The Principles of Taxation – Tea Party Nation

The Principles of Taxation – Tea Party Nation.

By Alan Caruba

NYSR to Sell Itself in $8.2 Billion Deal” was the lead story in the December 21, 2012 edition of The Wall Street Journal.”

“The New York Stock Exchange, the cornerstone of American capitalism for 220 years, agreed to be sold as part of an $8.2 billion takeover by IntercontinentalExchange, Inc. If regulators and shareholders approve, the combined company would own 14 stock and futures exchanges and five clearing operations that serve as middlemen between buyers and sellers of futures and other contracts, doing more things in more places than any other rival. The takeover also would seal the triumph of electronic trading over ‘open outcry’ floor trading that long dominated financial markets, as well as the push by exchanges to embrace new and lucrative kinds of trading.”

The Internet has transformed the buying and selling of stocks and other financial contracts, but it has not changed the fundamentals of capitalism.

The factors most affecting economic growth or decline remain the same and, as the “fiscal cliff” approaches for every American, it is predicted that its cost will represent an increase of $4,000 for all who still pay income taxes in a nation where an estimated 47% do not, where unemployment remains for 26 million Americans, and the Obama administration, during its first term in office, increased the national debt to $16 trillion, has spent and generally wasted billions in its “bailouts” and “stimulus” programs in addition to the billions lost on “green energy” companies that went belly-up.

In an essay on taxation by a former Secretary of the Treasury, the following fundamentals of taxation were discussed and I will share his observations with you before telling you who wrote it and when.

“The problem of the government is to fix rates which will bring a maximum amount of revenue to the Treasury and at the same time bear not too heavily on the taxpayer or on business enterprises.”

The Obama administration needs a lot of money. It borrows $4.8 billion every day. It has a debt of $16 trillion, $6 trillion of which was added in the last four years. The so-called “entitlement” programs are verging on insolvency in the years immediately ahead. They are not voluntary programs, but maintained by the force of law and Congress has routinely raided the Social Security fund to pay for other things. Obamacare raided billions in Medicare to fund a program that essentially nationalized twenty percent of the nation’s economy (Socialism!) and which included 28 new taxes. Many states have refused to create the “exchanges” it mandates.

“I have never viewed taxation as a means of rewarding one class of taxpayers or punishing another.” So much for Obama’s constant demand for higher taxes on “millionaires and billionaires” which, at one point it defined as anyone earning $250,000 or more.

“If such a point of view ever controls our public policy, the traditions of freedom, justice, and equality of opportunity, which are the distinguishing characteristics of our American civilization, will have disappeared and in their place we shall have class legislation with all its attendant evils…” That is the point which we have reached with an enormous and manifestly unfair tax code in need of major revision.

“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; the capital is being diverted into channels which yield neither revenue to the government nor profit to the people…”

Americans now have a huge, centralized federal government that sucks up and largely wastes vast amounts of taxable income that would otherwise be invested in new enterprises, the expansion of existing ones, and punishes the most productive members of society.

There is a war being waged on capitalism in the nation that rose to the greatest citadel of wealth the world has ever seen. It is being waged by a President who was recently reelected by demonizing a successful venture capitalist whose firm invested in companies that generated thousands of jobs.

“High taxation…is largely borne by the ultimate consumer. High taxation means a high price level and high cost of living. A reduction in taxes, therefore, results not only in immediate saving to the individual or property directly affected, but an ultimate saving to all people in the country.”

The author quoted throughout was Andrew William Mellon who, in 1921, was made Secretary of the Treasury, a post he held until 1932 when Franklin D. Roosevelt was first elected President. As noted in “The Patriot’s History Reader: Essential Documents for Every America”, Mellon was “the first proponent of the idea that lowering taxes stimulated business and therefore resulted in increased tax revenues.” The essay quoted was written in 1924.

Mellon’s policies were vindicated by John F. Kennedy, Ronald Reagan, and George W. Bush, but during Roosevelt’s administrations he was demonized at the same time that tax rates were raised to 80% on the highest incomes in 1935 and to 90% by 1940. This is a time period that is also known as the Great Depression.

The current Secretary of Treasury wants to give the President the right to increase the ceiling on new borrowing any time he wants.

© Alan Caruba, 2013


NUGENT: Four more years of debt and class warfare – Washington Times

Ted Nugent Live

Ted Nugent Live (Photo credit: The Toad)


NUGENT: Four more years of debt and class warfare – Washington Times.


D.C. pigs at home in the capital swamp


By Ted NugentThe Washington Times


We have fallen far and fast.


Instead of electing a serious-minded, proven professional, America went once again with a guy whose most impressive qualification is that of a questionable “Chicago” community organizer. I don’t mean Chicago in a geographic sense.


President John F. Kennedy would have been appalled. Instead of asking not what our country can do for us but what we can do for our country, in just 50 years since Kennedy uttered that famous phrase, it appears that a majority of Americans now demand that their country do for them. It’s America turned upside-down.


We have decayed into a nation of gluttonous, soulless pigs who feast on whatever Fedzilla provides by taking from one group of Americans (the producers) and giving to others (the takers) who haven’t earned it and don’t deserve it.


Alexis de Tocqueville, the famous French thinker who visited America almost 200 years ago, saw the dangers of our experiment when he wrote, “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”


There you have it, America. The pigs have come home to wallow in the mud of the Washington swamp, and we have a group of professional political punks — master scam artists — who are all too happy to shovel more slop while advocating that the producers should be punished further by raising their taxes and restricting entrepreneurs with business-wrecking overregulation. And you thought “Planet of the Apes” was a movie.


This is where America is today. Too many Americans have become entitlement chumps who have been convinced by Democrats and other liberal scammers that they are entitled to the sweat and hard work of other Americans. Free cellphones aren’t free. Food stamps have become vote-getting extortion vouchers.


Couple that sense of entitlement with the abject stupidity of basic free-market principles by Mr. Obama’s supporters, and it isn’t surprising to me that Mr. Obama was given four more years to wage class warfare, drive our nation into more unsustainable debt, and institute policies that put Americans out of work and cause energy prices to skyrocket.


I’m not nearly as surprised with the outcome of the presidential election as I’m disheartened and disgusted that my fellow Americans can be this woefully uninformed, easily manipulated and thunderously ignorant. I’ve got a rotting fence post smarter than these mouth breathers.


If you voted for Mr. Obama, you are thunderously dumb and incredibly naive. Believe it. For your intentional ignorance, you will ultimately pay a heavy price that you are obviously too ignorant to understand. Your children and grandchildren will pay an even heavier burden. America will pay the heaviest burden. Thanks for nothing, numbskulls.


Mitt Romney was by far the better candidate, though he may not have been as “cool” or likeable as Mr. Obama. Electing our leaders based on their likeability factor is slightly less amusing than listening to “Say It Ain’t So, Joe” Biden stick his foot in his mouth.


Twenty years ago, the results would have been different. America wasn’t nearly as stupid back then as we are today. The presidential election proves that the dumbing down of America is complete.


The cultural tapestry of America is changing with more people of color inhabiting America and voting. I have no issue with that. What I have issue with is anyone believing he is owed something without working for it and a president who agrees. That’s considered un-American by the roughly 50 percent of us smart enough to have voted for Mr. Romney, the far better choice.


Ted Nugent is an American rock ‘n’ roll, sporting and political activist icon. He is the author of “Ted, White, and Blue: The Nugent Manifesto” and “God, Guns & Rock ‘N’ Roll” (Regnery Publishing)


What must we do? – Tea Party Nation


What must we do? – Tea Party Nation.

Posted by Judson Phillips

To say America is in a bad place right now is an understatement.   If you look at the unvarnished economic data, not the propaganda that the Obama Regime puts out and the Obama compliant media spins, we are in a lot of trouble.


There are three words to describe our current situation.  There are also some simple steps this nation can take to bring us back.  What are those three words and what can a President Romney and a Republican Congress do to bring us back?


Our current situation is the great Obama depression.  There is no other way to describe it.  The real unemployment rate is 19%, not 8.1%.   For every new job that is created in America, we have two new food stamp recipients.   Last month the economy created only 96,000 jobs while 386,000 people left the workforce.  We have had a net loss of five million jobs since 2007.   Workforce participation is at the lowest level since the end of World War II. 


What can Romney and the Republicans do?


They can steal a page or two from Ronald Reagan’s playbook and then they can do a couple of things that Reagan should have tried.


Romney’s first act as President should be the same one Reagan did.  He should freeze government hiring.   As President, he has the absolute right to do that.  If that freeze will remain in place for two to four years, attrition alone will shrink the size of government.  There will at some point need to be a few exceptions, such as for Defense and Homeland Security, but the rest of the government simply needs to be frozen.


The second item on the conservative agenda should be massive tax cuts.  The left and the Obama compliant media will scream about this. Why do we listen to the perpetually stupid and the terminally wrong?  In the early 60’s John F. Kennedy championed tax cuts and the economy took off.  In the 80’s Reagan championed tax cuts and the economy took off.   One of George Bush’s achievements was the so-called “Bush tax cuts.”  The economy again took off.   Thanks to the growth in the economy, in 2007, the deficit had shrunk to $161 billion and we were on a course to balance the budget.


We should cut the tax rates for everyone; eliminate capital gains and corporate taxes to encourage investment in this nation.  We have 88 million Americans who are not in the workforce!  One out of five men are unemployed and the average term of unemployment is nearing one year.


Third we need to go through the government and take it apart.  The government as well as advocacy groups such as Citizens Against Government Waste and media outlets like the Washington Guardian constantly generate reports about waste, fraud and duplication of government services.  


The only problem is, nothing is ever done about the waste and fraud.


Romney and the Republicans need to champion Federal Realignment and Closure Commission legislation.  This legislation would create a commission to go through the non-defense budget looking for fraud, waste, duplication of services and programs that simply do not work or have failed completely.   These cuts would then be presented to congress for an up or down vote, without the possibility of amendments so powerful Congressmen and Senators cannot protect their turf. 


Finally, defense spending needs to be significantly increased.  Defense is the primary duty of the Federal Government and we are facing new threats from China, Russia, Iran and others. 


Defense spending is actually something that boosts the economy.  If we start building new tanks for the Army, a new Ford Class Aircraft carrier for the Navy, more F-35 fighters for the Air Force and Marine Corps, that puts the Americans who build those items to work immediately.   That is actually some stimulus spending that works.


The problem we have is that we have had four administrations that have basically lived off of the Reagan military build up of the 80’s.  Unfortunately the hardware we built in the Reagan build up of the 80’s is wearing out and going out of service.  The ships that were built for the 600-ship navy are at the end of their service lives.  The fighters we build in the 80’s are not only obsolete they are worn out. 


Obama’s America is an America in decline. If we have four more years of Obama, we will have a nation that is neither a military nor an economic power.  We will slide permanently into the status of a second rate nation.


This is our path back. 


The only questions are, will we put Mitt Romney in the White House and will he and the Republicans have the courage to follow through?


Our Disgraceful President – Derek Hunter –

Our Disgraceful President – Derek Hunter –

Warren G. Harding was corrupt, as was Richard M. Nixon. Bill Clinton and John F. Kennedy were like blind golfers, looking for a hole, any hole, every hole. Woodrow Wilson and Franklin Roosevelt were power-mad narcissists convinced they knew best how everyone else should live. Jimmy Carter was clueless. But as we approach the 100-year anniversary of the first of these men to serve as president, all have been lapped in debasing their office by its current occupant: Barack Obama.

It is understandable President Obama would not want to run on his record. Who would? “Give me four more years so I can make up for the first four” is not the stuff of campaign slogan greatness.

But even that wouldn’t work because, as he told CBS News this week, “The mistake of my first term – couple of years – was thinking this job was just about getting the policy right. And that’s important. But the nature of this office is also to tell a story to the American people that gives them a sense of unity and purpose and optimism, especially during tough times.” In other words, his only flaw is he’s too damn close to perfect.

It’s like someone bragging about being the most humble person on the planet.

The president of the United States thinks he needs to tell us stories to give us “a sense of unity, purpose and optimism…”

This struck me as odd because a.) he’s already told us stories, the story of his life, in – count ‘em – two autobiographies written before he accomplished anything, and b.) he’s made zero effort to bring people together at any point in his presidency.

Putting aside his autobiographies, which should be moved to the fiction section of the bookstore considering the 38 provable falsehoods uncovered in them – remember the uproar when James Frey’s A Million Tiny Pieces turned out to have exaggerations and lies? Obama does it; crickets – the fact this man would feel comfortable enough to speak the word “unity” without laughing is a testament to just how far we’ve fallen as a nation.

Barack Obama has done nothing but try to turn American against American based on income and accomplishment. He’s done nothing but sit silently by, smirking, while his defenders, allies, surrogates and staff have called Americans who disagree with him racists, homophobes, sexists, xenophobes, rednecks, idiots, Uncle Toms and anything else you can call someone when you can’t rebut what they say with facts or accomplishments.

Silence while disgraceful words are spoken on your behalf is just as disgraceful as uttering them yourself, which, of course, makes Barack Obama a disgraceful president.

When his attorney general isn’t dodging subpoenas and being held in contempt by Congress, he’s calling anyone who thinks we should have to present a photo ID to vote a klansman. MSNBC, a network that seems to exist only to parrot the president’s line, unsurprisingly gets praised by the White House. This is unity?

The White House has to use and condone this because the alternative is reality, and reality is not Barack Obama’s friend.

The president decided, against the express language in the law itself, he could unilaterally remove the work requirement from President Clinton’s welfare reform law. There is no precedent or legal justification for this action, but to question it is to be anti-poor.

Putting aside the unconstitutional nature of all this, it remains a mystery how it could be anti-poor to support a law that provably improves the lives of poor Americans, gives them their best shot at autonomy and helps move them get out and stay out of poverty. But the charge gets made, the grenade gets thrown, and the person doing it gets an invite to the next Georgetown cocktail party or White House concert.

The administration of Barack Obama embodies the worst characteristics of the worst Presidents in our history – the abuse of power, the incompetence, the laziness, the bigotry, the disinterest, the dishonesty, the arrogance. The reason he’s still personally popular is the same reason we know the names Paris Hilton, Nicole Richie, Perez Hilton or that TMZ exists – A large portion of our culture now celebrates what it used to shun, cheers that which used to drive people into hiding and rewards existence over accomplishment.

That’s why the media parrots and trumpets attacks on Mitt Romney’s incredibly successful private-sector record but ignores President Obama’s public-sector failures. How people can question what Romney does with his own money but ignore Obama wasting literally trillions of ours is disgraceful. That President Obama would sanction the charge is worse.

Rush Limbaugh is correct when he calls President Obama “President Kardashian.” Only we’re on the receiving end of what Kim Kardashian became famous for. To paraphrase Andy Warhol, in the future we’ll all have our own reality show for 15 minutes. Unfortunately the ratings will suck and it will serve only as a perch from which to watch the economy collapse. We can call it “Disgraceful.”

November could not be more important, and it cannot come quickly enough.

The Invincible Lie – Thomas Sowell –

The Invincible Lie – Thomas Sowell –

Anyone who wants to study the tricks of propaganda rhetoric has a rich source of examples in the statements of President Barack Obama. On Monday, July 9th, for example, he said that Republicans “believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth.”

Let us begin with the word “spend.” Is the government “spending” money on people whenever it does not tax them as much as it can? Such convoluted reasoning would never pass muster if the mainstream media were not so determined to see no evil, hear no evil and speak no evil when it comes to Barack Obama.

Ironically, actual spending by the Obama administration for the benefit of its political allies, such as the teachers’ unions, is not called spending but “investment.” You can say anything if you have your own private language.

But let’s go back to the notion of “spending” money on “the wealthiest Americans.” The people he is talking about are not the wealthiest Americans. Income is not wealth — and the whole tax controversy is about income taxes. Wealth is what you have accumulated, and wealth is not taxed, except when you die and the government collects an inheritance tax from your heirs.

People over 65 years of age have far more wealth than people in their thirties and forties — but lower incomes. If Obama wants to talk about raising income taxes, let him talk about it, but claiming that he wants to tax “the wealthiest Americans” is a lie and an emotional distraction for propaganda purposes.

The really big lie — and one that no amount of hard evidence or logic seems to make a dent in — is that those who oppose raising taxes on higher incomes simply want people with higher incomes to have more money, in hopes that some of their prosperity will “trickle down” to the rest of the people.

Some years ago, a challenge was issued in this column to name any economist, outside of an insane asylum, who had ever said any such thing. Not one example has yet been received, whether among economists or anyone else. Someone is always claiming that somebody else said it, but no one has ever been able to name and quote that somebody else.

Once we have put aside the lies and the convoluted use of words, what are we left with? Not much.

Obama is claiming that the government can get more tax revenue by raising the tax rate on people with higher incomes. It sounds plausible, and that may be enough for some people, but the hard facts make it a very iffy proposition.

This issue has been fought out in the United States in several administrations — both Democratic and Republican. It has also been fought out in other countries.

What is the real argument of those who want to prevent taxes from rising above a certain percentage, even for people with high incomes? It has nothing to do with making them more prosperous so that their prosperity will “trickle down.”

A Democratic president — John F. Kennedy — stated the issue plainly. Under the existing tax rates, he explained, investors’ “efforts to avoid tax liabilities” made them put their money in tax shelters, because existing tax laws made “certain types of less productive activity more profitable than other more valuable undertakings” for the country.

Ironically, the Obama campaign’s attacks on Mitt Romney for putting his money in the Cayman Islands substantiate the point that President Kennedy and others have made, that higher tax rates can drive money into tax shelters, whether tax-exempt municipal bonds or investments in other countries.

In other words, raising tax rates does not automatically raise tax revenues for the government. Higher tax rates have often led to lower tax revenues for states, the federal government and other countries. Conversely, lower tax rates have often led to higher tax revenues. It all depends on the circumstances.

But none of this matters to Barack Obama. If class warfare rhetoric about taxes leads to more votes for him, that is his bottom line, whether the government gets a dime more revenue or not. So long as his lies go unchallenged, a second term will be the end result for him and a lasting calamity for the country.

MCCLINTOCK: Putting freedom back to work – Washington Times

MCCLINTOCK: Putting freedom back to work – Washington Times.

Cutting taxes and regulations key to ending Obama recession

By Rep. Tom McClintockThe Washington Times

The Obama administration’s failure to address our nation’s gut-wrenching unemployment stems from a fundamental mistake about how jobs are created in the first place. We are now in the third year of policies predicated on the assumption that government spending creates jobs. We have squandered three years and trillions of dollars of the nation’s wealth on such policies, and they have not worked because they cannot work. The sad but incontrovertible fact is that, ultimately, government cannot inject a single dollar into the economy until it first has taken that same dollar out of the economy.

True, we can see the job that is “saved or created” when the government spends that dollar on Paul, but what we can’t see as clearly are the jobs that are destroyed or prevented from forming because government has first taken that dollar from Peter. We see those millions of lost jobs in a chronic unemployment rate and a stagnating economy.

Government can transfer jobs from the productive sector to the government sector by taking money from one and giving it to the other. That’s at the heart of the president’s plan to spend billions of dollars to hire more public employees. But these temporary government jobs come at a steep price: Every dollar spent sustaining one of these jobs is a dollar taken from the same capital pool that otherwise would have been available to productive businesses to invest in creating permanent jobs.

Government also can transfer jobs from one business to another by taking capital from one and giving it to the other. That’s how the administration created the Solyndra fiasco: It put a half-billion dollars at risk to create 1,100 jobs at the cost of $450,000 per job. Today, that money is gone and so are the jobs. Who pays for these losses? Other businesses and their employees – meaning fewer jobs created.

What government can do very effectively is create the conditions in which jobs either multiply or disappear.

When we place additional taxes on productivity, jobs disappear. The president says he only wants to tax millionaires and billionaires, but the tax increases in his “jobs” plan actually hammer more than 75 percent of net small-business income – at a time when we’re counting on these small businesses to create two-thirds of the new jobs that our people desperately need. That is insane.

When we place additional regulations on productivity, jobs disappear. That’s what we’re watching in real time: thousands of pages of new regulations from Obamacare, Dodd-Frank and the EPA stifling American job creation.

It’s no secret why business isn’t expanding – just ask a businessman. They’re scared to death of the additional taxes and regulations they may be facing in the next few years and are pulling back to see what happens. Ask bankers why they’re not lending, and you’ll hear the same answer.

House Republicans have laid out a comprehensive plan to revive the economy through the same policies that worked under Ronald Reagan in the early 1980s, John F. Kennedy in the early 1960s, Harry Truman in the mid-1940s and Warren Harding in the early 1920s.

For example, the Congressional Budget Office estimates that Obamacare by itself will cost the economy a net loss of 800,000 jobs. A few weeks ago, the House Natural Resources Committee received testimony that just by getting government out of the way and opening up American energy resources to development, the economy could generate 700,000 jobs and $660 billion of direct revenue to national and state treasuries. Together, that’s 1.5 million permanent jobs.

Now imagine doing that across all sectors of the economy. That’s precisely what House Republicans have proposed. The fact that the president doesn’t recognize this as a jobs plan suggests that he simply doesn’t understand how an economy actually creates jobs in the first place.

When Reagan inherited an even worse economy from Jimmy Carter, he reduced the tax and regulatory burdens that were crushing productivity – just as Republicans propose to do today.

In a recent article in the Wall Street Journal, former Sen. Phil Gramm estimated that if the economy under Mr. Obama had tracked the same as it did under Reagan, 15.7 million more Americans would be working today and per capita income would be $4,000 higher than it is today – $16,000 for an average family of four.

Freedom works. It is time that we put it back to work.

Rep. Tom McClintock is a California Republican.