Liberal Rhetoric 101: Teachers Should Earn More!

Liberals and "moderates" especially love to give lip-service to the idea of cutting spending, but never want to give up anything they deem REALLY, SUPER-DUPER IMPORTANT. Because if you can name something really, super-duper important, then the money grows on trees to pay for it. School spending is one of the most prevalent examples.

My sister is a middle school Biology teacher. She has bought into the idea that the problem with schools failing is that we're just not spending enough money. If we just threw enough money at the problem, it would go away!  Apparently if every student had an iPad and every classroom had a SMART Board, such problems as poor teachers with tenure, lack of parental involvement, and students who don't know how to read would just magically disappear.

Of course, they wouldn't disappear. Good teachers can teach with equal success with a chalk board and a 15 year-old textbook, especially in areas like History and English, where the material simply doesn't change that much. Romeo and Juliet hasn't changed since 1998. Neither have the events of the American Revolution. The Battle of Bunker Hill was still the first battle.

Similar to that is the attitude that "teachers don't make enough" based on the intangible "value to society." This mentality suggests that we should pay teachers like we pay business executives, because they're "more valuable to society." Except...

Except companies like Apple, Inc had nearly $156 Billion in gross revenue last year. They sell products that people want or need at a high market value. They have over $156 Billion coming in annually, making it possible for them to compete to hire the best and brightest in our country by offering them high salaries. 

Public schools, not to put too fine a point on it, bring in $0 in gross revenue each year. (Yes, they're nonprofit organizations. Just bear with me.) The employers of public schools are taxpayers. The Median Income of American Taxpayers is just over $32,000 a year. The median teacher's salary is right around $52,000 a year. That means the average teacher earns more than his or her (average) employer, the taxpayer!

Find a private employee who makes more than his or her employer in total compensation? It doesn't exist in the Real World. The idea that teachers should make more than a professional athlete or a movie star misses the reality of the latter two occupations: The athlete and movie star earn MILLIONS OF DOLLARS for their employer and those employers both have millions and earn millions more from that person's work.

While a teacher's work may indeed have greater societal value in an abstract way, that does not change the reality that the employers of teachers (again, taxpayers) do not have the funds to pay based on that abstract societal value, while the employers of athletes and movie stars do. Furthermore, the employers of athletes and movie stars will get immediate, real world returns on their investment that will in fact exceed the initial investment. (For those of you from Palm Beach County, FL, that means athletes and movie stars make lots and lots of money for the people who own teams and make movies.)

Teachers don't directly make money for their employers (taxpayers) so their compensation will necessarily be based on what their employers (taxpayers) can AFFORD to pay them. Considering only 7 states (5 of which are controlled by Republicans in both Governorship and Legislature for the record and the other 2 only have mixed control) do not have a budget deficit, clearly the money DOESN'T EXIST to pay more.

At the end of the day, it's not how much money an employee "should" make, it's how much their employees CAN pay. No amount of calling teachers really, super-duper important will make that money appear.

Best of Biblical Conservatism - Reality Check: Liberal Tax Policy Has Not and Will Not Succeed

This week, I'll be away on my annual Christmas Vacation. So today and Thursday, our new publishing days, I'll be posting Best of Biblical Conservatism articles that I feel are pertinent to our current moment in time. Merry Christmas!

Liberals have been stepping it up recently their cries to fix our deficit problems in states and on the federal level with the same solution this bunch has been promoting for years, "tax the rich."  Between cries at protests and dear old Michael Moore stating that the money owned by the wealthy is a "natural resource," (1) we've been bombarded by the same pie-in-the-sky easy solutions which require no sacrifice from those who cry for it.  Just tax someone else more, because "they can afford it", then all our troubles will be solved.

I've gone into great detail on the immorality of simply soaking those in our society who produce and succeed for more tax revenue (2) as well as the fiscal failures of those policies and the fiscal successes of reduced tax rates as it pertains to both the economy and to actual net tax revenue (3).  For now, however, I'm going to set these issues aside as I continue to present a preponderance of evidence against these policies over time to instead point a logical fallacy which continues amongst liberals. Buckle up, friends, because we're about to take a trip to a place I like to call The Real World!

Warning:  Entrance into The Real World requires you to consider consequences of all actions.  In The Real World, every action has a consequence. We cannot, and will not, pretend that by instituting a particular fiscal policy, nothing will happen save for the targeted goals of the policy.  You've been warned.

Let's pretend that you are a business owner.  You own the Acme Widget factory, a company that provides fine quality widgets, cogs and sprockets to 10% of all businesses in your state.  Your business employs 500 individuals with an average salary of $45,000 per year (4), giving you a payroll $22.5 Million annually.  That means your company's employees pay the federal government approximately $5.625 Million each year in taxes (5).  Let's also pretend that your state has a 10% state income tax, meaning that your employees pay that state $2.25 Million in taxes to that state.  This company's gross revenue is $40 Million each year (6). The company's building costs, operating costs, benefits costs, complying with federal regulations, etc comes to $12.5 Million. The company is making a reasonable net profit (7) on the widgets, cogs and sprockets of $5 Million each year, a 12.5% profit, while employing 500 people and paying those people a salary which pays $11.25 Million each year in aggregate tax revenue to the Federal and State government toward the things the government is currently funding (8). 

Let us now pretend that the state government decides to place a 10% tax on the corporate value of all businesses within that state in an effort to close a state budget deficit.  The Acme Widget Company is now assessed a $4 Million annual tax as a result.   As the owner, you conclude that your company needs to continue making a 12.5% profit for it to be worth having a business. After all, you didn't open this company just to give people jobs and benefits.  You took a risk that you could create widgets, cogs and sprockets for more money that it costs to produce. Each year you put up $40 Million and end up with $45 at the end of the year. But now your PROFITS are being cut not 10% but 80% as a result of this tax, because taxes are based not on profit but on the total worth of the company.

You now have some options.  In order to maintain profitability, you can lay off some workers.  Laying off 100 employees will close the gap. If you do that, however, you are now removing THEIR tax revenue from the state and federal government because they are no longer receiving a paycheck.  Thus the loss to state government is $1,000,000 in tax revenue, meaning government's net gain in funding ISN'T $4 Million, it's now $3.6 Million due to the lack of tax revenue from your now unemployed workers.

You are also now making 20% less widgets, cogs and sprockets for the businesses who use them, but that's okay because those companies have also had to lay off workers to help keep THEIR company profitable due to this new tax, which leads to the unemployment of 10% of their employees and the loss of THEIR tax revenue.One of your clients, for example, the Johnson Air Conditioner Company, is now producing 10% fewer air conditioners and are now having to charge more per air conditioner to maintain THEIR profitability, causing the cost of a unit to go up.  This in turn causes sales of air conditioners to drop 10% because people at a certain level decide to go without. This leads to Sears employing less air conditioner salesmen, and the subsequent loss of THEIR tax revenue.  Oh, and don't forget, since your company now has 20% fewer workers, you're company is now producing 20% less and bringing in 20% less profits which reduces your company's total gross income which reduces the total tax receipts the state is receiving from you, because the tax is a percentage.  If the gross revenue of your company drops, so does the amount you are paying in taxes.

All of a sudden, there is less money coming into the government than before.  They intended to close a deficit, but instead ended up eliminating taxpayers and causing less revenue to come in.  To deal with their mounting deficits, they decide to raise taxes on corporations again and the process begins anew.

See, here in the Real World, we don't pretend that all economic decisions have static consequences.  We recognize that the person who is taxed will do something to compensate instead of just taking the loss.  And, of course, there is one other thing this business can decide to do. They can decide to move their company all together!  Perhaps they decide to move their company to a state like Florida where there is no corporate tax and no state income tax! So now your state isn't just losing 20% of the employees' tax revenue they receive but now they are losing 100% of revenue, $2.25 Million each year, in tax revenue from that company.

Or maybe, as the owner of the Acme Widget Company, you decide that the taxes on both the state and federal level are ridiculous, so you decide to pull the company out of America entirely and set up shop in Mexico.  You are free to do that, government cannot stop you from it. Now, between the federal and state governments, there is a loss of $12.25 Million in tax revenue because every single employee of your company is no longer paying taxes because they don't have a job at the Acme Widget Company.  Further, because Acme is no longer there to supply your widget, cog and sprocket needs, Johnson Air Conditioner has to find a new supplier which costs them 20% more in parts.  In order to maintain their profit margins, Johnson has to lay off some employees, produce less air conditioners, raise their prices, and the cycle begins again.

You see, the problem with Liberal Economic policy is that it is based upon unrealistic expectations of the reactions of the business owners.  The people who instituted this 10% corporate tax expected to simply receive $4 Million in additional tax revenue but instead caused a chain reaction which removed part or all of the tax revenue this company was creating through it's employees taxes.  The owners of this business are free people.  They are not serfs of the land required to remain in the state that they are currently located or the nation they are currently located. The numbers in my example may be arbitrary but the reactions of the business are not.  This is what has happened and what does happen when business taxes are increased.

Those of us who live in the Real World don't have the luxury of pretending that these businesses will simply decide to eat the loss, make less profit and continue to provide the same products in the same quantities and continue to employ the same number of people.  It's not really going to happen, and there's no way government can force them to do it.

Friends, the above example explains why Capitalism is the only financial system that works while still protecting the fundamental rights and freedom of individuals.  Socialism and Communism require either people to act contrary to their nature and be 100% selfless without any consideration to consequences to themselves, or employing a command government which takes away rights.  For Communism to NOT take away any person's rights, individuals have to willing take less in an effort for the greater good.  This is inherently contrary to human nature. 

People under most circumstances do not intentionally harm themselves in order to help others.  There are certain, very noble exceptions like military service.  To those of you who have served our country in this capacity, thank you for keeping us free.  I appreciate you more than you could know.  Yet we must note that that sacrifice is in order to protect those other individuals rights to life, liberty and the pursuit of happiness.  The vast majority of people do not intentionally harm themselves to ensure that government can continue spending and spending and spending.  If they would, we wouldn't have deficits in government, and these Liberal economic policies would've worked previously when they have been tried.  They haven't.  Also, no amount of harping and scolding by Liberals has lead to these employers and producers to wanting to do themselves financial harm.  Once again, since you can't force them to, we are at an impasse.

Furthermore, for these policies to be successful, one must also expect Government to behave responsibly.  History has shown that an unchecked, irresponsible government that gets used to spending 50% more than they take in in revenue will continue to spend proportionally as they see an increase in revenue.  I have given the example before of the Reagan years.  Under Reagan, net tax receipts (that's the total amount money in dollars and cents received in taxes by the Federal Government for those of you from Palm Beach County, FL) doubled. Deficits, however, expanded.  Since revenue doubled, plain old fashioned logic tells us that the problem wasn't insufficient revenue...we had twice what we had before!  Had government simply MAINTAINED it's spending levels, we would have had a balanced budget.  Yet government did not spend less.  They spent $1.80 for every $1 that was brought in...the exact same proportional spending they had spent before the increased revenue.

At that time, government was used to spending 180% of tax revenue.  Today, government is spending about 200% of what it takes in, requiring us to borrow the same amount that we take in in taxes.  The problem is government is used to spending twice what they bring in as tax revenue.  History has shown us that government, left unchecked, will not spend less with more money.  They will simply increase spending on par with the increases and the problem continues.  In fact, it becomes proportionally larger!

However, there is another side to this concept. What if Government decides to CUT taxes on these businesses. Let's say we keep the same basic numbers. Again, you own the Acme Widget factory, a company that provides fine quality widgets, cogs and sprockets to 10% of all businesses in your state. Your business employs 400 individuals with an average salary of $45,000 per year, giving you a payroll $18 Million annually. Your company's annual worth is now $39 Million.  Your company is paying a 10% corporate tax to the state at $3.9 Million.  You're making the same 12.5% profit on your investment, a net profit of $3.75 Million.  Suddenly a Conservative state legislature and a Conservative Governor take office.  They want to create a good climate for business in your state.  They permanently repeal that 10% corporate tax. 

Since you are a good businessman, you realize that your business now has $3.9 million in new capital for the next year.  You could pocket that $3.9 Million and spend it on whatever you like, at which point everything you buy is going into the economy because someone has to make the product you buy or provide the service you buy.  You could stick that money in the bank where your bank uses that money to give loans to other people to buy a home or a car or to start their own business.  You could invest it in other companies via the stock market.  Under any circumstances, that money is working in the economy.  But perhaps instead you decide that you could invest that money into your own business. So you invest that money right into your business. 

For starters, you hire 85 people in order to produce more widgets, cogs and sprockets.  Because you have more people on the job you can make more widgets, cogs and sprockets every day.  So you figure you can now sell those widgets, cogs and sprockets for less a piece so you can undercut your competition and gain market share.So now your price is lower than the widgets, cogs and sprockets company down the street.  More businesses buy their widgets, cogs and sprockets from you because of your great prices. Business rises another 10%, so now you have 10% more revenue ($4 Million more).  Since the last reinvestment into your business was so successful, you decide to invest that money into the company as well.  You hire 85 more people at $45,000 per year which causes you to produce more, sell each widget, cog and sprocket at less, allowing you to lower your prices.

All of a sudden, more people are working.  At this stage you've hired a total of 170 new people at $45,000 per year.  Each of those new hires who you are now paying $45,000 per year are paying 10% in state income tax for a total of $7.65 Million in new tax revenue.  That's more than you were paying in corporate tax...nearly twice!  Let's not forget that these employees, who were previously unemployed, now have more disposable income.  They're more likely to go out to eat, to buy a new car, to go on vacation.  Someone has to make and serve that dinner, someone has to make that car and sell that car and service that car, someone has to book that vacation, someone has to fly the plane to the vacation, someone is a flight attendant, someone has to work the desk at the hotel.

I'm not making this stuff up.  This is what historically happens when the producers in the world have new capital available to put into their business.  The majority of large business owners with successful businesses see their business as a sound investment. If their business is steadily turning a 12.5% profit, they believe that they can, over time, increase whatever new money they now have by 12.5% over time.  And remember, even if they do keep that money for themselves it still goes to work in the economy.  The only place where money doesn't go to work for the health of the economy is in the hands of government, because government spends without producing anything.

Once you look at economic policies based upon the results and the reasonably expected consequences of those actions, it becomes crystal clear what the best plans.  The good intentions of liberal polices cannot be logically expected to come to fruition.  It's just not reasonable to expect.  Economic policy consequences don't happen in Ideal World, where Liberals think up these policies.  Economic policy consequences occur in The Real World. 

So let me ask you something:  In the Real World (where you do in fact reside), what set of economic policies are going to yield a robust, growing economy with low unemployment?  Good.  Now if you want a healthy, robust economy, I think we both know what way you should be voting.  Vote for good results, not for good intentions.  Because compassion of result is what really matters, not compassion of intent!  
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(1) Michael Moore Thinks Wealthy People's Money Is A 'Natural Resource' And Should Be Shared

(2) It's Not the Government's Money: Why how much money a person has DOES NOT MATTER
     by Christopher C. Bastedo

(3) Conservatives are the Center by Christopher C. Bastedo

(4) Average Salary.  Some make less, some more.

(5) Based upon an average Federal tax rate of 15% on the average salary of $45,000 per year

(6) Gross Revenue = All Revenue Brought in Over One Year

(7) Net Profit = Gross Revenue - All Business Expenses

(8) Figure obtained by calculating 15% of payroll to Federal Tax and 10% of payroll to State Tax 

Biblical Conservatism Week in Review - 12/17/12

Guest Post: Why Are You Defending the Rich?

Today on Biblical Conservatism, we have our favorite (and here-to-date only) guest poster, my good buddy, the JC_Freak! This post dates back to before Election 2012, but I felt it was still worth having on Biblical Conservatism in the wake of the Fiscal Cliff debate.

"Why are you defending the rich?" Provocative question isn't it? There are so many little assumptions that are built into that one sentence.

As a conservative, I get asked this question occasionally. Ironically, it is not because I am saying the rich are great, and it is not because I am defending some of the immoral behavior of some CEOs and corporations. It is simply because I disagreeing with liberal economic policy. So why ask this particular question?

So, let us consider some of the assumptions lying behind this, and maybe then we can consider some appropriate answers.

A Matter of Motivation

The first assumption is that what I am doing is defending the rich. People have a very difficult time accepting that the thought process of someone else can be radically different from their own. As such, we often assume that someone's reasons for opposing our beliefs are along the same lines as our reasons for holding them. For instance, many Pro-life people believe that Pro-choice people actually don't mind killing children. Meanwhile many Pro-choice people assume that Pro-life people are sexist. Neither one of these assumptions are accurate, but both are based off of us having trouble separating out our motivations from the motivations of others.

In this case, I do not hold to conservative economic principles because I have any love for the rich. To be frank, I don't care about the rich one way or the other, at least not as a category. It is irrelevant to me. I don't see economic policy as a means of rewarding or punishing people for behavior. I see it as a means of maintaining economic stability for our civilization. That's all I care about.

The reason why someone would accuse me of defending the rich is because they view themselves as assaulting the rich. They may not use or like that terminology, but clearly that is the way they view things. Why else would my opposing their beliefs be considered to be defending a different group?

It's OK To Have A Little Class

Assumption two, of course, is that the rich need to be assaulted and shouldn't be defended. The poor are seen as victims of society, while the rich are seen as hoarders, preventing the poor from being delivered from their economic woes. I am speaking in hyperbole here, since I know no one that would express it this way. Every liberal I've ever met will acknowledge that there are good rich people in existence. But you can tell by the way that some of them talk, specifically the kind who would ask the titular question of this post, that they see these as exceptions.

So, do I disagree with this view? Yes, though not because I think the rich are great mind you. It is because I don't think the rich are monolithic. Some are good, and some are bad. Some of the poor are good, and some are bad. Economic status has nothing to do with moral integrity in my opinion, and I don't target a group simply because of their class. I believe this to be bigotry.

I think we can all agree that those who view the poor as universally lazy are bigoted. I think we can also agree that those who view the rich as the epitome of what it means to be an American to be equally bigoted. Where we disagree is that I believe the opposite to be bigoted as well. And I don't abide by bigotry.

Economic Justice

The last assumption is that the purpose of economic policy is to bring justice to the world by evening out the classes. I've hinted at this before of course, it is good to address it directly.

I believe in justice and fairness, but I don't think that fairness means everyone gets the same thing. I believe everyone should get the same chances. The law is to treat everyone equal. That is not the same thing as making everyone equal. Whether we like it or not, we are not all equal in this society. I believe we were created equal, but as we live our lives, we go in different directions. Some of us succeed, and some of us don't. While it is tragic to be unsuccessful, it is not unjust or unfair.

Directly controlling the economic flow simply won't work. People are too selfish, and those in charge of directing that flow will be a higher class than those who aren't. Those who desire to eradicate the classes will merely recast them, and will cause that upper class to have considerably more control over the lower class than the system we have now. Instead of it being the rich vs the poor, it would be the government vs. the people. It isn't an improvement.

Classes are OK. They're not perfect, and it would be better if we didn't need them, but it is a natural result of living in a fallen world. It is the kind of problem that if you try and fix it, you end up breaking the whole system. What is wrong is when we think that being of one class makes you a more valuable human than someone else. That is bigotry as I said before. To some degree there will always be bigotry, and even if we managed to create a society without economic classes, we will still find ways to categorize each other and prejudge one another. We are very creative.

As a Christian, I believe that we are a fallen race. Sin and wickedness are inevitable. I am not going to look to a human system to try and fix the problem because I know it will fail. Instead, I will fight for justice within my own context, proclaim the gospel, and look forward to the return of the Son. That is the lot of the Christian, wherever we find ourselves.

You can read Martin Glynn's blogging at The JC_Freak.



Newtown Shooting SHOULD NOT Be a Political Football


Yet the Left begins it's cry again for more gun control. The attitude repeated is "if we had just had Law X in place, this never would've happened!" It's a sad but true fact that the American Left will use any crisis to push their agenda, up to and including circumventing the Second Amendment.

Nobody has a better answer for this attitude than our old pal Condescending Wonka:

While a bit crass, this meme is 100% correct. Adam Lanza, the perpetrator of this horrific crime, clearly had no respect for laws. After all, murder has been illegal in the United States since before it was a nation. Actually, it's illegal in every Western country. Yet this man chose to commit this crime.

The fact is, while the exact statistics are hard to pin down, the vast majority of gun crimes are committed not with a legally purchased weapon but an ILLEGALLY purchased weapon or an unregistered gun. Take for example Aurora, CO, the site of this summer's shooting at a showing of "The Dark Knight Rises." This town had some of the most stringent gun control laws in the nation. It did not stop the criminal. What it did stop was the law abiding citizens in that theater from having their own weapons for defense.

Yet some on the Left want to use this event to once again press their agenda of making the 2nd Amendment weaker and weaker. As always, the Left is happy to find rights that are somehow written between the lines of the Constitution (see: "Right to Privacy") but if a right is actually written IN BLACK AND WHITE then clearly the founders didn't really mean it the way it's clearly written. 

The bottom line is this tragic event should not ever be a political football. It should not be used by the Left to continually push their agenda. The reality is passing new gun laws will only take defense weapons out of the hands of law abiding citizens. The criminals will find ways to get their guns. Or, perhaps they'll just use another weapon to perpetrate their crimes. Either way, these new laws won't help stop any gun violence.

I conclude with this little ditty, courtesy of our founding fathers:

Emphasis Added

Barack Obama and the Kindergarten Compromise

Compromise. It's a word we've all known since early childhood. When two people have a disagreement, it's important to compromise, find a middle ground, one where both parties get SOME of what they want.

It's the word we keep hearing repeated in the Fiscal Cliff discussions. The Left and their willing accomplices in the Drive-By Media keep demanding the Republican party compromise and let Barack Obama raise taxes (even though it won't help an ounce in solving the problem).

It sure sounds like the GOP is the unreasonable one, right? They just won't compromise!

Except there's one problem: The GOP is trying to solve the problem. The REAL problem. Our massive deficits. President Obama clearly isn't interested in solving this problem, because he hasn't put forward any real solutions. Just "raise taxes on the rich" in amounts that will pay for the government to run for a whopping eight days. (We borrow 35% of our budget annually, which means we have to borrow money to cover just over 127 days a year. Obama has no plan to cover the other 119 days of borrowing.)  President Obama apparently is only interested in raising taxes to punish the wealthy. There is no other explanation.

This, of course, goes unreported in the Drive-By Media. They present it simply as two sides with reasonable deficit solving solutions that just need to meet in the middle to pass a compromise. It's a kindergarten mentality.  Too many Neighborhood Liberals and Moderates buy into this presentation of the story. Two sides, equally valid options, one refuses to budge.

They present the problem this way:

• The Bush Tax Rates (they've been in place twelve years, so calling them "cuts" is pure sophistry) are about to expire for everyone.
• The Republican Party wants to extend the rates for everyone.
• The Democrat Party wants to raise tax rates on the top 2% of wage earners.
• A reasonable compromise is raise taxes on the top 2% and extend the rates for everyone else.

What's REALLY happening is a completely different problem. We have a spending problem. The nation is spends 35% more than we have in the bank each year.

The Drive-By Media is presenting this as if it were a kindergarten class compromise. Let's pretend there are two boys in a class. One is named Buford. The other is named Baljeet.  Here's how the Drive- By

So here's the problem and solution in brief form, as the Drive-By Media is currently presenting it:

• Baljeet is playing with a toy firetruck during the class' 30 minutes of recess. 
• Buford would also like to play with the toy firetruck.
• The teacher suggests a compromise, wherein each boy gets to play with the toy firetruck for 15 minutes of recess.

Except, that's not the REAL problem at hand. Here's what the problem REALLY looks like:

• Baljeet has lunch money.
• Buford wants all Baljeet's lunch money. 
• Baljeet does not want to give Buford any of his lunch money.
• The teacher suggests a compromise, wherein Baljeet gives half his lunch money to Buford.

Does anyone thing Baljeet would be wrong to refuse this compromise? Of course not! The compromise ignores the real problem!  The real problem is a bully is demanding something that isn't his from another child. Buford isn't entitled to Baljeet's money. Giving him what he demands doesn't solve the real problem, which is that Buford is a bully.

The fact is 100% of the lunch money is Baljeet's and none if it belongs to Buford. Buford has no right to take it. (Read into that what you wish.) The teacher isn't solving the problem. One side in this problem is very wrong, and his name is Buford. One side is very right, and his name is Baljeet,. Baljeet shouldn't be asked to enter into such a foolish compromise. The teacher should be fired for suggesting it.

That is precisely what's happening in our Fiscal Cliff debate. Here is the problem and solution in brief form:

• The Bush Tax Rates (they've been in place twelve years, so calling them "cuts" is pure sophistry) are about to expire for everyone.
• The nation has to borrow money to run the government for 127 days. That equals borrowing $1.3 trillion each year.
  
• The Democrat Party wants to raise tax rates on the top 2% of wage earners, which will raise a mere $85 billion each year. (This covers only 8 days of deficit spending.)
• The Republican Party wants to extend the rates for everyone, because our problem isn't lack of revenue, but too much spending, and instead wants to cut spending.
• The Drive-By Media is saying "Just let the Democrats raise taxes on the top 2% and extend the rates on the other 98% of wage earners" as a fair compromise.

This supposed compromise ignores the real problem: Excessive spending.  A false premise is being presented as a red herring. The important detail of the real problem is being left out. The fact is the Democrats want to raise taxes because...ummm...uhhh...I don't know, reasons? Other than punishing the rich, there is no explainable reason. 

So what we have is a kindergarten view of compromise: Just have both sides give some. Forget what the two sides want. That doesn't matter. Just compromise. Even if one side's desires are beyond reason.

Letter Bag: Government's Job Isn't to Create "Fairness"

Recently, I received the following comment on the post "Understanding Infrastructure in Government Of, By and For the People."

He paid more money because he makes more money. I don't get your point. We all pay our share of taxes. Unfortunately, the wealthy pay less in proportion to their income than the middle class and that is not fair. - Anonymous (Henceforth referred to as Trogdor - you might want to google it before reading on so you get a lot of my included jokes.)

Dear Trogdor:

Your entire comment is illogical on two fronts. Let's start with the obvious one: Despite what you're being spoon fed on MSNBC or CNN or whatever Drive-By Media source you're regurgitating, it turns out the wealthy pay more in taxes both proportionally and in terms of dollars than those with less.

You see, Troggy, we have a progressive income tax system. Those in the top tax bracket pay 35% of their income in taxes, while those in the bottom bracket pay 10%.  There are also three additional brackets in the middle. Each one has an income level associated. The more money you make, the higher percentage of taxes you pay. Furthermore, the top 1% of wage earners pay 35% of all taxes, so they are paying a significantly larger percentage of the burden than their proportion of the population.

Then we come to your statement about what's "fair." By your logic, the government should take money it doesn't need just to make life "fair."

Now I'm not sure where your Mommy and Daddy were when they were supposed to be teaching you these things, Troggy, so I guess I'll step in.  (I assume they were out burnanating something.)  Please pay attention: LIFE ISN'T FAIR.  Moreover, it isn't the government's job to ensure some arbitrary definition of "fairness." It's job is to a) protect our God-given rights from all threats to our liberty, both domestic and foreign and b) For THE PEOPLE to co-op together to handle services we all need like roads and police departments (the latter falls under "a" as well).

Despite what President Obama wants you to believe, that wealthy person with a business pays significantly more in taxes toward that infrastructure. Furthermore, a business person does not use those roads and other infrastructure to even a relatively proportional degree more than the average consumer. Sorry to keep bursting your liberal bubble, Trogdor, but roads don't actually incur more wear and tear when a business vehicle uses it over a regular consumer vehicle. And while you can argue that a business vehicle is on the road more than the consumer vehicle, I'd like to once again repeat: THE BUSINESS OWNER PAYS MORE IN TAXES!

I know, I know, I'm asking you to think about taxes instead of buying a bumper sticker slogan that sounds smart, Trogdor, instead of just repeating an Obama catchphrase that validates confiscating money from those who have earned it and giving it to you in the form of free goodies. But you see, it's no more just to burninate the money of the wealthy as it is to burninate the money of the peasants.

Understanding Infrastructure in Government Of, By, and For the People

Infrastructure: It's the central basis of Obama's "you didn't build that" argument toward businesses...at least as he backtracks to sound like less of a socialist (unsuccessfully). I spent some time talking about this last week, but a conversation I had over Sunday lunch left me with one more thing to say.

Government is not a separate entity, existing on it's own, independent of citizens. This is why I continue to point out that government does not have it's own money, but rather it stewards our tax dollars to spend it as the people direct. Government IS some the people, elected by all of the people, spending the people's money for the people's better good.  We created government to do this because we all needed such things as roads and police protection, and it simply made more sense to caucus together as a whole to provide these services as one entity. That's what government "of the people, by the people and for the people" means.

So when President Obama stands up and says "you didn't build that, someone else helped you along the way" it's missing the point of America entirely. Let's pretend our old friend Mr. John Q. Taxpayer owns the Acme Widget Factory (maker of Widgets, Cogs and Sprockets for all your widget, cog and sprocket needs). Now, Mr. Taxpayer does ship his widgets, cogs and sprockets on public roads, that part is true. Mr. Taxpayer's business is protected by police, which is paid for by taxpayer money, this part is also true.

What President Obama fails to point out is that Mr. John Q. Taxpayer is, just as his name suggests, one of the tax payers who pays into that public fund that pays for roads, bridges, police departments, etc. As a matter of fact, since we have a progressive tax system in almost all types of taxes, he pays more taxes on his annual salary of $500,000 than his typical employee, who makes an average of $40,000 a year, both in terms of actual dollars and percentage. He also buys more products than his typical employee (since he earns a lot more than that employee) so he pays more in sales tax. He also has a bigger house, so he pays more in property taxes than his typical employee.

All around, Mr. John Q. Taxpayer is paying a larger portion of the tax burden that goes into the fund that pays for roads, bridges, and police protection for his business than his average employee.  So even if one can claim he somehow used those services more than the average consumer, he also paid more for those services than the average consumer!

The bottom line is this: Because we live in a nation with "government of the people, by the people, and for the people," it turns out Mr. Taxpayer DID take care of the roads, bridges, and police department himself, because he paid taxes into the public fund that paid for those services, and paid more than the average person. Mr. John Q. Taxpayer paid for those roads, those bridges, and that police protection. Yes, Mr. President, he did do that. Welcome to America.

Dissecting the Liberal Talking Points: The Wealthy Pay for the Infrastructure Already!

It's been a favorite liberal point for a while now: "It's justified to raise taxes on the wealthy because they benefit most from government paid for infrastructure, etc. with their businesses." President Obama made a similar claim recently when he said that businesses who succeeded didn't really deserve the credit, because they used public roads, bridges, etc.

I touched on the gaping hole in this logic yesterday, but let's dive into it more. Here's the problem:

THE WEALTHY PAY MORE IN TAXES IN ALL FORMS!

Let's look at some of the primary types of taxes, shall we? First of all, there are income taxes. People who make more income, whether under a flat tax system or a graduated income tax system pay more money in taxes. Under a flat tax (for the sake of argument let's say 15%) a person who makes $20,000 in income pays $3000 in taxes before deductions and credits. A person who earns $200,000 per year in income pays $30,000 in taxes before deductions and credits. (For those of you from Palm Beach County, FL, $30,000 is more than $3,000.)

Then we could consider our national graduated income taxes. The person making $20,000 per year is in the 10% tax bracket. That means they are paying, before deductions and credits, $2000 in taxes. The Person making $20,000 per year is in the 35% federal tax bracket. They are paying $75,000 in taxes before before deductions and credits. (For those of you from Palm Beach County, FL, $75,000 is more than $20,000.)

So, even if we except your erroneous logic, that evil, wealthy business owner is already paying a significantly larger amount of money into the community infrastructure pot.

Then there are the other two main sorts of taxes that come into play when it comes to infrastructure: Sales Tax and Property Tax. Now if a person making $200,000 spends say 80% of their income and saves 20%, that means $160,000 is spent. The lion's share of purchases with that money will be subject to sales tax. Let's even pretend another 20% of that money is spent on products like food and clothing that are sales tax exempt. We're now at $120,000 of income being taxes on sales. So let's take the sales tax I pay here in New York State of 8%. That means this person is pay $9,600 per year in sales tax. (That's in addition to what they pay in state and federal income taxes).

Now let's pretend our $20,000 per year person similarly saves 20% of their income and spends an additional 20% on tax-exempt products like food and clothing. So that means $12,000 of their spending annually is subject to sales tax. Again, at the 8% rate I pay in New York, that person is paying $960 per year in sales tax.

(For those of you from Palm Beach County, FL, $9,600 a year is more than $960 a year.)

So again, this person is paying significantly more than his counterpart (ten times as much, to be specific) of his working class counterpart. Now property taxes. I hope I don't need to give an object lesson to explain that the property taxes are significantly higher on a ten bedroom mansion sitting on seven acres of lake-front property has higher property taxes than a 3 bedroom ranch on half an acre of land in a suburban neighborhood.

Here's the bottom line: These evil, horrible wealthy people who President Obama wants to see punished for their success are already paying their "fair share." Even if they are consuming more public works and services, they are also paying significantly more in taxes than their working class counterpart. No matter how you slice it, the stock liberal logic does not hold water. Ultimately, it comes back to this: the Left wants to confiscate more of other people's money so they can keep spending and spending, and they're trying to give you a road to rationalize it. End of story.

Dissecting Obama's Rhetoric: If You Succeed, It's Not Because of You

That's what the President is claiming, anyway. "It's really everyone else's work that made you succeed...you had to use public roads and so forth, ergo, you get no credit...so you pay more taxes." (That's a rough translation for those of us with brains.)

In the interest of fairness, the President said "you didn't do it on your own." His implication is that somehow businesses are nothing if it wasn't for all the wonderful things government does, you couldn't succeed. Now I'm not going to sit here and tell you that that roads and police departments aren't helpful for success in business. I also know that there have been businesses long before such things existed.

Furthermore, the implication by the President is that "since you've succeeded, you OWE US more in taxes." Here's the problem, where good old fashioned logic comes and rains on President Obama's parade again: THE PEOPLE WHO OWN BUSINESSES ALREADY PAY TAXES. As a matter of fact, they pay taxes out of proportion to their percentage of the population. The only way to rationalize it is based on the invented number of "percent of wealth consumed," which treats an individual's fiscal property as owned by everyone.

The real fact is this: business owners, who make up a significant portion of the top 10% of wage earners, already pay the lion's share of the tax burden. Remember, the top 10% pays more than 70% of the tax burden. So even if they made their money using public infrastructure, they're also paying 7 times their "fair share" of the tax burden.  No matter how you slice it, Obama is wrong.

Moreover, what the President seems to believe is that government is an independent entity. He believes government has money that belongs to government (rather than being a steward of taxpayer money.) He believes government can somehow should be an active force instead of a restraint against infringement on people's rights. What he fails to understand is that we have government "of the people, by the people. and for the people." The very same successful business owners pay into the tax pot. Then they reap the benefits, but friends, they are already paying into the community fund. The concept that they are somehow more liable to pay even more than the seven times their share they already pay is preposterous and a phantom of the liberal imagination.

Really what it boils down to is the more the President can convince people that you didn't really earn your money, the easier it is for him to convince you that it's ok to confiscate the money of a wealthy person and pay for his liberal spending...to pretend that we have a revenue problem instead of what we actually have: a spending problem.

Dissecting Obama's Talking Points: Taxes (Part 2)

As offensive as this statement is to my sense of logic, the second part of Obama's talking point bothers me even more...the President's insistence that the wealthy "give up their tax cuts" makes me want to smack somebody. The attitude inherent to this is that the government is "giving" individuals money by "giving them a tax cut." Actually, friends, would you like to know how much of your paycheck is your money? Let's do an exercise:

Let's take a person in the top tax bracket, which is currently 35% (note that under Clinton, that tax rate was 40%) , who earns $1,000,000 income each year, Mr. John Q. Taxpayer.

According to President Obama, of that $1,000,000, that person owns $600,000 of it, the government owns $400,000 of it, and the government benevolently gives that person an additional $50,000 of it via a "tax cut."

Let me ask you a question: How much of that money ACTUALLY belongs to that person? (Hint: the answer is not $650,000 of it. It's also not $600,000 of it.)

Second part of the question: How much of that money ACTUALLY belongs to the government? (Hint: The answer is not $350,000. It's also not $400,000.) Are you ready to know the answer?

$1,000,000 of that money belongs to Mr. John Q. Taxpayer. Every penny of it belongs to Mr. Taxpayer. Now, does the government have the authority to take some of that money via taxes? Under our Constitution it does have that authority, and Mr. Taxpayer is required to pay that money as a citizen of the United States. But it's still the taxpayer's money. The government has the authority to tax, but it doesn't make it the government's money.

President Obama, however, believes not only that whatever portion of your money the government taxes belongs to the government, he acts like he believes ALL your money is the government's money. His entire attitude is backwards. That's why he thinks "tax cuts" (that are really set tax rates that have been in place eleven years, as we discussed Friday) "cost the government money." He sees letting people keep their own money as an expense for the government.

The only way confiscating less of a person's money costs the government money is if that money belonged to the government in the first place. That's like me telling Kellogg Corporation claiming me choosing to not buy Eggo Waffles costs them money. If the money doesn't belong to you in the first place, not getting that money from the person who it does belong to does not equate a loss for you.

Bottom line, and I cannot hammer this home enough: tax dollars are not the government's money. The government is granted stewardship over that money. This is not the same thing as the government owning that money. But as a liberal, Mr. Obama simply either does not or chooses to not understand this fact.

Dissecting Obama's Talking Points: Taxes (Pt 1)

Since the election is in full swing, I wanted to expand my sporadic series of "Dissecting the Liberal Talking Points" and do a more specific analysis of President Obama's rhetoric. Specifically, I'd like to analyze one well repeated talking point of the President's: "We're simply asking the wealthiest among us to give up their tax cuts."

I have two issues with this attitude. First and foremost, referring to these as "tax cuts" is a fallacy. The current tax rates were passed into law in June of 2001. That means these rates have been in place now for eleven years. Compare that to the Clinton Tax Rates, passed into law in August of 1993, which stood as law for not quite eight years. Yet according to most liberals, these are the "correct" tax rates...the ones we should return to by "repealing the tax cuts." Now friends, I'm no mathematician, but seeing as how the Bush rates have been the law of the land now for eleven years, changing the rates to a higher rate cannot honestly be considered "repealing a tax cut." Rather, they must be considered raising taxes.

What makes this even more preposterous of a claim is the fact that President Obama claims that raising payroll tax rates back up to the standard 6.2% from the active holiday rate of 4.2% equates "raising taxes." Here's a shock: Obama's trying to ride two horses with one rear end. Didn't see that one coming. So, if we return tax rates to where they were a year and a half ago is "raising taxes" but returning rates to where they were ELEVEN YEARS AGO is simply "repealing a tax cut?" Raise your hand if your head hurts after that logic? (My hand is in the air.)

Fact is the tax rates are what they have been since 2001. They are the official tax rates. Any increase in taxes above those rates is not repealing a tax cut. It is raising taxes. Period.

(Monday we will deal with the second part of this falicious claim by the President.)

Obamacare's "Taxes" Are Really Fines

After three years of telling us the Obamacare's fees "were not a tax" now we're told "actually, it was totally a tax all along."

Remember this?

I sure as heck do!  Now that this is what the President has to accept for his law to stay in effect, now it's a tax. I mean of course! It was always a tax! Pay no attention to the video evidence!

I am here to tell you that no, the Individual Mandate IS NOT A TAX. It is a fine. A fine for failure to comply with a government mandate, (not so) cleverly disguised as a tax. Here's how it works:

Your taxes are raised by X amount above the baseline across the board. All citizens. However, this tax is avoided by purchasing health insurance. Of course, nothing else is applicable to this "tax." There are no other taxes in this country that is based on inactivity. All taxes are based on either income, property or activity. Income taxes are paid on income earned (duh).  Property taxes are paid by all that own land (whether or not you have house on it). The rest of the taxes available are based on activities. There are taxes on purchases, like the tax on a pack of cigarettes, the tax on a gallon of gas, or the sales tax on the purchase of a product.

There are also fines. Fines are paid on inactivity. For example, you pay a fine if a police officer observes you failing to obey a traffic signal.  (For those of you from Palm Beach County, FL, that's "not stopping a stop sign" or "running a red light.")  There are fines for failure to have a valid driver's license while driving on public roads. There are fines for failure to legally register your car. There are fines for failure to register your firearm in many states. (There are not, however, fines for failure to drive on public streets or failure to buy a car or failure to buy a gun.)
There are also tax credits and deductions. There is a tax credit for every dependent child living in your home. There is also a tax deduction one can claim on their tax returns for interest paid on your house. Here, let me explain this in numbers:

If a couple has a household income of $50,000 and one dependent child and are in the 25% tax bracket based on that income, their baseline Federal tax is $12,500 a year, before all deductions. That is the baseline. Now if we say they paid (just picking a nice, round number here, friends) $2000 in interest in their mortgage.  So they get a $2000 tax deduction. That means their 25% tax rate is now assessed not off $50,000 in income but now off $48,000. So their tax burden has dropped to $12,000. They also have a tax credit of $1000 because of their dependent child. Their tax burden now drops to $11,000.  However, even without their mortage deduction and child tax credit, at no point are their taxes rising above the $12,500 per year baseline.

However, with Obamacare there is a new tax imposed on the family.  For three people they are paying a tax of $695 a year (per person) for  total of $2085.00 additional tax burden. This raises their tax burden to $14,585 (before the mortgage deduction and child tax credit) or $13,850 (including the mortgage deduction and child tax credit). However, if they comply with the the Obamacare mandate, they get a tax credit back of $2085.00. Translation, there tax burden goes back down to $12,500 (before the mortgage deduction and child tax credit) or $11,000 (including the mortgage deduction and child tax credit).

In other words: It's a fine!  If you do not get insurance you pay $695.00 per person for failure to comply. You avoid the fine by getting insurance. Just like you pay a fine of say $100 for failure to stop at a red light but you avoid that fine by not running the red light. That is a fine, my friends.

Don't believe the lies and hype. No matter how many times the Drive-By Media and the Democrat Party pull out the "it's a tax" line, remember, it's a fine.

Dissecting the Liberal Talking Points: Roads, Schools Don't Rationalize Liberal Spending

It's the latest talking point from both Activist and Neighborhood Liberals: Every time a conservative points out something like "Apple created the iPod 3 without government help" they respond, "Oh yeah?  It's shipped on public roads...and most of their employees went to public schools! Couldn't do it without government!" 

The reality is that the American public is waking up and realizing (finally!) that government is not the solution to our problem and that, in fact, it is the source of many of our problems. So now liberals are once again trying to change the conversation by bringing up schools and roads and other such things that government is the...shall we say, least worst...entity to handle.  It's also a rationalization for saying that "the rich don't pay their fair share in taxes!" (Which they have to rationalize since fact is the "evil" top 1% pay 36% of the tax burden and the top 10% pay more than 70% of the tax burden.)  They try to rationalize it by saying that those businesses use public infrastructure to ship their products ergo they somehow benefit more than other citizens from the public roads (of course, those same people use the same roads to get to their jobs etc).

It's time for a reality check on this talking point, which I'm pleased to be able to provide.  First and foremost, this entire argument is a Straw Man argument. Conservatives don't argue with government handling infrastructure (for those of you from Palm Beach County, FL, that'd be roads and bridges).  We do think the best place to handle this kind of project is local governments or, at most, state governments and not the Federal government.  The most efficient (relatively speaking...government efficiency is an oxymoron as always) way to handle these jobs is the public sector. Conservatives also don't argue with public schools.  Yet we again believe the best way to handle schools is the local level or at the most the state level, and never at the national level.

Now to the issue at hand:  Does this translate into "couldn't live without government?"  Absolutely not!  Fact is, public schools weren't available to all individuals in America until 1870!  It wasn't until 1910 when public school attendance was mandatory.  Are you saying that there weren't businesses before 1910?  Of course there were!  As far as public highways? The first public highway wasn't commissioned until 1921!  And again, every citizen has the right to use the public roads and has equal access.  The disparity between the taxes paid by the business owner over the rest of the population more than covers the theoretical extra wear and tear on the road from business shipping.

More importantly, this excuse of "infrastructure and education" absolutely does not validate the level of government spending that the modern liberal desires.  Government has handled both for decades.  Let's take a couple of snapshot years, shall we? 

In 1952, the federal deficit was $3.883 Billion.  Adjusted for inflation that's $31.536 Billion in modern dollars (translation - less than one day of modern deficit spending).  In 1954 the deficit was $3.114 Billion. Adjusted for inflation that's $24.695 Billion in modern dollars (translation - again, less than one day of modern deficit spending).  Finally, in 1962, the federal budget deficit was $9.229 Billion.  Adjusted for inflation that's a mere $65.780 Billion in modern dollars (translation - about two days worth of modern deficit spending).

What's the point, you ask?  Here's the point: In every one of those years, government was spending on infrastructure and schools. Yet the deficits were very reasonable...and I didn't even mention fiscal years 1951, 1956 or 1957, where the federal government ran a modest surplus...and yes, the government was spending for infrastructure and schools in those years as well.  Clearly, the cause of our trillion dollar deficits each year aren't because of Obamanomics and government spending. 

Talking about infrastructure and education, or if you prefer fire departments, police departments, or any other legitimate public service is simply a cop-out by the Left to deflect the realities: Government isn't overspending on the things it ought to be doing, nor is the problem that we don't tax enough.  The problem is...the problem has always been...that we spend too much and we spend to much not on necessities but on frivolous and unnecessary things.  Sometimes, those unnecessary things are veiled as compassion. 

Feeding people who legitimately can't feed themselves? Fine.  But doing so in a way that other people's money can be spent on candy, on potato chips, on soda? (I've managed an inner-city store...it was infuriating to see what food stamps were spent on...in greater quantities than actual nutritious food.) Advertising food stamps?  Again, those who need it don't need advertisements (which I can tell you due the fact that I work in media advertising is not cheap) to tell people "you may not think you qualify for food stamps, but you might!" Think about that!  "You may have enough money to buy food...but we can give you food stamps anyway!"

The truth that no liberal wants to tell you is that infrastructure, schools, etc. are a drop in the bucket of the deficit.  More importantly, they won't tell you that conservatives don't argue against infrastructure or school spending.  We do argue against Cowboy Poetry festivals, investing in phantom "Green Energy" and paying for people to not work for 3 years and giving food stamps to people who legitimately do not need it.  We argue against waste.  So let's refuse to engage in this misdirection and change the conversation.

We do not have a Revenue Problem, We have a Spending Problem

The debt limit battle continues to rage, and I for one would like to ask why it is we need to raise the debt limit at all?  The purpose of a debt limit is to cap spending and debt at a certain point.  At this point, it's time to accept that we've spent enough.  Liberals, lead by the President, keep talking about raising taxes to fund their irresponsible spending, but that will not solve our problem.  We do not have a revenue problem.  We have a SPENDING problem.

In the President's Friday speech, he claimed that "80% of the American people want a debt limit deal with some sort of tax increases." Wow.  No, they don't, actually, Mr. President.  According to a CBS/NYT Poll in April, nearly 70% of Americans don't want the debt ceiling raised AT ALL! That's one.  Two, Obama's statement is patently false.  According to a recent Gallup Poll, Americans prefer to deal with the deficit with only or mostly spending cuts nearly five to one over only or mostly tax increases.  Sorry, Mr. President, that's not true at all. One, they don't want a debt limit increase at all.  Two, most don't want tax increases.  More lies.

We do not have a taxation problem.  We have a spending problem.  Don't believe me?  Here's a quick history lesson:

President Obama would like you to believe that it was the Bush Tax Cuts that caused our deficit problems.  Based on that logic, you would expect that Bush's deficits to be close to those of Obama's, right?  Unfortunately, those pesky old facts keep getting in the way of Obama's argument. 

You see, under Bush, the worst deficits were just over $400 Billion.  I recognize that is far too much (about $400 billion too much by my math), but Obama's deficits in 2009 ended up being $1.4 Trillion, in 2010 the Obama deficit was $1.3 Trillion.  This year, it is projected to be over $1.6 Trillion (that would be four times Bush's worst deficit).  Refresh my memory, but weren't the tax rates under Bush the same as the rates under Obama?  Huh.  While we're at it, notice that before Clinton's Community Reinvestment Act reaped it's disasterous results in the sub-prime mortgage crash that those deficits were shrinking under Bush's tax rates.  Isn't that interesting?

Obama knows the Republicans aren't going to raise taxes, because to raise taxes in this economy would be absolute poison to the job market. So he keeps demanding it so he can claim "the Republicans are being unreasonable." The truth is Obama is demanding poison of the economy to pay for his overspending that is insufficient to cover those deficits anyway. But Obama won't admit that. He'd rather lie about it to keep the gravy train going a little longer.

Obama knows that the Bush rates did not cause the deficits.  Spending by Bush like Medicare Part D caused the deficits, just like Obama's spending has caused more deficits.  He also knows that raising rates as he wants won't make up a fraction of his deficits.  The truth, even though Obama won't admit it, is that he has spent far too much.  (To be fair, so did Bush.)

We are spending more than 50% more than the revenue we have, and that is simply not sustainable.  I made the mistake of spending significantly less than that over my budget when I was fresh out of college, probably about 10% over my income.  I spent that way for about a year, then I realized I could flat out not sustain it.  I proceeded to live like a pauper for a further three years until I could get back on my feet financially.  It wasn't by raising my personal revenue (actually, my salary dropped a little bit when this economy cost me my job in September of 2009) and yet when I started spending smarter (for example, buying store brand food instead of name brand) I had more money to spend on wants in my budget.

Spending at the levels Obama wants to spend is flat out unsustainable.  It requires large scale borrowing, because there is not enough money in the country to tax to fund this irresponsibility.  To borrow from an Obama talking point: It's time to "eat our peas" and cut spending.  Period.

Dissecting the Liberal Talking Points: The Rich Pay MORE than their "Fair Share"

This week we've been taking time to dissect the Liberal talking points as it pertains to the Debt Limit debate.  One of the lines that President Obama continues to use that the rich don't "pay their fair share" in taxes.  Unfortunately, pesky old facts keep getting in the way of Obama's demagoguery:

(1)

They tell you that the rich "don't pay their 'fair share' in taxes" but unfortunately, it's just not true.  Let's look at it by the numbers:  The top 1% of Americans earn 19% of the income in America, but pay 37% of the taxes.  The top 5% earn 33% of the income, while paying 57% of taxes.  The top 25% earn 66% of the income while paying 85% of the taxes.  Liberals are right, the "rich" aren't paying "their fair share" they're paying far more than their fair share!

Some sources will offer you a different metric:  The percentage of taxes as opposed to percentage of wealth.  I'm sorry, but there are two issues with that mentality:  One, taxes are paid on income (that's incoming money, for those of you from Palm Beach County, FL) not on wealth.  The money that people already have in the bank has ALREADY BEEN TAXED!  Whether it was taxed upon inheritance (also known as the Death Tax) or it was taxed upon an increase in investment (also known as Capital Gains Tax) or if it was saved income from a previous year (Income Tax), that money has already been taxed once.  So basically, by claiming it's okay to tax on wealth, government is punishing people for daring to save their money or invest well and thus have excess money at years end.  Two, and I cannot stress this enough, it's still not the government's money.  One way or another, they've already taxed those individuals once, and now, because government is irresponsible with it's spending, they don't feel their previous taxes levied are enough and are demanding more! 

Actually, the people who don't "pay their fair share" are a large group of Democrat voters:  The bottom 32% of wage earners who pay zero taxes. (2)  43.4 million wage earners pay zero taxes on the federal level.  Some even receive tax refunds that exceed the money they paid.  That's right...when their deductions exceed their taxes paid, they are paid the amount of the excess in addition to their tax deductions.  Translation:  If you paid $500 in federal taxes and have deductions that equal $600 and have an income that puts you at the 0% income tax level, you receive your $500 that was withheld back, PLUS an additional $100 that was never yours to begin with! 

So 32% of Americans are paying no taxes, and by the way those are the ones who are receiving the government services that the rest of our taxes pay for like Medicaid and other welfare programs.  (These people statistically vote Democrat, by the way.)  Some of them are even receiving money that wasn't theirs to begin with in a tax refund from the government.  Where does that money come from?  It's from taxing other people to whom that money DOES belong.  Meanwhile, we're running deficits annually.  Anyone else seeing a pattern here?

Bottom line, the wealthy pay significantly more than their "fair share" in taxes.  The only way to claim they don't is to believe that their "fair share" is whatever government wants it to be.  It's simply false a false statement bent on class warfare. 

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(1) Guess Who Really Pays the Taxes

(2) Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million

Dissecting the Liberal Talking Points: Taxes were not Cut in 2010

The Debt Limit debate is in full swing with the President and Congressional Democrats are breaking out their cliché fear mongering rhetoric. With that in mind, I wanted to take time this week to dissect these talking points and explain why they are false. For starters, Republicans are responsibly refusing to allow Democrats to raise taxes in this already strained economy. One talking point that keeps coming from the Left is “We tried tax cuts last year and they haven’t helped the economy.”


Inherent in this statement is a huge lie: In 2010 there were no tax cuts, other than a piddling little 2% cut in social security taxes. Other than that, all that happened was an extension of existing tax rates. Continuing the status quo by its very definition is not a cut. If I decide to maintain my current diet, including my current caloric intake, I cannot say I’ve cut calories. Yet Democrats want us to believe that the President cut income taxes. He didn’t cut income taxes. He simply didn’t raise them.

You see, friends, Liberals seem to believe that the proper income tax rates are always whatever the last Democrat President’s tax increases set the rates. In our modern time, this means they consider any tax rate below Bill Clinton’s 1993 tax increase as a cut. That’s why they keep referring to the Bush tax rates which have been in place since 2003 as “tax cuts.” It’s pure sophistry. The current tax rates have been in place since 2003. Those rates will now continue until 2012. The current tax rates we have now are the tax rates, period. They are not a cut anymore. In 2003 when they were enacted they were cuts, because they reduced tax rates from what the rates were in 2002. The rates this year are precisely the same as they were last year, as they were the year before and since 2003. Simply maintaining them is not a cut.

President Obama didn’t cut taxes. The reason tax cuts are good for the economy is because it means people have more take home pay in their paycheck. Let’s use Bush’s 2001 and 2003 tax cuts. Regardless of what Liberals want to tell you, every tax bracket saw a rate cut. So let’s look at the lowest tax bracket as an example, shall we? Let’s take that person in the bottom tax bracket. Prior to the Bush tax cuts, that bracket was 15%. So a person who is in that bottom bracket who has an annual income of $20,000 per year under the previous brackets would be paying $3000 per year in federal taxes. Under the Bush cuts that individual’s tax rate was cut to 10%. So instead of paying $3000 in federal taxes, now they are paying $2000 in federal taxes.

It may not sound like much, but it’s actually a big difference in that person’s budget. It’s a difference of about $80 per month. To that person who is making only $20,000 per year in salary (that’s a bit over $1600 per month), an extra $80 per month is a big difference.

$80 a month extra is actually a big deal even for someone making more than $20,000 per year. I’ll use some examples in my own personal budget as someone who does make a decent amount over that figure: $80 is roughly the amount I spend every two weeks on groceries for myself. It’s also approximately what I spend for two weeks worth of gas for my car. $80 is about what I pay for car insurance each month. I drive a used car that has close to 100,000 miles on it, so I budget about $80 per month for repairs as needed.

While we’re at it, consider the fact that I’m already paying all those items with the money I’m currently earning. Unlike the Federal government, I’m living within my financial means. Actually, I’m able to fulfill my budget, have a little bit of play money and save about 5% of my income. An extra $80 would make a HUGE difference in my life. With $80 more each month, I could go out to dinner five more times each month than I do now. I could afford to go to the movies more often. In the summer, $80 would give me the ability to play golf two more times each month at a nice golf course. One of my favorite things to do is go see my local minor league baseball team’s games. With $80 per month, I could go to four Rochester Redwings games with a friend each month during the summer.

Perhaps you don’t understand how me having an extra $80 helps the economy. Here’s how: Someone has to take my money at the movie theater. Somebody has to pour my soda and scoop my popcorn. Somebody has to mow the grass at the golf course and maintain the tee boxes and greens. Somebody has to work the box office at the ball game. Somebody has to cook the hot dog and pour the beverage I’ll buy there at the game and take my money when I buy those items.

When lots of people suddenly have more money in their paychecks and their fixed expenses stay the same (for those of you from Palm Beach County, FL, fixed expenses are things like housing, car payments, and utilities that are always part of your budget each month), it gets spent on buying new things that aren’t needed at the moment, like a car or new furniture or a new television. If several people choose to go to the movies more regularly, the theater needs to staff their shifts with more ticket takers, ushers, and concession stand attendants. Another person might choose to buy new clothes, which means the clothing store needs to have someone there to take care of the shoppers. Not to mention the fact that the company that makes the clothes is now selling more items and increasing its production. Even if I put the entirety of that money into savings, that’s an extra $1000 in the bank. (For those of you from Palm Beach County, FL, banks don’t just hang on to your money in a big safe. They use that money to give loans to businesses and individuals. That’s why the pay you interest.)

That’s why tax cuts help the economy. In 2010, there was no cut. My paycheck didn’t see any significant increase in take home pay. Saw that 2% cut in social security taxes…it meant a whopping extra $8 in my paycheck over the course of a month. I can buy one fast food meal with that (hardly world-changing). For all intents and purposes, my take home pay did not change. There was no tax cut. People didn’t have any more money in their pockets, so they didn’t have anything extra to spend. So basically, we did nothing and nothing happened. What a shock.

It is an Obama lie taxes were cut. It’s a further lie to say that Republicans are “fighting to keep the tax cuts of millionaires and billionaires.” The current rates have been in place for eight years to date. They are not a cut. They are the tax rates. Should those rates be increased, it would not be removing a tax cut, it would be raising taxes. Specifically, it would be raising taxes on the very people who own businesses. It would be raising taxes on the people who create jobs. Same goes for raising capital gains taxes. You are taking business capital out of the budgets of business owners. Not a wise decision when what this country needs is more jobs.

This particular talking point is nothing more than class warfare. They are trying to play divide and conquer, to tell people that the benevolent government will get back at those evil people who have more money than you. Let me ask you a question, if you are one such person who believes it would be good to get back at that rich person: If they have less money, does it help you at all? Do you suddenly have more wealth? No. Only the government will be wealthier. You think the government is going to give it to you? Only in the form of government programs that keep you in poverty. The only equality of outcome government can give you is equality of bad results by trickling up poverty.

The economy won’t be improved by taking more from the wealthy. Neither will the deficit be reduced. As Senator Marco Rubio demonstrated last week, it would only pay for about ten days of deficit spending. What’s the plan for dealing with the other 355 days? Here’s the truth that Obama won’t tell you: To achieve the positive results of tax cuts, you have to actually reduce the current rates. The 2010 tax extension did not increase anyone’s take-home pay. It won’t lead to new revenue through new taxpayers via new jobs. Tax cuts work. They’ve worked every time they’ve been tried. Maintaining the status quo and expecting new and better results doesn’t happen.

When the President and other Liberals try to say “we tried tax cuts, they didn’t work,” know that it’s a lie. They didn’t cut taxes. They just didn’t raise them. They didn’t do unnecessary harm to the economy in 2010 by raising taxes, that much is true. They also didn’t do anything to help it. They just let it sit still in its ill state.

NYT Accusing GOP of Sabotage on Debt Limit: Are you KIDDING me???

Sometimes even the New York Times finds a way to shock me with their blatant partisan lies.  The latest narrative from the Democrat party and the Drive-By Media has begun: "Republicans are deliberately sabotaging American job growth so that they can win in 2012."  It's so incredulous a claim I'm irritated that I have to even discuss it, especially to make a defense against the party who has so desperately attempted to hang on to policies that are damaging to the country and financially not feasible.  The article in question is dripping with bias and loaded questions.  Let's go to the article in question:

The Democrats, at least, acknowledged that reality at the bargaining table by saying that along with the cuts the Republicans cherish, there would have to be increases in revenue — an end to unnecessary tax loopholes for corporations or the rich. ]

First off, this presentation makes it sound like both cuts in government spending and "revenue increases" are both relatively good things for the country.  They aren't.  The business climate in America is already strained and business owners are taking their businesses elsewhere, costing workers badly needed jobs.  The reason, despite the Drive-By Media's attempts to paint business owners as "greedy," is actually because taxes cut into the legitimate and reasonable profit requirements of business owners to make the risk of business ownership worth it.

Increases in revenue, by the way, is simply a code word for raising taxes.  As I have demonstrated on multiple occasions here, additional revenue is not the problem.  Again, we go to the history of the Reagan years.  Prior to Reagan, the Democrat congress was spending 180% of the tax dollars received.  Reagan doubled tax revenues by reducing the top marginal rate from 70% to 28%.  Simple math shows that if you need 80% more revenue to reach a balanced budget and you receive 100% more revenue, you ought to have a 20% surplus, right?  Yet even with 100% more revenue, the Democratic Congress (which controlled the purse strings, remember) continued to spend 180% of that new, twice as large amount!

In short, friends, we do not have a revenue problem. If we had a revenue problem, the solution would be to CUT taxes to spur economic growth, leading to more people paying taxes as a result of businesses growing and hiring new people (works every time it's tried).  No, like in the 80s, we have a SPENDING problem.  As Ronald Reagan once said "We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much.”  We are not going to fix our problem by raising more revenue.  When you try to raise more revenue, it never works because business owners don't just sit there and accept those higher taxes cutting into their profits.  They often move to another country because they aren't serfs!  They don't belong to the land.  Government can't force business owners to continue to employ the same number of people when tax rates confiscate large portions of their profits, or to not move their business to another country to avoid those confiscatory rates.

Those demands were modest — too modest — and Vice President Joseph Biden Jr., who is leading the talks, said they were making progress. But any compromise at all proved too much for the Republicans.

Again more spin, calling the Democratic demands "modest."  They aren't modest, they are poison to an already ill economy!  Why should the GOP compromise and allow the Democratic party to damage the country further?  We know that raising taxes on businesses causes those businesses to leave the country and costs American jobs.  Why should we compromise on that?  It's poison for the economy!  How do you compromise with poison, exactly?  Do you compromise and say "you may not put enough poison in my food to kill me, but I'll compromise and accept enough poison to make me violently sick?"  OF COURSE NOT!  The Democrat policies proposed will hurt the country, so the Republicans, in good conscience, must not compromise with this poison!

But at least 11 hard-line Senate Republicans have already said they will oppose any deal that does not include a balanced-budget amendment — a nonstarter for Democrats — and Mitch McConnell, the Senate Republican leader, said this week that all revenue increases are the same as raising taxes and are unacceptable.

And here we have the inevitable explanation of the real problem:  Democrats consider a balanced budget amendment a nonstarter.  In other words, legally requiring the government to spend only what money they actually have, a horrible and inconceivable budgetary policy that basically every American family has to deal with, is a nonstarter.

Let's get serious for a moment:  The Republican party is not being obstructionist here.  They are tackling a person who is about to eat a poisonous morsel of food in order to stop them from taking a bite.  Might you give that person who you've tackled a bruise in the process?  Maybe, but I'd rather a bruise than suffering from a major case of deadness thanks to ingesting poison.  People need jobs.  By allowing the Democrat party to take more money out of the business budgets of business owners is going to cause more layoffs and less hiring, which is more bad news for the economy. 

The Times, true to it's usual modus operandi (that'd be "regular way of doing things," for those of you from Palm Beach County, FL) is playing political games, doing it's best to present the Democrats as nice people asking for reasonable compromises and the Republican party as blow-hard jerks insisting on their own way. (How DARE you tackle that poor person!  You gave them a bruise!)  The truth, of course, is that the GOP is trying to block damaging policies from passing.

Democrats and the Media will claim that Clinton was able to balance the budget with tax increases, ignoring the truth of history.  First of all, credit for the 90s balanced budgets belongs far more to the Contract with America and the Republican Party than Clinton, and secondly the balanced budget was created not by raising taxes but by CUTTING SPENDING (see: "The Era of Big Government is over").  Liberals won't tell you that because they want you to believe that a) it is possible to raise enough revenue to pay for their overspending and b) even if "a" was true, that it is moral to tax and tax and tax to pay for their overspending and c) even if "a" and "b" were true, that tax increases would result in static spending (which it NEVER does) by the wealthy.

Democrats don't want to let go of their ability to buy votes.  They want to keep taxing and borrowing so they can spend on social programs to reward the people who vote for them.  They are offering the country poison at a time when the economy is violently ill.  The Republican Party should absolutely not compromise with this poison, but instead should stop that poison from being ingested at all costs. Period.

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Overall Source - New York Times:  Republican's Temper Tantrum

Liberal Solutions on Deficit Same as Always: Just Raise Taxes

I'm putting a time-stamp on this particular post. It was completed and published at 10:05 am on Wednesday, April 12th.

Note this is before President Obama has even given his speech on how to reduce the deficit.  This is before the media "inside info" saying Obama would propose increasing taxes.  If I'm completely wrong and this isn't what the President proposes, I'll post a retraction, but I wouldn't hold my breath for it!

Liberal Democrats are bringing up the same old solutions they have always brought up to solve the deficit crisis: raise taxes on the rich.  Raise your hands if you are surprised.  If your hand is in the air, I've got some oceanfront property in Idaho to sell you. It's the same tired rhetoric that's been used for decades.  It's never reduced deficits long term and it's never increased revenues long term.  It won't this time either.

Liberals are fond of assuming a static reaction to tax increases and tax cuts, that is assuming that individuals will not change their behaviors one iota when faced with higher taxes.  (For those of you from Palm Beach County, FL, that means individuals will continue to spend the same, continue to employ the same number of people and continue to produce the exact same amount of product with their businesses without adjusting the price of those products.)  It absolutely never happens.  In a previous post I demonstrated what really happens when taxes are raised on producers (that's people who own businesses for those of you from Palm Beach County). (1)

It's a losing proposition for America.  It's taking venture capital away from those who own businesses, which usually means less jobs at best and at worst those businesses moving overseas to another country, thus setting the tax revenue received from that business at $0 per year (instead of whatever they are paying now) in addition to all employees losing their jobs (and the government losing their tax revenue).  So if your goal is to raise new revenue, raising taxes is detrimental to that goal!

So what do you do to raise new revenue?  Believe it or not, the answer is to cut taxes!  Don't believe it?  Here's some historical evidence.  Thanks to The Heritage Foundation for these facts:

- In the 1920s, top marginal tax rates were cut from 70% to less than 25%.  Gross tax receipts increased from $719 million in 1921 to $1164 million in 1928, an increase of more than 61% in revenue.

According to then-Treasury Secretary Andrew Mellon:

The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.


- During the Great Depression, Presidents Hoover and Roosevelt combined to raise top marginal tax rates to 90%.  President Kennedy reduced taxes across the board, dropping the top marginal tax rate from 90% to 70%.  Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62% (Adjusted for inflation, a 33% increase).


According to President John F. Kennedy:

Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits.  In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.

- In the 1980s, President Reagan cut the top marginal tax rate from 70% to 24%.  Tax revenues increased from $244 billion in 1980 to $446 billion in 1989, an increase over nearly 100% (Adjusted for inflation about a 50% increase). (2)

According to then-U.S. Representative Jack Kemp (R-NY):

At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.

Note: The entirety of the previous section, save for where otherwise noted, was compiled with information from the Heritage Foundation (3)


If the goal of President Obama and the Democrats' fiscal policy is to raise revenue, history demonstrates quite clearly that they should cut taxes.  They should cut taxes to ensure higher revenue.  I have given three examples on a national level of cutting marginal income tax rates to achieve higher revenues. These are historical facts.

Look back at the quote from Treasury Secretary Andrew Mellon.  He noted that the rich would find ways, usually legal, to pay less in taxes when the rates are confiscatory. These loopholes cannot be permanently closed without reopening another, because laws are created by human beings and human beings are completely fallible. It always happens.  Democrats cannot legislate it away.

Furthermore, aside from attempting to legally sidestep paying taxes, there is absolutely zero way to force people to continue spending money at the same rate when more of their income is taken away in taxes. Go back to the original post I penned on Liberal tax policy (1).  Business owners have a particular percentage of profit that is required for them to consider it worth the financial risk of investing their money in their business. Once the profit margin becomes below that acceptable reward for the risk, those individuals will find a way to adjust their business to put the projected profits back at that acceptable reward for the risk.  This is done by either laying off employees and cutting production, raising prices, moving the production of their products to another nation where tax policy is more reasonable, or a combination of the above.

Business owners (and people in general) are simply not going to do things detrimental to their own self interests so that government can continue to spend wildly.  Nor should they be reasonably expected to do so.  No matter how often Liberal Utopians (usually Neighborhood Liberals) start telling us that the rich should be willing to do that "for the greater good," it's not going to actually happen.

Even if they were willing to just pay more, Liberals have shown over many decades that they will find a way to overspend proportionally when their tax revenues increased.  For example, under Reagan, when tax revenues were doubled, Democrats still spent $1.80 for every $1 received in tax revenue.  Think about it.  If you subscribe to the idea that the government at that point needed to have 80% more revenue to successfully operate, and they received 100% more in revenue, it should stand to reason that the government would then have a 20% surplus, right?  It didn't.  Instead, the government ended up STILL spending 180% of whatever was received in taxes, leading to higher deficits because 180% of $153 billion ($122 billion in deficits) is more than 180% of $93 billion ($74 billion in deficits).

So the deficits more than doubled even though the revenue was increased enough to more than cover the previous deficits.  Clearly the problem isn't lack of tax revenue.  As Ronald Reagan said, "We don't have trillion dollar deficits because we tax too little.  We have trillion dollar deficits because we spend too much."

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(1)  Reality Check: Liberal Tax Policy Has Not and Will Not Succeed

(2) The Reagan Tax Cuts: Lessons for Tax Reform

(3) The Historical Lessons of Lower Tax Rates