May 10, 2006

Derbyshire Has Had Enough, and I’m Almost There

Filed under: Immigration,Taxes & Government — Tom @ 5:55 pm

The news that The US Border Patrol is tipping off the Mexican government to the locations of Minuteman patrols to facilitate the entry of illegal immigrants has sent John Derbyshire at National Review over the edge (HT Michelle Malkin, whose Hot Air segment today is a must-see):

This ….. is the last straw. Either our govt. is criminally incompetent, or else it is maliciously hostile to ordinary American citizens. Or both.

….. I can’t think of a single thing to say in favor of the national Republican party, its senators, representatives, governors, and administration. I can’t think of a single reason why, right now, I should vote for any of them.

I could never vote for the liberal mob; but if a conservative third party comes up between now and 2008, they’ll have my full attention — likely my money and my vote, too. We are on the last page of Animal Farm here; I can no longer tell the men from the pigs.

Anyone involved in making the decision to do this should be fired–yesterday. If that includes Department of Homeland Security Director Chertoff or lawyered-up ICE Princess Julie Myers (HT Debbie Schlussel), so be it.

One of the themes of Bill Pierce’s campaign was that incumbent Senator Mike DeWine has seldom been heard from when someone, ANYONE needs to say SOMETHING about what is going on. As usual, Mr. DeWine’s silence, and that of the vast majority in Congress, from both parties, is deafening.

Voodoo Schmoodoo Redux: Supply-Side Econ Works Yet Again

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 3:33 pm

Those who don’t think cuts in the highest marginal income-tax rates and in investment-related taxes don’t pay (excuse the expression) dividends in the former of higher tax collections will be impervious to this news, as they have been for some 40-plus years.

For the rest of us, from a subscription-only Wall Street Journal editorial, here’s more confirmation (bolds are mine):

TaxRevsApr06

House and Senate GOP conferees finally agreed yesterday on extending the 15% tax rate on dividends and capital gains for two more years through 2010. This means you can expect lots of media and liberal rhetoric about “the deficit” and “the rich,” but the real news is how well these lower rates have been soaking the rich to fill government coffers.

….. These columns have been documenting this trend for the last couple of years, as well as the revenue tide flowing into state budget coffers. Overall state revenues climbed by 8% in 2004 and nearly 9% in 2005, according to the Census Bureau, and more and more states are piling up big surpluses. We’ve reported this news because politicians like to disguise these tax windfalls so they can spend it all with impunity and still plead poverty. Journalists contribute to this ruse by focusing their budget coverage on deficits, rather than on the spending and revenue trends that are the actual components of any budget.

The current revenue rush also refutes the prevailing Washington consensus that the federal deficit is the result of the Bush tax cuts. In fact, this revenue tsunami is the direct result of the expansion that took off in earnest at about the time the 2003 tax cuts passed. Lower tax rates have since had precisely the result that supporters predicted, though don’t look for that story on page one any time soon.

This explains why tax-cut opponents have tried to change the subject from the sluggish growth they first expected, to the “jobless recovery” that soon became the 4.7% unemployment rate recovery, to lagging wage growth that is also now increasing. The latest liberal themes are allegedly rising “inequality” and allegedly exorbitant executive compensation. These are subjects for other editorials, but their current political and media prominence means the critics are conceding that they can’t credibly call the tax cuts an economic failure. So they have to find other election-year talking points.

Every tax-receipt increase quoted above is well in excess of the roughly 4% rate of growth in the economy.

Supply-side econ works. Just don’t look for the WORMs (Worn-Out Reactionary Media, known to most as The Mainstream Media) to acknowledge it any time soon.

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UPDATE: The investment-related cuts that have been in effect for three years have been extended another two years, to 2010. I’ll take it, but they should have been made permanent, so that specific action will be necessary in the future to raise taxes. As it stands, doing nothing by 2008, something Congress is very good at, might plant the seeds for a recession. That’s because if investors and companies lose confidence that the cuts will stay in place, they will reduce their capital-spending and investment plans, starting a reverse spiral.

UPDATE: This is a good time to hearken back to a great Don Luskin post from January showing that the Clinton 1993 tax increases DID NOT generate extra revenue to the Treasury — but that the 1997 cut in the capital gains rate did. In fact, that cut brought in so much revenue that it, along with the relative restraint on federal spending increases from 1995 until 1997, nearly brought the budget into balance.

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Cross-posted at NewsBusters.org.

Relative Taxation of Married People in Major Economies

Filed under: Economy,Taxes & Government — Tom @ 1:14 pm

Here’s the source (Click on the link to Table 2, which is a PDF).

Here’s the Table:

Married00thru05

Points:

  • The table picks up federal income taxes and government retirement programs, and shows the average tax burden on a family of four. For the US, the table shows the impact of income taxes plus both the employee and employer payments to Social Security and Medicare.
  • To emphasize that these are averages, a very high income-earner in the US will normally pay at least 38% of all of his or her earned income to Uncle Sam (federal tax at 35% and Medicare tax of 2.90% [1.45% employer, 1.45% employee]), with no exemptions or deductions, all of which phase out at the highest income levels. On top of that, add the roughly $11,700 combined employer and employee payments into Social Security (12.4% of the first $94,200 earned).
  • The family-friendly US is pleasantly near the bottom of this taxation scale, with the third-lowest tax burden on the list.
  • Also note how the tax burden on families in the US has declined significantly in the past 5 years. That must be because conservatives don’t care about working families (/sarcasm).
  • Look at all of the Old European countries that are over 40%. Is it any wonder, considering the costs of raising children, that Europeans aren’t having as many?

Relative Taxation of Single People in Major Economies

Filed under: Economy,Taxes & Government — Tom @ 11:05 am

Here’s the source (Click on the link to Table 1, which is a PDF).

Here’s the Table:

Single00thru05

Points:

  • The table picks up federal income taxes and government retirement programs, and shows the average tax burden. For the US, the table shows the impact of income taxes plus both the employee and employer payments to Social Security and Medicare.
  • To emphasize that these are averages, a very high income-earner in the US will normally pay at least 38% of all of his or her earned income to Uncle Sam (federal tax at 35% and Medicare tax of 2.90% [1.45% employer, 1.45% employee]), with no exemptions or deductions, all of which phase out at the highest income levels. On top of that, add the roughly $11,700 combined employer and employee payments into Social Security (12.4% of the first $94,200 earned).
  • The US is in the lower end of the taxation scale, with a higher tax burden than 7 countries and a lower burden than the rest.
  • Is it any wonder that Old Europe’s economic growth is so sluggish, with tax burdens of 45% or more in France, Belgium, Germany, Italy, Austria, and Sweden?

Stay turned for the married table.

The 22nd Carnival of Ohio Politics Is Up!

Filed under: News from Other Sites — Tom @ 10:40 am

….. and it’s here.

Fannie Mae STILL Can’t Get Its Books Right

Filed under: Corporate Outrage,Taxes & Government — Tom @ 9:18 am

How about this? Suspend Sarbanes-Oxley until this implicitly government-backed enterprise gets its house in order, which is NOT the case at the moment, and won’t be for quite a while.

Bizzy’s AM Coffee Biz-Econ-Life Links (051006)

9:45 AM: Oops — This accidentally was posted into yesterday. Apologies for the delay.
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Free Links:

  • Chavez hikes oil taxes — So Hugo Chavez isn’t satisfied with the $36 billion (5th paragraph at link) “his” country will get in extra oil revenues if oil stays at $70-plus a barrel. That’s a multiple of ExxonMobil’s “obscene” profit, but I digress. Here’s what stuck with me:

    Chavez said during his six-hour talk that the new tax on producers would be 33 pct, and replace an existing oil royalty of 16.7 pct.

    SIX HOURS?? And who was listening at the end? Bill Clinton’s audience at the 1988 Democrat convention almost lost control when he spoke for just over an hour. Chavez won’t have to resort to brutal methods to take out his opponents; he’ll simply bore them to death.

  • What a Ridiculously Biased Headline (“Republicans Set Aside Middle-Income Tax Cuts to Focus on Rich”) — Keeping the investment-related provisions of the law in place, and quickly, is more important so companies and investors, rich or otherwise, can make credible plans. The family-related provisions that expire in 2010 don’t negatively affect the economy if they aren’t made permanent right away, but tell you what, guys and gals — make it all permanent as fast as you can and get it over with.
  • A few years ago, there was a funny list of dumb tech-support questions going around, like the caller who couldn’t find the CD drive but wondered why the computer had a cup holder. It looks like this may be the beginning of the list of dumb voting-machine user stories:

    Some technophobic voters, we concede, will never get used to the newfangled machines. In Youngstown, one exasperated man was reported to have scrawled a write-in vote directly onto the device’s screen with a pen.

  • There should be a big push-back from the small business community on this (“Privately held firms facing SOX-like auditing standards”) — The stricter audit standards would take effect for annual financial statements with year-ends after December 31, 2007 (the article is incorrect about the effective date). There is no good reason for tougher audit standards on private companies, except to create revenues for the CPA firms. Most privately-held firms are small, and have financial audits for one reason: to keep their lending banker happy. The lending banker ordinarily has a direct relationship with the company’s owner or owners. There is no reason to lard on the internal control requirements expected of public companies, and the costs will be prohibitive. Many banks will consider exempting clients from the audit requirement, or risk losing business to other banks who will do the same. The result will thus be a combination of more costs pushed onto smaller businesses not exempted, and more risk being taken on by the banks for the ones that are. Neither outcome is desirable.
  • This writer believes that Microsoft’s Vista operating system, when it arrives, will be very problematic from a security standpoint.
  • The telcos, other special interests, and knee-jerk conservatives are trying to portray the issue of Net Neutrality (covered previously here) as the province of the MoveOn left. Unless Gun Owners of America has suddenly switched sides, that myth is officially busted (HTs to E-mailer Kevin and “S.O.B.er” Weapons of Mass Discussion).

Subscription-only Link:

  • This is one of those pieces that I hope comes out from behind The Wall Street Journal’s subscription wall onto OpinionJournal.com, as sometimes happens. It’s all about why certain groups are advancing economically and others aren’t. Here is the key excerpt:

    Still, some claim that the benefits of this economic boom are being enjoyed only by the relatively well-off, and that we have left the rest of our workforce behind. Is this true? Over the last 25 years, the wages of the skilled have continued to grow faster than the wages of the less skilled. For example, the wages of the college-educated have grown by 22% since 1980, while the wages of high-school drop-outs has fallen by 3%.

    This does not mean, however, that the rich are benefiting at the expense of the poor. Instead, it means that the return to investing in education and training continues to grow. Most economists believe that the increased divergence between the wages of the skilled and the unskilled reflects technological advancements that make workers’ skills more valuable. Having an economy that places a greater value on skills and education is a good thing. Our economy can grow more quickly when the returns to investment are high, and human capital investment is the most important form of investment.

Positivity: From Prison to Law School Grad

Filed under: Positivity — Tom @ 6:07 am

Yes, there are some presidential pardons that work out well, with the help of an interested attorney and the judge who sentenced her:

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