Category Archives: Economics

Miscellaneous economy stuff

Of What Are They Afraid?

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British PM David Cameron, in another step in his push to give the British people a vote on their continued membership in the EU, has

given his Conservative Party’s backing to a draft bill that would commit the UK to holding an EU referendum by the end of 2017[.]

Of course many of his governing coalition partners oppose this bill—they not only want continued membership in the EU, they want the matter closed without the people’s further input.

Opposition cronies also oppose the thought of acknowledging the people’s view—and the primacy of that view—in the matter, fearing the referendum might actually come out in favor of leaving the EU.  One such crony, John Cridland of something called the Confederation of British Industry, insists

For those of us in the business world, it feels like a diversion from what we should be doing in Europe, which is restoring growth, through trade deals, and championing the reforms that we want to see….

Europe is more important than Great Britain?  What “reforms” does Cridland seriously think he’s going to get through the EU?  Why not focus on helping Great Britain first?

The EU, in fact, is doing nothing serious for Great Britain; it does, in the larger picture, endanger British fiscal soundness with the EU’s own continued demand for bailouts of spendthrifts (which only condones that irresponsibility).

Of what are the opponents of the British voice so afraid?  Or is it simply that the people shouldn’t be allowed waste government resources on making a choice that their Betters already have made for them?

ObamaTaxes

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Compiled by the good folks at Americans for Tax Reform.  Se the link below for details.

President Barack Obama, in a cynical Mothers’ Day “defense” of Obamacare, actually called these taxes the

largest health care tax cut for working families and small businesses in our history.

Here’s an excerpt of the list.

  • $123 Billion: 3.8% Surtax on Investment Income (Took effect Jan. 2013).  This tax hits capital gains and dividends (think about the impact on your 401(k)s; this doesn’t only hit the evil rich).  It also taxes “other” income—things like interest, annuities, and royalties.  Think this only hits the rich?  Your 401(k) mutual funds also invest in interest-paying instruments—bonds, for instance.  Many of our seniors live on annuities.  Our farmers are making beneficial use of the royalties oil and gas producers pay them for access to these energy sources that lie below their land.
  • $86 Billion: Hike in Medicare Payroll Tax (Took effect Jan. 2013).  This isn’t the end of the payroll tax holiday, this is an Obamacare tax increase: a bump from the present employer tax of 1.45% per paycheck (2.9% for the self-employed) to 2.35% for the employer to pay (3.8% for the self employed).
  • $65 Billion: Individual Mandate Excise Tax and Employer Mandate Tax (Both take effect Jan. 2014).  Employers with 50 or more employees must offer government-approved health insurance if a single employee qualifies for a tax subsidy to buy insurance.  If they do not, they must pay a tax of $2000 for all full-time employees [emphasis added].  It gets higher under certain circumstances.
  • $60.1 Billion: Tax on Health Insurers (Takes effect Jan. 2014).  No particular reason for this one; it’s just an excuse to squeeze the insurance companies for more money.
  • $32 Billion: Excise Tax on Comprehensive Health Insurance Plans (Takes effect Jan. 2018).  These are the Cadillac plans that unions and evil rich get, and they’re pretty good policies.  But since the government doesn’t offer them, you have to pay even more extra to keep them.  Pay up, sucker.
  • $23.6 Billion: “Black liquor” tax hike (Took effect in 2010) This is a tax increase on a type of biofuel.  Because biofuels are unhealthy, so if you’re going to use them, you must pay the resulting health costs.  Never mind that the government requires you to use them.
  • $22.2 Billion: Tax on Innovator Drug Companies (Took effect in 2010): Because the innovators innovate too successfully.  Pay up, sucker.
  • $20 Billion: Tax on Medical Device Manufacturers (Takes effect Jan. 2013): A 2.3% excise tax.  Because these producers produce too successfully.  Pay up, sucker.
  • $15.2 Billion: High Medical Bills Tax (Took effect Jan 1. 2013).  Because if you can afford to get that sick, you can afford to give Uncle Sugar an extra taste.

And so on.  We’re seeing what’s in this…Act…now that it’s been passed, and it’s still incomprehensible.  Except the enormous tax increase—that’s clear to everyone but Obama.

Another Obama Sequester Fail

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Recall that California’s gas and oil industry has been shrinking for years.  It’s a slow shrinkage, but in the present political clime—the green political clime—it’s been inexorable.  This graph tells the tale (ignore, for this post the loud contrast with Texas).

Now this administration’s Bureau of Land Management, the agency responsible for leasing and permitting of Federal lands to oil and gas producers, is claiming that it’s helpless to reverse this trend—the sequester, you see.  The BLM has announced that it

will stop scheduled oil and gas leasing on public lands for the rest of the fiscal year. At least two auctions of more than 3,000 acres with promising oil deposits have already been canceled.

As the WSJ put it,

The state and feds forfeit the money from the leases. The industry can’t move ahead with its planned drilling, which wastes money. And Californians—in a state where nearly one of 10 workers is jobless—lose the chance at hundreds and perhaps thousands of high-paying jobs.

Never mind that lease income, and future royalties from the extractions, are both money makers for the government.  The sequester won’t let them make the money.

Nothing circular or political here.  Mm, mm.

Business Factoid

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Matthew Payne, writing in The Wall Street Journal this weekend on a related subject, had this little tidbit.  Quoting a Chief Executive Magazine poll of business-worthy states, he wrote,

CEOs are well disposed to Texas, and it’s not hard to understand why.  52 Fortune 500 companies now call Texas home.

That’s 10% of the Fortune 500 that live here.

If those 500 companies were spread evenly across the 50 states, there would be 10 of them here.  If the 500 were spread proportional to each state’s population relative the nation’s population, Texas would have 4 of them.

Hmm….

Debt, Taxpayers, and Morality

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President Barack Obama wants to forgive another batch of debt, this time owed by America’s youth.  This is another of those tidbits buried in his latest pseudo-budget proposal.

Obama wants to

increase the number of borrowers eligible for a program known casually as income-based repayment, which aims to help low-income workers stay current on federal student debt.

Borrowers in the program make monthly payments equivalent to 10% of their income after taxes and basic living expenses, regardless of how much they owe.  After 20 years of on-time payments—10 years for those who work in public or nonprofit jobs—the balance is forgiven.

Noticed that: “stay current.”  Not “pay off.”

That this would cost American taxpayers billions of dollars, in the middle of a very long failed recovery, doesn’t bother Obama at all.  After all, it’s only MonopolyFed money.

This would make all lending riskier.  This precedent would let every group of borrowers with a “good reason” (and they all will have good reasons) to be allowed to walk away from their debts.  There’d be no incentive left at all to borrow carefully and responsibly.  Dishonoring a promise would be destigmatized.

It also ignores the morality of the thing.  It removes all incentive to honor commitments solemnly made—indeed, it would condone “commitments” made for the most frivolous reasons, by eliminating the consequences of failing to satisfy them.