Some tax facts from the Tax Foundation [pdf]to ponder while you work toward paying off the government’s first claim on your paycheck today.
Fact 1: Not everyone is doing that.
Today, 46 million tax filers have no income tax liability after taking advantage of all of the credits and deductions in the tax code—one-third of all tax filers. Obama’s tax polices, such as the “Making Work Pay” tax credit, will increase the number of non-payers to more than 63 million.
Or 63 million won’t , as Scott Hodge of the Tax Foundation says, have any “skin in the game”. Why should they care about tax policy or how tax money is spent?
Fact 2: Not all tax cuts/credits are good.
[T]he most politically popular tax cuts actually give the government more control over the economy rather than less. Even the credits enacted with the best of intentions—such as the $1,000 child credit, hybrid vehicle credit, or adoption credit—are bad tax policy because they attempt to induce people to make choices politicians think are right while rewarding select industries at the expense of others.
Or said another way, we again have government picking winners and losers, which few people would accept as something it should be doing. Politicians use their first claim on what you earn to reward you by not taking it if you do what they want. Is that your idea of the function of government?
Fact 3: High corporate taxes punish workers.
As the new study explains, there is a growing body of evidence that a large share of corporate taxes is really borne by workers—most of whom are not wealthy. Using statistical methods, the new study found that for every $1 rise in state and local corporate tax collections, real wages in that area fell by $2.50 five years later. The reverse is also true: wages rose by $2.50 for every $1 reduction in state and local corporate income taxes.
If wages are depressed in your particular state or locality, check out the corporate tax rate – as we’ve pointed out for years, corporations don’t pay taxes, they pass them on.
Fact 4: US corporate taxes are high.
Average OECD top corporate tax rate: 26.29 percent. Average U.S. top rate: 39.1 percent.
And of course after spending time demonizing corporations as rich and greedy, the present administration and Congress want to raise these taxes even higher. Then they’ll have another job summit and wonder why unemployment continues to get worse and wages are stagnant.
Fact 5: The rich actually pay more than their “fair share”.
Share of federal income tax paid by top 1 percent: 40.4 percent. Share paid by bottom 95 percent: 39.4 percent.
In fact, the rich pay more than 95% of the taxpayers out there – and the plan is to tap them for even more. Because, of course, they’re rich, and that automatically makes them “greedy”. Not in the plan is how the government will make up the revenue it plans on collecting with this new tax when the rich do what is necessary to protect what is theirs from the increased government looting.
Fact 6: Tax increases cost nearly twice the revenue raised.
“With every dollar of revenue, the proposed tax hikes cost the economy an extra 86 cents.”
Called “deadweight loss” high taxes distort the economy by artificially affecting decisions, such as:
…how much people choose to work by decreasing the financial reward to labor. High tax rates also may discourage savings, affect investment choices, and change the way households spend their money. For these reasons, economists recommend low tax rates and broad tax bases.
But that’s not at all what we now have – 63 million projected to be paying no taxes at all, corporate taxes higher than the OECD average and going higher and 1% of the population paying more in taxes than 95%?
If you can’t see what’s wrong with this picture and where it portends to leave us as we try to “recover” from the recession, then you’re being willfully blind. And, if some of this isn’t addressed and changed in the upcoming jobs summit, nothing is going to change to improve the employment situation. We have a tax structure that is anti-growth, anti-business and anti-liberty. The unfortunate thing is the present administration and Congress are working on legislation right now which will actually increase the tax burden exponentially and have projected trillion dollar budget deficits for the next 10 years.
How, given the above and the inevitable result of their unconscionable planned government spending spree (and taxes to support it) are we going to “grow” our way out of this?
Gallup’s latest poll says it is:
President Hugo Chavez’s popularity among Venezuelans has waned in recent years. Less than half of Venezuelans (47%) in August 2009 said they approved of Chavez’ job performance — down from 61% in late 2006 when he was elected to a second six-year term.
That’s not a good sign for a
dictator “president for life”. And what’s even worse is his inability to do much about what is causing that decline but attempt to distract attention by stirring up an existential threat (Colombia).
The reasons for this decline in popularity aren’t hard to figure out. Again, Gallup:
This year, 30% of Venezuelans said economic conditions in their city or area are improving, down from 47% in 2008 and 63% in 2007. Electricity and water shortages have become frequent, and violent crime is rampant in much of the country. This year, 23% of Venezuelans said they feel safe walking alone in their areas at night, the second-lowest figure among the 67 countries in which Gallup asked the question.
Politicians, whether socialist or capitalist, are held responsible for their country’s ability to provide the basics in life – especially when in the past those basics were cheap and plentiful. And, politicians are also held responsible for providing basic security. In all areas the socialist “Bolivarian revolution” is failing. And, because of actions by Chavez over the years to nationalize many industries, Venezuelans who supported Chavez are now beginning to see his government as more of a threat to them:
Conversely, concern about the heavy hand Chavez has demonstrated in the recent wave of nationalizations may be growing. The proportion of Venezuelans who said people in the country can feel very confident their private property will be respected by the government has dropped to 40% this year, from 52% in 2007. And 44% of Venezuelans currently agree that life is very hard for those who oppose the government, up from 36% in 2008.
As Megan McArdle points out, Chavez was able to paper over much of this when the price of oil was high and revenue plentiful, but at the present price and faced with the fact that because he diverted money from the state run oil company PDVSA to fund social programs, his golden goose is on life support. And Chavez has been forced to impose some unpopular restrictions:
President Hugo Chávez has been facing a public outcry in recent weeks over power failures that, after six nationwide blackouts in the last two years, are cutting electricity for hours each day in rural areas and in industrial cities like Valencia and Ciudad Guayana. Now, water rationing has been introduced here in the capital.
The deterioration of services is perplexing to many here, especially because the country had grown used to cheap, plentiful electricity and water in recent decades. But even as the oil boom was enriching his government and Mr. Chávez asserted greater control over utilities and other industries in this decade, public services seemed only to decay, adding to residents’ frustrations.
With oil revenues declining and the economy slowing, the shortages may have no quick fixes in sight. The government announced some emergency measures this week, including limits on imports of air-conditioning systems, rate increases for consumers of large amounts of power and the building of new gas-fired power plants, which would not be completed until the middle of the next decade.
Combine that with growing food shortages and rampant inflation and the picture is not pretty for our boy Hugo. And while his popularity remains slightly north of the critical 50% mark, his job approval rating of 46% portends a fall for that as well. Chavez, like all socialists, is finding out the hard way that they call them the laws of economics for a reason. You just wonder if we’ll learn something from his inevitable decline.
Since the Great Depression, the peak unemployment rate was 10.8% in November, 1982. We will, in all likelihood, set a significantly higher record for the unemployment rate in the next 12 months. Here are 12 reasons why the unemployment rate will reach at least 12%.
I would also remind you that if we currently reported the unemployment rate as they did in the 1930′s, our current rate of unemployment would be around 17.2% In any event, here are just two of the most compelling reasons why the job picture is going to remain very cloudy:
For the first time in at least six decades, private sector employment is negative on a 10-year basis (first turned negative in August). Hence, the changes are not merely cyclical or short-term in nature. Many of the jobs created between the 2001 and 2008 recessions were related either directly or indirectly to the parabolic extension of credit…
But when we do start to see the economic clouds part in a more decisive fashion, what are employers likely to do first? Well, naturally they will begin to boost the workweek and just getting back to pre-recession levels would be the same as hiring more than two million people. Then there are the record number of people who got furloughed into part-time work and again, they total over nine million, and these folks are not counted as unemployed even if they are working considerably fewer days than they were before the credit crunch began…So the business sector has a vast pool of resources to draw from before they start tapping into the ranks of the unemployed or the typical 100,000-125,000 new entrants into the labour force when the economy turns the corner. Hence the unemployment rate is going to very likely be making new highs long after the recession is over — perhaps even years.
There are other compelling reasons at the link, but the two above are enough to ensure that the unemployment rate will remain high for quite some time.
It looks like the looming Copenhagen Climate Summit is shaping up to be a bust:
British officials preparing for next month’s UN summit in Copenhagen said the best that could be hoped for was that national leaders would make “political agreements” on emission cuts and payments to help poor countries to adapt to climate change. These agreements would be non-binding, however, and could later be revised or rescinded by national parliaments.
The admission that no treaty will be signed at Copenhagen marks the failure of the process agreed at a UN meeting in Bali in December 2007, when industrialised countries agreed to deliver a binding climate-change agreement within two years. The delay has angered developing countries, which say they are already suffering from man-made climate change.
No surprise that “developing countries” are angry about this – their opportunity to loot the richer countries has again been delayed. They’re angry because the payday is guaranteed since the “developed” nations have foolishly, in the past, agreed they’re the cause of the problem and should pay the “developing” countries for that.
Artur Runge-Metzger, the European Commission’s negotiator on climate change, said in Barcelona that the absence of commitment from the United States on emission cuts was a key factor contributing to the delay, although other countries were also to blame. He said that without a treaty the EU would agree to cut its 1990 emissions by only 20 per cent by 2020, whereas with a treaty it would agree to a 30 per cent cut.
And they can’t even blame Bush for this one. My question is, if Europe is so hot to trot on this idea, why they don’t take the lead for once and ratchet down their emissions to 30% unilaterally?
I’ll tell you why – because they know what effect it will have on their economy and won’t do anything without being assured everyone is sharing in the suffering.
The one good thing that may come out of this is the economy of Copenhagen may see a nice little economic up-tick as representatives from 190 countries fly in and hit all the posh hotels for a week or so. I wonder what the carbon footprint of that event will be?
As President Barack Obama said on Feb. 9 when touting the “stimulus”: “The biggest measure of success is whether we stop contracting and shedding jobs, and we start growing again.”
Well, guess what? Despite all the happy talk about the end of the recession, unemployment hit 10.2% today. And, as Dale and others have said constantly, if we were computing it like we did in the ’70s, it would be at 17+%.
So taking the President at his own word, something it seems this administration would prefer everyone not do, it would appears the “stimulus” is still chasing success.
That’s because despite his protestations to the contrary, the the “stimulus” was one, giant earmark. And it is not having the desired effect despite the bogus “jobs created and saved” numbers.
In fact, the reality of the situation is not at all good as the BLS noted in their press release today:
The number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points.
And as for those “shovel ready projects” the “stimulus” was supposed to target?
The unemployment rate for the construction field keeps mocking those “shovel-ready” promises: Another 62,000 jobs in construction lost last month, with the average at 67,000 jobs lost per month for the last six months.
The solution? Watch for it – a second “stimulus”, something Paul Krugman has been whining about for months. Any guess what it would look like if it happened? Well the fact that this “stimulus” was used to track radioactive rabbit feces and subsidize golf cart purchases should give you a hint.
By the way, where is “Sheriff Joe” with his policing of the “stimulus” money and calling out those who are wasting it? Overwhelmed by the job, I guess.
Finally there is the economy killing legislation – health care which is front loaded with taxes and cap-and-trade which will raise the cost and price of everything – which the Democrats are determined to pass. Yup – they’ve got a real handle on this, don’t they?
No, I’ve not lost my mind, I just wanted your attention for this great list from the American Energy Alliance:
10) It’ll be the largest tax increase in history and will help pay for the government takeover of health care.
9) America’s unemployment rate is only 10 percent. Higher energy prices and the resulting transfer of American businesses overseas will help us double it.
8 ) The U.S. has been the world’s number one economic superpower for long enough. It’s time to lie down and give someone else a turn.
7) Expensive energy is good. Really expensive energy is even better.
6) By making it more expensive to produce more of the vast amounts of American oil we have right at home and transitioning to affordable, commercial-scale alternatives that don’t exist, we can end our dependence on foreign oil in 10 years!
5) Spending billions of taxpayer dollars to create temporary, government jobs at the expense of long-term, private sector jobs not only makes perfect sense, it’ll be a boon to the nation’s struggling economy. Just look at Spain.
4) Energy is the lifeblood of the American economy – it is, literally, the capacity to do work. Hence, making American energy more expensive and less available will strengthen our economy and enhance our capacity to put Americans to work. Get it?
3) California and Massachusetts have adopted similar policies and they’re now enjoying some of the highest energy prices and unemployment rates in the nation. We need to level the playing field so every state can reap the benefits of expensive energy and abundant joblessness.
2) It will create millions of well-paying green jobs without destroying the jobs of Americans who are currently employed. Who put the green welfare provisions in there, anyway?
1) Reducing economic growth while achieving virtually no environmental benefit is simply a good idea. Don’t ask questions.
Sounds like a heck of a deal, no? ~McQ
That’s the word from Mark Tapscott at the Washington Examiner:
Gas prices here in the U.S. are creeping back up towards the $3-per-gallon mark even as news breaks today that China’s state-owned energy firm just closed a deal to buy interests in four development leases on the American Outer Continental Shelf (OTS) in the Gulf of Mexico.
The deal, which requires approval of the U.S. government, is between Norway’s Statoil and China National Off-Shore Oil Corporation (CNOOC). This is the same CNOOC that would have bought Unocal four years ago for $18.5 billion but for pressure from Congress, according to The New York Times, quoting an energy industry trade publication.
Because it must be approved by the U.S. government, the Statoil/CNOOC deal puts President Obama and Ken Salazar, his Secretary of the Department of the Interior, which controls OTS leasing, in a difficult position.
Really? Why does it put the government in a “difficult position”? Oh, you mean the apparent willingness to sell these leases to foreign entities vs. opening them up to domestic American exploration?
The deal also focuses renewed attention on Salazar’s slow-walking of a new plan for approving energy exploration and development in the OTS, which includes approximately 1.7 billion acres, and, according to Interior, holds up to 86 billion barrels of recoverable oil and more than 400 trillion cubic feet of natural gas.
The administration is moving much too slowly to open more of the OTS to development for domestic U.S. uses, according to Jack Gerard, president of the American Petroleum Institute …
But it apparently isn’t moving too slowly to open up the OTS to foreign competitors.
In the meantime:
If the administration approves the deal, it will be more vulnerable to charges that the White House is being careless with U.S. national security issues in the energy sector, and that it is putting the interests of a foreign power before those of U.S. energy consumers.
If Obama and Salazar reject the deal, it will likely complicate relations with China, the emerging Asian superpower that defense experts predict will be able at will to challenge U.S. legitimate national security interests around the globe in the near future.
Oil isn’t going away anytime soon and its use is critical during any transition to alternate energy sources (which, for the most part are vaporware). Additionally, the charge that the Obama administration is playing fast and loose with US national security will resonate if the public becomes aware that domestic producers have been barred from OTC production but foreign producers are given access.
So the dilemma facing the administration is one of its own ideological making. Its “slow walking” of the plan for domestic producers to explore the OTC is a decision it made to thwart the desires of a majority of the nation to secure those assets for the US’s use. And now it’s going to hand them over to China?
That will not play well in at all in middle America.
I‘m not kidding. So says none other than the New York Times:
A Week Mapping Radioactive Rabbit Feces With Detectors Mounted On A Helicopter Flying 50 Feet Over The Desert Scrub. … $300,000 In Federal Stimulus Money.” … “A government contractor at Hanford, in south-central Washington State, just spent a week mapping radioactive rabbit feces with detectors mounted on a helicopter flying 50 feet over the desert scrub. … the helicopter flights, which covered 13.7 square miles and were paid for with $300,000 in federal stimulus money, took place in an area that had never been used by the bomb makers. … Marylia Kelley, the executive director of a California group called Tri-Valley Communities Against a Radioactive Environment, said the rabbit cleanup was ‘kind of funny, in a sick way.”
A great way to stimulate the economy, no?
Well how about this:
“President Obama’s Stimulus Plan… Is Now Paying Americans To Buy That Great Necessity Of Modern Life, The Golf Cart.”…“Thanks to the federal tax credit to buy high-mileage cars that was part of President Obama’s stimulus plan, Uncle Sam is now paying Americans to buy that great necessity of modern life, the golf cart. The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart.”
Let’s not forget that our president is a great fan of golf afterall. What better way can you think to stimulate the economy?
Oh, how about this?
“The other third of the stimulus, government infrastructure spending, has been the most controversial from the start. Some proposals have been criticized as wasteful, Such as a $6 million snowmaking facility in Duluth, Minn.”
A snowmaking facility in Duluth, MN – the 15th “snowiest” city in America. Why that’s a perfect way to stimulate the economy.
But if that doesn’t resonate, there’s this:
“A big chunk of the money that will pay for a new spring-training baseball complex on Ttribal land in the East Valley will be delivered via a financing program that’s part of the Federal Economic-Stimulus Plan. The Salt River Pima-Maricopa Indian Community says it may borrow as much as $30 million of the estimated cost of the $100 million complex near Scottsdale that will become the spring home of the Arizona Diamondbacks and the Colorado Rockies.”
Because, of course, MLB is going broke.
You can read the whole disgusting list here.
Wasn’t Joe Biden going to police this?
Oh wait, I forgot – he and John Kerry are preoccupied deciding our new strategy in Afghanistan.
Yeah, nothing can go wrong with that, can it?
Despite all the happy talk from the administration and the lap-dog press eagerly parroting the “good news” that the recession is over, the numbers just don’t support the talking point. Liam Halligan delivers the news:
So I was pleased last week when I heard that, after four successive quarters of contraction, America’s economy grew by an impressive 3.5pc between July and September, compared to the quarter before. “The US is out of recession” numerous newspaper headlines screamed. No wonder share prices surged.
As ever, the numbers warrant a closer look. For one thing, this is annualised data. So the US economy actually expanded by only 0.9pc during the third quarter – a fact most newspaper reports ignored. What growth we did see resulted from a 3.4pc annualised rise in US consumption between July and September, which was in turn caused by a 22.3pc spike in spending on consumer durables.
As mentioned here that “spike” was driven by “cash for clunkers” and the $8,000 first time homeowners tax exemption. Halligan agrees. It wasn’t a trend, it was exactly what Halligan reported – a spike. So digging into it, what are the real numbers?
In other words, this latest US growth spasm stemmed from one-off government “giveaways” – with the public only able to take advantage of such gimmicks by going deeper into debt. The rise in US consumption coincided with a 3.4pc fall in household disposable income and a plunging savings rate too. With government and household debt spiralling anew, America’s so-called “return to growth” is nothing but a return to higher leverage. [emphasis mine]
Not quite what the administration cracked it up to be, is it? And Halligan reminds us:
Over the last 40 years, all US slumps have been interrupted by at least one quarter of positive growth, followed by a renewed downturn.
Of course, with an administration desperate for any good news, ignoring history is to be expected. After all, they’re quite the masters at ignoring the laws of economics and expecting results which run counter to them, aren’t they? Why shouldn’t they believe that one quarter of government give-aways equals pulling out of the recession? Can’t wait to hear the excuses when we’re back in the negative GDP growth trend next quarter. And you can also expect to hear the inevitable cries for a second stimulus (Porkulus II) crescendo.
Well, über defensive and stupid, to be more accurate. At least with its war on Fox News there was some calculated ability to garner sympathy and support from the fevered progressive masses. Taking on one of the most reputable reviewers of the car industry, when it’s giving you good news, is just plain idiotic:
It is an odd, and we’d say regrettable, pattern of this White House that it lets itself get dragged down into fights with specific media outlets.
But in addition to Fox News, now The White House is going after highly-respected and influential car site Edmunds.com.
They’re actually using The White House blog to dispute the site’s analysis of Cash-For-Clunkers (via Detroit News).
The post is snarkily titled: “Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers”
For its part, Edmunds.com responded with a sober yet forceful smackdown. After pointing to the obvious flaws in the White House’s (defensive) thinking, they put the once-venerable office to shame:
With all respect to the White House, Edmunds.com thinks that instead of shooting the messenger, government officials should take heart from the core message of the analysis: the fundamentals of the auto marketplace are improving faster than the current sales numbers suggest.
Isn’t this a piece of good news we can all cheer?
I’m not sure which is more pathetic: the fact that the White House clearly lost a blog war, or that it is stupid enough to get involved in one in the first place.