The Arrival Of Robin Hood

Remember teaching your children that money doesn’t grow on trees and that they have to earn it? Evidently some of our members of Congress never learned that lesson.

Yesterday Breitbart posted an article about some recent statements made by Representative Rashida Tlaib, a Democrat from Minnesota.

The article reports:

Far-left “Squad” member Rep. Rashida Tlaib (D-MI) spoke at the NAACP convention over the weekend and railed against the GOP tax cuts in a pitch for her anti-poverty BOOST Act, promising to take money from the rich and give it “back to the people that earned it.”

Tlaib introduced her anti-poverty legislation – the Building Our Opportunities to Survive and Thrive (BOOST) Act – last month and spoke about it at the NAACP convention over the weekend. The proposal offers a guaranteed income – up to $6,000 per year – to families and individuals under certain financial thresholds via a “refundable tax credit that can be paid monthly.”

The Michigan lawmaker’s BOOST Act serves as her response to what she calls the “GOP Tax Scam,” despite the fact that two-thirds of Americans will pay less in taxes in 2018, thanks to the tax cuts.

“Recently, I introduced the Boost Act. This legislation completely repeals the GOP Tax Scam that is only helping wealthy individuals – the rich, the corporations,” she told the crowd.

“And do you know what I did with that money? Do you know what I said? We’re going to go ahead and put it in the pockets of folks like everyday Americans,” she said, noting that families making less than $100,000 could get up to $6,000 per year.

Taking the moral route, Tlaib said it is important to give money back to the people who actually “earned” it, suggesting that wealthy individuals do not earn or deserve to keep the fruits of their labor.

 I guess the Democrats have decided that class warfare works better than racism. Their playbook is getting very old.

The article notes the impact of the GOP tax cuts:

The economy has seen a boost from the GOP tax cuts, with companies issuing employee bonuses and announcing plans to invest billions in the U.S., thereby providing thousands of new jobs.

Last year, Exxon Mobil announced that it would invest $50 billion in the U.S. economy, adding 12,000 new jobs, thanks to the GOP tax cuts.

Even Starbucks, a notoriously left-leaning company, used millions of its corporate tax cut to raise the wage for existing workers.

Under Tlaib’s economic plan, the people who would benefit are the people who are not working; and the people who would lose are the people who work for a living. How long would it be before those who are working to give those who don’t work a free ride would see the folly of their ways and quit producing? That’s where socialism always winds up.

This Could Make The Next Two Years Very Interesting

Don Surber posted an article today that included some rather surprising information.

The article reports:

Brad Parscale, Donald John Trump’s 2020 campaign manager, told Jesse Watters last night that 34% of the people who attended the president’s rally in Grand Rapids were registered Democrats.

Parscale knows that because people needed to give the campaign their cellphone numbers to get tickets. The campaign then used the information to check their voting record.

…Parscale called the Green New Deal a big juicy steak for the campaign.

Axios limited its report on the interview to Parscale saying, “[Trump] has been very easy to work with this week. He’s been very smiley.

“I was in the White House this week; he served me hors d’oeuvres. That was a first. … [A] little pigs in a blanket, some meatballs. …He gave me a Diet Coke; he was very happy. It was my first [time] in nine years serving, of hors d’oeuvres from the president. Which is safe to say, very good mood.”

Axios was the only outlet (besides Fox News) that I could find with a report on the interview.

Gee, I wonder how the experts missed that last election?

It’s difficult to ignore the economic success of the Trump administration. I suspect those in the deep state will attempt to undermine that success during the next year or so, but there are some fundamental changes in regulations that will make that difficult. The unemployment rate and the workforce participation rate speak for themselves. Salaries at the lower end of the wage scale are going up. People are keeping more of what they earn. The mainstream media is not telling us all of the good news, but people are experiencing better economic times and discounting the media. This President has dealt with an unprecedented assault on our southern border and is beginning to deal with the problem in spite of Congress–not with the help of Congress. The President has also dealt with an unprecedented attack on him personally and on his family. It is time to stop harassing the President and let him lead. The attendance at his rallies are an indication that the public is not listening to the mainstream media–they are doing their own research and drawing their own conclusions.

Americans Often Vote With Their Feet

Yesterday The New York Post posted an article about New York City’s shrinking middle class.

The article reports:

After decades of sharp income erosion in the face of relentless taxes, escalating living costs and wage reductions through technological changes, the full extent of this shocking exodus is laid bare in the latest US Census data.

That shows the city is losing 100 residents each day — with departures exceeding new arrivals.

“The rich in New York City are getting richer; the poor are actually getting richer, but not rich enough to be middle class,” said Peter C. Earle, an economist at the American Institute for Economic Research, who has studied other data, noting the expansion in welfare and entitlement programs.

Earle said it isn’t unreasonable to assume middle-class incomes are falling even faster in New York City than in other major US cities, because of the city’s high — and rising — housing and other living costs.

New York City’s middle class comprises 48 percent of city residents, with median annual incomes between $30,000 and $60,000.

Thirty-one percent make lower incomes, and the ranks of the rich account for 21 percent of New York City residents.

By contrast, in the early 1970s, about 61 percent of New Yorkers were ensconced in the middle class; today, fewer than half are.

Recently Amazon opened a facility in Long Island City that received an estimated $3 billion in subsidies, increasing the tax burden on city residents. Although increasing the number of jobs is a good idea, having the taxpayers pay for those jobs is not.

The article concludes:

National chain-store locations have plunged in the city by 0.3 percent, to 7,849, this year, according to the Center for an Urban Future. And a record 18 chains, including Aerosoles and Nine West, vacated all their city sites in 2018.

One sector doing a booming “business” is food pantries. Despite a city unemployment rate of 4 percent, New York food pantries report elevated levels of demand, especially during the holiday season.

More than 1 million New Yorkers now worry they won’t have enough food for their families, according to recent studies.

Unless something changes in the economic policies of New York City, the city will no longer be the center of commerce and art that it has been. The voters in New York City need to take a good look at where there city is going and make the appropriate political changes.

How Cutting Taxes Creates Revenue

On November 16th, Hot Air posted an article about the impact of the Trump tax cuts on government revenue. As I am sure you remember, the Democrats called the tax cuts on individuals ‘crumbs’ and swore that the tax cuts would bankrupt the country. Well, that’s not exactly what happened.

The article reports:

Unemployment is at an historic low. Employment is at an all-time high. Wagers are growing after years of stagnation.

And now from all that increased economic activity, the federal government has just reported historic record tax revenues in October, the first month of the new fiscal year, of $252,692,000,000.

That’s more than $11.4 billion above revenue for October of last year, which was the previous record tax revenue for an October.

And it did this by collecting more than $3 billion less in personal income taxes, thanks to the tax cuts.

The new revenues were the result of increased business taxes because of increased business. Here’s how much different it was:

Corporation income tax receipts to the U.S. Treasury this year in October were a whopping $8,000,000,000. This compares to the previous October’s $3.8 billion.

Despite the record tax revenues in October, the federal government ran a deficit of $100.5 billion that month because, spending. That’s a problem that newly-elected members of Congress such as Indiana’s senator-elect Mike Braun, a businessman, said would be a major target in 2019.

The thing to remember here is that as unemployment decreases, government spending should also decrease. Unfortunately Congress did not get the message. Our problem is not the revenue–the problem is the spending. If either party were serious about curbing government spending, it would have been done by now. Obviously they are not. There are a few members of the Republican party who have been trying to put the brakes on runaway spending for years, but they are either not trying very hard or they are ineffective. At any rate, we need to elect Congressmen (regardless of party) who will pledge to bring the spending under control. It does no good to increase the revenue if the spending increases right along with it.

An Explanation I Can Understand

IJReview has posted this in the past, but I thought it was worth sharing again.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing The fifth would pay $1 The sixth would pay $3 The seventh would pay $7 The eighth would pay $12 The ninth would pay $18 The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.  –   Professor of Economics.

The same general principle is explained in the Laffer Curve.

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