December 9, 2005

Graph of the Day: Federal Tax Receipts–Voodoo, Schmoodoo

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 4:24 pm

How many times did we hear from the WORMs (Worn-Out Reactionary Media, referred to by most as The Mainstream Media) and tax-cut opponents that lowering marginal tax rates and the taxation of dividends and capital gains would reduce revenues coming in to the federal government?

Way, way too many, and they were all wrong. From TaxProf blog (HT Instapundit):

TaxReceipts

What the president’s father called “voodoo economics” IS almost like magic, isn’t it?

French Frauds

Filed under: Economy,Immigration,Taxes & Government — Tom @ 11:24 am

From The Wall Street Journal (requires subscription), on how France is aiding and abetting its largely immigrant population’s determination not to assimilate with its lax enforcement of welfare rules:

The sprawling unemployment insurance scheme is fighting a losing battle against clever fraudsters. According to a report in Le Monde Wednesday, the courts are investigating 17 organized groups who’ve used the latest technology to swindle millions in illegal dole payments since 1998. In all, the system has lost something between €250 million and €4 billion due to fraud since 1998. That’s hardly small change for a program already €14 billion in the red.

In one case, a French national of Pakistani origin reportedly sold “kits Assedic” — named for the agency that manages unemployment insurance — that enabled 55 people, mostly immigrants, to claim benefits from losing jobs at a fictional small business. The kits went for up to €3,800 each. In another case, the suspect allegedly created 200 shell companies to fool Assedic into paying out €10 million to about 500 of his “clients.”

….. Once caught, according to Le Monde, a majority of the fraud rings’ customers said that they had worked in the black market and were temporarily without work. By this logic, they claimed that the benefits were legitimate, and many Frenchmen seem inclined to agree. Unlike the efforts to whitewash colonialism, these revelations about welfare fraud haven’t stirred up much controversy.

The jobless, who account for a tenth of the French workforce, receive 57.4% to 75% of their last salary, paid monthly for up to four years, depending on seniority. So the incentives to commit fraud are pretty clear. Perhaps the bigger scandal is that the incentives to find a new job aren’t.

Bizzy’s AM Coffee Biz-Econ Story: Biz Weak Analyzes Economy, Ignores Tax Cuts

(Cross-posted at NewsBusters.org)

How does one analyze the economy’s performance without considering tax policy?

In a column posted on the afternoon of December 8 at MSNBC’s web site, James C. Cooper and Kathleen Madigan of Business Week Online devote over 1,100 words to analyzing and explaining the current strong economy, and fail to cite the 2003 Bush tax cuts as a possible contributing factor. In fact, the words “tax,” “Bush,” and even “government,” do not appear at all!

Cooper’s and Madigan’s explanations center around spending:

So why has the economy performed above expectations amid unexpected developments? The main explanation seems to be that, despite the Fed’s desire to tighten monetary conditions, consumers and businesses, on average, still have access to cash, whether through cheap borrowing, better income and profit growth, or rising housing and stock market wealth. Accommodative financial conditions are proving to be the economy’s Peyton Manning, quarterbacking the steady forward movement in demand.

Cooper and Madigan mention “better income” as a contributing factor without considering that “better after-tax income” might be what really matters, and what really gives consumers the ability to spend more than they could prior to the 2003 Bush tax cuts. And they cite “cheap borrowing,” even though the Federal Reserve has raised rates 12 consecutive times (midway through article) since June 2004.

The economy has grown at an annualized rate of 3% or more for the past 10 consecutive quarters, the second longest such streak on record, exceeded only by the 13-quarter string that occurred from 1983-1986. The Reagan tax cuts ignited that 1980s economy and sustained the rest of that decade’s growth. The current streak began in Spring 2003, the quarter during which the legislation that made the Bush tax cuts retroactive to the January 1, 2003 passed.

And contrary to some claims earlier this year that the tax cuts were a one-time shot of adrenaline, shouldn’t it have at least occurred to the Business Week writers that the sustained pace of consumer spending is occurring because Uncle Sam is taking less of their earnings?
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Note: This is the first BizzyBlog post at NewsBusters.org, the blog of Media Research Center, one of the early pioneers in exposing and debunking newsroom bias. MRC carried the load for decades, and those of us interested in fair, accurate, and balanced reporting owe them a debt of gratitude that can never be repaid. It is an honor to get an invitation to blog at NewsBusters, and I am hoping that the relationship will be long-term.

Positivity: 101-year-old to Receive Western Ky. U Diploma

Filed under: Positivity — Tom @ 6:13 am

An amazing story for someone who’s older than the school–and they’re bringing the diploma to her (HT Good News Blog):

(more…)

Quote of the Day: Walter Williams

Filed under: Economy,Taxes & Government — Tom @ 12:01 am

On the consequences of economic ignorance (HT S.O.B. Alliance member Porkopolis):

Economic ignorance is to politicians what idle hands are to the devil. Both provide the workshop for the creation of evil.