Free Markets, Free People

Taxation

Fiscal cliff: Politicians play “chicken” with your lives and livelyhood

Because we’re served by the worst political class ever:

President Obama’slead negotiator in the “fiscal cliff” talks said the administration is “absolutely” willing to allow the package of deep automatic spending cuts and across-the-board tax hikes to take effect Jan. 1, unless Republicans drop their opposition to higher income tax rates on the wealthy.

Treasury Secretary Timothy Geithner said in an interview with CNBC that both sides are “making a little bit of progress” toward a deal to avert the “cliff” but remain stuck on Obama’s desired rate increase for the top U.S. income-earners.

“There’s no prospect for an agreement that doesn’t involve those rates going up on the top two percent of the wealthiest,” Geithner said.

Apparently there is no way to raise the desired revenue, at least according to Obama/Geithner, that “doesn’t involve those rates going up on the top 2%”.  No way.

Oh, wait …

What we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes — tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base.

Say, wasn’t that President Obama in July of 2011 at a press conference?  Why yes it was.  So there is a way, but he and apparently his “negotiator” refuse to pursue it (btw, no I”m not fooled by the illusion that this isn’t just as much a tax hike as what they’re proposing)?  It that what is happening?

Why yes, yes it is.  So there is another way to do this, apparently.  Unless our President was telling a tall one about what he’d be willing to do in July?  Yeah, I know, perish the thought.  Lie to us?  Unthinkable.

Instead according to Turbo Tax Timmy, they’d “absolutely” take us over the cliff, because, you know, raising taxes on the “rich” is now the only acceptable position.  You and your life?  You’re a mere pawn for these poppinjays.  They’re fine with playing with your life and livelihood to score a political win.   They have no problem holding your life and property ransom and using your future to force their desired resolution.  But if we go over the cliff, screw you.

Meanwhile, in the House, Speaker Boehner continues to look for a comfortable place to lie down and surrender.

In the Senate the GOP actually tried to bring the President’s proposal to a vote and Majority Leader Reid denied it.  Because it was, per Reid, a “stunt”.

This is all a “stunt”.    A miserable stunt perpetrated by a miserable group of people who have no concept of leadership or service to their country but are long on ego and party.

It is the price of always voting for the “lesser of two evils”.

Screw ‘em.

~McQ

“Fiscal Cliff” negotiations with Democrats? Gimme the usual please …

When is the GOP (and the public) going to learn?

How many times have we heard that the only thing standing in the way of a grand bargain to reduce our growing national debt is Republican intransigence on taxes? If Republicans would only agree to dump Grover Norquist, Democrats will agree to cut spending and reform entitlements. Then, we can all join hands and sing Kumbaya as we usher in a new era of compromise and fiscal responsibility.

Except that now that Republicans have agreed to raise taxes, er, revenue, as part of an agreement to avoid the looming fiscal cliff, liberals appear to have decided that there really isn’t a need to cut spending after all.

Yup, in fact they’ve taken entitlement reform “off the table”.

Senate Democratic leaders signaled Tuesday they would not agree to any entitlement reforms before the end of the year that cut spending on Medicare and Medicaid beneficiaries.

They also said that any year-end deal to avoid the expiration of tax cuts and implementation of spending cuts — known as the fiscal cliff — must include a provision to raise the debt ceiling, which would otherwise have to be addressed early next year.

The White House and Reid have indicated they will not consider cuts to Social Security, a notable change from 2011, when President Obama said “everything is on the table,” including entitlement programs dear to his party’s base.

In other words, we’re back to “tax the rich”, raise the debt ceiling and spend, spend spend.  Meanwhile, it is left up to the GOP to “compromise” by breaking the tax pledge (led by the Judas goats, Saxby Chambliss and Lindsey Graham) or be forever branded as the intransigent “bad guys” in this.

Meanwhile, low information Americans who, by over 60% approve of taxing the rich, will buy the spin by the press painting the GOP as the cause/reason for the calamity while Democrats “lament” the problem (“but, hey, that’s now the law thanks to Republicans”) and gleefully rub their hands in delight at all the new revenue they’ll have to “redistribute”.

Some things never change, do they?

~McQ

If tax revenue is up 19% since 2009, tell me again why taxes need to go up?

Rob Port throws up a couple of graphs that show that, as most of us have been saying for quite some time, it’s not a revenue issue causing the Federal Government’s deficit problem – it’s a spending issue.

Per Port, since 2009, tax revenues are up 19%.

So how does one get the message across to government that it must live within it’s means if it gets a tax increase without spending cuts?

You don’t.   You just encourage it to push for more.  Already “millionaires” are defined as those making $250,000 a year.

But let’s make excuses for the GOP’s capitulation, shall we (the hapless GOP, which will get blamed if we go over the fiscal cliff or if we avoid it and everything crashes anyway)?

Apparently the new conventional wisdom, “spend till your wallet bleeds and then break out the credit cards” has repealed the laws of economics once again.  Ask Paul Krugman if you don’t believe it.

~McQ

Republicans: Rationalizing breaking your word

Apparently when you pledge your word and you’re a politician, that pledge (and your word) has a shelf-life:

The decades-old pledge from the Americans for Tax Reform group has been signed by 238 House members and 41 senators in this Congress and has essentially become inescapable for any Republican seeking statewide or national office over recent election cycles, especially in the Republican-controlled lower chamber.

New York Rep. Peter King and Sen. Lindsey Graham said Sunday they would break the pledge and accept tax changes to generate more revenue to curb the trillion-dollar federal deficit.

Their statements followed a similar one Thursday by Georgia Republican Sen. Saxby Chambliss.

“I agree entirely with Saxby Chambliss,” King said on NBC’s “Meet the Press.” “A pledge you signed 20 years ago, 18 years ago, is for that Congress. …  The world has changed, and the economic situation is different.”

That’s what you get for electing moral cowards (aka, “politicians”) to office.

Spending cuts?

Forget about it.  It is your fault they spend more than they have so pay up and shut up.  After all, voters don’t seem to hold them accountable for any of this so why should they worry or take responsiblity?

The great cave-in begins.

The good news?  We won’t have to hear any moralizing by the GOP about “principles” … or at least we won’t have to take it seriously.

~McQ

So what would happen if Dems got all they want?

California, of course:

“The California Republican Party is functionally dead. And how is California doing, now that liberals have successfully terminated the state’s remaining conservatives?” #1 in debt, #1 in welfare, #1 in taxing the rich. And hoping for a federal bailout, I suspect. As is Illinois, which is in similar straits for similar reasons. “One-third of all the nation’s welfare recipients live in the state, despite the fact that California has only one-eighth of the country’s population. That’s four times as many as the next-highest welfare population, which is New York. Meanwhile, California eighth-graders finished ahead of only Mississippi and District of Columbia students on reading and math test scores in 2011.”

You can warn people till you’re blue in the face (no pun intended) how the blue state model is going to end up, but sometimes it is instructive to just let it happen.  Of course that assumes that those observing the train wreck try to understand how it happened and work to avoid it elsewhere.  I’m not so sure that’s the case in this nation.  But fair warning, given the fiscal road we’re on California is as much in our future as Greece:

“For a century or so, guided by brilliant private sector leadership, California was a beacon to the world, a land of opportunity such as never had existed in human history. Unimaginable wealth was created. Yet it required only 40 years of liberal governance to bring the whole thing crashing down. Today, California is the most spectacular failure of our time. Its government is broke. Productive citizens have been fleeing for some years now, selling their homes at inflated prices (until recently) and moving to Colorado, Arizona, Texas and even Minnesota, like one of my neighbors. The results of California’s improvident liberalism have been tragically easy to predict: absurd public sector wage and benefit packages, a declining tax base, surging welfare enrollment, falling economic production, ever-increasing deficits. Soon, California politicians will be looking to less glamorous states for bailout money. Things have now devolved to the point where California leads the nation in poverty.”

California is a state which has modeled blue government for decades, despite warning of where it’s continuance would lead.

And, shockingly to the left, it has ended up right where it was predicted it would end up.  Yet, they blindly and willfully continue to march along as though the reality will change and economic laws will disprove themselves if they just persist in their actions.

California is our future.  Our near future.  See, it’s pretty much as simple as this:

If a country runs a deficit (as a percentage of GDP) that is equal to its growth rate, the debt level will remain constant. This year U.S. GDP will be a little less than $16 trillion, and its historical growth rate is 3.25%. That works out to what we might call a “safe” deficit of $520 billion, or even $600 billion if you allow for a little inflation. Last year, however, the U.S. deficit was $1.1 trillion — or roughly $500 billion too much.

That gap could be closed by ending all tax cuts, tax breaks and stimulus payments for everyone, according to the Tax Policy Center. But two-thirds of the burden would fall on the middle class — something both political parties want to avoid. All the proposed tax increases on the wealthy, however, even combined with the end of the payroll-tax cut, would raise only $295 billion. So unless there were spending cuts twice as big as the ones currently scheduled, the deficit would still be too large.

Those sorts of cuts aren’t even being discussed.  Imagine, if you would, radical cuts in the size and scope of our current federal government.  Imagine subsidies of all sorts being eliminated.  Imagine backing government out of many of the areas it has no business.  Imagine simplifying the tax code and giving business a warm fuzzy feeling about the business atmosphere by freezing regulation and in some instances rolling them back.  Imagine all of that, because none of it is going to be done.

Instead, the solution is to “tax the rich”.

So let ‘em have it (only if they repeal the Hollywood tax cut).  Tax the rich.  And when it doesn’t work, and it won’t (in fact, I’m not sure what “work” means in this particular case since the amount to be collected is a mere drop in a 1.6 trillion dollar ocean of debt that’s planned each year for the foreseeable future), they’re left with a lot fewer excuses, huh?

Not that they won’t try to point fingers when their grand plan crashes.

Yup, in the end it all looks like we’re headed to California.  Apparently we’re going to have to recreate that debacle on a national level before the blinders come off of the public and the realization that you can’t spend more than you have forever finally sinks in.

Whether or not it will too late to salvage the country at that point, remains to be seen.

~McQ

Obama’s “tax negotiations” are no such thing

Obama has strained to make everyone believe he is open to “negotiations” on the tax rates in dispute that are leading us inexorably to this “fiscal cliff” everyone is talking about.

The word “negotiate” implies compromise.  You give a little, he gives a little, you reach a deal neither really likes but both can live with.

He has no intention of giving anything.  Why should he?  He can’t run for a third term.  He has nothing to lose if he stands his ground.  Nope, the only one’s who have anything to lose in this one are the usual deer-in-the-headlights suspects.  And, of course, Obama has someone else to blame:

By taking an absolutist line, he’s basically gambling that Republicans will be more reasonable than he is and will blink. But if they don’t blink and we go over the cliff, from his point of view so what? Mr. Obama then has an excuse to blame Republicans if there’s another recession. Meanwhile, he pockets the higher tax rates that take effect on January 1 anyway, and he can then negotiate a budget deal next year without having to make any tax concessions.

He pleases his left wing for which higher tax rates are a secular religion, while pinning one more defeat on Republicans. Lest you think this is a conservative fantasy, it’s more or less the tax cliff strategy that Democratic Senator Patty Murray of Washington advocated on Sunday on ABC’s “This Week” and that labor leaders lobbied for at the White House on Tuesday.

So, as we wander toward Taxmageddon, fear not, either way it goes, Obama figures he wins.  So why try?

Indeed.

Why negotiate?

~McQ

Entitlements: The Siren’s song

The cultural corruption of entitlements should, by now, be well known. But it also is just as well known that our current system incentivizes the “Santa Claus” form of government vs. that of the night watchman. The end state is inevitable. It isn’t a matter of “if” but “when”.

“The more government takes in taxes, the less incentive people have to work. What coal miner or assembly-line worker jumps at the offer of overtime when he knows Uncle Sam is going to take sixty percent or more of his extra pay? Any system that penalizes success and accomplishment is wrong. Any system that discourages work, discourages productivity, discourages economic progress, is wrong.” – Ronald Reagan

You’d think that would be self-evident. Apparently it’s not. And if you doubt that, watch what happens next year as our “leaders” try to figure out how to get us to pay their way out of the mess they’ve made (and for which we’ve never, ever held them accountable).

~McQ

Shadenfreude alert

All I could do when I read this was laugh.  And laugh.  And laugh:

The Danish government has said it intends to abolish a tax on foods which are high in saturated fats.

The measure, introduced a little over a year ago, was believed to be the world’s first so-called “fat tax”.

Foods containing more than 2.3% saturated fat – including dairy produce, meat and processed foods – were subject to the surcharge.

But authorities said the tax had inflated food prices and put Danish jobs at risk.

Gee, Econ 101 strikes again.

Go figure.

~McQ

Zombie “climate change” returns

It is quotes like this that drive me crazy:

“Climate scientists agree the Earth will be hotter by the end of the century, but their simulations don’t agree on how much. Now a study suggests the gloomier predictions may be closer to the mark. … That means the world could be in for a devastating increase of about eight degrees Fahrenheit by 2100, resulting in drastically higher seas, disappearing coastlines and more severe droughts, floods and other destructive weather.”

First, some “climate scientists agree”, not all.  Some climate scientists actually disagree.  In fact, quite a few.

Second – their simulations have been shown to be factually invalid.   They can’t even recreate the past.  Yet here we have a newsie asserting, by fiat, that they’re valid and the only problem we face is figuring out “how much” is “right” from these hopelessly flawed models.

Finally, a “new study” based on these flawed models predicts even more extreme consequences than most.  Wow … there’s a surprise.

Zombie climate apocalypse continues to stagger on. Why? Because it will be used as a basis to claim we need a carbon tax. Government is not going to miss the opportunity to create a revenue stream out of thin air no matter how questionable the “science” supporting such a power grab remains. It has paid it’s grants, gotten the “science” it paid for and now plans to cash in.

~McQ