Taxes

Taxes and the Total State

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Biden has proposed a rather draconian tax initiative: you can read some of the details and an analysis here.   It will be justified, of course, by claims about “asking the rich to pay their fair share”, and “equity”…and I’ve already seen arguments that no one should be concerned about this unless they are very high income or soon expect to be, and that there aren’t many people in that category.

Some responses are obvious: Taxes originally targeted at high income levels have a way of migrating downward through the income levels–the income tax itself is an example.   The capital gains rates are in reality much higher than they look, because of the effect of inflation on asset prices.   Corporate income tax increases can affect everybody, regardless of income levels, in their roles as workers, consumers, and/or investors. And there is the matter of fairness–true fairness, not faux fairness:   it is not truly fair, democratic, or even civilized to assume that because there is only a small number of people in a given group, the rest of the society is entitled to do anything to them that they feel like doing.

But there is also, I think, an even more important point to be made.   A tax structure like this Biden plan–with its likely extensions and increases over time–acts to prevent the establishment and sustainment of individuals and families wealthy enough to act as a countervailing force to the government–media–academic complex.   I think the kind of people who inhabit the Biden administration, and who dominate today’s Democratic Party, do not like to see power & influence centers outside of this complex.   They really, really don’t like it, for example, that someone like Elon Musk can bypass their censorship efforts by buying and running a social media company.

Woodrow Wilson disliked the whole idea of separation of powers within government, which seemed to him to violate some kind of organic principle.   Totalitarians of all kinds have striven to eliminate alternative centers of loyalty and influence within their overall societies.   As Benito Mussolini put it:   “Everything in the State, nothing outside the State, nothing against the State.”

Whatever your current and expected income and wealth levels–if you value the continuation of America as a free society, then you have a dog in this fight.

Government, the things we do together.

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cal

Barack Obama is fond of describing government this way.

As President Obama said the other day, those who start businesses succeed because of their individual initiative their drive, hard work, and creativity. But there are critical actions we must take to support businesses and encourage new ones that means we need the best infrastructure, a good education system, and affordable, domestic sources of clean energy. Those are investments we make not as individuals, but as Americans, and our nation benefits from them.

That was a reaction to Romney’s criticism of his silly comment.

I prefer the quote attributed to Washington.

“Government is not reason, it is not eloquence,—it is force! Like fire, it is a dangerous servant, and a fearful master; never for a moment should it be left to irresponsible action.”

Now, we see a new imposition.

The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.

Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.

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Joe Biden and the debate

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A clownish Joe Biden mugged, groaned and interrupted Paul Ryan for 90 minutes last night. It was an odd spectacle but, apparently, just what the Democrats wanted. He lied about the Libya story and now Bill and Hillary Clinton may be thinking rebellion. Biden strongly suggested that the State Department was to blame for the murders because they did not ask for more security, in spite of the testimony before Congress the day before. If Hillary thinks she sees the bus coming, she may jump ship and it won’t be pretty.

With tensions between President Obama and the Clintons at a new high, former President Bill Clinton is moving fast to develop a contingency plan for how his wife, Secretary of State Hillary Clinton, should react if Obama attempts to tie the Benghazi fiasco around her neck, according to author Ed Klein.

Biden also lied about Iran and their nuclear ambitions. He dismissed the danger of doing nothing. He said they do not have a “delivery system.” They have a delivery system named Hezbollah. Iran may not have an intercontinental ballistic missile that can reach the US, yet. If Iran were to choose to attack the US, a container ship and a US port are much more likely to be involved than a new missile. Certainly, Israel is within reach as are the countries of Europe. Saudi Arabia is within reach. The Sunni-Shia rivalry is sufficient motive but the other reasons should not be ignored. Iran is ruled by a sect of suicidal maniacs.

Ryan capably described the Romney-Ryan tax proposals and his Medicare plan. I expected the abortion question and I thought it was well handled. Biden, of course, lied about the administration’s rules for health insurance coverage of contraception and abortion. That is not a big issue for me as I am pro-choice but the dishonesty is annoying. The “47% issue” and Ryan’s mention of a “30% who are takers” will not bother many people who agree and the offended are likely Obama voters no matter what happens.

It will be interesting to see what the result will be. The left, of course, is excited by the nasty tone Biden adopted.

On their $5 trillion tax cut, Romney/Ryan really need to either start naming the loopholes they’d close to pay for it or just admit they can’t make it revenue neutral without whacking the middle class. The VP was appropriately relentless on this point. Even I’m starting to feel sorry for them every time someone brings up this little flaw in their plan. I suspect I’m not alone in realizing that this country simply can’t afford to elect people promising a tax cut of this magnitude who, when it comes to paying for it, essentially say “trust us, we’ll find a bipartisan solution.”

The “$Five trillion tax cut” has been thoroughly debunked, including Stephanie Cutter’s retreat from the claim.

But, as I pointed out, Gov. Romney has already taken capital gains and dividends-for example-off the table. Now, here’s the revealing part: Larry said, and I know many in the investment community, including Mitt, feel exactly the same way, “I don’t consider those loopholes.”

So, here is a lefty who wants to raise taxes on investment income and capital gains. I don’t see enough responses pointing out that this income has already been taxed as ordinary income. Mitt Romney and most investors had salary income, taxed at the rates of the time, which they saved and invested. The capital gains and dividend income is income that was already taxed once. The left simply does not understand this.

Ryan kept his cool and Biden played the fool. Ann Althouse was impressed as I believe many women were impressed.

As I said, I’m tired of the yelling. I found the debate really hard to watch, but I kept watching because I was committed to live-blogging. Even still, I got catatonic. There was a point when I didn’t write anything for 20 minutes and then I said:
Biden has been yelling at Martha Raddatz for the last 15 minutes (as the subject is war). It’s so inappropriate!

The previous post had been:
The stress level is rising. Biden is so angry. Why is he yelling? Ryan needs nerves of steel not to lose his cool. I’m impressed that Ryan, when he gets his turn, is able to speak in an even, natural voice. It’s hard to concentrate on the policy itself, because the emotional static is so strong.

That shows how I felt: pain. So here’s my question. Ratings were down, I see, but when were the ratings taken? In the beginning? How did the ratings drop off over the course of the 90 minutes?

I have seen many comments about people, especially women, turning off the debate because of Biden’s rudeness and blustering. The ratings were down and the question is when were the ratings surveyed ? Of course, last night was also a big sports night. I think Ryan did better than the initial impressions suggest.

If Obama uses the Biden debate tactic as a model for next Tuesday, the election may well be over.

A must read for every Conservative/Libertarian

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The linked article is, IMO, an important read for all of us in the think tank/free market movement. I’ve often started feeble attempts to write a nearly exact commentary, and thankfully, some one wrote it for me.

It encompasses many of the things I’ve attempted to communicate in various debates/discussions with colleagues at Heartland and out on the Free Market Rubber Chicken circuit. It applies to libertarians as much as conservatives.

MODERNIZING CONSERVATISM cogently lays out exactly why the conservative movement is heading toward rough waters.

While I don’t agree with every aspect of prescribed remedies, the need for a reformation of the movement is 100% accurate, IMO.

Some titillating excerpts…

“Long-term evidence indicates that the starve-the-beast strategy not only fails, but may make the problem of unrestrained spending growth worse, suggesting that a “serve the check” strategy might be a more effective means of curbing the growth of government spending. The simple explanation for this seeming paradox is that the starve-the-beast strategy currently allows Americans to receive a dollar in government services while only having to pay 60 cents for it.”

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Coolidge- Summing up

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I promise this is the last post of this series.

Coolidge believed that the wedding of government and business would lead to socialism, communism or fascism. Hoover considered Henry Wallace a fascist for supporting the McNary-Haugen bill. Hoover, ironically, was to bring on the Depression by progressive measures that might have been called a form of fascism. The farm bill would be re-introduced under Hoover and die. Only during the New Deal would it find enough support to become law. The summer of 1927 was peaceful and prosperous. It was the summer of Babe Ruth’s 60 home runs. The Yankees would win the World Series and end up with a winning percentage of 0.714, still unsurpassed. In September, Gene Tunney defeated Jack Dempsey in the fight marked by the “long count.” The “Jazz Singer” came out that fall, the first talking feature picture. Charles Lindbergh flew the Atlantic in May of 1927. He and Coolidge were much alike yet different. Both were shy and diffident but Lindbergh was happy to cash in on his fame while Coolidge refused all offers after he left office.

Coolidge arranged for Lindbergh to return to the states aboard the US cruiser, Memphis, where he was met by a crowd and by cabinet members, then there was a huge parade through New York City. Lindbergh and his mother stayed with the Coolidges at the temporary White House where Dwight Morrow, close friend of Coolidge from Amherst, introduced the young aviator to his daughter Ann. Aviation stocks, along with many others, soared and the Dow Jones Average by year end was at 200, the record high.

In his December 6, 1927 State of the Union message, he mentioned an economic slowdown and asked for the same things he had been requesting; sell Muscle Shoals, help farm cooperatives and keep spending down. In May of 1928, he complained to reporters about Congressional spending. “I am a good deal disturbed at the number of proposals that are being made for the expenditure of money. The number and the amount is becoming appalling.” He managed to get another tax cut passed including a cut in the corporate tax rate. The surplus that year was $398 million.

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