Corporations Don’t Pay Taxes… Part Deux

Some good discussions happening yesterday around this subject. I wasn’t as able to be a part of the conversation as I would have liked, so I am going to address some of the comments from others here. I will copy the comments from yesterday into the comments today in order to answer those I wanted to answer. I figured starting with a fresh thread would be a good thing as well. By the end of the weekend, it might have been a bit overwhelming to have to scroll through 500 comments to find if someone answered you. So the article from yesterday still stands, with a few additions today! I did, however, answer many posts in yesterday’s article late last night so don’t ignore that thread now that it has re-started here. The major point that I was making in the article seems to have slipped past a few folks, as the discussion took a decisive turn towards moral justification of taxes on the wealthy being raised. The point of the article, boys and girls, is that ECONOMICALLY the idea of increasing the taxes on the wealthy and corporations is a bad idea.

I think that there were a few different folks that were catching on and correcting some of the early commenters, such as the4freedoms, who ignored the premise of the article and went direct to a moral claim based on emotional terms. I recall PeterB pointing this out to them. But I think it was D13 who nailed it first that the comments were not following the discussion:

USW…..Unless I am missing the point….(that is not unusual for me)…..it seems that everyone is still going to the basic liberal argument and not comprehending what you wrote….or perhaps I have missed the turn….

Your point is that it matters not how much the gov takes….it is still going to impact the lower tiered wage earner. It is going to impact them to the point that they become more and more dependent upon the government.

I was disappointed to see that the good Colonel was correct. What was happening was a fall right back into the emotional and moral arguments against the wealthy or against the poor getting what they didn’t earn. And that is not what I want to get answers on. Moral and emotional arguments cannot be won, my friends. Those on the left believe that a certain level of income distribution is the morally correct thing to do. Those who fall in my camp believe that this isn’t the case. That is not going to change. It is a worthy discussion to have, but it isn’t what I am trying to get at.

The point, in no uncertain terms is this:

The practice of increasing the tax burden on the wealthy and corporations in America DOES NOT make things better for the middle class and lower class. It hurts them far more than it helps them. Because of all the reasons that I talked about in the article, the long term impact on the economy is a negative one, not a positive one. From a purely economic standpoint, I have never had someone on the left who advocates increasing the tax burden on the wealthy and corporations show me anything that disproves what I have offered. THAT is what I am looking for.

If you increase the tax on corporations, they either raise prices, cut labor, close up shop or move to another country. The wealthy are business owners. It isn’t a gift they got at birth (for the vast majority of them). So when you say you are taxing the wealthy you are taxing their businesses. Put all of that together and what you get is the FACT that increasing the tax burden on the corporations and wealthy causes more harm to the poor than the income redistribution does good for them. As an added benefit, there is the bonus stifling of innovation and expansion to go along with the harm to the poor.

Forget the emotional appeals. Forget the moral claims. ECONOMICALLY, increasing the tax burden on corporations and the wealthy has an overall negative effect on both the economy and the lives of the poor in America.

Unless you can prove that the economic impact is not negative overall, then the moral claim that you are helping the poor to survive is moot. You are not being moral and helping them, you are being immoral and hurting them!

THIS is the point of the article, and one that no one on the left even attempted to address. What happened was that you ignored what I presented and attempted to make a moral argument for helping the poor. That is what I get every time. So let’s try this again with a different spin…. Let’s say that the following statements are true:

  1. We are morally obligated to help those who are poor to survive and become self sufficient.
  2. It is completely moral to tax in order to do this. It would also be completely moral to tax the wealthy at a much higher rate in order to improve the living conditions for the less fortunate among us.

Now you know that I don’t think that either of those statements are true. I just want to make sure that I said that. But let’s assume that they are. Let’s assume that I accept them as true, and so does every single person in the United States. You no longer have to convince any of us that it is morally right to help the poor survive. It is our obligation to improve their lives and give them a helping hand towards self-sufficiency.

Now what you must do is make a case for why increasing the tax burden on the wealthy is ECONOMICALLY the right move to make in order to accomplish statement #1. I have presented my case for why ECONOMICALLY that strategy will hurt the poor more than it will help them. Prove me wrong.

Fail to do so, and what happens is you lose the moral argument at the same time. It can’t be moral if it hurts them more than it helps them. It would make you even more immoral than me!

Good luck.

Comments

  1. Mathius said:

    April 9, 2010 at 10:48 am e

    Perhaps it’s not efficient, but it does raise the standard of living for the poorest and most vulnerable among us.
    Adding, if you take government out of the equation, you will not have good, high paying job creation, you will have lots of very, very low paying jobs with no benefits. The poor will find themselves in work-houses spending 14 hours a day in unsafe conditions and with breaks to earn $15 a day. Then the poor are born into the system and, because there are no public schools, they go to work at 11 years old, and they can’t escape. Now, you’ve got a caste system in America.

    Perhaps there’s a middle ground?

    • USWeapon says:

      Matt,

      You make that first statement, “Perhaps it’s not efficient, but it does raise the standard of living for the poorest and most vulnerable among us,” despite my presenting a viable argument that the statement that you are making is absolutely incorrect. What I have shown above is that it does NOT raise the standard of living for the poorest and most vulnerable among us. In a very short-sighted way it does, but when viewed from the economic aspect, it does the opposite! It incrementally lowers the standard of living for EVERYONE, including the poorest and most vulnerable.

      I don’t think that your version of what the future would hold is accurate at all. You assume no rules, no regulations. I don’t advocate no government. I advocate a much smaller one that allows the market to prosper while doing the VERY FEW THINGS that make the environment both safe and the opposite from what you paint a picture of.

      What you forget is that before the massive influx of government, $15 a day would have made you a wealthy man! $15 a day makes you a very poor man today…. because of government.

      I know that it is a difficult shift to think of a world where government is not the answer, but I implore you to consider it. Imagine instead of public schools, there are private schools that are BETTER! Instead of massive government bureaucracy you have that wealth put back into the economy to create more jobs, more opportunities, and BETTER SCHOOLS!

      What we have now is a caste system in America. Created by and enforced by…. government. The average man wants everyone around him to succeed. Government wants a small minority to succeed and the rest to be dependent on them. They are the creators of the caste system we have. For 100 years they have told you they have the plan for things to improve for the poorest and most vulnerable among us. And for 100 years, their situation has gotten nothing but worse. It is time to stop believing they are here to help and find a better solution.

    • In the beginning there were the big robber barons taking advantage of the workers. Then came the unions, where workers organized to resist. Along came government and TRIED TO SQUASH THE UNIONS WITH TROOPS. The workers persevered and proved they were more powerful than the business owner. So the government changed sides and supported unions and started passing a bunch of pro-worker laws. In this way they managed to get into bed with both groups, thereby managing to increase their power and continue to screw the workers over in the end.

      Without government, the unions would have prevailed, then evaporated, only to return when needed.

      Furthermore, if you believe that government is the source of high wage job creation, YOU HAVE NO CLUE HOW BUSINESS WORKS. They are, in fact, by draining private investment and R&D, increasing the level of low wage jobs. Also, small businesses are the source of most job creation, and they are the least likely to pay large numbers of unskilled workers crappy pay. Every statistic on employment screams against your statement. How do you justify your statement? What are you basing it on if history and modern statistics say the opposite?

    • Steve in Allen, TX says:

      Well, there are a few fallacies in this argument. First of all, the whole thing begs the question (you need supporting evidence beyond the fact that you say so), and is a text-book example of a hasty generalization. You make the supposition that if you increase taxes it will be directly passed down to customers or employees; however, other factors such as elasticity, labor requirements, competition, and many others will have opposing effects. Also, it is rather fallacious to believe that those are the only options (false dilemna).

      Business owner, with few exceptions, derive their revenue from workers which they compensate at a rate less than the value of the labor they produce. Now, this disparity is expected since, if the business owner compensated the employee(s) more than the derived value, the costs would exceed profits. But, this leads to my question “What is a reasonable mark-up?” I contend that if labor compensation was higher (without exceeding the derived value), then fewer people would need the social programs provided by the government. Now this is not to say that everyone should get double their pay, or that raising wages would end all need for social programs. However, if we look at many companies financial records, as I have, you will see a disparity in the pay. Usually, a small group of people (mostly executives) derive a much larger work/pay benefit than their peers. One could argue that this is because of their expertise; however, I have never seen an executive that could operate exclusively on his/her own. They all need supporting staff at a minimum; and, in many cases, the staff and other employees provide a much greater value to the bottom line than the executives and management. Thus, I would like to see a “fair-value labor compensation standard” regulation imposed, which would fine or tax companies which pay a group of 1% (or less) of the employee more than ?? times (the ratio is subject to discussion – I like 5x) greater than the average of the other employees. Couple this with a tariff on goods imported from countries that do not have a “FVLCS”, and a corporate flat tax pegged at .5% less than the OECD average, and we could remain competitive.

      One argument you used, that I’ve heard frequently, is that “businesses will leave if we do _____”. While I agree that some businesses may decide to leave eventually, I have yet to see any of them do it because of the tax rate, or legal issues. On the contrary, though, businesses outsource work already, which they are entitled to do if they see fit. However, where it bothers me is when municipalities and sometimes state governments have offered tax abatements to businesses to encourage them to open their office in that region. The implied logic being that if they open an office in that region, then they will need people to work there, which has numerous positive economic effects. However, when companies outsource work, the municipality/state should rescind the tax abatements; and, in some cases, I believe the municipality/state may have grounds for a breach of contract suit. As for the companies that then decide to leave, I say good riddance. Go seek the security and prosperity we have here in another country, and don’t be surprised if someone else pops up here to fill the hole – in fact, count on it. Oh, and don’t be further surprised if you get hit with a tariff trying to bring your goods back in, since this is still the strongest economy in the world.

      Now for the bad news, and secretly the one I believe scares the hell out of affluent people that understand the consequences. If we implement a FVLCS, impose a flat tax on businesses, and rescind tax abatements, this will create a larger number of people with discretionary income and local governments that are sufficiently funded. The net effect will be that more people drive nice cars, boats, own better houses, etc. Thus, the affluent won’t be as special, and frankly I don’t give a shit.

      Throughout all of human history a small minority have exploited others to extend their wealth, usually using simple-minded, self-serving, hedonist/objectivist reasoning. This is the text-book definition of averice, and it’s the real plague of mankind. In fact, for all of you real and faux Christians, God/Jesus felt that it was so much of a problem that it is written about in many places in the Bible – both old and new testament. In fact, in the bible, I believe it is condemned more than any other vice. The problem has gotten to the point in our country that, instead of solving the root problem, a few well intentioned folks have forced our government to close the gap by redistributing the wealth. This makes since if you consider that economically speaking the affluent are hoarding the monetary supply. Why are 10% entitled to 80% of the wealth? Do they perform some kind of miracle work? No, they are shrewd business people who have stepped on others without compunction. So I feel it’s time for the majority (yeah, I’m a 95%er) to stand up against the minority and say, “That’s enough!!” Because this is a capitalist society, money is like water. If people dam up the flow (that’s the V in the Fisher equation), then the rest of the population will suffer. What pisses me off is that the affluent then have the audacity to bitch about people wanting enough to survive. Most people only want to live a modestly comfortable life; but, in a democracy, when a person is excessively exploited they will turn to the government for protection.

      On a positive note, I would like to point out that in a global economy (such as we have), the value of the money is derived by the solvency of the banks, the national GDP, and financial status of the government. This is the net effect of the Bretton Woods system. What this means is that if we raise income levels (FVLCS), encourage responsible lending (reduce sub-prime lending), reduce debt to income ratios, instill reasonable regulation on businesses (especially in the financial sector), and our government reduces the deficit, then our money will increase in value. Thus making us all collectively richer, and re-instating the US as a global super-power.

      • Steve in Allen, TX says:

        Damn, the quote didn’t work… The first part is directly related to the statement:

        If you increase the tax on corporations, they either raise prices, cut labor, close up shop or move to another country. The wealthy are business owners. It isn’t a gift they got at birth (for the vast majority of them). So when you say you are taxing the wealthy you are taxing their businesses. Put all of that together and what you get is the FACT that increasing the tax burden on the corporations and wealthy causes more harm to the poor than the income redistribution does good for them. As an added benefit, there is the bonus stifling of innovation and expansion to go along with the harm to the poor.

      • You make the supposition that if you increase taxes it will be directly passed down to customers or employees; however, other factors such as elasticity, labor requirements, competition, and many others will have opposing effects.

        All these things are already accounted for inside the current prices of goods.

        Just like fuel costs – which fundamentally rest at the core of every pricing scheme because in a high-division-of-labor economy, shipping is fundamental as parts and pieces are sent back and forth across the country to suppliers as they coagulate their end-product – this cost ‘rises up’ like the tide the whole underlying structure, and then multiplies it at every transport.

        Taxes are the same way, since it is fundamentally placed wholly across the economic engines.

        Business owner, with few exceptions, derive their revenue from workers which they compensate at a rate less than the value of the labor they produce.

        Not true at all.

        The labor is rewarded at precisely the agreed value between both parties no more or less.

        If it was too much, the worker would not be hired.

        If it was too little, the worker would not take the job.

        Labor is an economic good, no different than any other economic good. It follows exactly the same laws of economics like any other economic good in the market.

        Business owners do not evaluate their revenue as a percentage against labor – they calculate the profit and loss from all cost inputs (supplies, including the cost of labor)

        Now, this disparity is expected since, if the business owner compensated the employee(s) more than the derived value, the costs would exceed profits.

        But that is not how his goods are priced.

        His goods are priced based on what the market will bear.

        The market makes its own calculations of value independent of the seller.

        If the price of the good is less than the value as perceived by the consumer, a sale is made. If not, a sale is lost.

        But, this leads to my question “What is a reasonable mark-up?”

        The price is, ultimately, determined by the marketplace.
        Whatever “market up” ends up, it is what it is.

        “Percentage on cost” pricing is a quick and inarticulate model.

        I contend that if labor compensation was higher (without exceeding the derived value), then fewer people would need the social programs provided by the government.

        If your theory was correct, then why not pay everyone a million dollars a year?

        By your theory, there would be no poverty, everyone would drive Ferrari’s, and live in mansions.

        Yet, any person who has even a spark of economic understanding knows this would not happen.

        Thus, the basics of your economic theory is incorrect.

        Now this is not to say that everyone should get double their pay, or that raising wages would end all need for social programs.

        How does simply paying more than the value of an economic good improve the economy?

        Use apples – if you were force to pay $10 an apple instead of $1, do you think you would improve the lot of apple growers, and the economy?

        No – most apple growers would go bankrupt since people would STOP eating apples. Few apples would be sold – resulting in a huge, uneaten surplus.

        This applies precisely to labor as well – artifically increasing the price of labor will cause massive unemploymentthe exact backwards of your stated aim here.

        However, if we look at many companies financial records, as I have, you will see a disparity in the pay.

        If you look at the jobs, you’ll also find an array of different jobs and responsibilities too.

        Usually, a small group of people (mostly executives) derive a much larger work/pay benefit than their peers. One could argue that this is because of their expertise; however, I have never seen an executive that could operate exclusively on his/her own.

        No.

        One argues because of supply and demand.

        Nearly everyone can sweep a broom.

        Only a handful can understand the scope and depth of an corporate problem, make a difficult choice and select the one that makes (or breaks) a company.

        The former is paid a low-hourly rate.

        The latter makes one key decision in a year, and earns a $1 million.

        Labor – all labor – is an economic good of supply and demand.

        They all need supporting staff at a minimum; and, in many cases, the staff and other employees provide a much greater value to the bottom line than the executives and management.

        Most wage earners make this calculation.

        I want my money NOW. I do not want to wait until “the ship comes in”

        So they are paid out hourly, or bi-weekly.

        Those that say “I’ll wait for the ship” reap the greater benefit – a percentage on profit – or nothing.

        You hold that value is something objective – that is, you standing on the sidelines can determine the value of goods for everyone flawlessly.

        But you cannot even do that for anyone but yourself

        Your economic theory requires objective value – but humans value goods and services subjectively – I do not necessarily value anything you do or something of value at the same level.

        Thus, any argument of objective value fails, since all value is human, and personal.

        Thus, I would like to see a “fair-value labor compensation standard” regulation imposed,

        Have you not enough examples of a Centralized Command economies in the world?

        Does not Soviet Russia and North Korea dent your understanding?

        One argument you used, that I’ve heard frequently, is that “businesses will leave if we do _____”. While I agree that some businesses may decide to leave eventually, I have yet to see any of them do it because of the tax rate, or legal issues.

        However, where it bothers me is when municipalities and sometimes state governments have offered tax abatements to businesses to encourage them to open their office in that region.

        What is bothersome is that such actions are treated like a corporate charity – when it is really not getting your money stolen

        The more this is done, the better.

        The implied logic being that if they open an office in that region, then they will need people to work there, which has numerous positive economic effects. However, when companies outsource work, the municipality/state should rescind the tax abatements; and, in some cases, I believe the municipality/state may have grounds for a breach of contract suit.

        What is the contract?

        And often, the governments do rescind, and the company leaves.

        As for the companies that then decide to leave, I say good riddance. Go seek the security and prosperity we have here in another country, and don’t be surprised if someone else pops up here to fill the hole – in fact, count on it.

        If they could just pop up they would have already as competition.

        But they do not.

        When a company leaves these shores, there is no replacement === look at Detroit or Pittsburgh.

        Your economic theory fails to explain these examples.

        The same economic lunacy that motivated the company to leave remains steadfast and in place. Thus, who in their right mind would try to create a company when an established firm could not make a go of it because of these lunatic economic ideas.

        Oh, and don’t be further surprised if you get hit with a tariff trying to bring your goods back in, since this is still the strongest economy in the world.

        Indeed

        To show “whose boss” you advocate punishing the American consumer with higher prices!

        That’ll show those darn foreign workers!

        Now for the bad news, and secretly the one I believe scares the hell out of affluent people that understand the consequences….. Thus, the affluent won’t be as special, and frankly I don’t give a shit.

        You seem to think that they care about your opinion of style and class.

        Believe me, they are not copycatting YOU, you are copycatting them in your style, dress, decor, car, etc.

        . Why are 10% entitled to 80% of the wealth?

        Because they earn more than they consume.

        You consume more than you earn.

        Do the math.

        Do they perform some kind of miracle work?
        No,

        Correct.

        Everything they do, you can do – and you probably will receive pretty the much the same outcomes as they do.

        But you are not willing to do what they do. So you do not get what they get.

        You are only willing to do what you are doing. So you get t what you are getting now.

        If this does not satisfy you, do something different.

        If this does satisfy you, keep it up.

        Because this is a capitalist society, money is like water.

        No, in all economic systems, money is an economic good.

        If you believe money is water, then you will support economic theories that will turn money into worthlessness.

        If people dam up the flow (that’s the V in the Fisher equation),

        I recognized those roots to your economics.

        Fisher was a crackpot. He was not an economist. His economic theories fail to explain any economic circumstance or consequence.

        If you hang your hat on Fisher, you will surly hang.

        the value of the money is derived by the solvency of the banks, the national GDP, and financial status of the government.

        The value of money – like the value of any economic good – is wholly determined by the market.

        Banks, government, etc. all can attempt to manipulate that economic good – however, the market always corrects them.

        Often, this correction is painful to the People.

  2. Janet said:

    April 9, 2010 at 10:42 am e

    D13 said:

    All this rhetoric about those who have more should pay more simply because they have more is nothing more than hyperbole and smoke screen. Stifling incentive by greater taxes will simply create a much larger class of poor and eventually eliminate the middle class to where you have the banana republics of only a wealthy class that will control everything and a poor class that will control nothing.

    Thank you, D13. Finally! – someone brought this back to the point and away from the billiard ball-bouncing between various regulatory concretes. Leftists love when this invariably happens. USWeapon, you did a beautiful job of laying out the economic case. But this “billiard ball problem” will always happen as long as you don’t make the the full *moral* case for capitalism.
    Individual rights per our constitution are the bedrock for our economic freedom. Like love and marriage, you can’t have one without the other. Notice above that the opposing view *assumes* altruistic collectivism as the proper moral premise. Without your giving the proper moral argument, you inadvertently concede him the moral high ground. Now you know the answer as to why you can’t get through to these people when you lay out the reasonable economic case alone. They dismiss you as a moral hypocrite (by their moral terms).

    Economically, an across the board flat tax percentage would solve the problem of a “fair percentage of tax payments” for every American.

    But again, the arguments to be desperately made today can be found in two articles, “Individual Rights” and “The Nature of Government” by Ayn Rand. Read those, then speak.

    If you don’t want to just complain about the liberal Left, then be willing to say, “No more sacrifices in the name of the collective.” Be willing to demand that the redistributionist state be dismantled through repeal and reform and that protection of your individual rights to life, liberty and pursuit of happiness be restored.

    • USWeapon says:

      Janet,

      USWeapon, you did a beautiful job of laying out the economic case. But this “billiard ball problem” will always happen as long as you don’t make the the full *moral* case for capitalism.

      I completely 100% agree with you Janet. But what I think you are missing is that you are seeing step one. You are jumping immediately to cooking the steak without first turning on the grill. There is absolutely a need for the moral case to be made for capitalism. And I will always endeavor to make it. However, the first step is to disprove the morality of the case for progressivism. THAT is the point of this article. The left claims that their plan, whether you want to call it progressive, socialist, communist, fascist, or whatever, is the moral path to take. When you show that their path has an ultimately negative consequence rather than a positive one, what you have done is prove that their path is not moral!

      Until you do that, you are arguing your morals against their morals. That is a never-ending and futile argument. And one that you will never win. Until they are forced to see that their plan does more harm than good, they will not even begin to consider that capitalism is the more moral argument. Does that make sense?

      As for the two articles you mentioned from Rand, I have read them. I suggest that everyone should, and I am working on incorporating them into articles here on the site.

      Thanks for your comments!

      USW

  3. CyndiP said:

    April 9, 2010 at 1:43 pm e

    Well said, PeterB,

    But I wonder WHY so many middle class Americans STILL don’t see what’s being done to them. From what I can tell, there is a sizable portion who supports the regime. I suspect these individuals may not be capable of thinking for themselves and that as long as they have food, water and are comfortable, they really don’t care.

    • USWeapon says:

      Cyndi,

      I don’t think they are incapable of thinking for themselves. There are tons of people on the left who are very intelligent and very able to digest the facts. I think the problem is that there is a vast lack of facts being presented to most people in America. The media feeds them biased facts, one way or the other, so the people don’t trust those facts. Our leaders present us not with facts, but sound bytes based on emotion and a claim to morality. And the majority of Americans do not have time to go and sort them out for themselves.

      Take the health care bill. Those on this site are taking the time to learn about what is in that 2400 page monster. But even I, who am more than passionate about politics, struggle to find time to read and decipher what is in this one bill out of 1000 they will pass this year. Who can keep up. The middle class in America is not dumb or mindless. They are intentionally kept in the dark about the realities. They are intentionally misled by our leaders and media on both sides. They are stifled by legislation and processes and civil codes and legal documents that are intentionally made as complicated as possible so that people won’t be able to decipher and understand them.

      It isn’t that they don’t care or that they are happy so long as they have x or y, it is that they are overwhelmed and don’t feel that all the extra work that it would take to be engaged will yield a benefit. Look at how little impact in the big scope this blog has. And I spend 4-6 hours a day working on this. If I weren’t passionate about what we are discussing, I would have taken back that time a long time ago!

      USW

      • USW: I’m not sure you have it right on this one either. At the top it’s a power grab. But look right here at SUFA. All the lefties here are intelligent. They do their research. In the end they just won’t buy your argument because they CAN’T seperate the moral argument from the economics of it. The “why” part is what I don’t get.

        I’d love to see this play out. The country is pretty much split down the middle. Now let’s let the left take care of their own. Some have money, some don’t. I’ll use Matt since he is fun to pick on. Matt has to get paired up with the family next door to him who depends on the govt for everything. He gets to control all the money since he is the only one who has any. It is totally on him to take care of his neighbor since it is morally the right thing to do. Spread the wealth, right. I wonder if his mindset would change if his neighbor’s mere existence depends on him. Would he really just bring himself down to his neighbor’s standard of living? Somehow, after time he would simply throw his lazy neighbor to the raptors. But yet he can’t see the same thing happening in our govt today.

        • The thing is, they CAN think for themselves, but once their emotions enter the equation, or once a core belief is crossed, thought ceases. It is the will to think, not the ability. In the case of many Americans, there is a lack of training and practice on thinking. For the intellectuals, like the ones here, it is the refusal to think when such thought would challenge the core beliefs. It is difficult.

          I have seen the same reaction from people asked to challenge core concepts like the very idea of private property. Many economically conservative thinkers or capitalists of freedom lovers have never even attempted to challenge that concept, much less be able to articulate its need, or accept the thought process of someone who does not believe in ownership at all. I myself am a little rusty on it, its just not something I do a lot. It is a scary thing to think when it violates your beliefs. It takes a lot of work to recognize that those core beliefs are subject to challenge or that they are not already established beyond reproach.

      • Hi USW,

        I’m late to the party yet again! 🙂

        In short, whether people can’t or won’t ‘do the work’ the result is the same.

        I’ve tried to supply them with information and they won’t even look at it. When I ask why, they say its because they don’t think there’s a problem and even if there was other people will fix it. They don’t seem too fussed about it all.

  4. PeterB in Indianapolis says:

    PeterB said:

    April 9, 2010 at 11:38 am e

    I can also tell you succinctly why the world of Star Trek is (and will always be) complete and utter fiction. The world of Star Trek requires free access to unlimited resources. This will NEVER be reality. Obtaining resources ALWAYS has associated costs, and resources are NEVER infinite.

    You will notice that in the world of Star Trek, they never mention how much it costs to build an enormous fleet of Starships or who pays for it or how. They never mention how they get their supply of Dilithium crystals. They never mention if there are any costs or environmental impacts of obtaining said energy form. All of this is conveniently omitted.

    Of COURSE if we had access to unlimited resources at no cost, we probably WOULD explore space “just for the hell of it” because we would literally have nothing better to do!

    However, in REALITY, NECESSITY is the mother of all invention and the source of all innovation. In the science FICTION world of Star Trek, all necessity has been miraculously eliminated, but you will notice that there is NEVER any mention of HOW all necessity was miraculously eliminated and what the associated costs of anything actually ARE.

    Such a world is only possible if you have nearly infinite resources at nearly no costs whatsoever.

    • USWeapon says:

      What a great post Peter! I have thought that same thing myself at times. I had a conversation with someone about this a couple of years ago where I pointed out that what was missing from the Star Trek series was government killing the innovation needed for STar Trek’s world to exist. The series never mentioned the poor guy who spent 40 years testing and developing an alternative energy source and eventually ended up creating the photon torpedo. The government then stepped in and said they needed to take the rights to the product of his years of labor in order to counter the imminent threat from other species out there.

      They also never mentioned the cell phone company that was looking to find a more reliable network with faster download speeds for data. They struggled and struggled for years to find a competitive advantage over those assholes at AT&T and Verizon. Then one day… a breakthrough! They had invented that nifty little communicator that could not only talk across the country easily without cell towers, but could talk to ships outside of the atmosphere if needed! Big brother took that too. After all, the greater good needed to be served.

      I can’t even imagine how bad the guy got screwed for coming up with the technology that allowed one to be “beamed” to the planet’s surface! He got rich at first, but the progressives moved in. He was taxed to death. He had begun work on researching an improvement that would allow teleporting all the way from earth to a stationary ship far out in the galaxy, eliminating the need for ships to return to port for troop replenishment or parts replacement. But after the tax demons got him him for the money he made on the original device, he didn’t have the money to continue R & D. So he scrapped the almost working machine and left it in a warehouse, where Dagny Taggert found it years later, a rusted shell missing a key component.

  5. Todd said:

    April 9, 2010 at 4:45 pm e

    Hi USWeapon,

    Some questions first.

    First, the wealthy are business people. VERY few of the wealthy are silver spoon kids. They are where they are because they have a business of some sort that has earned them enough money to qualify. Remember the top 1% is qualified at $388k, not millions per year. Wealthy yes, but not “stinking rich.” They are there because they earned it by taking a risk, starting a business, and making it work. So when you are talking about taxing the wealthy, you mean you are talking about taxing a business owner. As such, for the purposes of this discussion, we can recognize the fact that the wealthy and corporations are basically the same thing in terms of taxes. If you tax a wealthy man, you are essentially taxing the business that made him that way.

    This is full of assumptions. Can you provide some references and sources?

    Second, and this is the important point, you cannot tax a corporation. Try as you may, you simply cannot do it. A corporation exists to provide a good or service for a price. When you tax a corporation, do you think that they simply shrug their collective shoulders and say, “eh, I guess we will have less profits this year”? Of course not. They increase the costs for their good or service to pay the increased taxes. And that means that the cost is…. wait for it…

    In the past you’ve argued prices are set by the market. How can corporations just randomly raise their prices because of taxes?

    Corporations work on the principle of offering their goods or services based on the cost of production.

    No, corporations work on the principle of offering their goods or services based on the price the consumer is willing to pay.

    Whether the cost increases for the good or service, or the company downsizes, limits expansion, and stops voluntarily helping the community, I fail to see how those on the progressive side see this as a positive thing for the poor in America.

    Or the corporation could use innovation to reduce the cost or increase the value of their product.
    Or the corporation could just have less profit, because Corporate Income Taxes are really Corporate Profit Taxes. A small but significant difference.

    They have some of the most brilliant minds in the country at their disposal.

    Usually you attack them and call them all idiots. But today they’re brilliant! Just remember that next week when you call them all idiots again!

    Which do you really think is the most likely scenario? Incredibly stupid or evil geniuses? I think you know where I stand.

    Actually, I’m not sure where you stand?

    Perhaps you missed that 97% of the top 10% didn’t come from families that were in the top 10%.

    I guess I missed this. Where did you get this information?

    One of the problems here is that there are so many other factors involved in this. Some of the comments have brought up Social Security, Medicare, Gas, Sales, etc. The discussions get bogged down quickly trying to define terms and scope.

    So, two Macro examples. There are lots of details and differences that affect this, but at a high level:

    During the Clinton Presidency:


    * top tax rates were raised

    * the budget went from deficit to balanced

    * the economy boomed

    * everyone did better

    During the Bush Presidency (even if only the first 6 years are used)


    * top tax rates were lowered
    
* the budget went from balanced to deficit
    
* the economy boomed

    * the wealthy did better while the middle, working, and lower classes slide backwards

    Which time period was “better”?

    I’ll be back tonight and this weekend, but since you used the same charts as last year, you can see lots of my thoughts at #23 here:
    https://standupforamerica.wordpress.com/2009/05/22/the-reality-of-taxing-the-rich/

    • USWeapon says:

      Todd,

      This is full of assumptions. Can you provide some references and sources?

      Exactly what was it that you think needs a citation in order to be proven? Which parts are you disputing? I understand the first part that VERY few are silver spoon kids, and I am working on finding again the study that I read it from so I will provide it as soon as I have time to do so. But it isn’t an assumption, it is a fact that I just need to find the reference for again. The rest is pretty straightforward. Based on that fact above, the rest have made their money. Are you disputing that they took the risk, did the work, etc.? That based on the fact that they are business owners a tax on them is a tax on the business? What do you want to see the research on and what do you accept? When you say that about a whole paragraph you have given me a lot to answer for, and I don’t always have time to answer for all. I am happy to provide whatever I can but I don’t have time to go looking for all of it so I just want a little bit more specifics.

      In the past you’ve argued prices are set by the market. How can corporations just randomly raise their prices because of taxes?

      They cannot randomly raise prices, Todd. And you know that. Yes the market determines what the price will be. Maybe they will raise prices, lowering demand, which also lowers production, which also lowers the need for labor, which also increases the profitability of the corporation and hurts the local economy. The market doesn’t exist in a vacuum. Supply, demand, and price are all linked together, as you know. If the corporation cannot raise prices in order to make up for the tax increase, they will find other ways to reduce costs, as I listed. They will reduce payroll, move to a more tax friendly nation (and with it take their jobs to that economy), or close the business altogether. That isn’t to also exclude that the market is the predominate force on pricing absent government intervention. When was the last time THAT market existed? The point is that the corporation will find a way to alleviate the higher tax burden. And the result will be negative on the economy, especially the poorest and most vulnerable among us. But you understand all this because you are a smart guy. So are you just trying to be difficult?

      No, corporations work on the principle of offering their goods or services based on the price the consumer is willing to pay.

      No sir, if the cost of production is more than the consumer is willing to pay, they do not offer the product. Increased taxes increase the cost of production. If there is really a consumer demand, the higher price will be paid. If there isn’t, the product will not be produced. You are touching on a basic premise of economics while ignoring the core concepts.

      Or the corporation could use innovation to reduce the cost or increase the value of their product.

      Or the corporation could just have less profit, because Corporate Income Taxes are really Corporate Profit Taxes. A small but significant difference.

      Innovation takes money. And since there is less money because of the higher tax, there will be less innovation. Take capital away from a corporation and the first thing cut will be R&D.

      If corporate profit taxes were the only taxes being discussed, that would be a very significant difference. But you and I and everyone here knows that isn’t the case. The list of tax increases being pushed on those evil corporations is endless. And soon to come…. Cap and Trade! More punishing the corporations that will result in higher energy cost for the very poor that you endeavor to save!

      Usually you attack them and call them all idiots. But today they’re brilliant! Just remember that next week when you call them all idiots again!

      Individual people are idiots. Government as a whole is anything but. No one rises to the top of the national political game by being a complete idiot, but they sure are idiots on certain topics.

      Actually, I’m not sure where you stand?

      Evil geniuses is where I stand. Incompetence at the level that the federal government APPEARS to operate is simply unfathomable. Therefore, I can only surmise that they are intentionally screwing all of us over, and are very smart in their tactics to manipulate folks into believing that they are helping instead of enslaving.

      During the two Presidencies, you make too much of a generalization and ignore too many other factors, and that thus makes your entire comparison irrelevant. Since you are insinuating that Bush was bad for the economy and Clinton was good, I will offer a few of the opposite spectrum things on both:

      Clinton
      * Dot.com bubble was the major cause of economic prosperity during the Clinton years
      * early in Presidency reformed welfare to spur self reliance and responsibility
      * Took advantage of dot.com bubble and raked in revenue reducing deficit

      Bush
      * Caught the brunt of dot.com bubble burst
      * faced national terrorist attack that paralyzed economy and forced industry bailout of airlines
      * lowered top tax rates which slowed the rate of decline of the economy caused by the first two points

      See how easy it is to generalize and make the point. Your points are valid, but your conclusion isn’t any more sound than mine is if I rely on just what I posted there about the two. There are simply too many things to consider.

      For example, perhaps the deficit problems were a result of a disastrous plan Bush called Medicare part D? Or the fact that he started fighting two wars and dealing with “the war on terror”. Surely these things were enough to turn a measly $250 billion surplus into a deficit, and lowering the taxes on top earners had no negative impact at all!

      I appreciate your response, as it is important to discuss all the aspects as thoroughly as possible. But you didn’t answer the big question: Do you still contend that the “good” of hitting the corporations and wealthy harder outweighs the bad that I outlined in the article?

      • USWeapon,
        I didn’t get the memo that we were moving here! 😉

        I posted this on the previous blog. More later:

        To clarify my first question:

        VERY few of the wealthy are silver spoon kids.

        Do you have a reference for this? It’s pretty vague and depends on so many things. The conditions of your birth can have a big impact on your life – stronger family, better schools, more opportunities.

        They are where they are because they have a business of some sort that has earned them enough money to qualify. Remember the top 1% is qualified at $388k, not millions per year. Wealthy yes, but not “stinking rich.” They are there because they earned it by taking a risk, starting a business, and making it work. So when you are talking about taxing the wealthy, you mean you are talking about taxing a business owner. As such, for the purposes of this discussion, we can recognize the fact that the wealthy and corporations are basically the same thing in terms of taxes. If you tax a wealthy man, you are essentially taxing the business that made him that way.

        You focus on business owners. There are a lot of wealthy people that didn’t start a business. I’ve never seen a break down of the wealthy comparing business owners vs employees. Do you have more information that shows this?

        Would it make any difference if we only taxed wealthy non-business owners? Like Investment & Commercial Bankers, Wall Street Investment Advisors, and Insurance Executives?

        You say the wealthy and corporations are basically the same thing. When you tax the wealthy, you are taxing a business owner. And corporations don’t pay taxes. They pass them on to consumers.

        If this is true, why are the wealthy and corporations against higher taxes? They can always just pass them on to the consumer?

        • Todd,

          Because taxes have nothing to do with revenue.

          The government can print money or T-bills and get as much ‘money’ as they want – they don’t need “taxes”

          Taxation is a tool of manipulation.

          When you look at it that way, the complexity and the bizarreness becomes clear.

          • I really wish someone would write an article about the governments printing of money and when it’s acceptable-I thought the idea was to have money that actually had something of value behind it-so why would we want them to just print money-what other way is there for the government to pay for what they do-if we don’t pay taxes -I just don’t understand.

      • USWeapon,
        The best case I can make is the 1990’s economy. The 1993 budget had significant spending reductions and tax increases. But it concentrated the tax increases on upper-income taxpayers.

        The 1990s were the longest running economic expansion in history. It had both low inflation and low unemployment. It included sharp reductions in poverty and the US deficit.

        It eventually ended with the collapse of the speculative dot-com bubble and the September 11th attacks. But this recession was brief and shallow. Many economists object to characterizing it as a “recession,” in the United States, since there were not two consecutive periods of negative growth.

        http://www.brookings.edu/papers/2001/1102useconomics_orszag.aspx
        http://politics.theatlantic.com/2009/09/closing_the_book_on_the_bush_legacy.php
        http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
        http://en.wikipedia.org/wiki/Early_2000s_recession

        • Todd,

          Do not make the mistake of assigning an incorrect cause.

          Paul Volcker headed the FED for Reagan and insisted one of the toughest financial reforms in the FED’s history.

          Volcker actions prevent the American economy from falling dangerously close to hyperinflation with his tight monetary policies.

          All tight monetary polices cause recessions as the excess credit is extracted from the economy and real grow and investment takes its place.

          Clinton replace Volcker with Greenspan who completely reversed this policy – creating the easy credit ‘boom’ of the stock market and the dot-com bubble which followed.

          You are correct, that didn’t last long because Greenspan – instead of allowing economic correction – took the US deeper into the easy-credit boom cycle.

          We live with that consequence today.

          Be wary of attributing incorrect causes to the economy. It was not “Clinton’s economic wisdom” but his ignorance – and the US will pay for it – long and hard.

          • So, the longest running economic expansion in history was all just smoke-and-mirrors? And it occurred because of Clinton’s economic ignorance?

            I guess that would make Bush an economic genius, considering the wonderful way he handled the economy…

            And when our economy finally does collapse, sometime in, oh I don’t know, say the next 150-200 years, it will all be Clinton’s fault?

            USWeapon’s challenge was to show that increasing the tax burden on the wealthy is ECONOMICALLY the right move to make in order to help those who are poor to survive and become self sufficient.

            In the 1990’s:
            * Tax increases were concentrated on upper-income taxpayers
            * Inflation was low
            * Unemployment was low
            * There was broad-based wage growth
            * There was a sharp reduction in poverty
            * There was a sharp reduction in the US deficit

            It ended with a brief and shallow recession caused by the dot-com bubble and the September 11th attacks. Those affected the most by this recession were speculative investors who made risky investments in dot-com start-ups and managers and IT professionals in those companies who had highly over-inflated salaries. There were job losses further down the economic ladder, but no where near the extent of the current recession.

            I think that answers USWeapon’s question.

            I await his response.

            I hope it is more logically and factually based than yours.

            • So, the longest running economic expansion in history was all just smoke-and-mirrors? And it occurred because of Clinton’s economic ignorance?

              Yes, Todd – it was artificial.

              Mises economic theory states that infusing an economy with artificially cheap credit creates an economic bubble.

              Investment that would not be entertained because they are not economically viable (for a number of reasons) suddenly become so viable because the risk/reward ratio is skewed.
              If an investment is risky, an investor may demand 20% interest. This forces the entrepreneur to reevaluate his project for risk – is the project “that good” that he can pay 20% – and the investor thinks “it is risky, I need a great return to pay back that risk”

              But if the bank’s interest on that loan is 1% – the model changes. The entrepreneur thinks “my project isn’t that risky because the independent measure of the pricing of money -using interest rates- is saying it is ‘safe’ @ 1% – and the investor is saying “it must not have much risk, and is safe, because that is why the rate is so low”.
              But it is lie.

              It traps both parties – systemically – into believing the risk is different than its reality.

              The economy receives lots of investment and new business pop up everywhere – but there is no underlying economy to support it.

              Eventually, the business owners see there is no one to buy; they’ve been mislead to the economic conditions; and they collapse – causing a recession.

              To avoid the recession, the government forces even lower interest rates and even cheaper credit – recreating even a larger boom – and then even a larger bust, and so on.

              You are being fooled because you do not recognize the time-differential between these events and –like business owners and investors – are mistaken in your analysis and in your economic calculation – and thus, mistaken in your economic applications of investments.

              I guess that would make Bush an economic genius, considering the wonderful way he handled the economy…

              Nope, he is Keynesian like every President has been since Harding.

              Bush handled the economy exactly the same way Clinton did – he dropped the interests even more.

              Obama is in the pickle he is in, because interest rates are as low as they can be – essentially 0%, and it is unable to lift the US out of the recession – in fact, it is getting deeper.

              And when our economy finally does collapse, sometime in, oh I don’t know, say the next 150-200 years, it will all be Clinton’s fault?

              The economy is collapsing right now – not in 100 years.

              Keynesian theory says that a dollar of debt creates “some portion of that dollar” in GNP (ie: economic growth)

              However, the Austrians say that every addition dollar in debt creates an ever decreasing portion of GNP, until eventually an additional dollar of debt produces no further GNP, and can no longer prevent a recession.

              The US reached this situation last year – with an infusion of over $2 trillion in new debt, the GNP went negative by 1.3%.

              According to the Keynesians, this is impossible.

              According to the Austrians, it was inevitable.

              The Austrians are right again.

              USWeapon’s challenge was to show that increasing the tax burden on the wealthy is ECONOMICALLY the right move to make in order to help those who are poor to survive and become self sufficient.

              It cannot be, no matter how you wish to paint it.

              Taking monies from the economically viable to fund the economically non-viable cannot improve the economy – no matter how “political” you want to be about the issue.

            • Actually, it was the longest “peacetime” growth, the longest was the post depression era, if you include the GDP propelled by WWII. More importantly, it was more than 8 years long, obviosly not just due to Clinton.

              Bush was at least as bad with economics, I did not mean to imply otherwise, I was just pointing out errors in your assumptions and information under both leaders. Its not about the friggin president anyway, it never has been. Its about fiscal policy, most of which is set by congress.

              • Jon,
                Do you have a source for longest “peacetime” growth?

                During the post depression era, there were recessions in 1937-38, 1945, and 1949. See the last table near the bottom of this page:

                http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

                It was more than 8 years long, obviosly not just due to Clinton.

                Yep – that’s right.

                Again, my point is to answer USWeapon’s challenge to show that increasing the tax burden on the wealthy is ECONOMICALLY the right move to make in order to help those who are poor to survive and become self sufficient.

                This is not meant to “prove” this should always be done or that this is always the answer. I’m simply pointing out a real world example where increasing taxes on the wealthy benefited all of society, including the poor.

              • Actually, I have to pull that. I went back and found the source on that and found that I had misread. There was larger economic expansion overall, but not a perfectly unbroken period of growth, the longest at that time was 1953 to 1962 under Eisenhower. I apologize for that error.

    • Todd,

      You said:

      Do you have a source for “everyone did better”? I watched a lot of people not do better at that time. There were some booms, but they did not last the whole time. Things began to crack before the end of his terms, delayed effects of his policies.

      Also, do you have a source for the “balanced budget”? Because it always looked to me like it was a projected budget balance based on boom revenues. It was all smoke and mirrors and BS, as would be fitting for Clinton.

      Do you have a source for the middle, working, and lower classes sliding backwards? They may have grown slower, as is expected in a growing economy, but sliding backwards? Not till the last couple years when the bottom really dropped out. Also, the deficit was due in part to a bad war or three. Not an excuse, but certainly not a direct result of tax policy.

    • Todd,

      You said:
      During the Clinton Presidency:


      * top tax rates were raised

      * the budget went from deficit to balanced

      * the economy boomed

      * everyone did better

      Do you have a source for “everyone did better”? I watched a lot of people not do better at that time. There were some booms, but they did not last the whole time. Things began to crack before the end of his terms, delayed effects of his policies.

      Also, do you have a source for the “balanced budget”? Because it always looked to me like it was a projected budget balance based on boom revenues. It was all smoke and mirrors and BS, as would be fitting for Clinton.

      During the Bush Presidency (even if only the first 6 years are used)


      * top tax rates were lowered
      
* the budget went from balanced to deficit
      
* the economy boomed

      * the wealthy did better while the middle, working, and lower classes slide backwards

      Which time period was “better”?

      Do you have a source for the middle, working, and lower classes sliding backwards? They may have grown slower, as is expected in a growing economy, but sliding backwards? Not till the last couple years when the bottom really dropped out. Also, the deficit was due in part to a bad war or three. Not an excuse, but certainly not a direct result of tax policy.

      • Jon,

        Do you have a source for “everyone did better”? I watched a lot of people not do better at that time.

        I didn’t mean every individual did better. It was a general reference to all levels of society sharing in the economic success:

        http://www.theatlantic.com/politics/archive/2009/09/closing-the-book-on-the-bush-legacy/26402/

        On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially.

        There were some booms, but they did not last the whole time. Things began to crack before the end of his terms, delayed effects of his policies.

        Well, nothing is every perfect, but it was still the longest running economic expansion in history:

        http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

        Also, do you have a source for the “balanced budget”? Because it always looked to me like it was a projected budget balance based on boom revenues. It was all smoke and mirrors and BS, as would be fitting for Clinton.

        Here’s one reference. There are many others.

        http://www.factcheck.org/askfactcheck/during_the_clinton_administration_was_the_federal.html

        Do you have a source for the middle, working, and lower classes sliding backwards?

        Same article as above:

        http://www.theatlantic.com/politics/archive/2009/09/closing-the-book-on-the-bush-legacy/26402/

        On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially.

        And this:

        http://www.washingtonpost.com/wp-dyn/content/article/2009/05/02/AR2009050202207.html?hpid=topnews

        From 2000 to 2007, the median income of American households, when adjusted for inflation, fell by $324, according to the Commerce Department.

        Also, the deficit was due in part to a bad war or three. Not an excuse, but certainly not a direct result of tax policy.

        Well, Bush choose to go to war. And the Bush tax cuts would have paid for both wars with cash left-over…

        • Not true, the Bush tax cuts were the only reason the economy did not fall apart sooner. Of course, the Bush spending is why it still did. Besides, the total costs of those wars exceeds the total figures of revenue from those tax cuts. There was an increase in investment when those tax cuts were put through. Unfortunately, there were increases in governemnt spending, making the dollar unstable, thus much investing went overseas to more stable markets, and foreign investment became more shaky and expensive.

          No one in Washington is worth a damn economically. They are all keynesian fools, educated in our out-of-touch ivey league schools that are the source of our corporate leaders, who are the bane of our economy.

      • Jon,
        Some additional information relating to the 2000-2006 time period.

        http://www.rollingstone.com/politics/story/12699486/paul_krugman_on_the_great_wealth_transfer
        Nov 30, 2006
        The reason most Americans think the economy is fair to poor is simple: For most Americans, it really is fair to poor. Wages have failed to keep up with rising prices. Even in 2005, a year in which the economy grew quite fast, the income of most non-elderly families lagged behind inflation. The number of Americans in poverty has risen even in the face of an official economic recovery, as has the number of Americans without health insurance. Most Americans are little, if any, better off than they were last year and definitely worse off than they were in 2000.

        http://www.ombwatch.org/node/2848
        March 21, 2006
        The country experienced relatively broad-based wage growth during the latter part of the 1990’s, but this growth ended with the 2001 economic downturn. Growth in real wages for low- and moderate-income families began to slow, and by 2003 wages began to decline and have not picked up in real terms. The economic recovery after the recession, one of the weakest recoveries on record, has not been diverse enough to generate the kind of income gains among low- and middle-income families seen over the last decade.

        Despite the White House’s selective use of economic data and sweeping generalizations about the overall strength of the economy, mining the data actually paints a much drearier picture, one in which most Americans are not making progress but actually losing ground, while the wealthy prosper more and more. This trend will only worsen unless more just and sensible fiscal and economic policies are adopted.

        http://www.americanprogress.org/issues/2009/02/pdf/picker_jobs.pdf
        Before the Bush Recession – Supply Side Tax Cuts Failed to Deliver Jobs and Income Growth between 2001 and 2007

        But their analysis ignores what actually happened during the economic cycle that began in March 2001 and ended in December of 2007 —which almost exactly coincides with the Bush presidency and the implementation of the Bush tax cuts. This period registered the weakest jobs and income growth in the post-war period. Overall monthly job growth was the worst of any cycle since at least February 1945, and household income growth was negative for the first cycle since tracking began in 1967. Women reversed employment gains of previous cycles. And for African Americans, the worst job growth on record was matched by an unprecedented increase in poverty.

  6. USW said

    “The government doesn’t do anything that doesn’t benefit the government. They have some of the most brilliant minds in the country at their disposal. So I submit that they are well aware of doing the math on this and realizing that a tax on the wealthy gets passed to the poor. To believe that they don’t understand this is to believe that they are utterly incompetent in terms of evaluating economic impacts. So the federal government is one of two things. They are either complete idiots not capable of running the country OR they are absolute geniuses to have played the bottom 50% like a fiddle and tricking them into believing they are taking actions that help them. Which do you really think is the most likely scenario? Incredibly stupid or evil geniuses?”

    ( And what has “the One” said?)
    http://www.heritage.org/Research/Reports/2010/03/Obamas-Capital-Gains-Tax-Hike-Unlikely-to-Increase-Revenues

    Obama’s Capital Gains Tax Hike Unlikely to Increase Revenues
    Published on March 24, 2010 by J.D. Foster, Ph.D.

    Abstract: President Obama has proposed raising the capital gains tax rate to generate billions in new revenues for the federal government. However, according to data included in the President’s own budget, if implemented this tax increase would—at best—offset the tax revenue from other sources that would be lost because of reduced total income, output, and jobs in the economy. Thus,

    the President is intentionally sacrificing jobs in the pursuit of his own notions of fairness with little or no hope of increasing revenues in the process.

    Further, this proposal is coupled with a proposed dividend tax rate hike that would also cost jobs for little or no gain in revenues. If the President is serious about making jobs his “number one priority,” he should instead propose reducing the capital gains and dividend tax rates to stimulate the economy.

    President Obama has proposed raising the capital gains tax rate from 15 percent to 20 percent for married filers with incomes above $250,000. This proposal continues a long tradition of changing the taxation of capital gains, but government figures suggest it is unlikely to increase total tax revenues.

    The longstanding policy tug-of-war over the capital gains tax reflects a classic tradeoff between tax revenues on one hand and economic growth and jobs on the other. A higher tax rate is usually intended to increase federal revenues, accepting the slower economic growth that follows. Proponents of higher rates argue that the revenue gains are worth the meager losses in jobs, while opponents argue the revenue gains are meager, at best, because the economic effects are substantial.

    The President’s proposal to raise the capital gains tax is coupled with a similar proposal to raise the tax on dividend income from 15 percent to 20 percent for married filers with incomes above $250,000. Combined, they are expected to raise $105.4 billion from 2011 to 2020. However, this estimate ignores the dampening effects that such a policy will have on the economy. During the 2008 presidential campaign,

    Barack Obama acknowledged that raising the capital gains tax rate could reduce revenues, but he remained interested in raising the rate “for purposes of fairness.

    • So once again tax policy is social policy not economic policy and revenue generation. Emotion wins again.

  7. I think USW is right on track with his comments on increased taxes vs harm to the lower classes and the economy. At our current tax rates, any new tax or tax increase has a net negative impact on the economy no matter a what level it is injected into the economy. It reduces the velocity of money thus depressing the entire economy.

    A couple of weeks ago I proposed incorporating all payroll taxes into one individual 401k style account and thus eliminating SS, unemployment and a host of other bureaucracies. The same argument could be made for our tax systems. Every tax has an adminstrative cost. Ex.: the new insurance tax or fine will require 16,000 new IRS agents. I propose eliminating all the minor taxes (telephone, gas, excise, ….) and replacing them with three taxes. First would be a flat import duty on incoming items. This was the original way the government funded itself along with land sales in the midwest and west. Second a flat individual income tax. Finally a national sales tax (NST), not a VAT. VAT’s must be administered at every level of production hence are too expensive to collect. Plus the are hidden. The NST would be added at the cash register just like state sales taxes so we all see what the tax man is getting. Three taxes, three administrations, all visible to the public.

    If we need to give any relief to the lower economic classes, then eliminate the NST on food and drugs but nothing else. Is this fair for all, yes, because we each can consume only so much food. There will be a small difference between hot dog and prime rib eaters but that is minor.

    I would tend to not apply the income tax to corporations but some mechanism would need to found to prevent them from being the repository of large sums of cash to avoid paying dividends and thus individual income taxes.

    Services would not have the NST, only physical goods that change hands.

    There would be no distinction between earned and unearned income, all would be taxed at the same rate.

    • T-Ray and others,

      Corporate taxes (or lack) is a myth.

      http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes.html

      Now the article makes a big deal that GE paid no tax, but consider the tax code:

      GE’s tax return is the largest the IRS deals with each year–some 24,000 pages if printed out.

      Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.

      But Exxon,
      . ExxonMobil ( XOM – news – people ) in its 2009 annual report to the SEC, recorded a larger income tax expense than any other U.S. company last year, some $15 billion, or 47% of pretax earnings.

      So the myth that “some how” the rich people and the rich companies pay no tax should be DEAD.

      Imagine how much oil Exxon could find, or invest in research into energy, if they got to keep the other half of their money, and not have it slip into the bizarre fire pit of governments.

      • I thought the following was an interesting perspective by a commenter to the Forbes Article.

        Posted by ddffgghhjjok | 04/07/10 10:18 PM EDT
        I think businesses should pay all the taxes. They already have accountants and lawers on staff to decode the 2,500 pages of tax laws that a common man should not have to deal with. Let them then pass the cost to the buyers. I can take home my paycheck and pay as I go, while capable corporations deal with the legal stuff.

        Similar to the rationale for the Fair Tax. It puts collection and accounting responsibility on the businesses not the tax payer.

        • I would agree.

          As corporations exist solely because of government – they should pay for their soul.

          With no other taxation, the people would voluntarily pay tax wholly dependent on their purchases and more important, which company they bought from.

          As the economy favors low cost, high quality – to avoid overpaying taxes – a company would focus on lowering prices or improving quality at no increase in cost as a competitive advantage.

          Or would the government compel corporations to artificially raise prices to force larger tax revenue?

          • BF: Could you slow down here for me? Your second sentence does not compute. Neither does your last sentence. Why does govt get to set the price of anything?

            • V.

              They get to set the tax rate.

              As USWep said, taxes are passed to the consumer.

              SO an increase in tax rate changes the business model of the corporation.

              Increase corporate taxes, causes increase in prices of the goods = and if there is a VAT, that also means an increase in VAT revenues as VAT is on the total price to consumer, which would include the increase in the tax rate to corporations.

          • You jest I assume?

            • Jon,

              No, I don’t jest.

              Corporations owe their existence to government – it is government law that creates them.

              Let government take as much money from a corporation as they like – give to Ceaser that which is Ceaser.

              If corporations disappeared tomorrow, the economy and society would be so much better off, IMO.

              • I agree that the abolishment of the corporation would be a good thing. I do not agree that taxes should be the means. Most businesses are currently corporations, thus I took your statement to mean we should tax businesses.

                I am sure if taxes were levied on corporations only, however, the attrition rate would be astronomical.

                Still, the cost would be largely born by the consumer, not the best way to fix the issue. Fixing the corporate issue requires abolishing the corporation itself and firing all of the ivy league economic professors that are teaching these MBA students to be good accountants. The bottom line is not all that is necessary in business, especially the shrot term bottom line.

              • Jon,

                As you know, I am against taxes AND against corporations.

                So, simply for arguments sake I accept corporations as immutable to our argument.

                Corporations are created solely in the abstraction of government – a non-government corporation is redundant to the concept of proprietor or partnership without government.

                It is government that gives a corporation all its “rights”. There is no such thing as a ‘natural’ right of corporations.

                Since corporation exist ONLY by an act of government, corporations are TOTALLY beholden to government.

                Corporation exist from government, without government they would not exist, thus, a corporation – for itself preservation – must provide for the funding of the ‘thing’ that gave corporations ‘life’.

                If government dies, I am still me – a human being.

                If government dies – corporations do not exist.

                Corporation – by this reasoning – MUST fund government to live themselves.

    • T-Ray,

      Your plan will fail and never happen because taxes are not for funding – they exist for political manipulation of the economy.

      The extent, confusion, depth, paperwork, etc. all exists to “motivate” tax payers into paying for or avoiding certain economic outcomes.

      Increasing tax “here” creates higher avoidance.

      A tax “credit” here increase higher engagement.

      Any attempt at “simplifying” will be met with total hostility and will never go anywhere, for it would remove the #1 reason of taxation – economic manipulation of outcomes.

      Frankly, it would be easier to END tax, then SIMPLIFY it.

      • Flag, I am not surprised you panned the idea as that is your MO. That being the case, what are your criteria for taxes? How would you fix the tax structure? Please do not cop out and call all taxes irrelevant or evil. That is not a solution but a dodge to the issue.

        My criteria are that I want a limited number of taxes to simplify the collection structure and associated bureaucracy plus I want the tax visible. I want to see how much is being collected/stolen when it is collected.

        I watched the documentary posted below. Interesting to learn that individual income taxes are not backed by a statue.

        Anyone else with ideas can join in too.

        • T-Ray,

          I support any idea that reduces government revenue.

          If your idea simply does nothing but rearrange the chairs on the deck – no interest with me at all.

          So, let’s be real:
          There is NO tax reform that the government will indulge or accept that will REDUCE their take

          Agreed?

          So, the best realistic thing you can present is ‘rearranging the deck chairs’ – and so what? It won’t change a thing other then the decor.

          Next, core point.

          The tax code is not about getting revenue for government.

          It is about manipulating you economically.

          Do you agree or not?

          So, if you agree – how the heck do you even spend one second in believing the government will change that???

          So any call to “Fair tax” or “flat tax” or “simple tax” is a call to a fantasy, way over the rainbow, right beside the pot of gold of leprechauns. You know darn well no government will do this and give up their most powerful tool of public manipulation. So I shoot this idea down instantly and don’t even waste a second discussing it.

          So, let’s take an account of where we sit.

          Government will NEVER reduce their take and the will NEVER simply the tax code.

          Given these two essential conditions – where do you believe you have any idea to ‘change the tax code’ to something else? What else is there?

          The conclusion will be equal or probably more tax revenue AND a more complex tax code!!!

          So, any and all calls to changes in the tax system is FUTILE.

          Take that energy that you would spend in trying to change the system of taxes and spend it on eliminating the system of taxes.

          Ironically – you have a better change in doing that!

          • We agree on a few things. Taxes are much too high. Spending is much^2 too high. Taxes have become manipulative.

            However, simplifying the tax code and reducing the total number of taxes imposed to a few simple ones reduces the cost to society thus providing a net overall savings and freeing thousands to work on more productive things. It also significantly reduces the number of bureaucrats collecting the taxes making government more efficient thus allowing the tax rate to be reduced. I know we have all seen the long list of taxes that were imposed during the 20th century. I want to do away with 97% percent of them. Follow the KISS principle.

            Below you present a hierarchy of taxes with a sales tax being the most destructive. Please elaborate as to why. I do not see any difference between a VAT that collects 20% on all goods and a sales tax that collects 20% on all goods. The same $ are collected but at a much higher cost for the VAT because it must be calculated at each step in the manufacturing process. Both are regressive and raise the cost of goods sold thus dampening demand. The VAT is hidden which I detest as I like to see what is being stolen so I can hold the thieves accountable.

            I also dissagree with you on corporations. Corporations were formed so that interested parties could pool their money to create an entity big enough to accomplish a specific mission. Fluidity (saleable stock) was required so that individuals could leave the combine and others could join. The corporate structure protects the individual stock holder while making the corporate officers accountable for any misdeeds. How would abolishing this structure serve the general good of society and business. Corporations do fail all the time. Look at the number of old corporations that are gone mostly because they got too big and became hide bound. GM should have been one of them except for interference.

            • T-Jay

              However, simplifying the tax code and reducing the total number of taxes imposed to a few simple ones reduces the cost to society thus providing a net overall savings and freeing thousands to work on more productive things.

              I laid out, I think quite clearly, the role of taxes as a tool of government.

              You stand – oblivious to it – and hold that is should be simple to be more “productive”.

              I’ll repeat:
              Taxes exist to MANIPULATE THE PEOPLE

              It is not a matter of being more productive – if that was the goal there would be no taxation!!

              So, that is not the goal

              They do not care if it is unproductive, they do not care how much it costs, they only care about manipulating you to their will
              and the tax code – the carrot and the whip all rolled into one tool – works wonders.

              It also significantly reduces the number of bureaucrats collecting the taxes making government more efficient thus allowing the tax rate to be reduced.

              Where the hell did you ever get the idea government wants to REDUCE the number of government workers???

              :blink:

              I know we have all seen the long list of taxes that were imposed during the 20th century. I want to do away with 97% percent of them. Follow the KISS principle.

              Why do you believe they want it to be simple?

              They want it to be complex!! There are reasons, sir!

              Come on, T-ray.

              Government is not STUPID.

              Do you really think they are so stupid that they cannot see what you see?

              Do you really think they are so stupid that they can’t see how impenetrably complex the tax code is?

              They do it for a reason – it is NOT by accident.

              Below you present a hierarchy of taxes with a sales tax being the most destructive.

              NO, a direct tax, such as income tax, is the most destructive.

              Then comes sales tax.

              Sales tax is like adding 8% or 20% inflation on your purchases (whatever the sales tax amount).

              Further, it hurts the lower incomes as the rich can avoid purchases locally.

              I also dissagree with you on corporations. Corporations were formed so that interested parties could pool their money to create an entity big enough to accomplish a specific mission.

              People can organize in anyway they wish

              But a corporation exists to mitigate negative consequences of poor decisions – that is, apply those negative consequences upon the innocent.

              A corporation is a ‘legal’ way to avoid paying for the damages of the decisions of the corporation.

              MEN who run the company can borrow money, use that money to enrich themselves, and when they fail to pay it back, can avoid the personal responsibility of such.

              They get all the positive consequences and mitigate or avoid the negative.

              It is evil to inflict harm on innocent people.

              Consequences are are a zero-sum – they must fall on somebody.

              If the people responsible in a corporation can avoid the consequences of their own action, those consequences must fall on those people who do not deserve it.

              The corporate structure protects the individual stock holder while making the corporate officers accountable for any misdeeds.

              NO THEY ARE NOT!

              GM lost billions – do you see the CEO repaying the losses!?!? NO!

              How would abolishing this structure serve the general good of society and business.

              see my post – Evil Ghosts –
              http://freedomfliesblackflag.wordpress.com/2010/02/03/evil-ghosts-have-human-rights/

              Corporations do not serve the good

              There are a means that men use to avoid the negative consequences of their actions while reaping all the positive consequences.

              As such, they have distorted economic morals.

              If a man can avoid negative consequences of his actions, he is more likely to engage in more risk, more questionable and more seriously destructive ventures than if he was to risk ‘his own skin and future’ to do the same.

              Corporations thus create more risk, destruction and unethical and immoral situations then would otherwise.

  8. USW

    Some interesting numbers related to your topic. Discussion as well.

    http://www.theatlantic.com/business/archive/2010/04/polling-the-budget/38714/

  9. I review the posts above latter, but I do want to address this question directly

    The point of the article, boys and girls, is that ECONOMICALLY the idea of increasing the taxes on the wealthy and corporations is a bad idea.

    Yes, and it has absolutely nothing to do with politics.

    Economically (since that is how the question was asked), if one transfers wealth -by force- from those that earn to those that do not, these conditions are created.

    (1) Those that DO NOT earn have no reason TO EARN. Their lack of earning gives them the same resources as earning them. Why would they earn?

    Indeed, they would be more compelled to demand MORE resources for “NOT earning” – to maximize their lack of effort. They would test the highest limit available for not earning before they were required to start earning to obtain their resources.

    Thus, their demands will always increase and test the highest limits of recieving unearned goods.

    (2) the earners will begin to withdraw. IF their effort cannot be retained, it is the same as making no effort. If effort gains the same as no effort, no effort will be the default.

    As the demands of (1) increase and the withdrawal of (2) increases, the economy experiences broad and systemic exhaustion and potentially collapse.

    All tax, no matter the form or the method, will eventually lead to economic exhaustion and collapse

    • Oh yeah, one other thing that is equally true:

      There are different types and methods of taxation that will increase the speed and the potential of collapse.

      In this, there are different degrees of destruction – but do not be fooled – all taxes are destructive and will eventually lead to economic exhaustion

      • “There are different types and methods of taxation that will increase the speed and the potential of collapse.” Okay I’ll bite- What type and why?

        • A VAT tax is less damaging then a direct tax.

          An excise tax/import tax is less damaging than a VAT tax.

          An indirect tax – like a gas tax – is less damaging than a direct tax, like sales tax.

          • PS:

            If a VAT has a reasonable possibility of passing, many pundits are recommending spending your available cash on goods TODAY – because you may lose up 20% to the VAT.

            The VAT will result in the same effect on the economy as 20% inflation rate except that running to gold will not help.

            Go directly to goods.

    • BF

      I respectfully disagree with your contention as presented. Exhaustion and collapse is not certain.

      There is a point where exhaustion will result in collapse, if there a place to run to.

      But if there is no place to withdraw to, then they remain trapped. That is, in my view, the biggest goal of the international progressive movement. They have to eliminate the sanctuaries by making everyone the same. A very hard thing to make happen.

      There is also a point, in my view, where we tolerate the constant sneezing and coughing. We can and will “get by”. That is the goal of the modern Liberal. Keep us on the edge but don’t kill the golden goose.

      I would say that all taxes are destructive of free choice and maximizing economic efficiency. They are not necessarily destructive to the existence of a viable economy.

      Of course this presumes the ability of man to pass some small tax and NOT ADD ON later. A measure of self control that has escaped us to this point in our history.

      Sun is finally back, but still pretty cool. How about you?
      JAC

      • JAC,

        So let’s work out your two scenario’s:

        Company A moves from high tax to low tax country. Country A suffers the TAX loss, but gains back the economic benefit – do not forget, the company is still selling its product but now at a cheaper price.

        Country B gains a small increase in tax revenue and some economic benefit of employment, and Country A still has the economic good (though, less likely to buy as much).

        However Country B is still a tax country (there is no country that is truly tax-free) and eventually the same process that undermined Country A will occur in Country B.

        Again, Human Action rules – if NO effort gains resources, NO effort will increase as will the demands for effortless resources –

        Scenario Two – trapped. Which is where the world really sits, as there are no such thing as a “tax-free country”.

        This WILL lead to economic exhaustion and potential collapse.

        With no outlet of escape, the company CLOSES.

        Unlike Scenario A, where the product remains available to the economy, Scenario B – the product is removed from the economy.

        Economic exhaustion accelerates as products begin to disappear from the shelf. The increase in numbers of tax eaters follows the decrease in tax payers. More companies close… and so on.

        True, economic collapse is not certain but economic exhaustion is certain.

        The economy could fall to a low poverty level of equilibrium where there are no effortless goods – but there is no effort above subsistence as any additional would be taxed away.

        What few goods are levied out on political motives, not economic ones. This was the Soviet and North Korean consequence.

        Ah, Snow! But who can complain? I’m still alive to see it! 🙂

  10. A Puritan Descendant says:

    I fully agree with USW and this/these articles. I have long had the same conclusions. I myself have given up on economic ventures not only because of taxes but excessive and even silly regulations.

    If someone asked me to ‘prove’ USW’s article correct, I would be challenged to do so. This I think is how politicians get away with sticking it to the ‘evil corporations’ to obtain votes from the masses. Most of the masses are far to preoccupied with life to search out the facts and the truth. I think many of us at one time or another has felt we got ‘stuck’ by some business or big corporation so they become an easy target. I have had known people who are quick to blame corporations or anyone with money as the root of all their problems. They seem ignorant of how the world works economically. They make easy targets for slimey politicians to pander to.

    Wealth creation makes our world go around, if we continue to cut off its legs it will someday collapse completely.

  11. Off topic but I thought I would post this link to a documentary on U.S. Income tax, especially since it is getting close to April 15th. I don’t know how accurate the information is.

    http://topdocumentaryfilms.com/america-freedom-to-fascism/

    • Birdman

      You could swear I wrote the script for the movie!

      Nice find.

      • Black Flag:

        I watched the entire movie. I thought it was pretty good.

        Nice job in writing the script!

        • Hey Birdman!

          Strangely enoungh, I watched this movie last week (at work). It took me 4 hours, because of work, but I found it very interesting. I thought that this movie would be a good subject of a guest article, but I’ve been busy researching the new healthcare law and how it effects my employer and those I represent (contract negotiations start in 10 days).

          I will however keep this in my mind for future writings. I like reshearching, even more so about history, so I should have fun with this. Could this be Part 3 of my recent series? Time will tell! 🙂

          Peace My Friend!

          Hope all is going well with you and your situation, I think of it often and wish you success!

          G!

          • G-Man:

            Should you find something that I may need to be aware of regarding the Health Care Bill, send me an e-mail.

            I’m preparing for negotiations for a contract out in LA. I’m meeting with our benefits person later this week since this location has a different plan than our other locations. We have been trying to get all locations under the same plan and we are not sure what we will do with the LA location.

            I’m not up to speed on the SPD for the plans we have. I have a lot of information to learn and numerous contracts to review.

    • Alright, have watched the entire documentary. Is this true? There is truly no law? Is anything like I thought it was? OMG…

      • Yes, Kathy, there is no law.

        You will have no hope of testing that in a court.

        They hold that any question about the lack of the law of taxation is “frivolous”. You will not be able to present anything to the court – they will refuse to accept it.

        The cases that were identified in the movie are rare. The judges were caught off-guard and allowed the questions – this is not typical.

        What is really telling is at no time – ever – has anyone from government out-and-out demonstrated the law. They all refuse. Think of it. If you asked about the statutes of, say, murder – they could would point to it instantly.

        They wouldn’t dance around and say “Well, murder is immoral, and really I’ve never murdered, my Dad didn’t murder, so we all shouldn’t murder…!”

  12. off Topic:

    A friend of mine completed her census and mailed it over a month ago. She just received another census form. Is this double counting? 🙂

    • I got 2 census forms on the same day. Only mailed in one. Am I violating the law?

      Double counting or incompetence. Take your pick. I choose the latter.

  13. Judy Sabatini says:

    Hi All

    We only got the one census, filled it out and mailed it back. Haven’t received a second one, but I did read in the paper the other day, that they were mailing out a second one. It said they wanted to make sure that everybody fills it out and sends it back. If they can’t count the first time around, then what makes them think they can count the second time around?

    I’m going with T-Ray here and say they’re incompetent. I mean, are these people that ignorant that they can’t count right?

    Hope all is doing well today.

    • Hey Judy…and T-Ray… I don’t think they’re incompetent- they know exactly what they are doing.

    • We only got one. Sent it out end of March with no names or ages filled in,
      waiting on the fine to come.

      Double counting or incompetence? Why not both?

      • Judy Sabatini says:

        Well, I really don’t understand why the second census they’re sending out. What are they going to do if you don’t fill out that one after already filling out the first one?

        Kind of wonder what it is they’re up too if they have to send out 2 of them.

  14. “The more I consider the condition of the white en, the more fixed becomes my opinion that, instead of gaining, they have lost much by subjecting themselves to what they call the laws and regulations of civilized societies.”

    Tomochichi
    Creek Chief

    Seems some could see the writing on the wall early in the game.

  15. “In the government you call civilized, the happiness of the people is constantly sacrificed to the splendor of empire. Hence the origin of your codes of criminal and civil laws; hence your dungeons and prisons. We have no prisons; we have no pompous parade of courts; we have no written laws; and yet judges are as highly revered among us as they are among you, and their decisions are as much regarded.

    We have among us no exalted villains above the control of our laws. Daring wickedness is here never allowed to triumph over helpless innocence. The estates of widows and orphans are never devoured by enterprising swindlers.

    We have no robbery under the pretext of law.”

    Joseph Brant (Thayendanegea)
    Mohawk

    • Brant and his Mohawks killed a lot of my relatives during the Revolution.

      • T-Ray

        Ever notice how these quotes flow in English?

        While I have learned the values are as described in many of them, I find it hard to believe they were literal translations.

        Hope you are well today.
        Still warm and wet down your way?
        JAC

        • Brant was was raised by Sir William Johnson, the British Indian Agent for the northern colonies. He was educated in the white man’s schools and as a result was more brutal than either the white man or the Mohawks.

          • T-Ray,

            The short investigation shows that the stories about his brutality seem to be fabrications, while there are numerous documentation regarding his mercies.

            Regardless, he saw – as a “savage” – the truth about ‘government’ as you know it –

            He quote is outstanding.

  16. And I thought this one most funny today.

    “The white man who is our agent is so stingy that he carries a linen rag in his pocket into which to blow his nose, for fear he might blow away something of value.”

    Piapot
    Cree Chief

  17. Hey USW and everyone else on this blog . . . What the heck is this V.A.T. that the White House senior economic adviser thinks is so great?

    • Sorry . . . I meant what do you think of this V.A.T.

      • Judy Sabatini says:

        Hi G.A.

        Here is an article I posted the other day on here about it, hope it helps you.

        Here Comes the Biggest Sales Tax You’ve Ever Seen

        By Andrea Tantaros

        – FOXNews.com

        The Obama administration is creating a crisis so that they can solve it with a mechanism that will serve as the catalyst for future spending on their massive government programs. And even though our president said he wouldn’t raise taxes on 95% of Americans while he was on the campaign trail, get ready for the “VAT” — a move that would raise taxes on everyone.

        A new and ugly phrase has recently made its way into the vernacular in this country: the Value Added Tax or VAT tax. But don’t let the term fool you. The “values” that accompany this legislative fungus are perverse and only “valuable” to the spending obsessed, socialist liberals who support them.

        A VAT is a sales tax imposed on every level of a product’s path from production to consumption. It already exists in Europe and many other struggling countries around the world. It’s a sneaky sucker, too, since it’s essentially built in ahead of time and doesn’t show up on a receipt like a sales tax would. If a VAT were in place that iPad you just bought would be $600 instead of $500.

        A VAT would pull in massive revenues. Just think: a 10% VAT would produce 1 trillion in revenues. Cash register sounds go off in the minds of every leftist that hears it.

        Obama and the Democrats are spending SO much that they’ll be forced to invoke a VAT. They are creating a crisis so that they can solve it with a mechanism that will serve as the catalyst for future spending on their massive government programs. And even though our president said he wouldn’t raise taxes on 95% of Americans while he was on the campaign trail, this move would raise taxes on everyone.

        Here’s how it’ll go down. This week, we heard former Fed Chairman Paul Volker float the VAT trial balloon just this week in a speech at the New York Historical Society, saying it was “not a toxic idea.” Then, on Thursday, current Federal Reserve Chairman Ben Bernake mentioned it in a speech — but only after he said we are on an unsustainable course with our record high deficits.

        When questioned thus far about a possible VAT for America the White House has been quiet, only mildly denying that it’s an imminent option. But doesn’t mean it won’t be under consideration in a few months.

        What Obama will say is that he is putting together a commission to find a way to pay down our country’s maxed out credit card.

        Expect that commission to recommend the VAT tax after the 2010 midterm elections. By then, we’ll be on the verge of Greece-like catastrophe and we’ll have no choice but to impose a VAT. But only one that will, coincidentally, go into effect after the 2012 presidential election.

        Worse yet – a VAT tax will create a lobbyist feeding frenzy just like the sales tax did.

        Right now, special interests across the country – that’s everyone from insurers to car makers to potato growers to soda companies — are wondering if they’ll be exempt from the tax or included. Believe me, they’ll spend millions to ensure they aren’t. It’ll be a special interest circus. Just watch.

        The Obama administration was supposed to keep lobbyists away from government, not lure them in with their socialist revenue raising tricks.

        Further, we are a nation of consumers. It’s what we do best. Unlike Germany and Japan who rely largely on exports to run their economies, 70% of our economy is fueled by consumer-based spending. It would be insanity to punish American consumers with a tax that’s bound to impair that beacon of growth.

        This is a sobering moment. Literally and figuratively. Not only does it mark the end to every reason our ancestors left their countries to seek a better life in a free and prosperous society, the good folks in Washington will also be taxing our liquor even more leaving us with nothing to numb the pain.

      • I think a VAT on top of all the other taxes would devistate the economy. I do not like this form of tax because it is added to all goods at every step in the manufacturing process from the mine to the driveway. Hence there is a lot of wasteful paper work. Also, it is a hidden tax. I would prefer a national sales tax that is visibally assessed at the point of sale to the consumer (individual or business) but only under the condition that a large number of other taxes are eliminated.

  18. Texaschem says:

    William Penn: “Those who will not be governed by God will be governed by tyrants.”

    Yup. A concise way to point out that, to the extent our institutions of social discourse fail to facilitate our free assimilation of good will each to the other in respect of higher morality, we must resort to rule under force.

    That force will be rationalized by tyrants who will monopolize detailed control over our governance. Which is exactly what’s happening right now at this point of time in the history of our beloved America!

    There has been an ongoing Psy-Ops operation by the cultural elitist leftards for the minds of our children for decades.Our education system has been infiltrated to the point that critical thinking is becoming a thing of the past.The Left has corrupted the education system in the USA to become nothing more than an inculcation machine. Ideology in one end – little robots out the other.We produce automatons with the majority of our public fed/state funded education systems.This is why I send my kids to a private school that not only teaches the three R’s but also fine arts and cultural philosophy.

    It seems that Ayn Rand was correct….that the struggle that I am talking about (i.e. to orient the hearts and minds of the population toward the “truth”) is really a struggle of competing Philosophies.

    If your asking yourself what this post has to do with the various concepts of taxation being espoused here then I suggest you read my post again and work on your critical thinking skills! ‘)

    • posting for comments!

    • TexasChem says:

      So…

      I just finished a rib-eye steak from an angus steer raised on my father in-laws ranch with a baby spinach salad sprinkled with bleu cheese crumbles.Canned tomatoes put up from last year and a very cold bud light.*burp*Simply fantastic…the steak just melts in your mouth as if it were steak flavored butter.mmmmm

      Anyways I posted yesterday on this topic and am amazed that no one has replied to it.I at least expected some anti-religious, uppity elitist zealot to have something to say about god interfering in the affairs of mankind or some such bologna!

      Does no one else get it?
      I ask myself quite frequently if I am the only one that does.
      I wish the rose colored glasses and kool aid could be countered by some means instantly whereas all people could see the lie they have been coerced into living all these years!

      People don’t get sidetracked and diverted by the spouted mantra of those that do not have your interests in mind.Stay with the original subject and determine the underlying cause of that subjects problem using formal reasoning to build proofs to prove your arguement!

      Forced taxation is morally wrong and criminal.

  19. Borrowed from Prof. Rowley.

    He attacks the same ideas as USWep a couple of posts ago. Great minds, and all of that 🙂

    The correct definition of liberty or freedom is negative freedom, the condition of men in which coercion of some by others is reduced as much as possible.

    Liberty, or freedom, describes the absence of a particular obstacle – coercion by other men.

    The presence of liberty, or freedom, does not guarantee man wealth, good health, good looks, happiness, or indeed any circumstance in life except freedom from coercion.

    Liberty, or freedom is not universally valued by men, but for the man devoted to liberty or freedom, there is nothing that makes it important. …..

    The direct enemy of negative freedom is positive freedom, which derives from the desire by man to be his own master, to be independent of external forces of whatever kind, to be rich where he is poor, to be handsome where he is ugly, to be healthy where he is sick, to be happy where he is miserable, all by invading the negative freedom of others, by coercing them to his will, by divesting them of their properties for his own advancement and the supposed advancement of others in society.

    In essence, the difference between negative and positive freedom is encapsulated in the difference between the classical liberal doctrine of limited government, private property, individual liberty and the rule of law, on the one side and the progressive socialist doctrine of unlimited government, communal property, the regulatory state, and rule by any vote majority, on the other side.

    [Positive Freedom, t]ranslated: “Give me digital television and a DVD recorder in my prison cell, and I am free.

    Just push my three squares a day through the slit in my prison door and I am free.”

    Nurse me from the cradle to the grave in my warm prison cell, and I am free.”

    They are redistributive transfers that require the coercive power of the state, and that significantly diminish the liberty, or freedom, of mankind.

    • I had to think for awhile on this post by the Prof. – because it so perfectly described Freedom.

      For me (as a “Negative” Freedom lover) this line was the most important:
      but for the man devoted to liberty or freedom, there is nothing that makes it important.

      And he has no reason for his devotion.

      Exactly.

      Freedom is hard.

      It hurts most of the time.

      You’ll probably die, and badly, fighting for it or defending it. No man finds anything about freedom in its fruits to justify it.

      Most of its fruits are bitter.

      Freedom is, ultimately, its own justification.

      Because, really, without it, nothing else matters.

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