There is no moral precept that does not have something inconvenient about it.
Denis Diderot
Dedicated To the Victims and Surviving Family Members
of the Aurora, CO Movie Massacre
I do not want to publicize the perpetrator of this atrocity. I remember after the 9/11 tragedy that the 2001 Emmy Awards were postponed as the nation's breath was held not knowing when or where the next attack will come from (including any captive audience as in the case of a movie theater auditorium). The sad thing is 11 years later, this young man was able to work around security: he propped open an exit door in the back of the theater, parked his car near the exit and returned with his weapons.
No doubt there will be the inevitable post audit; there's already the predictable backlash from the gun control lobby (I find political opportunism in the face of tragedy morally reprehensible). I'm sure that there must be improved security alternatives to the status quo (e.g., back door alarms, one-way doors/turnstiles, etc.)
But it's very difficult to defend against a madman, whom had premeditated the event. He picked a date that he knew the theater would be full: the opening night of the summer's biggest blockbuster; he had extensively booby-trapped his apartment, knowing law enforcement would go there. There will be justice.
This Political Season's Cliffhanger:
Taxmageddon and the Sequester
The Washington Post on July 15 published an article under the ominous title "Democrats threaten to go over ‘fiscal cliff’ if GOP fails to raise taxes".
Democrats are making increasingly explicit threats about their willingness to let nearly $600 billion worth of tax hikes and spending cuts take effect in January unless Republicans drop their opposition to higher taxes for the nation’s wealthiest households.
Emboldened by signs that GOP resistance to new taxes may be weakening, senior Democrats say they are prepared to weather a fiscal event that could plunge the nation back into recession if the new year arrives without an acceptable compromiseWe learn from the article (surprise, surprise) that this time Obama refuses to accept anything less than an upper income tax hike and will veto any budget deal otherwise. Defense Secretary Leon Panetta is running around like Chicken Little over a default sequester $55B cut out of a $608B budget, unless Congress can agree to compensatory/greater cuts elsewhere.
"Emboldened by signs that GOP resistance to new taxes may be weakening?" This is delusional. If the GOP, which was not in control of the House, did not do it in 2010, they certainly aren't going to do it now. They have the upper hand in this argument: they argued to make the Bush tax cuts permanent on multiple occasions. There isn't an elected Republican whom doesn't know what happened to G.H.W. Bush when he broke his no-new-taxes pledge and let the Dems increase the upper rate from 28% to 31% while not keeping their part of the bargain (spending cuts), i.e., "fool me once, shame on you; fool me twice, shame on me". The marginal rate isn't going to go up: it affects business at the margins (meaning that raising the rate would hurt economic growth). With growth deflating once again, the last thing needed is to increase marginal rates: it would increase the cost of investment.
Perhaps Senator Murray is referring to the consternation of some of the defense hawks like Sens. McCain and Graham, whom have made no secret of their concerns about any defense cuts. But the Democrat have some dilemmas of their own: three-fourths of the Bush tax cuts are for the middle class, and they have to find money to avert a $55B or so cut to their social programs. The GOP is in a position of getting both cuts and tax hikes without casting another vote and being able to blame Dems for tax hikes and cuts in Defense spending.
What's the likely ground of compromise on taxes? Most likely, tax expenditures and/or tax preferences. According to Andrew Fleenor, only about 40% of income is actually taxed after various exclusions. Tax preferences (subject to AMT rules) includes items like private-activity municipal-bond interest, the qualifying exclusion for small business stock and excess intangible drilling costs for oil and gas.
According to Wikipedia:
Tax expenditures are "those revenue losses attributable to provisions of the Federal tax laws which allow a special credit, a preferential rate of tax, or a deferral of tax liability" In 2009, the JCT listed over 180 tax expenditure programs that cost the U.S. government over $1 trillion dollars in revenues. Tax spending has to only pass through two committees the House Ways and Means and Senate Finance. Tax expenditure programs, once in the tax code, do not come up for annual review and can only be removed through tax legislation.The leading tax expenditures (using 2007-2011 estimates) are:
Fleenor argues that income tax bracket rates are twice what they should be if we got rid of all the tax gimmicks. I have made it clear that as a free marketer, I don't believe that we should be picking winners and losers through the tax code. For instance, we can see multiple items directly relevant to the real estate market. (I would like to see the tax burden shifted to more of a balance with consumption (e.g., VAT), inflation-adjusted and/or excluded double taxation of interest, gains and dividends, and more economically efficient alternatives, like the land tax.)
- Medical insurance premiums and medical care: $889 billion
- Home mortgage interest deduction): $471 billion
- Capital Gains Exclusion on home sales: $318 billion
- Deductibility of charitable contributions (total): $243 billion
- Exclusion of net imputed rent: $205 billion
- Child Credit: $200 billion
- Exclusion of interest on public purpose state and local bonds: $168 billion
- State and local income taxes, not including property (non-business): $162 billion
- Exclusion of Social Security benefits (total): $149 billion
- Property taxes on homes: $74 billion
I would think compromises might include some means-testing or caps and/or conversion of deductions to flat credits, so more income at high levels is taxed at the higher tax bracket.
The Guitar Man and Obama's Theory of Business Success
"If you’ve got a business — you didn’t build that. Somebody else [government] made that happen.” - Barack Obama
From the Washington Times:
U.S. authorities raided Gibson Guitars recently over the instrument maker's use of allegedly illegal imports of wood. According to a Wall Street Journal interview, though, Henry Juszkiewicz, chief executive officer of Gibson contends, "a broker probably made a mistake in labeling the goods but that the sale was legal and approved by Indian authorities."
Mr. Juszkiewicz also told KMJ Radio host Chris Daniel on Wednesday that the Obama administration sent his company a letter that if the guitar maker used Madagascar labor instead of an American work force, their "problems would go away."This whole controversy involves the US government enforcing a provision of the Lacey Act: "The Lacey Act also makes it unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant in violation of the laws of the United States, a State, an Indian tribe, or any foreign law that protects plants." It was amended in 2008 to enforce illegal logging. The allegations involve rosewood and ebony wood; Madagascar prohibits ebony wood logging or the sale of certain unfinished ebony wood.
The issue seems to be not that ebony wood, presumably from a legal source, isn't sold by Madagascar but its status as unfinished versus finished, a form of labor protectionism. Gibson insists that the wood had been cut into pieces and certified by local officials as finished. In fact, Gibson has been well known by the Rainforest Alliance for compliance with enlightened sustainable forestry practices.
The Obama Administration is shamefully violating Gibson's economic liberty.
Political Humor
Jobless claims rose again by 35,000 last week. Not good. But it does show that if you're unsuccessful in this country, you didn't do it on your own. You had help. Thank you, President Obama. - Jay Leno
["We rise or fall together as one nation and as one people, and that’s the reason I’m running for President -- because I still believe in that idea. You’re not on your own, we’re in this together." ("That's why, after this election day, I'll be joining you at the unemployment office...")]
The United States Postal Service is about to default on $5.5 billion. They made the payment but the check got lost in the mail. - Conan O'Brien
[I wonder who they'll find to deliver those eviction notices...]
Musical Interlude: My Favorite Groups
The Babys, "Back On My Feet Again"
