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Posts Tagged ‘taxes’
August 20th, 2012 at 9:00 am
Ramirez Cartoon: Important Campaign Issues
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

August 9th, 2012 at 5:38 pm
Donald Trump Provides Econ 101 Lesson … In 140 Characters or Less

Early this week, the liberal group Americans United for Change and the American Federation of State, County and Municipal Employees launched a $280,000 ad campaign targeting some Republicans who voted to extend all of the Bush tax cuts for all Americans.  The ad charges them with voting “to give people like Donald Trump a tax break worth $150,000 a year…” [Emphasis added]

In response, the Donald took to Twitter and fired back with the following:

To the geniuses at ‘Americans United for Change’: the more you tax me the less people I employ. Get it?

That’s the problem, Mr. Trump.  They don’t get it.

August 8th, 2012 at 1:36 pm
Bloomberg: Obama Can Win Sweeping Victory by Raising Everyone’s Taxes
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Yes, you read that right. New York City Mayor Michael Bloomberg (who, let’s be honest, is the most irritating politician in America) has an ingenious campaign strategy for Barack Obama that’s totally going to spellbind the room at his next cocktail and caviar soiree. From a phone interview Bloomberg gave to the Huffington Post:

“What Obama should do is say he’s going to veto any change to the end of the expiration of the Bush era tax cuts for everybody, and I feel very strongly about the everybody because you don’t want to split the country — that’s not what America is all about,” said Bloomberg.

“Obama would win this election going away if he’d stand up and say, ‘I’m gonna do this,’ and then turn to Republicans and say, ‘You know, you didn’t want any more revenues … I just outfoxed you. Now work with me on cutting expenses, and we’ll actually balance the budget in 10 years, and we’ll do it responsibly.'”

Bloomberg here reminds me a bit of Walter Mondale, who thought it was utter genius to declare in his 1984 acceptance speech at the Democratic Convention that he would raise taxes (Newt Gingrich, who was part of a Republican rapid response team during that convention, has noted that his group decided to pack up and go home after Mondale’s declaration, figuring they couldn’t damage him any worse than he had himself). Mondale’s theory was that both he and Reagan would end up hiking taxes, but that voters would give him points for being honest about it (for a thorough understanding of the truth of Reagan’s tax record, by the way, this Matt Lewis piece is indispensable). Later, after losing 49 states in the Electoral College, he probably thought better of that.

Here’s the foundational error in both cases: the tax argument is about substance, not style. Mondale thought he’d be rewarded for being honest about the fact that he was going to take more money away from the American people. But we don’t generally reward honesty when it’s a truthful admission of nefarious intent. Similarly, Bloomberg seems to think that “unity” is more important than tax rates, and that the American people will reward Obama if he makes clear that he’s going to put the screws to all of them with equal force. But, to paraphrase Obama from 2008, no one much cares what shade of lipstick you apply to a pig. The equal distribution of suffering is not a compelling campaign rationale (although it might be the most honest slogan Obama could devise).

There’s another irony at work here, of course: if Bloomberg thinks that tax rates should be harmonized in order to avoid “splitting the country,” the most logical step he could take would be to promote a flat tax. But that probably wouldn’t fly at the open-bar receptions of the Upper East Side.

August 1st, 2012 at 1:27 pm
Urgent Action Alert: Contact House to Prevent January 1 Taxmageddon and Support Comprehensive Tax Reform
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Reasonable people agree that the U.S. tax code is too bloated and complex.  We also agree that our businesses and economy cannot withstand the January 1, 2013 tax cliff catastrophe that Barack Obama and his Congressional accomplices are willing to allow in the name of class warfare.

Fortunately, there’s something you can do about it.

The House will vote soon on H.R. 8 and H.R. 6169, the “Job Protection and Recession Prevention Act” and the “Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012,” respectively.   In conjunction, stated simply, the two bills would:  block the scheduled January 1 tax increases by extending current income tax rates for one year;  maintain marriage penalty relief;  continue the $1,000 child credit;  continue the critical 15% top rate on dividends and capital gains;  maintain the estate tax at its 2011 and 2012 parameters (indexed for inflation);  provide for higher Section 179 small business expensing limits;  preserve education-related benefits;  provide a two-year AMT patch for 2012 and 2013;  and provide a clear pathway to comprehensive tax reform in 2013 by implementing expedited procedures to enable lawmakers in both the House and Senate to overcome technical hurdles that cause bills to languish during the legislative process.

For this to occur, however, members must hear from you.  Please call your representative immediately and demand their support for this critical legislation (members and contact information accessible via CFIF’s “Take Action” link here).

July 10th, 2012 at 3:05 pm
The Obama Administration’s Tax Increase Doublespeak
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With President Obama making a public pitch yesterday to raise taxes on millions of Americans (the boldest election-year tax increase pledge since Walter Mondale in 1984), the White House is facing a bit of a cognitive dissonance. After all, Obama signed legislation keeping all of the Bush tax cuts in place only 18 months ago. Good for that ailing economy but not this one? White House Press Secretary Jay Carney (whose podium may as well be mounted above a dunk tank these days) is having a hard time sorting it out. Here’s how Charlie Spiering reports it at the Washington Examiner‘s “Beltway Confidential” blog:

White House Press Secretary Jay Carney admitted [yesterday] that the extension of the Bush Tax cuts signed by President Obama in 2010 helped the United States economy at a critical time.

“At the time that you question there was a package of proposals that passed that helped the economy at a time it was very vulnerable, and that the president signed into law.” Carney admitted.

… When pressed by [CBS News’ Norah] O’Donnell to explain what had changed between now and 2010, Carney accused her of buying into a faulty argument.

“You’re buying into a red herring argument that just isn’t true,” he insisted.

Translation: “I don’t have a rejoinder ready that won’t get me laughed out of this room.” So the economy was vulnerable in December 2010, when Obama renewed the cuts and unemployment was at 9.8 percent, but we’re in the sunlit uplands of recovery now that unemployment is at 8.2 percent?

An increase in taxes leads to a decrease in economic activity. Period. Full stop.

There’s never really a good time for a tax increase. But there are few times that are this bad.

June 29th, 2012 at 6:28 am
Ramirez Cartoon: I’m A Big Fat Liar
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

June 13th, 2012 at 5:08 pm
When Police Care More About Revenue than Crime

Creative carpooling or rogue riders?

Today, the Wall Street Journal details how commuters over the George Washington Bridge between New Jersey and New York are picking up passengers at bus stops near the bridge in order to pay a reduced toll.

E-ZPass customers pay $9.50, while those paying cash must cough up $12.  (Each toll will rise another $3 by 2015.)

Price of the toll for cars carrying 3 or more passengers: $6 less.

Police officers working for the Port Authority of New York and New Jersey – the agency which owns and operates the bridge and six other crossings – are not amused.  They claim the practice of picking up strangers to pay a cheaper toll is dangerous to drivers.  To make the point, the cops hand out tickets for hundreds of dollars a pop.  (But they do not, mind you, patrol the bus stops for dangerous looking characters.)

Those on the receiving end have a different theory.

“In order to pad their pensions and lifestyle, they’re taking bread out of our children’s mouths,” says Ms. Javier.

According to the Journal, “With extensive overtime, some toll collectors make more than $100,000, while salaries for several officers working at the bridge topped $200,000 last year.”

Public employees gouging taxpayers to pad their compensation packages?

Fuggedaboutit.

June 12th, 2012 at 1:29 pm
California’s Perestroika Moment Near?

Joel Kotkin sees the groundwork being laid for a grand political restructuring (i.e. perestroika) in California now that each branch of the state’s ruling class is fracturing.

Environmentalists are split over Governor Jerry Brown’s decision to shield the multi-billion dollar high-speed rail train from California’s tough environmental review process.  Facebook’s disastrous IPO means liberals in Sacramento can’t bank on tech industry riches to finance tax hikes.  And with serious pension reform being enacted in San Jose and San Diego last week public sector unions are no longer guaranteed to win every election.

All that’s needed now is a Democratic leader to stand up and acknowledge that California’s system is broken and needs major restructuring.

Too bad Jerry Brown is no Mikhail Gorbachev.  The latter risked a revolt from his party to save his people from economic disaster.  Brown just announced a truce with the public employee unions to raise taxes even higher than he originally envisioned.

Nevertheless, Kotkin predicts that California is fast approaching a moment where the citizenry will be poised to reward “a coherent vision – from either Independents, centrist Democrats or Republicans – that can unite business, private sector workers and taxpayers around a fiscally prudent, pro-economic growth agenda.”

If that sounds impossible, remember that the Soviet Union fell without a shot being fired.  All that’s needed is the right man with the right message at the right moment.

May 31st, 2012 at 4:50 pm
More on Economic Uncertainty

In my column here today, both Sen. Tom Coburn and Sen. Jeff Sessions talked about the deleterious effect that policy uncertainty imposes on the overall economy. Now comes Gary Palmer of the Alabama Policy Institute to reinforce that point:

Members of Congress surely know that uncertainty has a negative effect on the economy. If businesses can’t predict next year’s tax rate, they are unlikely to invest in new equipment or expansion or to hire more workers. Individuals and families are less likely to spend as much for the same reasons.

Adding to the uncertainty is the explosion of new federal regulations on American businesses. Since January 2009, federal agencies have issued 106 major regulations that cost $46 billion per year. In 2009 and 2010 alone, federal agencies issued 7,076 rules…..

This is an important message for conservatives to stress.

May 30th, 2012 at 1:08 pm
Greek Liberals’ Economic Recovery Plan: Lie to the Rest of Europe
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It’s almost hackneyed at this point to evoke Greece as a warning sign to the rest of the Western World; as a promise of what’s in store should the artificial decadence of the welfare state completely strangle individual initiative in developed nations. Yet there’s a reason that California on the Aegean is always the cautionary tale of choice: when it comes to outright political absurdity, the birthplace of democracy is constantly outdoing itself. The most recent example — which has to be read to believed — comes courtesy of James Angelos reporting in the Wall Street Journal:

Greece’s radical left party has upended the country’s politics with an idea as simple as it is seductive: Athens can renege on the deals it made in exchange for a bailout, and still remain in the euro.

Greece’s future, and possibly that of Europe’s monetary union, may depend on how many Greeks buy into the idea.

The Coalition of the Radical Left, known as Syriza, is competing with Greece’s conservative New Democracy to become the biggest party in Parliament in June 17 elections that could send further shock waves through Europe …

Syriza leader Alexis Tsipras, a 37-year-old former Communist youth activist, promises that despite its dire financial straits, Greece can halt austerity programs, restore social spending and nevertheless continue to receive the payments from the euro zone and the International Monetary Fund that keep it from bankruptcy.

The repeated warnings to the contrary from Europe and the IMF are simply efforts to blackmail Greece into doing what they want it to do, Mr. Tsipras says.

A few facts about Greece to consider in light of Mr. Tsipras’s demagoguery. This is a nation where public employees have no compunction about taking monthly paychecks 14 times a year (yes, you read that right: 14) and where tax evasion is so widespread that it’s estimated that 30 percent of the national economy is in the black market. And now the proposed solution from one of the nation’s two major political parties is to welch on a deal with the rest of the continent?

Greece is experiencing an economic crisis, to be certain. But it looks increasingly like that is only a symptom of a deeper moral crisis.

May 19th, 2012 at 4:42 pm
VDH to Europe: Don’t Mess with Germany

Military historian Victor Davis Hanson trots out an underappreciated statistic that should give European opponents of Germany’s austerity measures a reason to reflect:

There is one general rule about the history of the modern state of Germany since its inception in 1871: Anytime Germany has been both unified and isolated, armed conflict has followed.

The Greeks can’t form a government to implement Germany’s austerity measures, and are rioting rather than reforming.  Spain is teetering on the edge of a shredded social contract where more than 40% of young adults can’t find work.  France just elected a Socialist president who claims that “My real enemy is the world of finance.”

And there sits Germany with the most money on the Continent, vilified for insisting on the same frugality from its debtors.

While it’s almost impossible to think that Germany would resort to military force to press its claims, it is within the realm of possibility to see it pulling back from the European Union in a way that cuts its losses and leaves the big spending countries to defaults and devaluations.

If that happens, expect to hear at least a few Europeans wishing Germany had just annexed their country.  At least then they would be a part of a more stable economy.

May 18th, 2012 at 7:56 pm
Ryan: Obama Practicing ‘Lost Decade Economics’

When asked by the Washington Examiner about the policy choices facing American voters this election, Paul Ryan painted a picture of stark contrasts, beginning with the Obama Administration’s high-tax, high-spending approach:

“Those kinds of packages won’t succeed in preventing a debt crisis. We’ll pass one round of austerity, that won’t work, then the bond markets will get us, then we’ll do another round and another round, just like what Europe is going through now. We will have chosen to go on the path to decline and we’ll have a lost decade,” Ryan explained. “We see the president and his party are basically practicing lost decade economics,” he finished.

Moving to the Republican alternative, Ryan explained, “We think we have one more great chance, if the elections go the right way, to turn this thing around once and for all. And address it, the right way, up front. With real entitlement reform, restructuring these programs. Real tax reform to get back to growth. We want growth we want opportunity, we want reform, so that we fix this the American way.”

In terms of jobs and economic opportunity, it certainly has been a lost half-decade under President Obama.  Doubling down on more of the same for another presidential term would likely consign an entire generation of workers to a lifetime earnings amount much lower than their parents.

President Obama may be willing to tolerate being the first leader to see a generation of kids live below their parents’ standard of living since World War II.  (What else explains his campaign’s “Life of Julia” foolishness?)  However, my suspicion is that a majority of voters are not interested in either Lost Decade Economics or much less a lost generation of opportunity.

Good sound bites convey truth in a memorable way.  Kudos to Ryan for correctly identifying the likely result of Obama’s wasteful policies.

April 18th, 2012 at 9:10 am
A Federal Budget That Ignores the Constitution
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Writing in the Washington Times, Richard Rahn — Senior Fellow at the Cato Institute and Chairman of the Institute for Global Economic Growth — puts the current state of federal spending in rather horrid relief:

The federal government is spending about 24 percent of gross domestic product (GDP). Most of it goes for Social Security, Medicare, Medicaid and other entitlement programs. The “discretionary” portion of the budget equals about 9 percent of GDP, with about half going for defense. Until 1930, the federal government normally spent less than 4 percent of GDP, except for the periods during World War I and the Civil War. The Constitution gives the federal government very few tasks for which it is required to spend money — the big item being the “common defense.” Again, up until 1930, the courts forced the federal government to live largely within the confines of the Constitution. Deducting defense spending from the federal budgets before 1930 shows that the federal government lived perfectly well on 2 percent to 3 percent of GDP for the first 140 years of the republic.

What all of this means is that approximately three-quarters of all federal government spending is not required by — and often is contrary to — the Constitution.

Conventional wisdom in Washington increasingly holds that those who wish to see the federal government pare back its expenditures rather than increase the tax burden on the American people are delusional, if not antediluvian. Yet for the majority of American history, the federal government was only a fraction of what it is today — and the Republic did quite well for itself.

Are we really to believe today that spending cuts that would still leave the federal government’s share of GDP several multiples higher than it was less than a century ago mark some civilizational rot? Because by all indicators (Europe comes to mind), the failure to prune seems to be the more perilous course.

April 17th, 2012 at 10:39 am
Ramirez Cartoon: Reagan And Obama
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

April 12th, 2012 at 1:40 pm
As California Bleeds Money and Citizens, Unions Call for Higher Taxes
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California, as has become universally known in recent years, has become a fiscal and political basket case. Take a look at the state as it stands in the spring of 2012: it has a $9.2 billion budget deficit, approximately half a trillion dollars in unfunded public pension liabilities, and a business environment ranked worst in the nation by Chief Executive magazine (in 2010, the periodical referred to the state as “the Venezuela of North America”).

Part of the problem, of course, is the liberal-labor union coalition that dominates Golden State politics, in which the most nefarious force is the California Teachers Association, the hulking union that overwhelmingly outspends any other special interest in the state. Now, in the midst of this economic crisis, the CTA is getting behind Governor Jerry Brown’s proposal to increase state sales and income taxes, a move that would only hasten the state’s decline.

I tackle the issue in my new column for City Journal California. From the coda:

CTA officials contend that Brown’s proposal—an extra quarter of a cent added to the sales tax and up to three extra percentage points on the state income tax, depending on income levels—represents only a modest increase, a cost that the Golden State’s economy can easily absorb. But the margin of the increases is less significant than the final rates they will produce. If Brown’s package passes, California would have both the highest state sales tax in the nation and the highest top income-tax rate. That will only continue to drive economic activity out of the state, a trend that recent IRS data shows cost California $27 billion in tax revenue from 1999 to 2009.

The lesson should be clear: the kind of punitive taxation that Brown’s initiative promotes is precisely what depletes the tax base necessary to finance California’s public schools and pay the salaries of CTA members. Raise rates and you only dim the prospects for public education further.

In a 2009 piece for National Affairs, I noted that, “from 2004 to 2007 more people left California for Texas and Oklahoma than came west from those states to escape the Dust Bowl in the 1930s.” Yet in the intervening years California’s political class has done nothing to improve conditions for those who might be tempted to leave the beauty and cultural dynamism of the Golden State behind for more economically palatable environs. One wonders exactly what natural disaster they’ll have to approximate before the lesson sinks in.

April 12th, 2012 at 9:20 am
Ramirez Cartoon – The “Buffet Rule” Distraction
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

March 20th, 2012 at 1:46 pm
Real Job Creation is When Entrepreneurs Become Employers

The Kauffman Foundation for Entrepreneurship’s newest report on business creation rates across the United States offers some intriguing insights for policymakers.

According to Robert Litan, the foundation’s vice president of research and policy, “The Great Recession has pushed many individuals into business ownership due to high unemployment rates.”  “However, economic uncertainty likely has made them more cautious, and they prefer to start sole proprietorships rather than more costly employer firms.  This ‘jobless entrepreneurship’ trend negatively effects job creation and the larger economic recovery.”

No doubt, regulatory barriers and confiscatory rates of taxation are causing start-ups to make the same kind of cost-saving hiring decisions as larger, more established firms.  Across nearly every industry these days companies are hiring people to independent contracts rather than salaries, converting many ‘company men’ into standalone consultants.

While becoming an accidental entrepreneur may not be the first career choice of many people – and according to the Kauffman study the college educated cohort saw the steepest decline in their willingness to start their own business – the movement of millions of people into the ranks of the self-employed could have huge consequences for policymakers.

For starters, this army of new business owners is much more likely to demand rollbacks of costly regulations and profit-killing tax rates on corporations.  Your perspective changes when you go from receiving a paycheck to making a payroll.

Remember, the people that lose a job and start a business are the people whom the government should want to help the most.  They aren’t looking for a hand-out or even a hand-up, just space to make a contribution that others in the free market will reward.

This constituency is a natural growth area for the conservative movement.

The best part about the Kauffman report is that entrepreneurial activity can be found in important electoral pockets.  Consider:

  • Entrepreneurial growth was highest among 45- to 54-year-olds, rising from 0.35 percent in 2010 to 0.37 in 2011
  • The top five highest entrepreneurial rates among the fifty states were:

(1) Arizona with 520 per 100,000 adults creating businesses each month during 2011;

(2) Texas with 440 per 100,000 adults;

(3) California with 440 per 100,000 adults;

(4) Colorado with 420 per 100,000 adults; and

(5) Alaska with 410 businesses started per 100,000 adults

The key to our economic recovery rests on policymakers understanding that Americans want to work.  I submit that any politician willing to make the necessary changes to tax and regulatory rules so that start-up owners can become employers as well as entrepreneurs will find a loyal constituency, and one well worth fighting for.

March 16th, 2012 at 12:43 pm
Former CA U.S. Senate Candidate Moves to Texas

Former California Assemblyman and 2010 Republican U.S. Senate candidate Chuck DeVore explains why he gave up on the Golden State and moved to Texas in an article for National Review.

Here’s just one example of the differences between the states:

In his State-of-the-State address this January, California governor Jerry Brown said, “Contrary to those declinists who sing of Texas and bemoan our woes, California is still the land of dreams. . . . It’s the place where Apple . . . and countless other creative companies all began.”

Fast forward to March: Apple announced it was building a $304 million campus in Austin with plans to hire 3,600 people to staff it, more than doubling its Texas workforce.

California may be dreaming, but Texas is working.

March 15th, 2012 at 12:47 pm
Putting a Face to the Ruin of the Death Tax
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Conservatives could probably learn a thing or two from Saul Alinsky. Bear with me here. While Alinsky may have promoted thuggish means in the service of repugnant ends, it doesn’t mean the man didn’t have some genuine insights into political strategy that — applied with a dose of morality — could help the right.

One of Alinsky’s tactics (to be specific, it’s actually part of the 11th rule for radicals) is to personalize attacks on your opposition (i.e., go after a specific individual rather than an abstract entity). This also works, however, in reverse. When you’re trying to portray the suffering caused by big government, use a human interest example rather than generically inveighing against state excesses.

My friends over at the Beacon Center of Tennessee (I worked there back when it was the Tennessee Center for Policy Research) have put this principle to great use in a new video that makes both the moral and economic case for abolishing the Volunteer State’s death tax. In the story of Roger Blackwood, a 77 year old Tennessee farmer whose family stands to lose the products of his life’s work because of the estate tax, they’ve found a compelling narrative that underscores an important point: the estate tax amounts to the outright theft of a family’s legacy. This is, by my lights, utterly brilliant:

February 21st, 2012 at 7:49 pm
Mitt Romney, Crypto-Keynesian
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Mitt Romney has at least one thing in common with every other member of the Republican presidential field: his worst enemy is Mitt Romney.

At a speech in Shelby Township, Michigan earlier today Romney’s answer to a question about the Simpson-Bowles fiscal commision ended up in this intellectual cul-de-sac:

If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy. So you have to, at the same time, create pro-growth tax policies.

Romney, of course, is correct about the broader question of tax policy, but his understanding of public spending makes him sound like a logical candidate to succeed Timothy Geithner as President Obama’s Secretary of the Treasury.

Federal spending doesn’t generate economic growth — all it does is repurpose money from the private sector. In some cases where government is performing essential functions, such as law enforcement or national defense, that’s a necessary sacrifice. In virtually all others — from green energy boondoggles to stimulus giveaways — it’s a net drain on the economy. And, as Milton Friedman would remind Romney, the rate of spending is the effective rate of taxation.

Over the past few weeks, a wide variety of conservative pundits have counseled Romney to more aggressively address his “authenticity” problem, showing the public a little more of his true personality. But as today’s little slip-up reveals, the only candidate less palatable to conservatives than the phony Romney is his authentic counterpart.