But It Sounds So Good

On Wednesday, Investor’s Business Daily posted an editorial about the cost of free stuff. Yes, you read that right.

The editorial reports:

In a devastating piece that appeared on the left-of-center web site Vox (to its credit), Manhattan Institute fellow Brian Riedl went through the simple math of what free actually costs. It’s a lot.

It’s not just the free aspect, but the fact that the democratic socialists have made so many promises that must be paid for that will make it so tough to swallow for most voters.

Riedl looked at the 10-year costs of all the various promises made by Bernie Sanders, Alexandria Ocasio-Cortez, and other self-described democratic socialists. He was as generous as could be in his estimates, often accepting the democratic socialists’ cost estimate even when it was patently and absurdly too low. It’s quite a laundry-list of promises with enormous costs: “Free college” ($807 billion); Social Security expansion ($188 billion); single-payer health care ($32 trillion); guaranteed jobs at $15 per hour plus benefits ($6.8 trillion); infrastructure ($1 trillion); student loan debt forgiveness ($1.4 trillion).

Net cost: about $42.5 trillion over 10 years, give or take a few hundred billion. To paraphrase the late, great Republican Sen. Everett Dirksen: “A trillion here, a trillion there, and pretty soon you’re talking real money.”

I wonder if the young people who support socialism understand how much it costs.

The article reminds us that our spending is already out of control:

As it is, current federal estimates expect about $44 trillion in tax revenues over that same period, with a deficit of roughly $12.4 trillion. Remember: All this democratic socialist spending comes on top of what we’re already spending.

Please consider this when you vote. If you want the government to take less of your money, the only hope you have (although it is a small hope) is to vote Republican.

The Economic Impact Of Tax Cuts

First of all, let’s take a short walk down memory lane to a Washington Post article from November 20, 2017.

The article explains how the Democrats plan to use the tax cut plan in the 2018 mid-term elections:

The goal of the ads will be to hit two messages. The first is that the GOP changes to the tax code themselves would be enormously regressive, showering most of their benefits on the wealthy while giving crumbs to working- and middle-class Americans or even raising their taxes. The second is that these tax cuts would necessitate big cuts to the safety net later — the ad references $25 billion in Medicare cuts that could be triggered by the GOP plan’s deficit busting — further compounding the GOP agenda’s regressiveness down the line.

Geoff Garin, a pollster for the Democratic super PAC Priorities USA, tells me that his polling shows that this combination alienates working-class whites, particularly Obama-Trump voters. “They are fundamentally populist in their economic views, and they find big breaks to corporations and the wealthy especially heinous when the flip side of that means cutting Medicare and Medicaid,” Garin said.

That was the original plan. Now lets look at an article posted yesterday in The New York Post about the results of the tax cut plan.

The New York Post reports:

We are already starting to see a fiscal dividend from Trump’s pro-business tax, energy and regulatory policies. The Congressional Budget Office reports that tax revenues in April — which is by far the biggest month of the year for tax collections because of the April 15 filing deadline — totaled $515 billion. That was good for a robust 13 percent rise in receipts over last year. ‎

…But there’s another lesson, and it’s about how wrong the bean counters were in Congress who said this tax bill would “cost” the Treasury $1.5 trillion to $2 trillion in most revenues over the next decade. If the higher growth rate Trump has already accomplished remains in place, then the impact will be well over $3 trillion of more revenue and thus lower debt levels over the decade.

Putting people back to work is the best way to balance the budget. Period.

The article concludes:

No one thought that Trump could ramp up the growth rate to 3 percent or that his policies would boost federal revenues. But he is doing just that — which is why all that the Democrats and the media want to talk about these days is Russia and Stormy Daniels.

I want to go back to the original Democrat statements about the damage the tax cuts would do to the economy. Did they really believe that or do they simply want more of our money under their control? Either way, it doesn’t say good things about them–either they don’t understand economics (see the Laffer Curve) or they lied. Obviously they have to continue lying if they want to use the tax cuts as part of their mid-term election campaign–they have already stated that they want to rescind many of the tax breaks that have resulted in the recent economic growth.

If you are inclined to vote on pocketbook issues, the only choice in November is to vote for Republican candidates for Congress.

Bad Decisions Based On Faulty Premises

There are still some legislators that believe raising taxes increases revenue. Up to a point it does, but only up to a point. At a certain level, increased taxes result in people finding creative ways to avoid those taxes.

Hot Air posted an article yesterday about a proposed tax increase in the Rhode Island 2019 budget. The proposal would levy an 80 percent wholesale tax on all vapor products and related equipment in the state. There was an attempt to include this tax in the Rhode Island 2018 budget, but the attempt failed.

The article reports:

The tax would effectively label electronic nicotine delivery systems as tobacco products, despite containing no actual tobacco. Vaping advocates argue the tax will harm overall public health in the state by cutting off former smokers’ access to vapor products. They also note the proposal will fail to boost state revenues due to diminished sales, coupled with consumers crossing into neighboring states to buy their vapor products.

Rhode Island is a relatively small state–you don’t have to drive too far to cross into another state. That is what people will probably do to avoid this tax.

The article lists the problems with the proposal:

First, these are not tobacco products. The state plans to tax them under the same category, despite the fact that there is no tobacco involved in the process. Further, the tax applies to the equipment used to “vape” the liquid nicotine. Compare that to the tax system applied to tobacco. Even the worst sin taxing states haven’t tried applying that sort of a penalty to buying a pipe.

Next, as noted above, the damage to the nascent vaping industry will be epic just as it was in Pennsylvania when they instituted a 40% tax. After the tax went into effect, more than one hundred new businesses shut down just in the greater Philadelphia region.

In terms of health, not only will this likely push people who managed to quit cigarettes by switching to vaping back to tobacco, but new vapers who have probably developed a habit may feel compelled to go try smoking cigarettes for the first time. Rather than allowing this new technology to continue to help people quit smoking, a tax such as this will likely lead to the opposite effect, creating a new generation of smokers who find it more economically practical to light up rather than vape.

And finally, in terms of raising revenue for the state, this scheme never works. Every time states push for a big new sin tax on tobacco it blows up in their face and that’s what going to happen to a vaping tax as well. In 2016, New York State actually lost a half billion dollars in tax revenue on tobacco rather than seeing an increase.

This is a picture of the Laffer Curve:

The Laffer Curve is simply a representation of how human nature responds to increased taxes. When taxes reach a certain point, people begin to look for ways to avoid them, and tax revenue goes down. That is exactly what will happen if the tax on vapor products and equipment in Rhode Island becomes law. People will make the trip to neighboring states rather than pay the increased tax. As an unintended consequence, the vaping industry in Rhode Island will be destroyed, and more people will make the trip to Foxwoods to buy cigarettes to avoid the cigarette tax.

Eliminating A Tax Break That Only Benefits The Rich

The class warfare that surrounds tax reform is bothersome. It’s not constructive and most of the information is false. The reason some tax cuts appear to benefit the rich is that the rich pay 80 percent of the taxes. They are the ones who need tax breaks. However, there is one tax break that generally impacts the rich that may disappear if the tax code is truly reformed.

Yesterday The Daily Signal posted an article about the elimination of the deduction for state and local taxes. The article explains how this deduction impacts the residents of California:

Yes, California has high state income taxes. For instance, the rate for millionaires is 13.3 percent. It’s not insanely lower for the middle class, either: A married couple making $103,000 or more would pay a 9.3 percent rate, and while $103,000 might go far in plenty of areas in the United States, California’s outrageously high housing prices ensure that such a couple wouldn’t have an easy time paying all the bills.

But those Hollywood liberals raking in the big bucks and paying the 13.3 percent rate? Well, they’re not actually paying the 13.3 percent rate, thanks to our current U.S. tax code, which allows deduction for state and local taxes.

Let me explain. Currently, if anyone files taxes with itemized deductions, he can deduct his state and local taxes. In other words, if Joe Random makes $250,000 a year, and pays $26,000 in state and local taxes, and then donates an additional $14,000 to charity annually, he could deduct $40,000 from his salary—and pay federal taxes on only $210,000.

This deduction has big benefits for wealthy Californians. According to The Heritage Foundation’s research, that deduction means the effective tax rate for rich lefties in the Golden State is 8 percent, not 13.3 percent.

Essentially the rest of the country is subsidizing California’s high tax burden.

The article further reports:

Furthermore, for individuals pulling in over $200,000 a year, the average benefit of the state and local tax deduction is $6,296, according to Heritage research. For those making in the range of $40,000 to $50,000, that benefit shrinks to $134.

And it’s not just California whose blue-state government is currently raking in the perks thanks to the tax code.

“Just seven states receive 53 percent of the value of the state and local tax deduction: California, New York, New Jersey, Illinois, Massachusetts, Maryland, and Connecticut,” write Rachel Greszler, Kevin D. Dayaratna, and Michael Sargent in their upcoming report for The Heritage Foundation.

Why should Americans from red states and lower-tax blue states be subsidizing other states? If states like California want to embrace big government, that’s fine—but they should also have to finance it themselves, not ask for a handout from the rest of the country.

Ending the deduction for state taxes would help make the income tax more equitable for everyone. There will be loud cries from the states it will impact, but it still needs to be done. Hopefully the Republicans will have the courage to do it.

More Free Stuff The Taxpayers Can Pay For

Congratulations. Today is April 15th, Income Tax day. Tax Freedom Day this year is April 24th. Tax Freedom Day is the day Americans stop working to pay the government and begin working to pay themselves. The tax code has become so ridiculous that many Americans use a computer program or an accountant to file their taxes. TurboTax and other tax services profit mightily because of our ridiculous tax system. The Tax Code is a tribute to the lobbying efforts of special interests. It is the crowning achievement of the Washington establishment.

Meanwhile, Washington wants to make it better. The American Thinker posted an article today stating that Senator Elizabeth Warren wants to make filing your taxes free for Americans.

The article reports:

Sen. Elizabeth Warren says taxpayers shouldn’t have to pay for tax software. She has the support of other liberal Democrats. She has introduced a bill that would require the IRS to make available a “free” online filing option to some taxpayers. She doesn’t mention that taxpayers will have to pay for the development and continuing maintenance of this system through higher taxes. So it won’t be free. Rather it will be a system the cost of which is hidden in the fine print of the federal budget. Never mind that TurboTax and other software companies now offers a no-cost option for a majority of taxpayers. Sen. Warren says TurboTax keeps it secret: a secret known only to the 3 million people who use it and to millions of others who know about it but choose not to use it. The IRS website has a direct link to the free software. The various software companies also have links from their websites. Wouldn’t it be simple if Sen. Warren were to promote the existing free system? Who believes that a system developed by the IRS would be easier to use?

At least TurboTax and other private businesses have an interest in protecting the taxpayers’ identity. Recent testimony on Capitol Hill indicates that the federal government is not doing a very good job of that.

The article concludes:

Senator Warren also wants the IRS to send some taxpayers a “completed” federal return which the taxpayers can sign and file. You can be sure that there will be no promise that the taxpayers who accept this option will be exempt from subsequent audits that can lead to additional taxes, penalties, and even prison. Who believes that the IRS will work to minimize the taxes on the returns it prepares? Will the IRS encourage contributions to Individual Retirement Accounts? Will the IRS help taxpayers avoid ever increasing penalties imposed on taxpayers by ObamaCare? Will the IRS recommend investing in tax-exempt bonds to save taxes? What about itemized deductions?

I don’t think anyone believes that the IRS will adapt to a role where it advocates for taxpayers in place of its traditional role of tax enforcer and collector.

When will Americans learn that nothing from the government is free? The government has no money except that which it takes from Americans. We need to realize that before we are totally bankrupt.

The Problem Is Not The Revenue–It’s The Spending

CNS News posted a story today stating that the federal government raked in a record of approximately $2,883,250,000,000 in tax revenues through the first eleven months of fiscal 2015 (Oct. 1, 2014 through the end of August), according to the Monthly Treasury Statement released Friday. This equals approximately $19,346 for every person who was working either full or part-time in August.

The article further reports:

Despite the record tax revenues of $2,883,250,000,000 in the first eleven months of this fiscal year, the government spent $3,413,210,000,000 in those eleven months, and, thus, ran up a deficit of $529,960,000,000 during the period.

…The largest share of this year’s record-setting October-through-August tax haul came from the individual income tax. That yielded the Treasury $1,379,255,000,000. Payroll taxes for “social insurance and retirement receipts” took in another $977,501,000,000. The corporate income tax brought in $268,387,000,000.

The chart below is an illustration of America‘s spending problem.

The article also noted that under ObamaCare new taxes took effect in 2013.

Excessive spending is a problem that Washington has no incentive to fix. It is up to the voters to give them an incentive–fix this or we vote you out of office!

 

The Truth In A Chart

Received in my email from a friend:

Below is a brief summary chart of what the Obama regime has really done to our great nation.

1.    Our national debt rose 80% to over $18 trillion.

2.    Our population rose 17 million, but the number of taxpayers only went up 9 million, the workforce rose only 4 million,  13 million desperate people stopped looking for work and dropped OUT of the workforce because jobs don’t exist (millions applying for and getting designated as ”disabled” so they don’t starve) and actual unemployment rose 4 million.

3.    The “food stamp” president, Obama,  has seen recipients rise 16 million (almost as much as the 17 million population increase!) to 46 million. Those living in poverty rose 16% to 44 million and US manufacturing jobs dropped from 19 to 12 million since 2000.  Why?  Because our highest-in-the-developed-world corporate tax rate of 35% is driving jobs out of our country as fast as corporations can legally incorporate off shore to maximize profits and survive.

graphofWorkforceThis, my friends, is where we are.

T

Why Congressional Investigations Can Take A Long Time

It seems that there have been so many scandals involving the Obama Administration and Hillary Clinton that it is hard to keep track. After a while it seems as if the investigations never seem to end. Well, there’s a reason the investigations seem to drag on–sometimes the information needed to conduct the investigation can be hard to get.

The Hill reported yesterday that thousands of emails from Lois Lerner have magically appeared.

The article reports:

The Treasury inspector general for tax administration (TIGTA) said it found roughly 6,400 emails either to or from Lerner sent between 2004 and 2013 that it didn’t think the IRS had turned over to lawmakers, the panels said. The committees have yet to examine the emails, according to Capitol Hill aides.

…But a spokesman for Senate Finance Committee Chairman Orrin Hatch (R-Utah) said the committee hoped the new emails would bring the panel closer to releasing the findings of its IRS investigation. Committee aides have said the panel was close to finishing its report when the IRS said it couldn’t locate the Lerner emails last year.

“These emails will be carefully examined as part of the committee’s bipartisan IRS investigation,” the spokesman said. “After TIGTA produces their report regarding the missing data later this year, the Committee hopes to follow suit and move forward with the release of its bipartisan report on this issue.” 

If the IRS had produced the emails when they were originally asked to, the investigation would be over. I also can’t help wondering if the emails have been tampered with in any way.

It’s All In What You Name The Bill

On Tuesday Time.com posted an article about the Transparent Airlines Act, which had just passed in the House of Representatives. The law allows airline ads to exclude government fees. Therefore the consumer could easily be misled as to how much his flight will cost.

The article reports:

As MONEY’s Brad Tuttle reported in April, $61 dollars of a typical $300 flight comes from federal taxes–20% of the overall ticket price. Under the new law, airlines could ignore that portion of the fare and advertise the same flight at $239. Could anyone actually buy that flight for $239? Of course not.

One argument by those who favor the law is that it will allow consumers to see exactly how much government fees add to the price of airline tickets. That may be true, but when I buy an airline ticket, I want to know exactly how much it will cost me–not a number that may actually be 20 percent less than the actual cost.

 

Compromise Isn’t Possible When There Is A Basic Philosophical Divide Between The People Involved

Historical government spending in the United S...

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Yesterday CNS News reported that President Obama stated in a speech:

“If taxes consumed less of America’s wealth, as some Republicans would like, it would not be possible to have a “modern industrial economy,”

That idea simply does not line up with the views expressed by the men who founded America or the practicalities of a free society.

The article further reports:

“Right now, we’ve got the lowest tax rates we’ve had since the 1950s,” Obama said during a lengthy reply.

The article posted a response by Michael Tanner of the CATO Institute:

Tanner said Obama was correct to say that tax revenue as a percentage of gross domestic product was lower than in the past. However, he pointed out that the Congressional Budget Office projects it to be higher than average by the end of the decade. Also, government spending is 25 percent – much higher than in the 1990s, when it was about 18 percent.

“If you look at it as a percentage of the economy that is being taken in taxes, we are at a low point right now, largely because of the recession,” Tanner said. “CBO predicts we will be up well above the historic average by the end of the decade. Historically we take in a little over 18 percent. CBO says it will be around 20 percent by the end of the decade.”

Higher taxes do not create a growing economy–they discourage growth in the private sector. The 2012 election will be a referendum on which philosophy the American voters agree with.

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Quote Of The Day

Rahm Emanuel (right) and Senator Dick Durbin (...

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Jan Schakowsky is a Democrat Congresswoman who has represented the ninth district of Illinois since 1999. WLS in Chicago posted the following quote from her today:

Schakowsky said that Americans don’t deserve to keep all of their money because we need taxes to support our society.

The exact quote was:

“I’ll put it this way. You don’t deserve to keep all of it and it’s not a question of deserving because what government is, is those things that we decide to do together. And there are many things that we decide to do together like have our national security. Like have police and fire. What about the people that work at the National Institute of Health who are looking for a cure for cancer.”

I don’t want to keep all of my money–I just want to keep more of it than the government takes and gives to other people.

If you agree with Congresswoman Schakowsky, you probably vote for Democrat candidates. If you disagree, you probably vote for Republicans. That is the debate in America right now. The 2012 elections will tell us who is winning the debate.

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