Tag Archives: taxes

Be Too Bad if Something Was to Happen to It

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So, pay the vig.  That’s the extortion Senator Patty Murray (D, WA) is threatening us with.  Roll over, and give us our tax increase on those we don’t like, or we’ll raise taxes on everyone.

[If] we can’t get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013…. We will have a new fiscal and political reality….

Of course, she continues to insist that “fair” is whatever the Progressives say it is, at any moment.  She, like her fellows, have continuously refused to say what amount constitutes a “fair share,” for her hated rich or for her sainted poor.

Here’s her naked extortion threat:

If middle-class families start seeing more money coming out of their paychecks next year—are Republicans really going to stand up and fight for new tax cuts for the rich? Are they going to continue opposing the Democrats’ middle-class tax cut once the slate has been wiped clean?

She’s also taking our national defense hostage and demanding that it be ransomed with more taxes.  The article at the link cites her as adding

[If] Republicans don’t negotiate to her party’s liking on the automatic spending cuts—known in Washington as the “sequestration”—set to take effect at the start of next year, her party would let those cuts happen, too.

Can we afford four more years of this assault on our freedoms?  Can we afford four more years of bipartisanship meaning “do it the Progressive way, or else?”

As to the taxes themselves, to which Senator Murray and her fellows are so tightly bound, Murray and her fellows, as with so much of the legislation they’ve rammed through, are running against the wishes of Americans.   The latest McClatchy-Marist poll has found the following:

  • Registered voters want all of the tax cuts extended, including for those with incomes above $250,000, by 52% to 43% wanting the cuts reserved for those making $250,000 or less
  • Those making less than $50,000 per year supported tax cuts for all incomes by 53% to 41%
  • Voters in the age band 18-29 favor tax cuts for everyone by 69% to 29%

Dependency of America

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Greg Mankiw, a Harvard University economics professor (OK, he’s the Chairman of the Department of Economics), has on his blog some hard numbers that show the increasing dependency of Americans on government.  Here’s what he says [bold emphasis added; italic emphasis in the original]:

Because transfer payments are, in effect, the opposite of taxes, it makes sense to look not just at taxes paid, but at taxes paid minus transfers received.  For 2009, the most recent year available, here are taxes less transfers as a percentage of market income (income that households earned from their work and savings):

  • Bottom quintile: -301 percent
  • Second quintile: -42 percent
  • Middle quintile: -5 percent
  • Fourth quintile: 10 percent
  • Highest quintile: 22 percent
  • Top one percent: 28 percent

The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned.

The most surprising fact to me was that the effective tax rate is negative for the middle quintile.  According to the CBO data, this number was +14 percent in 1979 (when the data begins) and remained positive through 2007.  It was negative 0.5 percent in 2008, and negative 5 percent in 2009.  That is, the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess.

The CBO report can be read here or here.  The supplemental tables, which contain the Table 7 from which Mankiw made the calculations above, are here.

I recognize that part of this change is attributable to temporary measures to deal with the deep recession.  But it is noteworthy nonetheless, as other deep recessions, such as that in 1982, did not produce a similar policy response.

Again, I ask: what are we to make of the motives of the politicians that are doing this, knowing as these highly intelligent and rational human beings do, what the outcome is?

Another Idiotic Idea

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And another attempt to emulate the blatantly failing European model.  This one is backed by the AFL-CIO and the National Nurses United unions….

With that union backing, the Democrats (led by Congressman Peter Defazio (D, OR) in the House and Senator Tom Harkin (D, IA)), are pushing a bill that would impose a .03 cent tax on all financial trades.  Defazio says,

It would benefit long-term investors with stability

but

It’s “tiny,” and it would cost the “average investor” just $1 per year.  Let me see if I understand the logic of this.  It’s too small to matter to the little guy (and since it’s not a progressive tax, it’s even more trivial for the big players) but it’ll influence everyone to move toward trading market stability.

Then Defazio added this:

[I]t will still generate about $35 billion a year in income—income that could be used to rebuild the real economy, infrastructure, other investments.  Or money that could be used to help defray our deficit.

Yeah, sure.  We saw how much the last several Progressive stimulus spending packages did for our “infrastructure” and all those shovel ready jobs that President Obama yucked it up about not actually being shovel ready.  On top of which, when was the last time either party used tax money to reduce a budget deficit, rather than as seed money with which to leverage even more spending?

And this:  Bill Gates and George Soros are cited as backing this…idea…as a fine way to “painlessly” raise “a lot of money without affecting growth.”  There’s that false premise, again, this idea that the government needs more money.

Are the Democrats Serious about Raising Taxes on Americans…

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…or are they just posturing so they can continue their class warfare campaign, or otherwise for personal political gain?

First we get President Obama’s demand that the Congress pass his tax increase forthwith—you know the one: his extension of the Bush tax cuts only for some Americans while raising taxes on that group of Americans of whom he so thoroughly disapproves.

Then we get the Senate Minority Leader, Mitch McConnell (R, KY), trying to take him up on his demand.

My recommendation is we give the president what he asked for.  He wants to have a vote on raising taxes on individuals making over $250,000….  That’s a vote we welcome.

But Senate Majority Leader, Harry Reid (D, UT) won’t allow the vote.  Acting on the President’s demand is an “obstructionist stunt,” you see.  President Obama himself, through his press spokesman, Jay Carney, insists that the Republicans’ effort to give him what he demands is just “a gimmick.”

Of course, four Democrats in the Senate who are up for reelection this fall don’t want to be on the record as voting for a tax increase, and it would only take a three-Senator swing to change control of the Senate and cost Reid his power.  Additionally, these four—Bill Nelson (D, FL), Claire McCaskill (D, MO), Tim Kaine (D, VA), and Shelley Barkley (D, NV)—are from swing states whose coming down Republican could cost Obama his job, too.

Hmm….

Obamacare vs Romneycare

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Just to be clear from the start: I don’t like Romneycare.  I think any time a government thinks it knows better how I should allocate my resources and my priorities than I do, it’s making a grave mistake.  Against that background, I want to look at the “debate” over Obamacare and Romneycare.

Here’s President Obama:

[W]hen you hear all these folks saying, oh, no, no, this is a tax, this is a burden on middle-class families, let me tell you, we know because the guy I’m running against tried this in Massachusetts and it’s working just fine.

Except that it’s not working that well, as President Obama surely knows, since of course he looked into the matter before he began pontificating on it.  Between half and two-thirds of those uninsured before the plan was implemented remain so—not quite universal coverage.  And this failure stems from the same thing that makes Obamacare a failure: it’s cheaper to pay the penalty in MA than it is to get health insurance.  Furthermore, as recently as 2011, National Review Online was reporting that Massachusetts still has the highest health costs in the US.  Mandates and subsidies—here for folks required to buy insurance but can’t afford it—just don’t work, whether implemented by Republicans or Democrats.

Against that baseline, there are major differences between the two programs.

President Obama has inflicted a trillion dollars in tax increases over Obamacare’s first 10 years to cover its cost.  Romneycare didn’t raise taxes at all.

Stan Dorn, of the Urban Institute, claims that Romney got Federal financial help in the form of Federal Medicaid money.  This is disingenuous, though.  Romneycare simply diverted Federal Medicaid funding it already was getting from its originally targeted hospitals (vis., to pay unpaid bills) to subsidies to individuals with which to buy their own policies.  As Josh Archambault, of the Boston-based Pioneer Institute, put it

Affordable insurance on their own.  The federal approach simply put them on the public rolls….

There’s another difference that both candidates are ignoring, and that difference centers on the 10th Amendment.  What one state does for its own citizens, for good or ill, is not a valid reason for the Federal government mandating or proscribing that same thing for all states and all Americans.  Each state, under the 10th Amendment, is free to makes its own decision concerning what is appropriate for its citizens.  Of course, this States’ Rights argument would be wholly irrelevant were the Progressives willing to admit that Obamacare is originally and completely President Obama’s idea, instead of trying to blame it onattribute it to Governor Romney.