Michael Moore’s preferred 95.6 % Income Tax Rate

  I saw Michael Moore on Hannity the other night and maybe some of you did as well, but I decided to put his (Moore’s) demeaning comments to Hannity down on paper mathematically.  If you watched the show you know that he was talking down his nose to Hannity all night suggesting that he didn’t care about the “poor” at all.  When Hannity asked Moore to define what his tax plan would be he said the following below.  Please bear with me as I transcribe his comments into real values.  Also my assumptions are not assumptions at all, but based on “taxing the rich” as Moore prefers.

 

Since we are talking about the rich and both Hannity and Moore could be described as “rich” with each making income in the million’s I am going to make this analysis based on the Maximum tax bracket in both the Federal and State model and I am going to ignore the slight impact of the lower brackets since it is insignificant within the class of the rich.  I am also going to “assume” for the purposes of this analysis that the “rich” in question here are “self employed” people since most of them are such as Moore himself, Hollywood Stars, Rock Stars, etc.  These are the rates effective for 2009.  

 

Mr. Moore said that both he and Hannity could afford to have their tax rate “doubled” and that this should happen and would be disappointed if Obama didn’t do this.  Although Hannity took him to mean doubling ALL their tax rates I believe that there was a disconnect between Hannity and Moore on this point.  I am going to assume the conservative approach and say that Moore was only referring to the Federal Income Tax Rate (if I am wrong and he is suggesting what Hannity thought he heard, watch out, that is a combined tax burden exceeding 100% of income).  Since the maximum Federal Tax Rate (effective on income above $372,200 for Married Filing Joint) is 35% Moore’s “doubling” of the Federal Tax Rate would bring his practical “Federal” tax rate to 70%.  He went on to state that it was a scandal that “high earners” paid Social Security Retirement tax only on the first $106,800 of earnings with the rest being untaxed.  He thought that this was an abuse of the lower earners and a shame on the higher.  (He didn’t mention that through the IRS taxation of Social Security Earnings that by far that most of the Social Security payments are made to the lower income earners.)  So adding this tax to not only the first dollar but the last dollar of earnings as well brings this component of tax up to 15.3% on all income.

 

In addition to this we can assume (though Moore didn’t state) that the State Income Tax is still part of the “overall” tax package as it affects the tax payer.  States vary in such rates, but since most of the noise on the matter is coming from California, I’ll use their tax rate as the example in this model.  That “maximum” tax bracket is 10.3%.

 

Adding this all up you will get a combined 95.6 % (70.0 % Federal Income Tax, 15.3 % Combined Social Security & Medicare Tax, and 10.3 % State Income Tax-CA).  

 

This 95.6% is simply those taxes based on income and do not recognize Real Estate nor Sales Tax.  (Of Course in addition to “income taxes” the Democrats through the voice of Nancy Pelosi are now considering a “National Sales Tax” (VAT) on top of it all.

 

So, lets take a great income of $10,000,000 for these “filthy rich” celebrities, stars, Entrepreneurs, business owners, etc.  So here you have a Gross Income is $10 million and after deducting the taxes that Michael Moore and his ilk have in store for you, your “take home pay” (i.e. after tax income) is $440,000 and you may say “gee that is a good income and so right you may be, but this the amount before further reduction due to sales taxes and Real Estate taxes on those expensive houses, and with that you will probably be in the S300’s take home range.  If you are not so talented and only making $5 million per year you can count on a take home pay before sales and real estate taxes more in the low $200,000 range and this is before putting anything aside for Retirement or children’s education (assuming we ignore the VAT tax on top of this all being considered by the Democrats right now).  I have to believe that the Jet Fuel for this class of liberal is more than $200,000 per year alone.

None of this analysis begins to approach the element of “risk” that the “rich” must confront in order to develop a business that will earn them a profit of $10 million, $5million or even less.  When you take this into consideration you have a situation where nobody would take the risk to develop the jobs that the country needs.  At the 10 million level of pre tax profit you might have a Gross business of $100,000,000 with a 10% pre-tax profit (which would be great) and if you were fortunate enough to obtain a rate of return on your invested capital of the lofty number of 20% this would mean that you had “at risk” capital of $50,000,000 to fund this type of operation.  In short you are risking $50 million with the hopes in a good year of making maybe $300,000 take home pay.  Not me……..and I doubt you would either.  I’ll just keep the $50 million risk free and you can look for your jobs elswhere.

Now this is change you can not only believe in, but that you are going to get………………….

October 10, 2009 | Filed Under Administration, American Left, Economics, Taxes, The Left | 3 Comments 

“Collective” Praise by School Children

  Now back at the Florida Headquarters from Ohio then Nashville (nearly adjacent to the EIB network) J

I wanted to post a personal email I sent to a couple of friends last night that are occasional readers and commenters here at NSL, though not on the flattering side.  I have taken the liberty of nominal editing and redaction of some actual personal numbers in this republished letter, but you can trust that they were just the same significant, at least to me.

I’d hope that while the left is taking a page out of the Mao Tse-Tung songbook of “collective” praise by school children for the leader (mmm, mmm, mmm) that some might read the article (below) about the “real world” and learn something about how finance actually works, but then again that is why they say about SOME teachers: ”those that can do, do …. while those that can’t do, teach.”  New York is worried and perplexed about why the income tax revenues from the recent piled on tax of the “wealthy” this year is not meeting expectations even after adjustment for the recession.  The truth is (and to their future and intensified dismay) because it was enacted just this year the “wealthy” have not yet been able to implement their “end game” economic plans.  This year down 20% but look out for additional exodus from New York that will not only erode some of the planned increase, but take money off the table that previously existed under the prior tax structure.  You might say, “well, that is a state problem,” but they can’t run away from the Federal Government.  This is the naiveté of the left.  These people are the primary employers in the country and just watch them move investment & production offshore because of this type of stuff and cap & trade, etc.  [Just like Obama did in 2008 with the proceeds of his book sales income invested almost entirely in foreign investments.]

 

Though just a small player in the financial world, I am a “tax refugee” from Ohio myself.  I make most of my income from stocks and the stock market.  My margin cost (i.e. investment interest) can run to 50% of my gross proceeds (and has been 80% in the past).  Ohio is one state that does not recognize the legitimate expenses of producing income and wants to tax the gross not the net.  Even the Federal Government allows this type of expense though be it “below the line” as they say and then they also have an “unfair” “run off” of Schedule “A” deductions and of course taxing the gross through AMT outrage.  Any self respecting “progressive” won’t see anything wrong with this at all and others will justify it by accusing and citing what they personally didn’t like about George Bush or some ad hominem comment like that, but the bottom line is this is costing governments “revenues” and they just can’t seem to grasp that.

One example is that I myself now file as a Florida resident (and you can be sure I am dotting the i’s and crossing the t’s religiously on the residency game).  I went ahead and calculated my hypothetical OHIO taxes for 2008 (just for personal humorous entertainment since I became a refugee in 2007).  Well, I laughed when the computer gave me the answer.  Even though the rate is about 30% lower than CA, if I were an Ohio resident in 2008 I would have sent them a check for $XX,XXX.  If they had responded favorably and reasonably to my petitions to have margin or investment interest deductible against investment income, I would have only had to pay around $XX,XXX in taxes.  A couple of Republicans proposed this legislation (which I think I may have influenced) but the “progressives” shot it down.  Their “progressive” ignorance not only cost them the $XX,XXX extra tax they wanted from me but the amount I would have paid if they had allowed investment interest deduction as well.  In short they lost it all.  You say “no big deal” but remember I am not the only one.  I meet “tax refugees” down here all the time.  Ted Turner is one by his own admission. (though I didn’t meet him)

 

If teachers or people want their children to learn something that will be of value apart from some inane mantra about the leader however creepy it may seem, they should teach them the lessons of this article (just think how delicious the response would have been if it were George Bush they were singing about 2001-08).  Since people still have certain freedoms the schemes of the left are doomed to failure, but I think they know this and realize that they will have to deal with what we once thought of “as” our freedoms.  [just for starters take note of the Baucus health care bill requiring the young & healthy to buy health insurance or pay $3,800 +/- “tax” under penalty of fine and imprisonment in the gulag (most likely un-constitutional now ….. pending future vacancies) in order to subsidize health care for the older and other uninsured (which now looks like will include “illegal aliens” by simply declaring them legal).  Just think what a world wide health care magnet that will make us…….we’re so wonderful]

 

About the article below, read it, memorize it and don’t forget it…………. They already tried this with the aviation and marine industries during Clinton and it failed so badly that Teddy Kennedy led the repeal himself. But along the way it cost untold thousands of jobs and was a “net income loss” for the Treasury.  The Democrats bragged about it being a luxury tax on the rich.  No “rich” person paid the tax and none were denied luxury yachts or private jets or non-jet aircraft, yet they (the rich) still created a lot of jobs…….overseas.  What is it they say about what the deffinition of insanity is?  But what the hell, change is coming.  (heard that before too)  http://news.yahoo.com/s/ap/20090927/ap_on_re_us/us_taxing_the_rich

September 28, 2009 | Filed Under Administration, American Left, Economics, Health Care, Political Correctness, Politics, Taxes, The Left | 1 Comment 

Blood for Votes (and other musings)

  Obama claims that he doesn’t want to nationalize U.S. businesses, but as I see it, Obama has been in office a little over 4 months and he has turned our legal system upside down and stole the property that belongs to the “secured” and senior lenders to GM and Chrysler in order to essentially “give” those companies to the unions, his largest political financial supporters which are junior and unsecured.  Nice payback payoff ……what is it they say; “elections have consequences.”  This is more adept than the Russian Revolution of 1917.  Remember the misery this brought Russia and others for nearly a century following that little experiment?

To the surprise of the executives in the car industry and dealers, he has dictated the closing of many car dealers nationally without a mechanism to insure that the survivors are not Political Favorites of Obama while many “successful and profitable” dealers are being closed outside of the parameters set up by the auto industry for continued existence.  The only significant justification that you can deduce from this is that they are (as most in fact were) Republican supporters.  He fired the head of GM and replaced him with an “Obama friendly” retired communications executive, Edward E. Whitacre Jr., who claimed on the day of the announcement that he “doesn’t know anything about cars.” Go figure.

Now he is running the banks and deciding how much their executives can earn.  He has even hired a salary “czar” to establish their pay grade.  He likes this idea so much that he is looking into expanding this to other industries.  Steve Ballmer, CEO and co-founder with Bill Gates of Microsoft has been a supporter of Obama but stated that they will move Microsoft “offshore” if Obama continues down this punitive path of taxes and making companies non-competitive in foreign markets.  While attacking US corporations that do business overseas and receive tax benefits for it and wealthy taxpayers not paying enough tax, he himself (according to his published personal taxes for 2008) almost exclusively invested those millions of book royalties U.S. Tax Exempt offshore companies and tax exempt bonds….check it out yourself.

We passed a $800 Billion pork laden program under the guise of “emergency stimulus” to save us from the “Bush economy” [see my link HERE on Obama and the “Community Reinvestment Act” that I posted this past October revealing the real cause of the financial meltdown] and used this urgency as the cover to violate his own campaign promise of posting legislation for 48 hours on the White House website so all could see its contents.   He called it his “new transparency.”  Instead he delivered the 1,000 page bill to the Republicans for first review at 11 PM with a final vote scheduled on it the following morning at 9 AM.  Is this the transparency he promised?  The only thing transparent is that we were played for fools.

The way we know that this bill has nothing to do with “emergency stimulus” (even as it was designed and written) is the fact that 2/3rds of it wouldn’t be spent until 2010 and 2011 with most of that being in 2011.  But it couldn’t wait another 48 hours on the website for proper disclosure.  After it was shot gunned through Congress, Obama took a vacation and didn’t even sign it till mid (the following) week.  Heck, not even the rank and file Democrats had a chance to read it.  But this has all turned out even worse than that because they have only spent 5% of it to date, but you probably recall that part of its sales pitch was that we had plenty of “shovel ready” projects ready to go to effect an immediate stimulus……….not so.  The economy is now beginning to recover without much Federal Stimulus money and even though it will likely be a protracted recovery, maybe we should revisit this spending and cancel it and save our children and grandchildren much grief.

He further emphasized the urgent need of the “stimulus” package in order to avoid the unemployment rate from going over 9% this year.  Well, that strategy worked and that ill designed “stimulus” package did pass and almost exclusively by Democrats but the unemployment rate already hit 9.4% last month.  Now just yesterday he has fired the Inspector General who investigated some suspicious illegal activities of a crony of his own.

Every despot in the world is testing Obama and they are learning that they can get away with anything and they include not only Iran and Venezuela but N. Korea as well.  N. Korea tested nuclear bombs and missiles in contravention of US and UN warnings and yesterday the UN passed a resolution permitting UN member countries to “interdict” N. Korean vessels suspected of caring weapons.  Obama stated yesterday that he intends to challenge such vehicles on the open seas, but wouldn’t use force to board them…………  Do you see what I see here?  He has essentially neutralized even the weak action of the UN and stated IN ADVANCE that we wouldn’t actually stop them.  What kind of leadership is this?  Do you think N. Korea will be inclined to cooperate with the “spirit” of the UN action since we have notified them that we won’t enforce it?

He has been on a world wide tour apologizing for the “misdeeds” of America without mention the countries we saved, the poor people we have fed, etc. and he has even unilaterally stated to the nations of the world that the United States is NOT a Christian nation.  Ok, I can live with that maybe if he let it go at that, but then he goes onto Moslem soil and states that the United States is one of the largest Moslem nations.  Truth is, even by those metrics we are not.  We would be far down that list.  You may have noticed that he managed to exempt his own culpability from all these woes that America has brought on the world.

Obama and his party are doing everything to release real terrorist that we have captured while simultaneously strategizing to prosecute real Americans that protected us from them.  Now Pelozi wants to release photos that even she agrees with U.S. Generals will cost American’s lives.  People don’t understand why she would do that, but it is an easy assessment.  She is playing to the political left in San Francisco that is demanding this.  She has placed her reelection and position ahead of Soldiers lives.  The Deomcrats once (often) said “Blood for Oil” as they criticized Republicans.  I think this is much more clearly Blood for Votes.  (You can’t come up with any other analysis of it.)

What is the cost of all this…………..?  Essentially every economist (eliminating those with a White House connection) feel that the Obama program will bankrupt the country and leave our children with an insurmountable debt at a time they will already be going broke over the existing Social Security and Medicare problems.  Obama said last week “you ain’t seen nothin yet.”  With Cap & Trade and Cap & Tax he will permanently make the US non-competitive with the rest of the world so we can be seen as “politically correct” in solving a problem (global warming) that either doesn’t exist or is not caused by people.  The primary Charlatan and Elmer Gantry of our era is Al Gore.  He has already made $100 million propagating his junk science that he won’t debate with opposing scientists and he is on the threshold of making Billions by becoming the primary “broker” of carbon offset credits.  Understand this is a Ponzi scheme that moves around the production of carbon but doesn’t reduce a single pound of emissions.  Did I tell you that C02 is NOT a toxic substance and is necessary in the photosynthesis process?  You breathe C02 in and out with every breath.  If you didn’t you’d be dead.

Let me conclude and say I smell that Obama is on the threshold of betraying the Israelis in a fundamentally existential fashion and he is headed in the direction of being the biggest elected disaster in the history of the country………..stay tuned.

June 13, 2009 | Filed Under Democratic Hypocrisy, Economics, Global Warming, Muslim/Islam, Political Correctness, Politics, Taxes, U.S. Constitution, War on Terror | 6 Comments 

The Tax Exempt Cabinet

  Obama was fortunate to receive an early Presidential endorsement from former Senator and Leader of the Senate, Democrat Tom Daschle.  Obama has stated that Daschle has been a long time advisor in his Presidential campaign.  In June of 2008 Obama declares victory over Hillary Clinton in race to secure the Democratic Presidential nomination.

          Also in June of 2008 Tom Daschle claims that “SOMETHING made him think that the limousine and driver he had been receiving from his employer (InterMedia Partners) since the beginning of 2005 might be taxable income since he used it 80% of the time for personal use.”  The total tax due on the unreported income of over $250,000 was $128,000 (plus $12,000 in interest and penalties).

          His Accountant said yes that would be the case it could pose a problem for him.  Since Daschle had not included this income on his tax return for the years 2005, 2006 & 2007 he was delinquent in his taxes and he would be required to notify the IRS and pay the late taxes and penalties immediately.

          Daschle claimed he was going to take care of the delinquent taxes (already 3 years delinquent) in April of 2009 when he files his 2008 return and expressed it in a way that might lead you to think it would appropriately be part of his 2008 filing.  Sorry, that is not the case, it is totally a separate issue and would continue to accrue interest and penalties for an additional 9 months.  But, Obama had not been elected in June and it was entirely possible that he might not be elected at all and even though I am sure Daschle knew he was on the list for a top appointment, he couldn’t be sure he would even have to confront the Vetting process at all, so why rush to pay a tax he may never have to deal with.  Also, if he waited to file his amended returns till 4/15/2009 curiously that is the date that the earliest of his delinquent years (2005) is released from liability by the statue of limitations and 2005 was the year of largest liability because duration of interest and penalties.

        If Obama does not get elected there would be no compelling reason for him to file an amended return.  If he does get elected he could file delinquently for years 2006 & 2007 (omitting the 2005 return) in April, 2009 and pay the piper in order to get the terrific powerbase as Health and Human Services Secretary.  In that light it might be a small price to pay.

          But subsequent events, to Mr. Daschle’s disappointment, have put the spotlight on Cabinet appointments after Obama appointed Tim Geithner as the Secretary of the Treasury and it turns out he didn’t pay all his taxes and he was going to be head of the IRS.  Mr. Geithner filed amended returns AFTER the Obama vetting team found the underpayment on his tax returns.  I am not sure why he had to wait for Obama’s staff to find it since he had received multiple notices from the IRS to pay the amount he owed, which he regularly ignored.  Mr. Geithner even signed documents yearly with the IMF (the International Monetary Fund) his employer acknowledging that he knew he was responsible for this tax and he even submitted reimbursement vouchers to the IMF for said tax which they paid him, yet he did not remit that money to the IRS.  Does this sound like an “error” to you?  Don’t be a fool.

          Back to Daschle.  It was also discovered by the Obama transition team that over the 2005-2007 period Daschle took $15,000 of Charitable Contribution deductions for donations he didn’t make to qualified tax exempt organizations (I’m guessing Political Donations),  AND…… in 2007 he received a consulting salary of $1,000,000 from InterMedia Partners of which he didn’t include $83,333 of that income on his tax return in 2007.

          Add this to the previous report that Charles Rangel, (D-New York), the Chairman of the powerful House Ways & Means Committee who writes the tax laws failed to report many years of rental income on real estate that he owned, claiming he wasn’t aware of his liability.

          These are the guys that have been the prime movers behind the tax laws over the last 20 years and they have repeatedly claimed that certain Americans are not paying their “fair share” and continued to push for increased taxes regularly.  This is the true “culture of corruption” in Washington.  But it is time to reward them with cushy political jobs with overwhelming power.

January 31, 2009 | Filed Under Democratic Hypocrisy, Taxes | 10 Comments 

Hmm…My Vote in the forthcoming FL Primary….. See 1/30/2008 Update Below

 Being a legal resident of Florida I am now and looking forward to the Florida Primary which is scheduled for January 29th.  Actually the voting in Florida has already begun in what is called “early voting” but we have decided to wait until the official date for a couple of reasons, with one being important and another being not so important.

First of all we will delay because we have never voted in Florida and sort of want to get a first hand orientation with process and our precinct (not so important on some metaphysical scale) and the opportunity to evaluate the candidates in the daily changing landscape (ostensibly more important).

I must say that my sentiments in this race had been shifting towards (not to) Mitt Romney and I had been alarmed somewhat at John McCain’s resurgence.  I have over recent years come to pretty much dislike John McCain.  I haven’t always felt this way about Mr. McCain and was even a defender and proponent of him during the era of the Keating Five and its role in the collapse of many Savings and Loan companies in the 1980’s.  This was an investigation initiated by the Senate Ethics Committee that was controlled by the Democrats in the Senate.  There was some real misdeeds emanating from the “gang of five” when examined as a whole, but it was clear to me at the time that it encompassed McCain in order to dilute the accountability of the Democrats who held the other four slots in that grouping.  Also innocently accused in this group of five was Democrat John Glenn but he became the sacrificial inclusion in the group to insure that it was a “bi-partisan” operation.

Well it didn’t work and no guilt was found in Glenn and even less guilt was found in McCain.  This little blip in the career of McCain has not seemed to have any impact on his political career since then.

But in short I had not yet picked a candidate in 08’ but had McCain ranked as third from last on my personal preference list of the Republican hopefuls.  Of course Paul was last and I had Huckabee as second to last.  The primary reason for my low regard for McCain stems from my disdain for his liberal leanings in the more recent years in the Senate (McCain-Feingold & opposition to Bush tax cuts-I am not going to again defend those tax cuts here, but if you are interested you can read the posts on the topic tax cuts and numerous comment responses throughout this website).

So what is the purpose of this post?  I might (don’t read this as a conclusion) vote for McCain.  Not because of a single thing he has said but because I saw an interview of Jack Kemp tonight where Jack has endorsed John.  Yes part of that is the “winability” strategy but he has explained his recent meetings with McCain where they discussed fiscal policy (both taxation and budgetary).  Jack dislikes the past of McCain as much as I do, but if Jack is satisfied with McCain on where he will head in the future, so am I.  (McCain has pledged a conservative tax and spending program)  I have been sort of an acolyte of Kemp’s and over the past 30 years he has been my preferred person to rise to the level of Presidency himself.  He was actually the intellectual architect of the Reagan Revolution at least as it depended on the tax reductions to come from Reagan’s administration.  You may recall the accolade of the “Kemp-Roth” tax cuts.  Well Regan’s tax cuts were authored by Jack Kemp.

So this leads me to my vote.  Yes…….it MIGHT be for John McCain.  (sheesh……I almost can’t even say that.)

UPDATE 1/30/2008:  Well the Florida Primary was yesterday and we voted for Romney.  Lot of complex and obtuse reasoning here, but suffice it to say I believe that McCain will get the nod and may be the only one to beat HRc (who I think will get the Democrat nod) but I want the coronation of McCain delayed in order to hold his feet to the Conservative fires that he has been pandering to a little longer.  My ultimate confidence in him rests only in Kemp as stated above.

January 22, 2008 | Filed Under Presidential Politics, Taxes | 25 Comments 

Frank Cerabino, Palm Beach Post

 I entered a discussion with Frank Cerabino an award winning columnist here in Florida with the Palm Beach Post.  It has been obvious to me from his writing that he is most definitely of the Liberal slant.  Frank is a former military person and graduated from the Naval Academy (1977) and later obtained a Masters Degree in Journalism from Northwestern University.  (It is too bad he didn’t spend that time studying economics.)

Frank said something in a column HERE that I took as more of the same tired left wing diatribe about “tax cuts for the rich” where he stated that these funds were coming from the have-nots and going to the rich, and he framed the discussion around the Megayachts that regularly sail in and out of the Palm Beach area.  He went on to conclude his article by stating (as an anchor to his overall conclusion) that “more tax cuts for the rich are in the pipeline.”  I know better than that so I wrote him asking him to point to his back up for these statements.  This launched quite a number of exchanges throughout the day where he would simply dip to an ad hominem belittling of me and totally avoid the “merits” of his own thesis.  (If you read the exchange you will clearly see why).  As you read below you should note that the comments in Red are by me and the comments in Black are by Frank.

Read this for a real life illustration of how influential people in the media want to level charges but not deal with metrics of a discussion about them.  I think Frank is a nice guy, but misguided by his own self-assumed brilliance like so many other liberals in the media that they expect you to accept their “pronouncements” and basically resent being questioned about them…….steve

————————————-Frank, In your article Megayachts prove not everyone is in the same boat, you mentioned tax cuts for the rich twice and the second time when you were wrapping up and summarizing your article you mentioned that tax cuts for the rich were in the pipeline.  You article didn’t actually reference these, could you elaborate.  I would be very interested to learn of what you are referring.
 
Thank You,  Steve————————————–Hi  Steve:
   These tax cuts, as you can see from story, run through 2010.
   Thanks for reading.
   Tax Cuts Offer Most for Very Rich, Study Says —FrankNOTE: For the sake of space Frank pasted a long article by another columnist regarding the Bush tax cuts that are set to expire in 2010 in response to part of my initial question.——————————-Hi Frank, Oh those tax cuts.  I believe that those tax cuts skewed the income tax burden to the upper end of the tax spectrum, not to mention delivering us from the Clinton recession.  But you mentioned additional tax cuts in the pipeline, which are those.  You really don’t do yourself service discussing tax and matters that you aren’t really up to speed on and to do so with such a bias spin as though somebody is doing something wrong, but I suppose it sells newspapers.   I am sorry to sound somewhat hostile here, I really am not, but really encourage you to look deeper into tax policy and consequences since you are in a position of influence. Steve——————————————The consequences of our tax policy, my dear FoxNews hound, is that the people who need relief the least are the people who get the biggest break. Yes, wealthy people pay a lot of taxes. But the percentage drop in the taxes they pay is the highest of any income group during the Bush years.  In other words, the burden was shifted more to the bottom, not the top, as you somehow managed to think.
     In fact, the tax cuts favoring of the rich have been touted by the administration as a wise move, because giving money to the rich is supposed to result in magically making everybody’s life better, through investment in the economy. But what it has done has widened the gap between the haves and the have nots.
   Clinton recession? I seem to remember a budget surplus, a booming economy, and the recent praises of Alan Greenspan, who in his new book, has the highest praise for Clinton’s stewardship of the economy. (By the way, Greenspan regrets being a cheerleader for those Bush tax cuts that haven’t panned out as advertised.)
     You don’t sound hostile, Steve, you just sound like somebody who has been conditioned to believe that we all do well when government takes from the poor to give to the rich.
     – Frank  

————————————————-

Frank,  (I have interlined his  statements above with my response in red)

 

    The consequences of our tax policy, my dear FoxNews hound, is that the people who need relief the least are the people who get the biggest break. Yes, wealthy people pay a lot of taxes. But the percentage drop in the taxes they pay is the highest of any income group during the Bush years.  In other words, the burden was shifted more to the bottom, not the top, as you somehow managed to think.

You seem to confuse rates with burden.  You are errant about this.  The burden of tax receipts shifted more to the upper bracket after the tax cut.  This is unequivocal.  If you are so sure would you like to pick up an easy $1,000? I put that up against yours and then I’ll prove my point.

Fox News Hound?  A little ad hominem don’t you think? …..I am a tax practitioner and specialize in tax and fiscal policy.  And since you are talking about the Bush Tax Cuts let me say that the people you say need relief don’t actually pay income taxes…at all….cummon, you know that.

     In fact, the tax cuts favoring of the rich have been touted by the administration as a wise move, because giving money to the rich is supposed to result in magically making everybody’s life better, through investment in the economy. But what it has done has widened the gap between the haves and the have nots.

Tax cuts always favor the people that actually pay them.  The important question is impact on the economy.  History is rife with examples of this and you might want to get off your Democratic “talking points.”  Do they do much of your writing?  By the way, economic policy is not magic and history points to the soundest course of action.  Nothing will make everybody’s life better.  The goal is to deliver the best for the most at the least (cost).  That is where egalitarianism misses the boat (no pun).  You wouldn’t want to live in the decaying society where all were equal once you realize what the least common denominator would be. Clinton recession? I seem to remember a budget surplus, a booming economy, and the recent praises of Alan Greenspan, who in his new book, has the highest praise for Clinton’s stewardship of the economy. (By the way, Greenspan regrets being a cheerleader for those Bush tax cuts that haven’t panned out as advertised.)

BTW you obviously haven’t either read Greenspan’s book or listened to his rebuttal to the point you and others are trying to make.  He does not claim that the tax cuts didn’t pan out, but that the spending should have been curtailed.  That’s his gripe.  Bush was wrong here, but I am sure his loose spending was applauded by you and the Democrats at that time.  I personally believe it was a misguided strategy to endear himself to the Democrats in Congress in the spirit of compromise……..I could be wrong………but Tax Policy and Spending Policy are separate issues and you won’t get away with trying to blur that distinction with me.

The Budget Surplus followed the people that control the spending in Congress, which came into office in 1994 and you know who that is, and I’ll add that the single biggest contributor to low inflation and economic growth was technological advancements resulting in productivity gains in that evil concept called “private enterprise.”  (of course you know this I’m sure) I suppose you didn’t realize that the 1st quarter of negative growth in the US economy nearly occurred in the 3rd quarter of 2000 the final year of the Clinton administration (still not the classical definition of Recession) and slightly rebounded in the 4th quarter of 2000 (Christmas impetus).  Any armature can look at the graph (see below) and see the economic growth was clearly headed down throughout all of 2000 while bottoming out after the 1st quarter of 2001.  By the time the recession was confirmed in March of 2001 Bush had been in office two months.  Are you telling me that you don’t know that it takes many month for economic activity to be affected by fiscal or monetary policy.   The stock market began its plummet approximately 13 months before Bush and that is typically the most common leading indicator for the economy.  Again, you aren’t suggesting that the fiscal policy of Bush during February and March of 2001 is what Greenspan is hanging his hat on for the recession are you?  In short it actually is a the Clinton/Greenspan era recession and many believe that Greenspan’s slow response to a contraction of the economy was in part responsible.  He’s isn’t going to make that eminently clear do you suppose. Common……tell it to the masses, but you can’t blow that by me.  This canard that you and others in the media try a propagate that it was a Bush recession (I’ve even heard some Democratic elected officials say “made worse” with the tax cuts……how preposterous, but I suppose it only matters in the context as to who they lying to, anything to stir up the base) is nonsense and shame on you and others.You don’t sound hostile, Steve, you just sound like somebody who has been conditioned to believe that we all do well when government takes from the poor to give to the rich.

I believe the facts will bear out your pre-conditioning, not mine. So, how about that $1,000 wager.  I’ll even accept the burden of proof to establish that the burden of income taxes (not rates) has shifted even more progressively under the Bush tax cuts, after all your argument is about fairness not mathematics.  If you are interested further in my explanation that taxes policy should be established to optimize federal revenue and not to fund pet programs (or social goals) you can check the latest post in my blog (and there are others). http://nextstoplauderdale.com/  B-T-W immediately following that particular blog post is another that criticizes of one of those fearful FOX pundits, Bill O’Reilly. One further point…..  Since your original article was about Yachts, you might be interested to know that the last time the official powers that be (Democratic Congress with Clinton) and not newspaper columnists tried to settle the score with the rich and add big taxes to yachts and airplanes they essentially killed both industries (this is not in dispute) in the USA yet these same evil rich people purchased their yachts and planes overseas without said tax.  The Democrats had to relent and reverse this tax after costing tens of thousands of blue collar jobs.  Is your objective to optimize federal revenues and economic stability and growth or merely a evnious and fool hard attempt to balance outcomes in society?   And ……….. you still owe me an explanation of what “additional taxes” where the have-nots give to the rich are “in the pipeline” as you claimed in your article or do I sense a retraction? –Steve   

————————————

Oh, my.  You’re also one of those people who don’t want to face up to global warming.  I’ll say you’re for “free enterprise.”   (Frank)

———————-

Oh I believe in global warming, just not necessarily the nonsense you’re amen chorus is buying into.  To bad you aren’t for free enterprise.  It probably has made you what you are.  What about that retraction………is it coming? Steve——————————-Steve, we could go round and round forever. Just this last message is enough to tie up another chunk of time to set you straight. But I’m calling it quits here. Good luck to you.   ———————Frank, Ok, and good luck to you, your loss not mine.  I was looking for a way to put a cool grand in your pocket, but I understand that this is not without risks.  I’ll go back to the books and look up those forthcoming tax cuts (in the pipeline) for the VERY RICH since you clearly don’t want to let me know the basis of the following statement that anchors the concluding comments of your article: 

Sure, you may be anxious over keeping your finances afloat, but the megayacht business is booming, more tax cuts for the very rich are in the pipeline, and you have a ringside seat to the grand parade.

 This is not only indefensible, but obviously so recognized by you.  :)  I will conclude by stating that you would be well served to re-read my comments here and at NSL with more of an open mind and a less an ad hominem attitude especially in your position as a public commenter.  I think you have a duty to your readers to be better informed.  It is clear that you don’t want your facts challenged and when they are you refuse to discuss the merits (or lack) of those points.  I know it is easier that way, but that is for people outside the public arena…….. Anyway, good luck and try to keep an open mind. Steve

October 27, 2007 | Filed Under Economics, Taxes | 9 Comments 

There You Go Again………..

charles-rangel.jpg In borrowing a phrase from Ronald Reagan in the second presidential debate with Jimmy Carter on 10/28/80 (corrected) I will apply it this time to the tired strategy of the Democrats proclivity to raise taxes every time they get in control.  You may also recall that at least partial credit has been given for Reagan’s win during the second presidential campaign to the debate with Walter Mondale where Mondale stated that he would raise taxes on Americans if he won, he lost big time.

Now the Democratic Chairman of the House Ways and Means Committee, Charles Rangel, is planning broad and sweeping changes to the tax system with the centerpiece being a 4% to 4.6% surtax on earning in excess of $150,000-$200,000.  You know the “rich” that they keep talking about that are not paying their “fair” share.  [I am not going to debunk this here again today with that endless stream of statistics that demonstrate that this is a lie.]  This tax increase will also have the impact of raising taxes on investments. Now that is a real smart move and all this is just a test for an additional slew of taxes that they will propose after they win the Presidential Election of 2008.  The scariest thing is that they will probably start spending that post election money now since they are so sure they will win it.

Another thing is that this is being falsely touted as a Surtax (which would be a percentage increase to the normal tax).  What this amounts to is an additional two tax brackets in the existing tax structure.  It also has the negative effect of further increasing the “marriage penalty” built into our tax structure.

But let me say this.  I believe that Economists and Statisticians (at least the honest ones) understand that raising taxes doesn’t always produce more income.  It is a more reliable precursor for provoking a recession.

I want to shout this from the rooftops once again……….You don’t establish income tax policy in order to fund what ever projects you are desirous of.  You establish tax rates to maximize federal revenue without regards to spending preferences.  After you establish the rate that will optimize economic growth and consequently revenues you can turn to the budget side of the matter and debate spending priorities with the income that tax policy will produce, again understanding that not all spending is equal in terms of its simulative effect on the economy.

I really think it is time for the Democrats retreat from this age old political strategy that only serves to insure the “economic cycle” of boom and bust and cause greater deficits in the long run turn to a consistent and simulative tax philosophy.  Even their constituency would be much better off if that were to happen, but the Democrats ace in the hole is that their constituency really doesn’t understand this.  This is all about protecting their incumbency.  Hence they again turn to divisive political rhetoric and wrong headed tax policy.  For a deeper explanation of this overall tax proposal by Rangel go HERE.

October 25, 2007 | Filed Under American Left, Fiscal Policy, Taxes | 8 Comments 

$1,000 for your vote!!!!

hillary.jpg Do you remember when George McGovern ran for President against Richard Nixon in 1972 he promised to give every American $2,000? Talk about pandering and having the taxpayer pay for what amounts to campaign financing.  (This would have increased federal spending by about 50% for this plan alone……..no wonder he was 100% behind having Senator Eagleton on the ticket as V.P. originally before he fired him……..Wiki Eagleton if you want in on this bit of humor :)

Well now we have it again with Hillary offering to set up everyone a 401-K with the Government kicking in $1,000 per plan.  Gee thanks, just write me the check and forget the bureaucratic costs.  Lets see, you have had the Republicans saying (along with myself on a few NSL posts) that private retirement accounts are the only solution for solving the Baby Boomer retirement equation.

I think this proposal is a defacto admission that no form of modification (short of changing the retirement age to death + 1 year) of the Social Security System will keep the program solvent.  But wait………..now we have them also proposing a system that basically turns the money that employers and workers put in retirement savings over to those nasty Wall Street boys, and get this, along with taxpayer money as well.  I wonder if Harry Reid will immediately jump on this and accuse her of having retirement savers put their money in a “risky” stock market scheme like he accused Republicans of when proposing private accounts.  (you don’t think that the 401-K managers will simply purchase Treasury Bills do you?)   

Now here is the sweetest part of all.  She is talking about financing this through a modification on the Estate Tax laws and according to her statement at a campaign stop in small–town central Iowa she is going to tax Estates over $7,000,000 to fund this program and again according to her own statement that from each estate exceeding $7,000,000 5,000 families would get the matching funds of $1,000 (i.e. $5,000,000).  Wow, that sounds generous of her…….and to think she can do all this with only taxing estates at the rate of 71.4%.  Although she didn’t admit it out loud you can see that if a single estate of $7,000,001 would fund $5,000,000 (5/7 = .714 - that is 5,000 families at $1,000 per family) you end up with a confiscatory estate tax rate of 71.4% at the Federal level alone plus what ever the state accesses.

I wonder if this proposal will last any longer than last month’s little bit of pandering where she stated at an address to the Congressional Black Caucus that she wanted to give every child born a $5,000 baby shower gift from Uncle Sam which could be used to pay towards college or a first home.  Her office claims that she has now given up on that proposal, but not until after (I am sure) it obtained its desired impact on impoverished and black communities relative to their support for her candidacy.

I am sure she took pains to calculate at what threshold she could put the Estate Exemption (less than $7,000,000) so as not to disturb or rattle the majority of Iowa farmers that have land values not exceeding that amount with those exceeding being a small percentage.  For additional information on this latest and greatest from the geniuses in the Clinton camp, check HERE.

October 9, 2007 | Filed Under Economics, Retirement, Social Security, Taxes, The Left | 11 Comments 

Don’t Let the Left (and their politicians) Lie to you

irs-logo.jpg 

UPDATE 8/26/2007:  I wanted to add that nobody “took the bait” at least not yet.  That bait was the first sentence of this post “Which readers of NSL have believed that the 2003 “Bush” tax cuts were a tax cut for the rich and have not served the “non-rich”  (I won’t say poor)?  Now I know that M2 has been temporarily pulled away from this blog for the most part along with his particularly acerbic comments on my posts, comments and comments of some of NSL’s readers, but cummon I would have thought somebody would have jumped in and said “see you are like the rest of the “fat cat” Republicans in that you don’t “see” (such as Hillary often states) the poor in America.  My response is, Oh yeah, I see them, they just aren’t particularly germane to this discussion. 

The reason for this is because the poor in America (and a lot of others) don’t pay income taxes at all.  What I do see and see as pandering nonsense is the lefts proclivity to discuss tax policy in the United States through a prism which they see as some type of un-just treatment of the poor.  Not only do the poor not pay taxes at all, the “working poor” actually get a refund (and not a small one) of taxes that they didn’t even pay to begin with through the Earned Income Tax (EIT).  You would think that basic civil honesty would at least force these politicians to recognize to the population as a whole that this is basically welfare on the federal level and not tax policy. 

As I have stated in other posts that the spending priorities of the country should be debated in Congress and the EIT is one that should stand on the merits of its own debate apart from the tax policy of the United States.  This is just another way that the left continues to “confuse” voters with the question of good tax policy.  I’ll assure you that the next time the tax code takes front and center stage in the debate on the policy of the United States that they (the left) use the Tax Code and it shaping as a campaign tool to insure their continued re-election.   

The Democrats in Congress will not even mention the facts of this recent WSJ article (summarized below) as they continue to debate the question as though the evidence is not in already.  They are the one’s that said in 2003 that the tax cut of Bush would not cause a recovery in the economy which was in recession, but would do further damage to it.  Hmmm……… :-)  

I am considering offering a reward for the first reader that will remind NSL after the next tax debate if the whole process ensues with any tacit acknowledgement by the Democrats (left leaning Democrats) that the statistical results are in and have proven their sloganeering and campaigning rhetoric wrong again.  This is not a matter of conservative opinion, but of recorded fact………..read on……..

ORIGINAL POST:  Which readers of NSL have believed that the 2003 “Bush” tax cuts were a tax cut for the rich and have not served the “non-rich”  (I won’t say poor)?  As a result of these tax cuts the burden of tax revenue has intensified on the “rich.”  According to the Wall Street Journal HERE the statistics for 2004 are in and the Richest 1% paid 35.7% of all taxes based on income and without the 2003 tax cuts they would have paid only 30.5%.    Read more

August 24, 2007 | Filed Under Economics, Fiscal Policy, Taxes | 15 Comments 

Giuliani on Taxes

irs-logo.jpg I am more interested in a recent report that says Giuliani expects the Democrats to raise taxes by 20-30 percent from the perspective that it reveals more about Giuliani than the Democrats.  We all know that the Democrats plan to raise taxes if they take control of the White House as well as Congress, but it is comforting to know that even though Giuliani has some moderate to liberal leanings on some matters, tax policy isn’t one of them.  He further stated that John Edwards had promised to double the current Long-Term Capital Gains tax [talk about a bright move that is directed at populist appeal notwithstanding the damage to the economy].  Rudy correctly noted that the last time Capital Gains was raised by the Democrats that revenue from this source fell by 40%.   

I am really frustrated here, I don’t know why it is so hard for these lame Democratic politicians to get it through their thick skulls that their tax policy is counter productive and reduces federal revenues (and economic growth) while tax cuts (as in the most recent example by Bush) have always increased federal revenues.   

You must be smoking something if you are reading this and don’t conclude that the only conceivable explanation for this is the desire for the Democrats to maintain a perpetual campaign strategy which is a politics of envy.  It seems that they would rather keep a club in their bag to beat the Republicans over the head with than actually do something for the economy.  I realize they have much invested in this line of argument and its continued success depends on their ability to repeatedly lie about it and have that lie believed by the masses.  

August 1, 2007 | Filed Under Economics, Presidential Politics, Taxes | 12 Comments 

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