Taxes

Perry’s “Flat” Tax: Good Policy or Hail Mary?

Rick Perry has found himself at the bottom of the second tier after what seemed like a cake walk to the presidency.  But the Rick Perry bankroll has pundits on the ready for the next move upward.  On Monday, Perry tickled the media with a preview of his 20/20 Flat tax.  His overall plan which is named “Cut, Balance and Grow” seems much less catchy, especially if he has his eye on a primetime ABC host slot.

If one were going to summarize the plan, they might suggest that Perry believes in “caps”.  His 20% flat tax is optional, so essentially everyone paying more than 20% currently can move to 20% while everyone paying less can still pay their current rate. It also moves the corporate rate to 20%, kills the death tax, and removes taxes from qualified dividends and capital gains.  The plan also includes capping spending at 18%.  I believe talking about caps on spending as a percentage of GDP are a mistake for the simple fact that if you do this, what are the odds that congress will ever spend less than this amount?  Then again, after what we’ve seen in the last three years, it doesn’t sound half bad.

James Pethokoukis breaks down Perry’s plan over at The American:

—A choice between a new, flat tax rate of 20 percent or their current income tax rate.

—The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.

—Abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.

—Lowers the corporate tax rate to 20 percent—along with a tax holiday for foreign earnings—and moves toward territorial taxation.

End the War on the Rich

There are more and more people out there pissed at the rich.  I certainly understand where they’re coming from, but they’re wrong.  The rich per se aren’t the problem.  It’s time to quit fighting against the rich.  Occupy Wall Street has been wanting to smack the rich, and making a lot of noise about it.  The problem is they’re wrong.  The rich are not now, nor have they ever really been, the problem.

No, the problem is the corporatists.  Those are the people we need to stand united against.

Corporations are a tool, a way to organize businesses.  They’re not the enemy either.  However, the people who seem to believe that corporations deserve tons of special breaks, including government bailouts, are.  They are the reason people are pissed.

Ezra Klein has a piece where he outlines many of the complaints of the OWS-ers.  Most of them are debt related.  A lot of it is student debt, debt that Presidents through the years told them to take on for a better life.  I understand that anger…to a point.

But you look around and the reality is not everyone is suffering. Wall Street caused this mess, and the government paid off their debts and helped them rake in record profits in recent years. The top 1 percent account for 24 percent of the nation’s income and 40 percent of its wealth. There are a lot of people who don’t seem to be doing everything they’re supposed to do, and it seems to be working out just fine for them.

Eat the Rich

Oh yeah baby, the new plan is here. Raise Taxes on those Rich Sunsabitches. Once again confirming the old adage “Democrats Tax and Spend, and Republicans just spend”.

In what would appear to be a last ditch effort to get out of the basement in Presidential rankings, President Obama is proposing an increase of taxes on the “super earners” of America that may in fact close the gap on the deficit enough to restore America’s credit rating.

The one question I have yet to see asked is: Who does a better job with money, the government, or top private earner? The question that has been asked (and answered) is how much would increasing taxes on top earners actually increase revenue? And I would like to expand on that:

Warren Buffett, who has spoken out about “not paying enough taxes” made about 43 Million last year according to one report I read – and he paid about 18%. That’s about $7,740,000. Want to know what that covers in terms of Federal Government Spending? $3.9 Trillion Divided by 365 days, divided by 24 hours, divided by 60 minutes = $7,420,091.So obviously, doubling Mr. Buffett’s taxes will get you…. One whopping minute of spending.

Or put another way…. It’s just shy of 1.5% of what the federal government just lost with Solyndra. Apparently though, $535 Million is a “drop in the bucket”. You need seventy Warren Buffetts just to pay for the Solyndra theft loss… that doesn’t seem like a drop in the bucket to me.

Real tax hikes, phony spending cuts

President Barack Obama made his pitch yesterday to jack up tax rates on high-income earners and bring a host of new fees that will reach across income groups — offering $3 in tax hikes for every $1 in spending cuts:

Drawing clear battle lines for next year’s elections, a combative President Barack Obama on Monday demanded that the richest Americans pay higher taxes to help cut soaring U.S. deficits by more than $3 trillion. He promised to veto any effort by congressional Republicans to cut Medicare benefits for the elderly without raising taxes as well.

“This is not class warfare. It’s math,” Obama declared, anticipating Republican criticism, which was quick in coming.
[…]
The president’s proposal, which he challenged Congress to approve, would predominantly hit upper-income taxpayers and would also target tax loopholes and subsidies used by many larger corporations. It would spare retirees from any changes in Social Security, and it would direct most of the cuts in Medicare spending to health care providers, not beneficiaries.

Benefit programs wouldn’t be unscathed. Obama’s plan would reduce spending for those, including Medicare and Medicaid, by $580 billion. But with Republicans calling for massive cuts in entitlement programs, Obama said he would veto any legislation that cut Medicare benefits without raising new revenue.

Is Warren Buffett a hypocrite?

Is the Oracle of Omaha a hypocrite?  He is, according to the New York Post.  For those with faulty memories or who simply weren’t paying attention, Warren Buffett wrote an op-ed claiming that he and his fellow “mega-rich” weren’t really paying enough in taxes.  Obviously, this tore through the internet with both sides battling over Buffett’s arguments.  However, the Post claims that despite Buffett’s claims that he’s not taxed enough, his own company hasn’t even paid what it owes.

This one’s truly, uh … rich: Billionaire Warren Buffett says folks like him should have to pay more taxes — but it turns out his firm, Berkshire Hathaway, hasn’t paid what it’s already owed for years.

That’s right: As Americans for Limited Government President Bill Wilson notes, the company openly admits that it owes back taxes since as long ago as 2002.

“We anticipate that we will resolve all adjustments proposed by the US Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years … within the next 12 months,” the firm’s annual report says.

It also cites outstanding tax issues for 2005 through 2009.

Um…oops?

Buffett is free to argue any position he wishes.  However, if he truly feels that he isn’t taxed enough, then why hasn’t Berkshire Hathaway, that he is chairman and CEO of, paid their taxes?  Or maybe it’s as the Post suggests, that he only wants to shill for President Obama.

Club for Growth on Rick Perry

Just like in 2008, the Club for Growth is putting together a series of white papers on candidates running for the Republican Party’s presidential nomination. We’ve already covered their reports on the records of Newt Gingrich, Tim Pawlenty, Herman Cain, Mitt Romney, Jon Huntsman, Ron Paul and Gary Johnson. Next under the knife is Rick Perry, who has served as Governor of Texas since 2000.

Perry has certainly shaken up the race for the GOP nomination for president and dominated media coverage during his first week on the campaign trail. His campaign is being driven by conservatives and tea partyers wary of Mitt Romney, who they see as a flip-flopper and someone who laid the blueprint for ObamaCare. But does Perry have the fiscal record for conservatives and libertarians to get behind? You be the judge.

Taxing the rich is smoke and mirrors

When it comes to debt reduction, one often cited method is to increase taxes on the richest Americans.  It’s a small wonder that this one gets trotted out so much, since it’s typically rather popular.  Even billionaire Warren Buffett has come out in support of this one, citing that he has a lower effective tax rate than his own secretary.  The problem is that it won’t actually solve a thing.

The whole “tax the rich” is smoke and mirrors, designed to look like those in power are addressing the issue of debt while really doing nothing more than taking more money that wasn’t theirs to start with.  We could take every penny from every billionaire in this country, as well was tax the profits of every Fortune 500 company in the U.S. and still have a problem with our debt.

There are plenty who will say that I’m arguing that if it won’t fix it all, then it shouldn’t be done at all.  I’m actually not.  What I’m saying is that the whole argument is predicated on it doing something that it really won’t.  People are free to support whatever policies they so choose, but they need to be aware of the fact that what they’re proposing won’t make a dent in the national debt.  It won’t really make a dent in the deficit either.

Taxation is essentially the government taking money from citizens to pay for whatever.  The key word in that is “taking”.  Making no mistake, it’s the correct verb.  They take it from Americans like you and me, and then spend it on things that we might not necessarily agree with.  They’ve used it to fund wars that were horrendously unpopular.  They’ve used it to arrest such nefarious criminals as guys who sell raw milk.  Ah yes, they use it oh so wisely </sarcasm>

The progressive Contract for America

Could they at least get an original name?

On Monday afternoon, MoveOn.org and Rebuild the Dream announced a campaign to build up a popular movement that could match (if not surpass) the debt reduction crowd in both size and energy. And they have borrowed a concept from former House Speaker Newt Gingrich (R-Ga.) as their organizing principle.

The campaign, led by Van Jones, President of Rebuild the Dream; Justin Ruben, Executive Director of MoveOn.org; and Rep. Jan Schakowsky (D-Ill.), among others, is debuting a new Contract for the American Dream. They describe it as “a progressive economic vision crafted by 125,000 Americans … to get the economy back on track.” Its debut will involve a nationwide day of action, as well as an ad in The New York Times to run sometime this week, organizers said.

This “Contract” is very illustrative of the core tenets of modern liberalism – that it is the government that drives the economy, and that the government has every right to commandeer your money if it believes it has a better means of using it. Remember that the government is not some abstract and omniscient system; it is merely a group of power-hungry individuals with enough naivete to believe they know more than the rest of us:

The basic premise of the campaign is that America isn’t broke, it’s merely imbalanced. In order to stabilize the economy, politicians should make substantial investments in infrastructure, energy, education and the social safety net, tax the rich, end the wars, and create a wider revenue base through job creation.

Putting “politics” aside is capitulation

With the August 2 deadline fast approaching, many people are getting more than a little anxious for some kind of deal on the debt ceiling.  One of those is syndicated columnist Donna Brazile.  In her column, she calls on Congress to “drop politics”.  Unfortunately, like most any other person who calls for folks to drop politics, her motivations are political.

You see, any time anyone calls on the opposition group to drop politics, it’s really a call for that other side to shut up and do what the person wants.  It’s no different than calls for bipartisanship.  It doesn’t matter on political affiliation either, because both major parties do it pretty regularly.

However, if Brazile was serious about helping the nation, I would argue, then she would also beg for deep, deep spending cuts that exceed John Bohner and Harry Reid’s plans.  She would be calling for a serious rollback on intrusive government and job hampering regulations that would, ultimately, lead to increased revenue for the federal government.  She would call for a lot of things, but she isn’t.

Like so many others out there, Brazile is just wanting Republicans to shut up and do what she thinks they should be doing.  Is she necessarily wrong?  Well, that’s a topic for debate all on its own.  I honestly don’t want to get into that one right now.  But right or wrong doesn’t really matter, not for the purposes of this post as it applies to the debt ceiling.

Senate kills “Cut, Cap and Balance”

The Senate voted along party lines this morning to table “Cut, Cap and Balance,” the budget plan offered by House Republicans that passed that chamber on Tuesday evening:

The Senate voted 51-46, along strict party-lines Friday to kill the House Republicans “cut, cap and balance” legislation.

The measure would have cut spending by $111 billion in 2012, capped spending over the next decade and prohibited more borrowing until Congress passes a balanced-budget amendment to the Constitution.

President Obama had threatened to veto the bill, which was dead on arrival in the Senate.

Senate Majority Leader Harry Reid (D-Nev.) called the legislation “very, very bad” and said it was a waste of the upper chamber’s time.
[…]

During the debate on “cut, cap and balance,” Senate Minority Leader Mitch McConnell (R-Ky.) argued the GOP plan would solve the nation’s deficit crisis if Democrats would join Republicans in supporting it.

“This isn’t rocket science,” said McConnell. “We could solve this problem this morning if Democrats would…join us in backing this legislation that Republicans support.”

Supporters of the proposal have cited a CNN poll in recent days showing that voters support some parts of it, specifically the Balanced Budget Amendment (BBA). That’s not a surprise since BBA proposal are politically popular. However, the “Cut, Cap and Balance” proposal passed by the House only called for a BBA. It didn’t attain the 2/3 requirement to pass a constitutional amendment.


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