Freedom Line Blog

In an interview with CFIF, James Pinkerton, co-chair of RATE (Reforming America’s Taxes Equitably), Fox News contributor and former White House domestic policy adviser, discusses the need to lower the U.S. corporate tax rate to enable American companies to compete in the global marketplace and jumpstart U.S. economic and job growth.

Listen to the interview here.

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the dire need for meaningful tax reform – including lowering and simplifying the corporate tax rate – to make the U.S. more competitive in the global economy and put Americans back to work.

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.

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.

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.

Here’s a story that serves as a great response to people who say there’s no difference between the Tea Party and Occupy movements.  The Tea Party in Richmond, VA, got a business license, rally permits, and paid $10,000 for the privilege of exercising their First Amendment rights to speech and assembly.  The Occupy Richmond mob, on the other hand, squatted on public property for days without jumping through any of the legal hoops that ensure the health and safety of a civilized society.  When the Tea Party complained, the City of Richmond sent them an audit claiming the group failed to pay excise taxes for its events.

What hypocrisy!  Lawbreakers are allowed to devalue public goods like parks while law-abiding citizens who follow the rules are sent an extra bill to pick up the tab.  If local government officials aren’t careful they are going to teach all Americans that the rule of law only applies when you want it to.  If that’s the governing philosophy going forward, it’s time to renegotiate the social contract.

H/T: Fox News

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.

One way to think of a presidential campaign is as a nationally followed negotiation.  Each political party provides players who in turn generate ideas for public consumption.  Some proposals change the national consensus (e.g. Ronald Reagan’s tax cuts), while others fall flat (Walter Mondale’s “I will raise your taxes” pledge). 

If we look at what leading Republicans have proposed this cycle, it’s an impressive range of serious fiscal ideas.  Paul Ryan has his “Path to Prosperity” budget, Rick Santorum his tax cuts. Mitt Romney has 59 points to get America working, and Herman Cain has “9-9-9”.  Now, Ron Paul says we should cut $1 trillion dollars by eliminating entire federal cabinet departments and going back to 2006 funding levels for those that survive. 

My suspicion is that Paul’s plan will get the most criticism because it is the most radical.  But might it also be the most helpful in a sense, since it probably represents the least government that any major Republican will put his or her name to this year?  And if that’s the case, then isn’t Paul doing the electorate a favor by clearly articulating what the most radical version of reform would look like so voters can weigh the differences fully? 

If Quin, Tim, or Troy has anything to add, I’d like to read it.  Is Ron Paul’s plan bold, crazy, or something in between?

I’ve posted before on the difficulty that Texas Congressman Ron Paul’s presidential candidacy presents: while Paul is utterly at sea on foreign policy issues and too philosophically pure to countenance the type of compromise that real political progress requires, his libertarian beliefs also make him one of the best candidates in the Republican race on economic issues. Thankfully, Paul has no hope of being the nominee, but let’s hope that his “Restore America” economic plan, unveiled earlier today, has an influence on the GOP field. This is solid stuff, as the Wall Street Journal’s Washington Wire blog reports:

Mr. Paul does get specific when he calls for a 10% reduction in the federal work force, while pledging to limit his presidential salary to $39,336, which his campaign says is “approximately equal to the median personal income of the American worker.”  The current pay rate for commander in chief is $400,000 a year.

The Paul plan would also lower the corporate tax rate to 15% from 35%, though it is silent on personal income tax rates, which Mr. Paul would like to abolish. The congressman would end taxes on personal savings and extend “all Bush tax cuts…”

While promising to cut $1 trillion in spending during his first year, Mr. Paul would eliminate the Departments of Education, Commerce, Energy, Interior and Housing and Urban Development…

Mr. Paul would also push for the repeal of the new health-care law, last year’s Wall Street regulations law and the Sarbanes-Oxley Act, the 2002 corporate governance law passed in response to a number of corporate scandals, including Enron.

What’s most remarkable is that Paul — long considered an ideological outlier — is now in line with the majority of the Republican establishment (the movement was on their end, not his). With the exception of his call to abolish the federal income tax and a few of his cabinet department eliminations, these are all priorities that a Republican congress could support coming from a GOP president. That man won’t be Ron Paul … but let’s hope he’s read his plan.

Perhaps a head nod to Hot Shots fans will lessen the depressing (but by no means surprising) analysis from the Sacramento Bee’s Alan Autry on the dismal failure of Jerry Brown’s resurrected governorship:

The governor has signed nearly 745 bills, most aimed at yet more micromanagement of every aspect of our lives from Sacramento or at satisfying the interests of the organizations that funded his election. The Los Angeles Times said, “When the dust settled on Gov. Brown’s first legislative session in nearly three decades, no group had won more than organized labor.”

There you have it, the product of Brown’s first year in office: signing off on campaign payoff obligations, more Sacramento micromanagement, vetoing of bipartisan common sense reforms to increase government efficiency and effectiveness, procrastinating on regulatory reforms to help job creation, and signing a gut-and-amend bill that will ensure even more partisan gridlock – this from the man who ran on breaking the “morass of poisonous partisanship.”

The canary is dead and the coalmine is collapsing.  If you run a business and you have an option outside of California – take it.

So Warren Buffett, who falsely claims that the wealthiest Americans pay lower tax rates than their receptionists, finally got around to disclosing (some) of his tax information.

It turns out that he paid approximately $7 million in federal income taxes from a taxable income of approximately $40 million.  That’s approximately 17.5%, substantially more than the 12% rate paid by the middle quintile of taxpayers in America, according to the Tax Policy Center.  Interestingly, Buffett’s $40 million taxable income was also significantly smaller than his total $63 million in gross income, but he apparently didn’t bother to explain that $23 million gap.

On top of all that, Buffett also apparently didn’t explain why he took any deductions at all, or why he didn’t simply pay more to the federal government if he felt that he was undertaxed.  Nobody is stopping him from putting his money where his mouth is, after all.  So the evidence suggests that Buffett is not only incorrect, but hypocritical.

On yesterday’s Meet the Press, Rep. Paul Ryan (R-WI) demonstrated how to reframe quickly just about any debate on taxes or the economy into one that favors free markets and opportunities for everyone:

“I don’t worry about people who are already rich. I worry about getting people to become successful,” Ryan said Sunday on NBC’s “Meet the Press.” “Removing those barriers so that people who have never seen success before can actually become successful. … This redistribution idea of pinning people against each other does not work. It’s divisive, and it hardly gives us the kind of attitude we want for businesses to take risks so we can succeed in the future.”

Conservatives need more of this kind of rhetoric from leading politicians.  Let’s hope the eventual GOP nominee lifts Ryan’s lines to give an inspirational lift to what will surely be a withering attack on the failed Obama economy.

Warren Buffett has enjoyed a fair bit of celebrity over the last few weeks, acting as the iconic symbol of President Obama’s proposal for tax hikes by ubiquitously making it known that he hasn’t been debited enough by the feds. Buffett’s rhetorical trope of choice is to invoke the fact that he pays lower taxes than his secretary. That’s because most of Buffett’s income comes in the form of capital gains from his investment empire, which are taxed at 15 percent, not earned income like his assistant’s paycheck, which is likely taxed at a federal rate of either 25 percent or 28 percent, depending on whether her annual salary is above $83,600.

This sounds unjust at first blush — until you consider the fact that the capital gains tax is essentially double-dipping. That is, the money you have to invest is what’s left over after your earned income is taxed. In other words, the investment money on which Buffett is paying the cap gains tax was already skimmed by Washington when he earned it in the first place. If his assistant was investing, she’d be paying the same rate as Buffett. As pointed out by S.A. Miller in the New York Post:

Buffett actually was taxed twice on his investment income.

First, Buffett had to make the money he invested. Those earnings were taxed as corporate income, at about a 35-percent rate.

Then, Uncle Sam took another cut when Buffett invested the money and earned a profit. That’s when Buffett paid the 15 percent capital-gains tax rate.

All told, after combining corporate taxes and capital gains taxes, Buffett forked over about 45 percent of his earnings.

We’ll put Buffett in the same category as Albert Einstein and Noam Chomsky: experts in their field who should have never been given automatic credibility when it comes to politics.

NBC News reports a breath of fresh air for ailing U.S. manufacturing workers: Companies that once outsourced jobs to China are starting to bring some of them back.  Some of the reasons:

Labor costs are soaring by 40 percent a year, as migrant workers are becoming pickier, since there are more job opportunities at home. Also China’s one-child policy means there is no longer such a huge pool of young, dexterous workers. Bank lending is tightening and China’s currency is also appreciating by around 6 percent a year against the U.S. dollar, not quickly enough for US and European policymakers, but sufficient for factories on low margins to feel the pain.

Of course, slapping a new tax on USA-based job creators will stifle any trend towards manufacturing growth China’s growth might enable.

Mr. President, have pity on the working man…

In this week’s Freedom Minute, CFIF’s Renee Giachino analyzes President Obama’s “jobs plan,” which he outlined last week before a joint session of Congress.  While the plan has been advertised by the president as a bold new approach to job creation, Giachino says the details reveal that it is nothing more than “a new version of the same old song.”

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.

We’ve long known that Pat Sajak counts himself a resident of the political right. Now, thanks to this new video from Chuck Woolery, it looks like we may be able to go so far as to carve out a game show host exception to the otherwise ironclad rule of Hollywood leftism. No word yet on Alex Trebek, but don’t hold your breath … he’s Canadian.

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.

Byron York breaks down a CNN poll showing that Republican voters 65 and older (i.e. eligible to receive Social Security) favor Texas Governor Rick Perry for president more than any other GOP candidate.

This flies in the face of the current criticism of Perry’s widely discussed comment at last week’s debate that Social Security is a “Ponzi scheme.”  As far as I can tell, no one has yet shown that Perry is incorrect since in both Social Security and a Ponzi scheme the money from later investors (or taxpayers) goes to benefit earlier investors (or taxpayers).

If anything, Perry should be applauded for speaking the kind of tax-and-spend truths necessary to get a handle on the nation’s fiscal problems so we can begin to fix them.

Admittedly, there is one noticeable difference between the programs that Cato’s Michael Tanner explains perfectly:

Of course, Social Security and Ponzi schemes are not perfectly analogous. Ponzi, after all, had to rely on what people were willing to voluntarily invest with him. Once he couldn’t convince enough new investors to join his scheme, it collapsed. Social Security, on the other hand, can rely on the power of the government to tax. As the shrinking number of workers paying into the system makes it harder to continue to sustain benefits, the government can just force young people to pay even more into the system.

In fact, Social Security taxes have been raised some 40 times since the program began. The initial Social Security tax was 2 percent (split between the employer and employee), capped at $3,000 of earnings. That made for a maximum tax of $60. Today, the tax is 12.4 percent, capped at $106,800, for a maximum tax of $13,234. Even adjusting for inflation, that represents more than an 800 percent increase.

In addition, at least until the final collapse of his scheme, Ponzi was more or less obligated to pay his early investors what he promised them. With Social Security, on the other hand, Congress is always able to change or cut those benefits in order to keep the scheme going.

Our friends at Americans for Tax Reform compiled this helpful list of the 21 new or higher taxes President Barack Obama has signed into law since being sworn into office.  Of these, 20 come from ObamaCare.

Remember, try to laugh while you cry.