminated
• Commission on Fine Arts – Eliminated
• Consumer Product Safety Commission – Eliminated
• Corporation for Public Broadcasting – Eliminated
• National Endowment of Arts – Eliminated
• National Endowment for Humanities – Eliminated
• Privative the Smithsonian Institution – Privatized
• State Justice Institute – Eliminated
• End TARP (how many of you knew it was still going?): “The September 2010 Outlay of TARP funds report put out by Treasury comparing committed amounts and actual disbursements, shows a $87.39 billion savings if no more money was disbursed.”
• Sell Unused Federal Assets: “Of that property the Office of Management and Budget (OMB) claims more than 21,800 federal properties are abandoned assets, which could be sold for approximately $19 billion.

A Top To Bottom House Cleaning

One of the management methods employed in the private sector is called zero based budgeting. What that means is that every year, you don’t take last year’s budget and tack on a growth factor but you take a look at why you continue to do a particular function at all. If you can no longer justify it, you eliminate it. What Senator Paul’s report has uncovered is that we need a complete top to bottom house cleaning of the federal government and leave no corner of the government unexamined with a bright light. It appears there has been too much of “the way we have always done it.” This gets reinforced with the standard progressive argument that the reason any government program doesn’t work is that it wasn’t big enough. If we only expand it to hit that tipping point, all things will be wonderful.

How about this instead: Take out a copy of the Constitution and turn to Article I, Section 8. It starts with, “The Congress shall have the power to…” Take every function of the federal government and match it up against that list. If there is no match, eliminate it. But fear not, all you statist hand wringers, you can have the states or local government step in and choose to continue any program eliminated if they desire. When the people get the bill for those services they can take out their newly sharpened pencils.

In five years, after the Paul plan has balanced the budget and the economy is growing crisply again, federal taxes can be cut to return money to the citizens who have been robbed to sustain these useless and ineffective programs.

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



You have to smack your head listening to Schumer, Weiner, Pelosi, Reid wailing like crybabies that the spending cuts proposed by the Republicans are too harsh. Perhaps it’s time to shut the government down and like a parent at wits end, send the babies home for a timeout.

The draconian budget cuts of $61 billion passed by the House and rejected by the Senate amount to just 3.8% of the current year’s deficit. That is the deficit, you know, the shortfall between what the government takes in and what it spends; not the debt, not the budget, just 3.8% of the deficit. Which, of course, means that Congress will still be able to overspend what it takes in by $1.5 trillion rather than $1.6 trillion. Yes, I am rounding off as I keep losing track of that many zeroes.

It is not just in Washington, where we have this problem but in the states as well, as the alarming video below shows, and yet, efforts in Wisconsin to rein in the spending was greeted by the left with yowls of indentured servitude (that is, lifetime employment with a six figure income), comparisons to Hitler who they claimed abolished the unions (he didn’t, he just replaced the existing unions with new ones), while issuing death threats, and damaging the Wisconsin capital to the tune of $7 – $8 million, which will have to be paid for to repair. I guess they glossed over that pesky word in the First Amendment about the right to “peaceably” assemble.

If we don’t stop bingeing at the government trough soon, there will be hell to pay, with no one to pay it. See how long Michael Moore sticks around when he is the last rich guy to tax. Hello, Havana!

http://www.youtube.com/watch?v=6eyhnw6TBfI

Hat tip to Ben Howe for the video.

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

President Barack Obama released his budget blueprint on the same day the White House says it expects the budget deficit for the current fiscal year ending in October to hit $1.65 trillion. His budget calls for spending cuts of $1 trillion spread out over ten years. 

To put it another way, the cuts that the president is proposing will be less than the deficit in the first year alone, projected at $1.1 trillion. So the debt leviathan will continue to grow and with it, the interest payments required to satisfy it. While the nation is staggering under this massive and growing debt, this president still wants to spend $53 billion building high speed railroads. Such a program may create jobs to build such railroads and create jobs to man the trains, stations, and track, but they are make-work jobs that will be a burden on future budgets and future generations because anyone with a room temperature IQ knows that these trains will operate at a deficit, just like Amtrak does.

While showing extraordinary focus and determination in ramming his healthcare and other socialist programs down the throat of Americans that do not want them, his knees buckle when it comes to showing leadership on cutting the vast and growing entitlement programs.

 ”It is a patronizing plan that says to the American people that their concerns are not his concerns,” Senate Minority Leader Mitch McConnell (R., Ky.) said.

Also, noticeably absent from the president’s budget was most of the recommendations of the bipartisan budget panel he created via an executive order. There’s nothing like spending tax dollars on a show panel to buff up your fiscal “cred” before an election and then ignoring the results afterwards to build on your reputation for cynicism.

 Erskine Bowles, the Democratic chairman of the fiscal commission, said the White House budget request goes “nowhere near where they will have to go to resolve our fiscal nightmare.” – Washington Post

So there you have it folks, even Democrats are saying the president’s budget doesn’t go far enough. It will be up to the newly elected Republicans and the Tea Party who will hold those Republican’s feet to the fire, to get that job done.

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

Michelle Bachmann let off the three day CPAC conference with a keynote address that laid out the case against the current administration and the rule of Nancy Pelosi. Most of the focus of her talk was on raising the alarm on our current financial situation and its urgency.

When the Nancy Pelosi took the Speaker’s gavel in January of 2007, the national debt stood a eight trillion dollars, not a meager sum by any means. To illustrate she pointed out that if a dollar was a second of time, a trillion seconds equates to thirty-two thousand years. It took two hundred and thirty years for the America to accumulate that much debt. In the four years that the Democrats controlled Congress and the two years that President Barack Obama occupied the White House, the debt increased by 75% to fourteen trillion dollars. That is truly astounding.

Much of that debt is being funded by foreign countries including China. She mentioned President Hu Jintao of China being perfectly happy with our borrowing binge, prompting her to ask, “Hu’s your daddy?” She asked who in the crowd was of college age and then addressed her next point to them. If we do not get our financial situation under control, she told them, you will be paying about one-third of your income to cover Social Security. If you add to that your federal income tax you may be rates up to 75% of your income in your peak earning years.

She then called on the assembled to complete the task they started with the major electoral victory this past November with a repeat performance in 2012, to take control of the Senate and the White House.

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.

The essence of the book is about how we got into the mess we are currently in and what we can do to get out of it.  Bloated government, taxes up to the eyeballs, debt as far as the eye can see are what we are wrestling with.  So I picked up my copy of the Constitution to see how much stuff the Founders wanted the government to give to everyone.  The short answer is nothing.

 The Constitution is about some pretty basic things.  Protecting us from foreign powers and managing our relations concerning commerce with them.  Putting the basic pieces in place to operate as a government: money, post offices, courts, patents and trademarks, bankruptcies, Naturalization, standards of weights and measures, and that’s about it.  It was to be a framework within which we would be left alone to live our lives in liberty and to pursue our own happiness.

But where are we today?  Where did we jump the tracks?  How much of it is because government started giving us things?  As government gave us more and more things, they needed the money to pay for it, so they had to take more from us.  Government has no money except that which it gets from its citizens.  So to give something it has to take something.  Give not, take not.  The Founders seemed to know this instinctively and created a government that was to provide structure not sustenance.

Think about what the government gives out:  retirement; medical care; farm subsidies to raise food prices and food stamps because food is too expensive; housing subsidies; tax breaks for this, that, and the other thing; funds for education; ethanol subsidies, solar subsidies, wind subsidies; and on and on. 

Prior to 1913, there was no income tax.  At first the tax was only on the very rich, but now taxes in some form or another have reached the point where almost no one escapes it.  But today, it is not enough.  There are talks of a national sales tax in the air, which would open the floodgates of revenue into Washington, which will enable Congress to give away more goodies, and then take more of the fruits of our labor.

So how do we clean up this mess?  Start with giving less.  It is redistribution of wealth plain and simple.  Give less, take less.  Cut a program, cut an equal amount of taxes.  Cut another program, cut more taxes.  If some people really want the government to provide these things then let them do it at the state or local level, but be forewarned, if you go bankrupt, don’t look to the rest of us for a bailout.  If we followed this simple four word rule, give not, take not, then there may be a day when the income tax goes away or becomes so modest that there will be no more arguments about how to raise it, now much, and on whom.  The income tax rates would be low and the epic battles we are seeing played out in Congress would be a memory.

The ideal of federalism was not to aggregate everything in a massive central government.  It was to have each individual rely first on themselves, then on their family, then on their faith community.  Local governments would provide services closer to the people like schools, water, roads, police, fire, sanitation.  Those governments would have their own ability to tax their citizens, but would also have to face them, literally.  Town hall meetings take on another meaning when you look your constituents in the eye.

Give not. Take not.

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

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.

In an article published in Newsday today titled, “Rep. Israel: Poorer states take NY’s share,” he has this to say,

“Nobody should be paying more than they get,” Israel said. “The unfairness should not be based on where you live. That’s what really drives me crazy. It’s not necessarily the numbers; it is the discrimination against states like New York” that have more high-income earners.”

That statement opens up at least three contradictory positions that Steve Israel has taken and indicates how out of touch the progressives are with the majority of the American people.  Let’s look at the three issues:

1. Redistribution of Wealth – is it a good thing or a bad thing?
2. Why send money to Washington if it is only going to send it back, albeit with a healthy chunk of overhead removed?
3. If New York is discriminated against because it has high income earners – is increasing taxes on high income earners by making permanent the Bush tax cuts a bad thing or a good thing?

Redistribution of Wealth

Steve Israel votes with his party 98.7% of the time.  We all remember what Barack Obama said to Joe the Plumber, “I think when you spread the wealth around, it’s good for everybody.”  He has voted for the very policies he complains about.  Let’s do some quick math.  Steve Israel voted for the $825 billion stimulus bill.  The stimulus, according to Recovery.gov, brought about $249 million into Mr. Israel’s district.  But based on the relative wealth of his district, his district pays about 0.4% of the nation’s individual income tax.  To make the number’s easier, if we assume that the stimulus borrowing will be repaid exclusively through individual income taxes, that means Mr. Israel’s district will have to re-pay $3.3 billion of the stimulus debt.  So he voted to send $3.3 billion to the rest of the country in return for $249 million for his constituents.  So what’s his argument?  His wound appears to be self-inflicted.

Round Trip Ticket for Your Tax Dollars

Mr. Israel has a 100% rating from the National Education Association, the teacher’s union.  Mr. Israel is part of the federal government.  Nowhere in the Constitution is the Congress empowered to do anything about education.  Education has always been a local matter.  We have local school boards who run the schools, and the bulk of our property taxes go toward funding the schools. 

But we also have a Department of Education.  So what do we do?  We tax the same people who pay for schools through property taxes and state taxes and we send that money to Washington.  The Treasury takes a cut to pay for the added resources it needs to manage this revenue.  The Department of Education takes a cut to pay for their overhead, and then the money is sent back to local school districts as federal aid.  Why not abolish the Department of Education and keep 100% of those tax dollars locally to pay for schools rather than eighty cents on the dollar for the privilege of having the geniuses in Washington handle our money and tell us what to do?  On top of that, what guarantee do we get that a further portion of our tax dollars are not going to pay for another state’s education instead of ours?  If we don’t give the money to Washington in the first place, they can’t give it to someone else rather than returning it.  It is lunacy. 

The article then describes this bizarre exchange:

Israel said “the fairest” situation would have each state receiving the same share of federal funding that it pays in federal taxes. He was asked if states should just keep all their revenue instead.

“It’s priorities!” he said. “The federal formulas need to be changed. It’s not as simple as saying it should be 1-1; it’s the formulas that need to be changed.”

It’s the formulas?  Why in the world would you send tax dollars to Washington and then expect to get an equal amount back?  Why send it in the first place?  If Washington kept to the powers enumerated in the Constitution, most of this discussion would be moot.  The Founding Fathers created the federal government to deal with mostly national issues concerning defense and foreign nations. In carrying those out I want the military to decide where to place their forts, arsenals, naval bases and not to make sure that we have the same amount in every Congressional district. 

The Bush Tax Cuts

Steve Israel has a voting record on tax policy:

• He voted against retaining reduced taxes on capital gains and dividends (Dec 2005)
• He voted against making the Bush tax cuts permanent (April 2002)
• He voted for raising taxes on those making over $250,000 (Dec 2010)
• He received an 18% rating from the National Taxpayers Union meaning he’s a big spender (Dec 2003)
• He received an 83% rating from Citizens for Tax Justice, meaning he supports progressive taxation (Dec 2006)

How do you square these positions with the complaint that New Yorkers send more tax revenue to Washington than they get back?  He voted for those very policies.  He wants to raise taxes on the wealthy and then complains that New York sends more to Washington because we have wealthy people living in New York. Exactly where does Mr. Israel think those tax revenues are going? 

Solving the Problem

The problem may actually solve itself.  Because New York also has high state taxes, high property taxes, high city taxes, and high sales taxes, those wealthy folks might move to Texas or some other state.  Then Mr. Israel and his fellow progressives can finally be in the enviable position of begging Washington to send more money to a bankrupt New York than New York sends to Washington in tax revenue.

That’s my opinion. I’d like to know what you think.  Please add your comments below.