Why Liberals Want Higher Taxes

Via TaxProf Blog:

The 19% Solution

Obama came to fractious agreement on taxes with Republicans yesterday but it's important to remember that, no matter what anyone agrees to or what's passed into law, the government can only raise about 19% of GDP in total taxes.

Don't believe me? Here's a scientific looking graph to prove it:




And here's source of the graph.

So, tax the rich, tax the middle class, pass the Fair Tax, it doesn't matter: the economy can only sustain the 19% of GDP level for any length of time. If politicians want more dollars to spend, they should choose whatever method of taxation boosts the economy most. Cutting taxes across the board seems to do just that.

Oh, but what about the deficit, you ask? I'm not entirely sure deficits matter but could fiscal responsibility demands we do keep an eye on it. Here's how to balance the budget without really trying:

The CBO, the non-partisan agency charged with estimating the effects of legislation on government costs, has produced a long-term budget outlook in which Bush-era tax rates remain unchanged. Their conclusion is that over the next decade, "government revenues would remain at about 19 percent of GDP, near their historical averages." That's actually a bit higher than the historical average, but is within the bounds of reason.

A balanced budget in 2020 based on 19 percent of GDP would mean $1.3 trillion in cuts over the next decade, or about $129 billion annually out of ever-increasing budgets averaging around $4.1 trillion. Note that these are not even absolute cuts, but trims from expected increases in spending.

Short version: you can still have a mighty big Federal government with spending at 19% of GDP.

Somewhat related and entirely prescient. This idea isn't new. From October 8, 2008:

(L)ower taxes = higher GDP. Higher GDP = better for everybody.

The Economy and China

Worried the economy's going to heck in a hand basket? That the Chinese own so much of our debt they'll call in our loans? Victor David Hanson says don't be:

The notion that we are doomed and the Chinese fated to prosper is not written in stone. It is simply a matter of free will, theirs and ours. They must deal with a new era of coming suburban blues, worker discontent, unions, environmental discretion and regulation, an aging and shrinking population and greater personal appetites, social protest, and nonconformity — in the manner that industrializing Western nations did as well in the early twentieth century.

We in turn can easily outdistance any country should we remain the most free, law-abiding, and economically open society as in our past. A race-gender-ethnic-blind meritocracy, equal application of the law, low taxes, small government, and a transparent political and legal system are at the heart of that renewal. America could within a decade become a creditor nation again, with a trade balance and budget surplus, drawing in the world’s talent and capital in a way not possible in the more inflexible or less meritocratic China, Japan, or Germany. Again that is our choice, not a superimposed destiny from someone else.

So quit worrying and get back to work.

Where Have You Gone, Roger Ebert?

I've said what I had to say about movie critic and hateful columnist Roger Ebert and now Lawrence Meyers weighs in on Ebert's continued sad decline:

It breaks my heart to write this article. Roger Ebert has been a part of my love for cinema since I was eleven years old. When I was in the hospital for two months at age 19, I devoured his entire book of movie reviews. I even met him at the 2002 Conference on World Affairs when he dissected David Lynch’s masterpiece Mulholland Drive (though I thought he needlessly threw in the towel regarding the film’s meaning). I don’t need to expound on his contributions to film education and his championing of truly great movies.

Nevertheless, I don’t know the man. I only know his words. Yet I have to wonder if the physical and mental trauma Roger has endured has taken a toll on his mind. He always seemed apolitical to me. He just wrote great movie reviews. However, he started a political journal on his website in the past year. It’s full of the same clap-trap expected from those on the Left: false premises, poorly constructed arguments, and replies to comments which dodge legitimate challenges.

Meyers has updated his post to report about Ebert's typical small-minded and angry reply. Following Meyer's link to Ebert's site, you'll find Ebert's expanded comments where Ebert once again puts out his false assertion and demands a yes or no answer, which is impossible give. (Sort of like, Have you stopped beating your wife, yes or no?") It's a juvenile move on Ebert's part and underscores Meyer's point.

IRS May Tax Payments to Gulf Coast Victims

Well, yes they might:

Out-of-work Gulf Coast shrimper Todd Pellegal spent his first $2,500 check from BP quickly, paying off bills and buying groceries for his family.

He never even considered putting some of it away for taxes.

Now he's among the people up and down the Gulf Coast reeling from the oil spill disaster who are surprised — and frustrated — to find out the Internal Revenue Service may take a chunk of the payments BP PLC is providing to help them stay afloat.

Congress will likely step in to remedy this but for now the payments are intended to make up for lost income. If the spill hadn't occurred and the residents were able to earn their living as normal, they'd be taxed; reimbursement for that lost income would be taxable as well.

According to the article though, in previous disasters, Congress has acted to exempt such payments from tax. I see no reason why that won't happen this time.

Ralph Lauren: Canary in the Coal Mine

From TaxProf Blog, designer Ralph Lauren makes his tax move:

Reuters, the Wall Street Journal, and the New York Post all have coverage of Ralph Lauren's plan to sell a quarter of his stake in his publicly traded Polo Ralph Lauren apparel/fashion/retail empire, with proceeds estimated at between $900 million and $1 billion. The press accounts that give a reason chalk it up to asset diversification. But, as one FutureOfCapitalism.com reader-participant-watchdog e-mailed, what the press is missing is the tax angle.

On January 1, 2011, the tax rate on long-term capital gains is scheduled to increase to 20% from 15%. By selling now rather than waiting until later when the taxes are scheduled to increase, Mr. Lauren potentially saves some significant money in taxes. It's hard to say how much money without knowing what his basis is, but the savings certainly may have something to do with Mr. Lauren's decision to diversify his assets now, rather than, say, three years ago, or a year from now. ...

Lauren is among the first of what may be a massive sell off by the end of the year to avoid a 33% tax increase.

Obama supporters, the change you hoped for is coming soon.

5 Things You Can Do Now to Get Ready for Huge Tax Hikes in 2011

I can't say I disagree with this list from Kelly Phillipps Erb. About the only thing you don't have any control over is dying.

Click through and read the whole thing.

Tough Talk

Just in time to answer his critics for not being passionate enough about the BP oil spill in the Gulf of Mexico, Obama talks tough:

President Barack Obama says his talks with Gulf fishermen and oil spill experts are not an academic exercise. They're "so I know whose ass to kick."

Goodness me. Tony Hayward, CEO of BP, must be quakin' in his boots.

But not so fast. If Obama really does crack down on BP - whatever that means - he might be putting his chief of staff out on the street:

In case you were tempted to buy the faux Washington outrage at BP and its gulf oil spill in recent days, here's a story that reveals a little-known corporate political connection and the quiet way the inner political circles intersect, protect and care for one another in the nation's capital. And Chicago.

We already knew that BP and its folks were significant contributors to the record $750-million war chest of Barack Obama's 2007-08 campaign.

Now, we learn the details of a connection of Rahm Emanuel, the Chicago mayoral wannabe, current Obama chief of staff, ex-representative, ex-Clinton money man and ex-Windy City political machine go-fer.

Al Gore, Tipper Gore Snap Up Montecito-area Villa

Like Instapundit says, I'll believe it's a crisis when they believe it's a crisis:

Former Vice President Al Gore and his wife, Tipper, have added a Montecito-area property to their real estate holdings, reports the Montecito Journal.

The couple spent $8,875,000 on an ocean-view villa on 1.5 acres with a swimming pool, spa and fountains, a real estate source familiar with the deal confirms. The Italian-style house has six fireplaces, five bedrooms and nine bathrooms.

Carbon footprint estimates not available at this time.

Sting Stung

Musician Sting may have stepped in the middle of big ol' steaming pile of something:

O Sting, where is thy sting?

It is not where his principles lie, according to human rights activists who are demanding that the superstar stinger donate to charity the more than $2 million dollars “in blood money” he received for playing a secret concert for the daughter of one the world’s most brutal dictators, Islam Karimov of Uzbekistan.

Sting's response:

"I have come to believe that cultural boycotts are not only pointless gestures, they are counter-productive, where proscribed states are further robbed of the open commerce of ideas and art and as a result become even more closed, paranoid and insular."

You know, he's kind of got a point here. Name one boycott that's brought a dictator to his knees. Go ahead. I'll wait.

Yeah.

Boycott's don't work. Dictators only understand brute force and while I'm not saying Uzbekistan should be miltarily invaded, we can accomplish quite a bit with a cultural invasion. Let the people get a taste of freedom and they'll take it from there.

The Obama Tax Hikes--What to Do

The Obama tax hikes, they're a'comin'. Forbes tells us what to do:

Buy munis, book losses, avoid marriage, consider a Roth conversion now and get your Lasik eye surgery next year.

And since the tax hikes are only targeted for the rich, I'd add one more strategy: don't get rich.

Think We Need a Tax Hike? What's Stopping You?

Howie Carr notes that those in favor of tax hikes are in favor of tax hikes for everyone but themselves:

As the deadline for filing 2009 state income taxes nears, once again the Beautiful People of Massachusetts are proving that while they enjoy talking the talk, walking the walk is another thing altogether.

We have a two-tier income tax in this state, you know. You have the option of paying either at the standard rate of 5.3 percent, or at the old, higher 5.85 percent rate.

As of Wednesday, here are this years numbers, according to the state DOR:

Of 1,840,000 state tax filers, exactly 931 have opted to pay taxes at the higher rate. That works out to one-twentieth of one percent. Think of it this way: In 2000, only 60 percent of the Massachusetts electorate voted to cut the income tax, but a decade later 99.95 percent of the population has decided to take advantage of the tax cut a lot of them claimed they didn’t want or need.

The moonbat motto is: Do as I say, not as I do.

No need to wait for Congress and the President to act before you can have your own tax hike. There's nothing in the Internal Revenue Code that prevents you from understating your deductions - it's the reverse that gets you in trouble. So, go ahead, create your own tax increase. Forgo those itemized deductions. Claim fewer dependents. File separately from your spouse. And hurry. Health Care Reform isn't going to pay for itself.

Peggy Noonan From Behind the Wall

I don't know the reason, or even if it's permanent, but for Friday at least, the Wall Street Journal has brought out Peggy Noonan's column from behind the wall and made it available for non-subscribers. Just in time, too:

Excuse me, but it is embarrassing—really, embarrassing to our country—that the president of the United States has again put off a state visit to Australia and Indonesia because he's having trouble passing a piece of domestic legislation he's been promising for a year will be passed next week. What an air of chaos this signals to the world. And to do this to Australia of all countries, a nation that has always had America's back and been America's friend.

How bush league, how undisciplined, how kid's stuff.

You could see the startled looks on the faces of reporters as Press Secretary Robert Gibbs, who had the grace to look embarrassed, made the announcement on Thursday afternoon. The president "regrets the delay"—the trip is rescheduled for June—but "passage of the health insurance reform is of paramount importance." Indonesia must be glad to know it's not.

(I'm glad the WSJ has wised up and brought Noonan back to us non-subscribers. Let's see if the trend continues. I think a site that has advertisers and lots of page views is making a mistake charging for access.)

As of today, the passage of Obamacare is no sure thing. I don't think Obama himself has been very helpful to his cause.

The False Promise of The Fair Tax

Last year was about the last time I heard anything about the goofy idea of The Fair Tax but with soaring deficits and abounding questions about how to fund Obamacare should it pass, the Fair Tax may be getting another life. National Review's Ramesh Ponnuru has a pretty good takedown of this deceptive idea:

Here’s the pitch: The FairTax — a plan to replace the federal income tax and payroll tax with a national sales tax — will get rid of the IRS forever. It will let workers keep their entire paychecks and retirees keep their entire pensions. It will raise just as much money as the current tax code. It will promote economic growth. It won’t hurt the middle class, and it won’t cause prices to rise. It will even end our illegal-immigration problem.

These claims are drawn from the leading proponents of the plan: a group called Americans for Fair Taxation, former Republican presidential candidate Mike Huckabee, and the trio behind the book FairTax: The Truth. By painting an attractive picture of a prosperous America without an IRS, they have gotten many conservatives to become enthusiasts for their cause. Rising conservative star Marco Rubio, a Senate candidate in Florida, has endorsed the FairTax in the past (although more recently he has hedged on it). Republican congressman John Linder of Georgia, a FairTax co-author who just announced that he will not run for reelection, has made promoting it his principal mission in Congress. The Iowa Republican party has endorsed it. It seems to be gaining support among tea partiers.

The FairTax sounds too good to be true. It is. The campaign for the FairTax is deeply misleading, and much more likely to set back the cause of tax reform than to advance it.

Our current system of taxation is far from perfect but there's nothing about the Fair Tax that would bring us closer to a fairer, more efficient system. Its dishonest supporters only muddy the legitimate dialogue of tax reform we should be having.

Panel urges Core to Shore Changes

Remember all those big dreams we had when MAPS3 passed? Great things were a'comin'. And soon.

Okay, maybe not so soon. Fifteen years you thought? Try fifty:

An Urban Land Institute panel reviewing Oklahoma City’s Core to Shore plan warned Friday the project will take 50 years, and not 15 years as anticipated, and advised a proposed boulevard will not be a successful retail corridor.

The panel also concluded Core to Shore office development is unlikely any time soon and a new convention center should be built south of Bricktown, and not across from a planned central park.

Wow, that's a downer. But hardly a surprise. I think it's a wise thing to look at these kinds of projects just like you would if you were renovating your home. Figure out what the time and cost will be and then double it. Why would anyone think a government sponsored project would be executed on time and on budget?

I think the battle is only beginning. When this is finally finished, few of us will be around to witness the results. Results which will look entirely unlike anything that was planned.

White Stripes: Air Forces Reserve Ad Stole Song

I couldn't get to the ad to listen to the song myself but I'll take The White Stripes' word for it:

The White Stripes say the Air Force Reserve used one of their songs without permission in a Super Bowl ad, and that they are insulted their song was used to encourage recruitment during a war they don't support.

The two-member band, which is originally from Detroit, said the ad made unauthorized use of their song "Fell in Love With a Girl."

"The White Stripes support this nation's military. ... We simply don't want to be a cog in the wheel of the current conflict," the band said in a statement posted to its Web site.

"The White Stripes take strong insult and objection to the Air Force Reserve presenting this advertisement with the implication that we licensed one of our songs to encourage recruitment during a war that we do not support." They did not specify which war.

(Emphasis mine.)

So it looks like Obama's lost The White Stripes' support. His war effort is doomed.

Look, I like The White Stripes raucous stripped down sound and if The Air Force truly did steal their song - the Air Force says they contracted an ad agency for the spot and had nothing to do with the music - then the group should be duly compensated. But, heck, if the group really supports the troops, why not donate the song? You don't have to support the war effort to support an institution that provides for the security of the country - and your right to create raucous, stripped down rock - as well as a pretty good career choice for thousands of people. You can still take your anti-war stance and keep your bona fides among your fellow hip rockers.

(If The White Stripes' truly support the troops, I've found no evidence on the web other than their own self-serving statement. Maybe the group has gone overseas to entertain the troops and its escaped the web's notice. But I suspect, like with most people who say they oppose war but support the troops, it's a lot easier to say you do than actually do it. Yeah, I know, no surprise.)

Hitler Finds Out Scott Brown Won

Once again, I'm late to the game but here's the Hitler Finds Out Scott Brown won video. Blogging skillz? I lack 'em.

As if you haven't seen it yet:

No 2009 Taxes From Some Lawmakers

Taxes for thee but not for me:

Some state legislators failed to file their 2009 income taxes.

Georgia Revenue Commissioner Bart Graham mailed letters last Friday to an undisclosed number of lawmakers.

Under a new ethics law passed on the final day of last year's General Assembly, the lawmakers have 30 days to respond to Graham's letter.

After that deadline Graham will give the names to the House and Senate Ethics Committees for possible disciplinary action.

The names will be released if formal charges are brought.

Heck, release their names now; voters should be informed.

(Oh, and if anyone knows any of those lawmakers who need a good CPA to get them current, send 'em my way.)

Twitter's Down

As of right now, Twitter's down, and down hard. Crashed because of last night's historic election win by Scott Brown? Could be. If so, that's something else for the history books: a pivotal election win thanks to the new media and the new media's inability to handle the crush of news and comments about the result.

That or Twitter's just plain ol' down.

TurboTax, Geithner Edition

Via TaxProf Blog, Mary O'Keefe captures some screen shots of the new TurbTax version that would've kept Treasury Secretary Tim Geithner out of trouble.

Oh, that's right, Geithner didn't get in trouble for over-riding TurboTax's tax computation. He was confirmed as head of the the Treasury Department and paid the tax on his "error" without penalty. You should be so lucky.

With the new version of TurboTax, Geithner won't have any excuse now. Not that he didn't have an excuse before. But still. . .

(I'm getting a lot of my hits from this post and this post. My best case about using a professional versus using TurboTax and I don't think I have anything to add to it right now.)