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Posts Tagged ‘taxes’

Romney: I’m “entirely inconsistent with the concept of one nation under God”

22 Feb

Who can still believe that Romney is a fiscal conservative?

Take 1:

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you have a president encouraging the idea of dividing America based on the 99 percent versus one percent — and those people who have been most successful will be in the one percent — you have opened up a whole new wave of approach in this country which is entirely inconsistent with the concept of one nation under God. – Mitt Romney

This was a representation of those on the right who have a problem with the president speaking of Americans in classes of people, and pitting them against each other. Many conservatives lean toward a flat tax or a fair tax rather than the progressive tax that penalizes those who create wealth in order to redistribute their property to those who haven’t been creating wealth.

Obama had previously proposed in his “Jobs Bill” limiting deductions on the wealthiest Americans, which would result in fewer donations to charities, and would in effect be a war on non-government charities. The idea is consistent with Obama’s perspective that government is the answer to every problem. He’s simply working on putting charities out of business. First with the “Jobs Bill” reducing contributions, now restricting the exercise of religion on employers.

In addition to dividing Americans into classes, many conservatives object to the language of people paying their “fair share.” The questions are significant: Who decides my fair share? What is “fair”? Why is my “fair share” different than someone else’s? In America, do we even have shares to pay?

Take 2: Today Romney announced his newest tax plan: Drop everyone’s tax rates except for the 1%, who need to pay their fair share:

Romney said his plan to limit mortgage interest and charitable contributions deductions would not impact middle income families. Instead, he noted, he wants to “make sure the top 1 percent keeps paying the current share they’re paying or more.”

Romney’s plan is everything he criticizes in Obama: Dividing Americans, and picking and choosing who to penalize because they aren’t paying their Fair Share.

Romney simply declared today that he is ” encouraging the idea of dividing America based on the 99 percent versus one percent — and … entirely inconsistent with the concept of one nation under God”

We have a liberal, 2 conservatives, and a libertarian running for the Republican nomination. Gingrich continues to lose steam, but will make a great advocate for conservatism. Vote Santorum.

 
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Posted in Politics, Reason

 

Bridge to nowhere, vote conservative

26 Nov

image

Near Wadsworth and Bowles in Littleton, Colorado, a bridge was built over a crosswalk.

The bridge connects Southwest Plaza mall, with its huge parking lot to a huge parking lot of a strip mall that is largely abandoned, save a Staples and a few other stores.

This unused and poorly planned structure carries a price tag in the millions for tax payers. On Black Friday, some people finally used the bridge – to protest it.

 
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Posted in Politics

 

Intellectuals and Herman Cain’s 9-9-9 tax plan: no analysis.

30 Sep

I’ve been reading Intellectuals and Society by Thomas Sowell.

A few characteristics of intellectuals stood out to me from this article in the Christian Science Monitor by Diane Lim Rogers, an economics professor:

A reporter called me about it, which was the only reason I went to the Cain website to check it out for a few seconds, which was all it took to “get” what his proposal is basically about…

I don’t know if I’ll feel compelled to say anymore about the Cain tax plan unless the candidate actually seems to have a decent chance of getting the Republican nomination, but on the way to seeing if that happens I hope people recognize how insane his tax plan is without needing any detailed analysis. This is one plan where my biggest reaction to the plan is not that it doesn’t raise enough revenue. Like I said, theoretically it could, but why would we ever want to do it that way?

It’s sort of an example of what I called “Neanderthal tax policy” in my Tax Notes column.

via Cains 999 plan: Not sane tax policy – CSMonitor.com.

  1. Intellectuals have an over-developed sense of arrogance in their intellect. This columnist writes that she only took a few seconds to read up on the tax plan of republican candidate Herman Cain. It’s a simple admission that she has written an article to dispense ideas when she’s only put a “few seconds” into research.
  2. Intellectuals tend to bypass real argument and real facts with name calling and other distractions. This columnist really hopes that everyone will call the simplified tax proposal “insane” all “without needing any detailed analysis.”
  3. The refusal to do any detailed analysis is another pattern Sowell points out in his book. When an idea isn’t the idea of the intellectual, they ignore the data, and refuse to look into the facts behind the proposal. This columnist isn’t opposed to the tax structure because it’s bad; he’s not opposed because it wouldn’t work; he’s opposed to it because, as she writes, “why would we ever want to do it that way?” In fact, she had previously written an article about tax policies and proudly declares here here that she feels no need to read about alternative tax policies.
  4. She ends the article by calling Herman Cain a Neanderthal. While this would instantly be called racism if spoken against our President, it’s simply another example of an intellectual-style argument: dismissing  any opposing argument as simply out-dated. In the mindset of the columnist, simply calling something ancient (or more insultingly “Neanderthal”) is supposed to cue everyone to never consider the idea.
 
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Posted in Books, Politics

 

Tax Cuts for the Rich

10 Sep

political satire cartoon about tax cuts for the rich

Cutting taxes for the richest citizens is only a bad thing if you believe it is the government’s job to punish people for being successful.

Those who want to raise taxes on some and lower them for others do so because they believe it’s the government’s job to use the power of the federal government to pick winners and losers – to punish people arbitrarily for what they like and don’t like.

My kids get paid for doing chores. If son 1 does more work more efficiently and earns $4 but son 2 only earns $2, is it my job to forcibly take away money from the one who earned more and give it to the one who earned less?

No. It’s immoral.

Political cartoon of redistribution of candy at Halloween

On the other hand, those who want to lower taxes do so because they believe that money in the private sector is more productive for the economy and freedom than government confiscation, waste, and redistribution

The private citizen has no vested interest in wasting money. The citizen (and corporations run by citizens) are interested in investing the money to get something of greater value, whether that’s goods or more money. So if the rich keep more of their own money, they invest more in the market – that’s putting money into businesses, who add value to the economy and create jobs.

This pursuit to get more value drives the market and also drives corruption, where someone will want to use their ability to impede the ability of others’ liberty for their own gain. This is where the government steps in, protecting the citizens’ liberty from being infringed on by others.

These two views are diametrically opposed on what the purpose of the government is. The first “liberal” view is that the government’s job is to solve all of society’s problems and through arbitrarily deciding what is “fair,” pick winners and losers by force (like taxing some at different rates than others). In this view, government is the solution to everything and should be always getting bigger and more invasive in citizen’s lives.

The second “conservative” view is that government’s role is ONLY to do things that the market cannot practically do – protect people’s inalienable right to liberty from being invaded by others in or outside of the country, and a few other things that private citizens or corporations can’t do. In this view, government intervention into people’s lives is a problem, and government should be strictly limited with enumerated powers.

The second view is how the founders set up America, and is the view that lead to America’s greatness from the start.

 
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Posted in Politics

 

The Rich Need to Pay Their Fair Share

09 Sep
Photo of Obama at his Job Speech to the joint session of congress on September 8, 2011
Obama speaks to congress about the rich needing to pay their fair share.

As expected by many, Obama’s job speech last night consisted of recycled rhetoric and finger pointing. One of the key phrases he uses is:

The rich need to pay their fair share.

The ambiguity of this statement is astounding. Clarity is needed, not Ambiguity. As G. K. Chesterton said, “Evil always takes advantage of ambiguity.”

So the questions are:

Who are “the rich”?

“Rich” and “Poor” are arbitrarily defined by the government. President Obama picked a number $250,000. If you make that much or more in a given calendar year, you’re rich.

“Poor” is also arbitrarily defined.  I recently heard a reporter say that one out of seven Americans is “poor.” I don’t think the reporter was lying, but they are speaking according to whatever income dollar amount the federal government picked to define the poverty level.

There’s nothing to stop the government from saying that the “rich” are those who make a million dollars per year or those who make more than $40,000 per year. Likewise, there’s nothing to stop the government to adjust the numbers to show that 50% of Americans live in poverty.

The terms are meaningless. They are only used in order to create angst between American citizens and to create a class warfare of classes that the government arbitrarily picks to pit against each other for the benefit of the politicians in power.

What is a person’s “fair share”?

The consequence of falling into the group that Obama calls “the rich” is that you are to be despised by all other Americans. You are wronging all Americans by not paying your “fair share.” The problems that citizens experience are your fault.

What is the fair share of the rich? Let’s take a look at some numbers

The richest half of tax payers have 100% of the taxes. The less wealthy 50% pay nothing – in fact, they have  net gain from the government, usually through social programs where the taxes paid by the 50% that pay is paid to them through welfare, social security, etc. Is it fair that only half of the country pays taxes?

The richest 5%, those who made over $160,000, paid 59% of the taxes. 5% of people paid more than half the taxes in America.

It’s startling to look at the numbers and and realize the president thinks the top 5% paying about 60% of the total tax revenue is not their fair share. If they have to pay more to pay their fair share, how much would the top 5% have to pay?

Tomorrow: Tax Cuts for the Rich.

 
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Posted in Politics

 

Why a Fair Tax Would Be Better.

01 Nov

This is the second of a 3 part series on taxes.

1. Flat Tax

2. Fair Tax

3. Basic Economics and the Laffer Curve

Here in Colorado, appointed-never-elected Democrat Senator Michael Bennet launched a deceptive attack ad on his opponent, Ken Buck, claiming he wants a 23%  tax hike.  Here’s the ad:

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Other Democrats around the country are attacking conservatives for the same thing.

And really, who would want a 23% sales tax?

To answer the question, we have to clarify what we’re talking about.  The conservatives talk about two types of tax alternatives. A Flat Tax and a Fair Tax. I wrote about the Flat Tax previously. The sales tax is called the “Fair Tax.”

The basic idea is this: Instead of penalizing earning money (income tax), saving money (interest tax), investing money (capital gains tax), and passing money on (death tax), we just collect taxes when money is spent.

Some liberal Democrats have suggested adding a federal sales tax in addition to income taxes. Some Conservatives are in favor of the sales tax, but instead of income taxes. This would likely require an amendment to the constitution.

The Math: Tax inclusive or exclusive?
The math on this is a bit tricky. We speak of income tax in tax-inclusive terms. A 23% tax means that 23% of your money goes to the taxes : out of $100 total, $23 is paid in taxes, 23/100 is 23%. We use different, tax-exclusive, terminology with sales tax. If a purchase total is $77, and the tax is 23%, we’d normally say it’s a 30% sales tax, as 23 (taxes)/77 (purchase amount) = 29.8% tax-exclusive.

This causes some confusion because the 23% tax could also be called a 30% tax when calculating it differently.

The Math: Why is 23% the magic number?
23% sales tax would be collected in place of income tax, Medicare tax, self-employment taxes, and corporate taxes.  This would pay for:

  • replacing the revenue the government currently makes with the current system.
  • sending prebate checks for low-income Americans
  • a few percent to pay retailers and local governments for collecting the sales tax.

23% Seems really high, even as an income tax. However, our current system taxes us more than just our tax bracket. Most people fall in the 15% income tax bracket, everyone has 7.65% taxed in payroll taxes, and the employer has to pay an additional 7.65%. That’s already more than 23%.

What’s a prebate?
The fair tax prebate  is a check mailed to poorer Americans at the beginning of every month to pre-emptively pay the sales tax for them.

What’s the benefit?
Suddenly everyone’s income would jump up without having to get a raise. Businesses would no longer have to pad their prices to pass corporate taxes on to consumers so every product becomes cheaper. Only new products are taxed, not used items, so anyone shopping at a thrift store for clothes just gets cheaper clothes.

Your life savings is no longer taxed, so everyone’s retirement funds are more valuable. The IRS would be able to be dramatically downsized because retailers and states would receive a portion of the tax revenue as payment for their collecting it. There would be no tax filing every spring.

The “fair tax” sales tax, like the flat tax, removes the system of loop-holes and allows everyone to pay a lower tax rate instead of just the poor and the super-wealthy. Both would stimulate the economy. Both would remove government financially rewarding and punishing Americans for behavior politicians favor or disfavor.

For more information, check out the FAQ over at the fair tax website.

 
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Posted in Politics

 

Why a Flat Tax Would Be Better.

22 Oct

This is the first of a 3 part series on taxes.

1. Flat Tax

2. Fair Tax

3. Basic Economics and the Laffer Curve

Flat Tax

Today in America we have a progressive tax system. The greater your income, the greater percent of your money goes to the government.

One rate to rule them all.
Google was in the news yesterday when it was discovered the company pays only 2.4% income tax.

As it works out, almost half of Americans pay no taxes and the wealthy can afford lobbyists to influence legislators to create tax loopholes and accountants to utilize them. The tax rates are so prohibitively high, it’s worth the extra cost of paying lobbyists, attorneys and accountants to figure out a way around them. If businesses and individuals didn’t have deductions and credits, businesses would shut down and people wouldn’t have enough money. We’ve created a tax system that’s unrealistic.

A flat tax means one tax bracket for everyone. The US government would make the same amount of tax revenue if everyone and every business paid 13% income tax. That’s about equivalent to rate that applies to the poorest Americans who pay taxes.

Almost no deductions or credits.
The only way for one tax rate to work is to get rid of all of the “loopholes,” or tax break incentives. Deductions and credits are used to provide incentives to manipulate people into certain behavior. We want people to be homeowners, so we reward them and renters have higher income taxes as we punish them for renting. We want people off cigarettes, so we smokers pay higher taxes. The government rewards people monetarily for behavior that the politicians-in-power like, and punishes people monetarily for behavior the politicians-in-power don’t like.

The theory is that taxes should be used to provide government with the money it needs to fulfill it’s constitutional responsibilities. Taxes should not be used as a reward and punishment system to manipulate choices of the citizens.

The resistance, of course, is that we like our tax deductions and tax credits. If this is an argument it simply reveals that it is not just those on welfare who are dependent on the government. It means we are if we’d avoid a more just system because we want to chase after government financial rewards for good behavior.

The 13% rate includes deductions for mortgage, rent (so renters don’t have a heavier tax burden than owners), and not much else. The system also includes help for poor Americans.

Benefits of a flat tax
A flat tax would mean everyone would have ownership of government. We  would not be dependent on the government dole to give us back our tax dollars, we’d all pay something, relative to our income. A sense of ownership would do wonders for the half the country that doesn’t pay taxes today.

The IRS could all but shut-down. Payroll costs go down. Americans would save millions of hours and dollars preparing their taxes. How difficult would it be to calculate 13% of your income?  The tax form becomes a half-page worksheet.

The greater your income, the more dollars you send to the government. The lesser your income, the fewer dollars you send. How straightforward! At the same time, it would help us back away from the class warfare language that the Obama administration has been pushing. We’re supposed to hate the rich (arbitrarily defined as those who make over $250K), and love the poor (arbitrarily defined as another income bracket).  Why? If the poor have money, they have the ability to use what they have to move up through income brackets. If rich people have money they tend to invest it in companies that hire people at lower income levels, which is job creation.

 
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Posted in Politics