All religions, arts and sciences are branches of the same tree.
Albert Einstein
Taxing the 1%: Politically Wise Strategy?
Given the fact that a number of Wall Street people are registered Democrats, we should not be surprised that some of them, despite their professional success, will echo the progressive Democratic lines.
I don't want to promote a rather pedestrian commentary restating the usual class warfare/income inequality nonsense. I will let Don Boudreaux and other free-market economists parse through the polemical use of statistics, but I want to make what I think, even without a degree in economics, are fairly obvious points that most of the policy wonks seem to ignore.
First of all, these statistics are not unlike a dog chasing its own tail. It should not surprise us that higher-level income goes up when we lower the cost of investment or burden of income. In the long run, equities perform superior to other types of investments (e.g., bonds) so when the well-to-do shift from a more tax-avoidance to a risk-taking mode under market-friendly policies, we should see significant income increases. So it's hardly surprising when you effectively go from artificially low income for the high earners (due to tax avoidance) that we would see more of a spread between income classes.
Second, I want to point out there is a risk premium to compensation. I know a lot of people simply interested in putting in their 40 hours and don't want the responsibility of hiring/firing people, dealing with budgets, spending nights and weekends traveling or attending meetings and always on the phone. They know they could make more by putting in more time and effort but feel that it's a quality of life issue. In many cases, if you feel the owners or managers get a lion's share of the income, you are free to start your own competitive business, but you may find yourself struggling for years and long hours before you make a reasonable income or profit.
Third, as I mentioned in another post over the past week or so, there's a distinction between income and wealth. The "pick and choosing" of statistics becomes more apparent here, because wealth distributions were even more pronounced at the beginning of the twentieth century. Wealth contracted under federal mismanagement in the latter 20's and of course during the Great Depression and even when you factor in gains during the lower Reagan tax years, wealth distribution did not recover to its former disparity.
But let me quote the ending statements of the commentary here:
Furthermore, given the size of America's fiscal challenges, it is simply inconceivable to me that the country would ever agree to spending cuts of the magnitude that by themselves could return us to a sustainable fiscal path. Whether you think it's a good idea to increase taxes on the wealthy or not, a pragmatist would acknowledge that it is inevitable.
I am therefore puzzled that the Republicans have chosen to draw a line in the sand on the question of raising taxes on the top 1%. The Republican position looks like a loser politically, is intellectually and morally difficult to defend, and puts them in a battle whose outcome is already known.
So why fight it?Response? First, the proposed millionaire tax (or any other form of class welfare nonsense) has, at most, a negligible effect on the deficit. It's not serious fiscal policy: it's a gimmick, and everybody knows it. There simply aren't enough rich people to sustain current spending. The Republicans probably would consider a "real" grand bargain, but Obama is not proposing a compromise: he wants to pretend the 47% not paying any federal income tax burden constitute "shared sacrifice"; only a Koolaid-drinking ideologue could take the Deadbeat-in-Chief seriously. The guy is not even proposing an across-the-board spending freeze.
Second, we need to be talking about alternative forms of taxation; one I have particularly raised is the fact that we don't have a VAT (sort of a multi-layered sales tax) and almost all of our trading partners have one. VAT's get certain favorable consideration under current international trade rules which we don't get. Our current tax system is overly complex and the federal government's income is less predictable because of accounting considerations, particularly during times of economic distress. A VAT would provide a more stable revenue source. We need to really move away from the current entitlement schemes--$50T unfunded liabilities are just unsustainable. I've hinted at where I think this has to go: we need to vest people in health care decisions (e.g., increased user fees, higher deductibles, incentives to use lower-cost providers, etc.), and we need to think more of fixed-price contracts at the macro level (e.g., cost-plus vs. fixed-bid contracts), which would give providers more of an incentive to wring out things like defensive medicine costs. We also need to establish caps for government agencies, e.g., provide them with an incentive to dispense with unnecessary personnel, redundant procedures, etc., while we implement some variation of zero-based budgeting and business reorganization. These are just a few ideas off the top of my head, and I haven't heard a single policymaker speak in the manner I just have.
The fact of the matter is every time the Democrats offer to swap spending cuts for tax rate increases, they never, ever make good on their commitments of real spending cuts. They violated their promises to both Reagan and Bush Sr. The Democrats do not negotiate in good faith. Obama's sophistic budget policies are just another variation of Lucy pulling away the football before Charlie Brown's kick attempt: the Republicans are saying: look, we've been there, done that. We are done with Dems' bait-and-switch game-playing with front-loaded spending and deferred spending cuts, tweaking baked-in baseline budget increases, and related nonsense.
Third, the reason we libertarian-conservatives don't want to raise taxes on the well-to-do is because: (1) they are already contributing a disproportionate share of the income tax burden , (2) investment/income tax increases are double-edged swords, and (3) they are taxed, from a business/investment perspective, in an globally uncompetitive manner. High tax bracket rate increases raise the cost of business and projects. That's counterproductive when you're trying to boost the economy and jobs.
Finally, let me address a point from others as well: there are people whom will point out that post-WWII economic growth was robust, despite high progressive tax rates--and the same thing after the Clinton tax hike. Therefore, all of this is much ado about nothing. Wrong. We can talk about Hauser's law: basically we have an observed cap in federal revenue of about 19 to 20% of GDP: regardless of high-end tax bracket rate. However, tax rate increases have a negative effect on economic growth. Going back to the original point: costs matter. Economic growth sometimes occurs DESPITE counterproductive progressive anti-growth policies, not BECAUSE of them. We can think of it in terms of simple supply and demand: you increase the cost of labor or investment, you get less of it. You shrink the tax base. What we libertarian-conservatives point out OPPORTUNITY COSTS. We argue however good economic growth was post-WWII or during the Clinton era, THEY WOULD HAVE BEEN MUCH BETTER WITH LOWER TAXES ON THE JOB CREATORS/TOP BRACKET.
Romney: Now Is NOT the Time To Bring Up Abortion
First of all, as I discussed in an earlier post this weekend in an earlier commentary (i.e., on the Lochner Era), general police power is constitutionally exercised on the state/local level with a narrow role on the federal level. The President has no role in an amendment to the constitution; a pro-life amendment would have to gain two-thirds majorities in both chambers of Congress (or be enacted in an unprecedented constitutional convention), but the process is not subject to Presidential consent. Probably less than 10% of federal Democratic legislators are pro-life and have generally numbered at least 40% in either chamber, the chance of reversing Roe v Wade via a restrictive amendment based on the scientific fact that human life begins at conception is unlikely. Given the fact that even the mother is often unaware of her early pregnancy and there are readily-available abortifacients, there are serious enforceability issues.
This is the reason why we pro-life libertarian-conservatives will talk about restoring state regulation. A pragmatic consideration I floated in a prior post is to use analogous criteria for judging if a born person is alive or dead, e.g., a functioning heart beat, nervous system, etc., distinct from the preborn child's mother. I suspect that SCOTUS might be receptive. The ideological feminists will reject that from the get-go, but one is at an impasse at people whom are in a state of denial and conveniently and arbitrarily define away a child's rights.
Romney doesn't need to pursue this issue; all it does is play into this patently absurd, contrived talking point that there is a GOP "war on women". In fact, the Obama-Maniacs shot the opening volley in this "war" by suggesting that women are entitled to socialize the expenses of their personal sex lives; no one is talking about banning the purchase of artificial birth control. If the woman and/or her partner go to dinner, movies, a hotel, or whatever: these expenses cannot be socialized: why are they asking the taxpayer to pick up the cost of birth control pills and/or a condom? (Don't play word games over taxes versus regulations [money is fungible]; the point is that there is no reason to add the cost of a middleman if the woman ends up paying the full cost in the long run. Why should I, as a celibate male, have to pay a portion of sexually active Susan's birth control? At least if Susan delivers a child, we would have a future taxpayer, contributing member of society.)
Romney has no need to push on a string for pro-life voters. Barack Obama personally stood in the way of the Illinois born again infant protection act, which simply provides if a baby survives the abortion procedure, the medical profession has an obligation to treat him or her, e.g., to provide incubator services for premature babies, and not simply let her die a preventable death. There are ghastly stories, e.g., in a hospital ironically named after Jesus Christ of babies left attended to die in utility rooms, falling off tables or dumped into trash receptacles. One of Jill Stanek's stories was the year after Obama had previously stonewalled the act, the so-called "Christian" hospital had created a new room so the parents of the dying aborted child could comfort the baby during the remaining 40 or so minutes of her life, baptize her, take pictures of them together, get a copy of her little footprints, etc. (I'm sorry but writing about this seems so macabre: these so-called parents are specifically refusing medical treatment for their dying child--while parents in another room of the same hospital are fighting to save their lives of their babies at a similar stage of development: what happened to equal protection under the law?) Stanek told us that the first thing Obama did was to try to take credit for the dying room and then seemed exasperated that Stanek wasn't satisfied with this "compromise". The bill finally passed--after Obama was elected to the US Senate. (For a more comprehensive discussion, see Jill Stanek's website here. Regardless of one's position on infanticide, Obama's misrepresentation for years of his on-the-record votes tells you all you need to know about his integrity.)
Romney needs to avoid alienating moderates and independents whom have serious doubts about Obama but happen to be pro-abortion choice; there is no need to give them a reason to vote against him over an issue on which he can do little. The one thing he could bring up is his criteria on selecting federal judges and SCOTUS nominees. My suggestion is that he should mention characteristics like even temperament, intellectual brilliance, a healthy respect for traditional institutions and morals, the balance of powers and the Bill of Rights, and an acute awareness of the unintended consequences to judicial decisions.
What got me on this commentary? A British newspaper ran an item of questionable taste by a so-called comedienne Sarah Silverman where she showed a picture with a bloated stomach (after reportedly eating a burrito) and then a later picture with a flat stomach. She allegedly tweeted this message: "Got a quickie aborsh in case R v W gets overturned." There's nothing funny about the idea of killing a preborn child. I write better jokes than Silverman (and her former boyfriend Jimmy Kimmel), and I'm an amateur.
What's even worse is the female British columnist whom said this in writing background material: "At the expense of the Republican party who want to take away women’s autonomy over their bodies..." I could spend hours just refuting the bogus alarmist statistics in this newspaper column (see here for an example of a more realistic analysis: for example, the commonly cited number of maternal deaths from illegal abortions is based on old figures (like the 1920's/30's) before advances in medicine to treat infections and the 1M illegal abortions per year were similarly based on extrapolations from old, dubious data; the real figure was maybe a tenth of that).
But the idea conservatives or pro-liberty conservatives like Ron Paul and myself want to "take away women's autonomy over their bodies" is sheer nonsense. The preborn child is biologically dependent on her mother during pregnancy, just like she's analogously physically and emotionally dependent on her parents, relatives or others to care for her needs after birth. We aren't talking about setting child quotas per fertile female; we aren't requiring a judge's order before removing her ruptured appendix, tying her tubes or implanting a birth control device; we aren't suggesting that she doesn't have the right to say 'no' to intimacy with her significant other. It's not all about the mother; the baby has her rights, too.
You would also not know from the busybody British feminist columnist that Gallup published a poll last year showing that by a percentage of 61-37, Americans opposed to nearly all abortions (except for basic rare exceptions of the mother's life in danger, rape or incest, etc.) As a libertarian, I would be the first to point out individual liberties should be protected against tyranny of the majority--except to point out there are also the child's unalienable rights at stake. The reason I raise this point is to show that despite relentless pervasive feminist propaganda over the past 5 decades, most Americans remain unconvinced.
Obama Narcissistic Behavior Watch (Retro Edition)
Technically the ObamaBall and the ChiaObama may have been done without Obama's knowledge or consent (because he is a public figure); this isn't as egregious as Obama's comparing himself to Gandhi, but there is no question that Obama, if he knows anything, is aware of his favorable public image and consciously manipulates it to sell his policies. (You can put lipstick on a frog and kiss her, but she remains a frog.) So these are more a consequence of Obama's personality cult.
The 2009 commercial below is in the afterglow of the inauguration. As a veteran politician, Obama had to be aware that there were unrealistic expectations being set, particularly in the euphoric early phase for the 2008 Democratic nomination. He did pay lip service to that effect, but that's not the same thing as managing expectations.
There are only two other Chia Presidents: ChiaWashington and ChiaLincoln. No ChiaJefferson or ChiaReagan. Your ChiaObama comes with a "green energy commitment" (or Politics of Green Envy) Afro and can also serve as a paperweight as you put together your tax return this weekend.
My Greatest Hits: April 2012
This is a list of posts which have gotten the most pageviews over the past month. My Valentine Day's post finally fell off the charts. If you are a new or occasional, here are my 5 (6 with tie) most popular posts in descending order (including two one-off posts, not in my miscellany format):
- Romney VP Selection? My Suggestion: Kay Bailey Hutchison
- Miscellany: 3/10/12
- Miscellany: Easter Sunday 2012 Edition
- Miscellany: 3/27/12
- Breaking Up With John McCain
- Miscellany: 3/16/12
An original:
- Hard-line Egyptian Islamist Abu Ismail was disqualified from the upcoming Presidential election based on evidence that his mother was an American citizen. Who knew Donald Trump was interested in Egyptian politics?
The Rolling Stones, "Tell Me"
