Obama Can't Find Any Honest Democrats

I generally don't like to do this, but I read an article in that rag of a magazine called Newsweek that so outraged me that I needed to comment on it.

Apparently, based on this article, all we have to do to address the federal budget deficit is to get Democrats to pay their taxes.

http://www.newsweek.com/id/190355

The writer actually laments that the standards of integrity are too high for the Obama administration. He whines that Obama can't fill posts because it's virtually impossible to find Democrats that follow the law and pay their taxes. The writer almost scoffs at the notion that people actually pay all their taxes as intended.

Wow.

It's hard enough to believe that someone would make this argument, but even more amazing that a so-called reputable news magazine felt the article was appropriate to publish.

Is it really too much to ask that people appointed to positions in the Treasury Department actually pay their taxes?????!!!! Silly me for thinking the government should follow the laws they created. Perhaps Leona Helmsley was right when she said, “Only the little people pay taxes”.

Looks like the tax-cheat-in-chief Geithner has lots of company in the beltway.

Why Taxes Matter -- The Perfect Government Stimulus Plan

I work for a large international manufacturing company (one of the largest in the world) with manufacturing plants across the globe. In 2008, an unexpected Brazilian tax law revision changed the tax rate on a product we manufacture in Brazil from 8% to 20%. In 2009 a project is being executed to move production of that product out of Brazil.

I give this example to demonstrate the impact of government rules and laws on business, and how quickly businesses react. In the example above, the project to move the production location was actually started in 2008, the same year the tax law was changed. Taxes are not just a nuisance with which businesses must deal -- they drive decisions. In this real-life example, the Brazilian government's tax increase has led directly to job losses. Politicians take note.

The opposite can also be true. Businesses don't just react to raised tax rates. They also react to lowered tax rates.

If the US government is serious about stimulating the economy and creating real, long-term job growth, the solution is simple: lower corporate and business taxes. Based on the latest pork-filled "stimulus" bill, I fear that the government is not serious about stimulating the economy. They are more concerned with petty politics. However, that's a subject for another day. Getting back to the subject at hand...

Surprisingly, to the credit of the main-stream media, it's been well publicized that the United States has the second highest corporate tax rate in the industrialized world. Only Japan has a higher rate (see chart). It should be noted that Japan is just now starting to come out of a decade long recession.

Remember my example above -- businesses react to tax changes. Imagine the stimulation to the economy if the United States were to lower their corporate and business (taxes on manufactured goods need to be considered as well as corporate tax rates) tax rate to be the second lowest instead of the second highest. Even better, what do you suppose would happen if the United States eliminated the corporate tax altogether. Businesses would flock here to set up shop! Businesses want to do work in the US already. The US has the best educated, most productive work force in the world, but as it stands now the financial numbers don't add up. The movement to the US would be quick and dramatic if the government could set up the proper tax incentives.

What would be the impact of corporations moving business to the US? Jobs. Production. Income. Wealth. Instead of exporting jobs, the US would import jobs. In addition to the incentive for non-US companies to set up shop in the US, the benefit to companies already in the United States would be enormous. Imagine the programs corporations would tee up with a new-found store of cash. In the small division of the company I work for, we have several proposals for new product introductions that can not be started at this time. That would change immediately if tax reductions were made to free up cash. Projects that have been on the back burner would immediately be green-lighted. Instead of a disadvantage, US companies would have a distinct advantage on the global stage. This would drive innovation and growth.

The cash freed up as a result of a significant corporate tax rate cut would give the short-term injection the economy needs now. The job creation from international businesses setting up shop in the US would provide the long-term boost to sustain the economy.

Of course, this plan would cause the government to lose significant tax revenue. The government is now trying to spend somewhere in the neighborhood of a trillion dollars on a stimulus package with dubious potential for job creation. You tell me which approach would be a better way to spend a trillion dollars.

Some people have a knee-jerk opposition to lowering taxes on businesses, especially larger corporations. This is plain foolishness. These people suffer from class envy, as they mistakenly think corporations represent rich "fat cats". Quite the opposite is true. Successful businesses are the foundation of a healthy middle class.

So far, the government has considered no other ideas except excessive pork spending. A truly bold and effective economic stimulus plan would include dramatic corporate and business tax reduction.

A Quick Truth About Corporate Taxes

President-Elect Obama has grand ideas to siphon tax revenue from the "greedy" corporations in the form of higher corporate tax rates, as well as a "windfall profits" tax. He has especially gone after the oil companies.

Remember and understand one thing: Corporations do not really pay taxes. Consumers pay taxes. Like any business, large or small, expenses such as taxes simply get passed onto the consumer.

Therefore, a "windfall profits" tax on the oil companies is nothing less than a tax on every single man and woman in this country that uses gasoline or home heating oil.
Not to be overlooked is that it's an extra tax on American oil companies that puts them at a competitive disadvantage against international companies, thereby threatening jobs.

Perhaps President-Elect Obama does not see a problem with higher gasoline prices. After all, he was quoted during his campaign to not be alarmed by this summer's gasoline prices. He was only concerned with the speed at which they got to the record high prices. I guess when you're busy chartering separate MD-80 airliners for you and your wife to separately fly to Washington DC from the same location on the same day for a 1 day trip you don't worry too much about how gasoline and heating oil prices (never mind the dreaded greenhouse gases!) might impact the "little guy" you claim to care so much about.

A Classic Tax-n-Spend Liberal – That’s Change?!

It’s just over a week until Election Day, and I’ve resigned myself to a Barack Obama victory. Obama has run a campaign with the theme of “Change”. Change you can believe in. Change we’ve been waiting for. (Note: Both of these Obama slogans end in a preposition – a grammar no-no. I hesitate to point this out because I’m no grammar expert. I’m sure to have grammar faux pas in this very post. However, I’m not running to be leader of the free world, with millions of dollars at my disposal.). Change for America. Change the course of history. Change the rising tides of the seas. Change, change, change, blah, blah, blah.

Oh, there will be changes, but they won’t be the kind of changes Obama supporters are hoping.

If you think the economy is tough now, wait until Obama wins.

Despite all his grand talk, Obama is nothing more than your classic tax-and-spend liberal. A fact that cannot be disputed is that Obama plans to increase the level of federal budget spending. This is not my opinion, or some Conservative attack. It’s simply fact. Obama’s social programs, particularly his health care plan, will increase the federal budget. Even with an end to hostilities in Iraq, an Obama administration plans to increase spending. The argument here is not whether increasing federal spending is good or bad. I’m simply pointing it out as fact that spending will increase under the Obama plan. That’s the “spend” part of Obama–the-tax-and-spend-liberal.

As far as taxes go, yet another undisputable fact is that Obama plans to increase taxes. OK, one can argue that he plans to raise personal income taxes on only the top 5% of Americans (More on that later), but regardless of who will be paying the taxes, the fact remains that he certainly plans to raise taxes. When the government plans to take a higher percentage of available income in taxes, no matter who’s paying, that’s a tax increase. That’s the “tax” part of Obama-the-tax-and-spend-liberal.

Let’s delve a little deeper into Obama’s tax increase plan. In addition to raising the personal income tax on the top 5% of wage earners, Obama plans to let the Bush tax cuts expire. Regardless of his campaign rhetoric, this will certainly impact some of that precious 95% that Obama claims will be unaffected. On top of these taxes, Obama’s plan is to raise the capital gains tax as well as taxes on corporations. Such tax increases are indirect taxes on individuals. They don’t show up on your 1040 form in April, but they certainly impact you, whether you notice it or not. These hidden taxes play well with the populace because they tap into people’s intrinsic jealousy. They fan the fires of class envy, and eventually get passed on to the “little people” anyway.
Senator Fred Thompson used an analogy of a pool to help explain Barack Obama’s tax plan. Imagine our economy as a big pool. We are all in that pool together; corporations, working people, rich people, unemployed people, retired people – all together. So, if the corporations are on one side of the pool, and Obama takes water away from them, what happens to everyone else in the pool? The water level does not just go down on the corporation’s side; it goes down for all.
Obama is under the impression that an increase in the corporate and capital gains taxes will not have impact on most Americans. Well, again to steal a concept from Fred Thompson, raising the corporate tax will have no impact on you as long as you don’t work, invest, or buy anything from a corporation. Unlike government, which continually runs on deficit, the bottom line is not a moving target for a corporation. If the government takes away more money in the form of taxes from a corporation, that corporation will have to take actions to make up for this loss. Those actions could come in the form of tightening their corporate belts, but it can also come in the form of layoffs, reduced spending and investment, and the passing on of costs to consumers. Corporations are already meeting to layout plans for cuts to offset the Obama tax increases.
Obama likes to say that we are all in this together. In his now famous lecture to Joe The Plumber, Obama said, “spread the wealth”. Obama needs to understand that when it comes to taxes we are also all in this together. Once again, liberal policy will fall victim to unintended consequences, and instead of “spreading the wealth” the Obama tax plan will most certainly spread the pain.

A Rarity: School Board Pulls Off Budget Surplus

I've been especially tough on school boards and school administrators in this space in the past, especially the school board of my local town of Bristol, CT. Since I've been so tough in the past, I found it only fair to give credit when credit is due. The Bristol, CT Board of Education announced this week that they ended the fiscal year with a surplus of nearly $800,000.

I send my kudos to the Board of Education and administrators of all Bristol schools that made this possible.

This demonstration of efficiency and fiscal responsibility in the face of rising costs (energy, food, etc.) should be applauded. The effort will go a long way towards increasing the trust of the local tax payers in the school system management.

I don't know all the details of what created the surplus, but I'm taking this one at face value.

Great job BoE and thanks for looking out for the local tax payers! Keep it up.

Ever Wonder Where Your Local Property Taxes Go?

A Redding, CT non-partisan action group has created an on-line calculator to demonstrate how the town spends local property taxes. In the state of Connecticut nearly all local government is funded by one of the highest property taxes (taxes on real estate and registered vehicles, i.e boats, cars, motorcycles, etc.) in the nation.
Although the distribution of expenses in your town will not be exactly the same as Redding's, the calculator still gives you a general idea of what the budget requirements are for a typical town.

The calculator can be found at the following link:

http://betterredding.org/html/taxspending.html

One thing that is noticed immediately is that 71.4% of the town budget is spent on the public school. This is again typical of a Connecticut town. Connecticut spends more per pupil on public education than any state. Despite this spending, Connecticut remains in the mid-30's in standardized test scores, including SAT scores.

Thanks NABR for bring transparency to taxpayers with regards to local government spending.

Exercising Civil Disobedience While Paying Property Taxes

July and August is the time when vehicle property tax comes due in all 169 Connecticut municipalities. As if the property tax Connecticut residents pay on their real estate is not enough, like many states, Connecticut residents are also taxed on all registered motor vehicles including cars, trucks, campers, boats, and even trailers.

This summer, the tax payers here at Liberty Alert (i.e. me) used the opportunity to let the town of Bristol, CT know what we really think of their tax collection. See the attached picture. Each tax bill was separately mailed with a special label for the tax collector on each envelope.

Now, I fully understand that the tax collector does not determine the tax rate or tax system. However, this small act of civil disobedience was done not just for the benefit of the tax collector. Those envelopes will be seen by multiple post office employees, and likely some town hall staffers on the way to the tax collector. The envelopes may even draw enough attention to get the mayor or some council members in the act. The point is, this small act of rebellion could get noticed, and help encourage some civil disobedience in others. Is it a bit childish? Perhaps. But, in the spirit of Henry David Thoreau, a little civil disobedience is a good thing. Humor and satire can be a strong tool to get your point across. I look at it more like playing a prank on a good friend. You like the friend, but it's fun to see them go through a little harmless suffering. Don't let the government off the hook. It's ok to give the government a hard time once in a while. The government is not above being harmlessly punked. Remember, the government should fear the people, not the other way around!

Incidentally, Civil Disobedience by Henry David Thoreau is an American classic that I highly recommend. The essay inspired such leaders as Martin Luther King and Gandhi. It is a quick read, and can likely be found at any local library. It's a must read. Look for a future book review of Civil Disobedience on Liberty Alert.