This election year, there is a vast amount of misunderstanding and disinformation regarding taxes rates, tax revenues, spending and deficits. One of the most common is that Clinton left a burgeoning surplus, and the Bush “tax cuts for the rich” have caused huge deficits. This is false.
One of the hardest things for most people to understand is that deficits are caused by spending, not tax revenues. This can be hard to understand because unlike the private sector, there is no relationship in government between revenue and expenses. As an example, if a company builds a new factory or offers a new service, increasing expenses, it expects the products created at that factory will increase revenues. If the company gets no return on its investment, it stops the activity.
Government does not work this way. There is no causal relationship between government services and government revenues. The government confiscates the tax dollars it wants for revenue regardless of the programs offered. If the government cancelled all defense spending in Iraq tomorrow, it would have no effect on the taxes you pay.
Because there is no causal relationship between tax revenues and government expenses, deficits do not result simply because tax rates are cut. Deficits are caused when the government spends more than the incoming revenues. Since 1965, the government has operated at a deficit for almost the entire 33 year period. The only exception was the period immediately following the 1994 Republican Revolution in Congress. It was during this period that Bill Clinton famously declared “the era of big government is over.”
I have a simple question for Obama and his liberal supporters: How much is enough? Liberals constantly say the wealthy in this country are not paying their “fair share.” I’d like to know what they consider fair. Given that the top 5% of earners in this country pay 60% of the total tax bill, while the bottom 50% of earners pay less than 3%, I’d like to know what the liberals in this country consider fair. 30%, 40%, 50%, more? Give me a number.
I sat down this evening and tried to calculate what % of my income is confiscated by the government and redistributed to others. It is incredibly difficult to calculate, due to the vast array of hidden taxes, regulations and fees. I modeled my actual income, deductions, tax deferred contributions, property values, spending, etc. All rates are the actual percentage of my gross income before deductions (not AGI). FICA and Medicare rates include the employer contribution which reduces the total compensation my employer is willing to pay me.
McCain and Obama both claim to be supporters of the middle class and small businesses. Both have offered a myriad of proposals meant to benefit small businesses, but how can we know whose will be best? One way to know is to look at their voting record.
When browsing the political action committee (PAC) website for my employer eBay, I stumbled across the “How Congress Voted” guide of the National Federation of Independent Business (NFIB). The NFIB is a “the voice of small business” in America. eBay, which has been the driving force behind over a million small businesses is a member, and co-hosted the 1st Small Business Summit in Washington DC. I think it is fair to say these guys understand the issues facing small businesses.
According to the NFIB congressional voter guide, John McCain supported small businesses 100% in both the 110th and 109th Congressional Sessions. Obama only supported small businesses 50% of the time in the 110th Congress, and a dismal 13% of the time in the 109th. Joe Biden was slightly better than his running mate at 56% and 25% respectively. (read more…)
We hire teachers to do a job. The job is to teach students to read and write, to teach them math skills, to teach them science, to teach them history and civics. The teachers of California (and nationwide) are failing in their responsibility. Instead of focusing on core curriculum, the teachers of this state continue to push a radical liberal agenda. Instead of teaching students to read, they want to teach gay marriage. Instead of teaching the scientific method, they want to teach junk science and the cult of global warming. Instead of teaching the historical and philosophical foundations of this country, which make it the best country on the planet, they want to teach that America is to blame for all the world’s problems. I am sick of it.
Think I’m wrong? Yesterday, the California Teachers Association gave $1,000,000 to the campaign against Proposition 8, the Defense of Marriage Act. Why would teachers give so much money to support gay marriage? What does gay marriage have to do with reading, spelling, algebra, chemistry, etc.? Nothing. One could argue it has everything to do with biology, but in that case the teachers should be for Prop 8, not against it. (read more…)
Will Obama raise my taxes? I don’t know, and neither do you. Believe me, I’ve tried to figure it out. I’ve read his plan, as well as McCain’s. I’ve read the analysis of both campaigns. I’ve watched all 4 debates. I’ve even read the neutral analysis of the Brookings Institution Tax Policy Center. Any objective analysis points to the fact that taxes will be lower under McCain than Obama, but how much and for whom is an unknowable. Both campaigns have proposed so many convoluted strategies that it is next to impossible to determine the net effect for an individual taxpayer.
Here’s what I do know:
1) Obama plans to raise the top 2 marginal tax rates. This is his personal version of Robin Hoodness, or in his words, an attempt to “spread the wealth around.” High marginal tax rates are a staple of Liberal/Socialist policy, and Obama is no exception.
2) Obama plans to raise taxes on capital gains and dividends. He intends to make these rates graduated, like ordinary income taxes, so high income individuals would pay a higher marginal capital gains rate of 20%.
3) Obama plans to raise tax rates and reduce tax loopholes on “large” (think public) businesses.
4) Obama plans to raise death tax rates to 45% on estates larger than $3.5 million.
5) Obama plans to freeze income tax rates for other income levels, and cut taxes through targeted tax credits for various activities.
6) Obama supports changing the FICA tax limits (currently capped at $102,000), so higher income individuals would pay higher FICA as well as higher income, cap gains, and dividends. (read more…)
I love California for many reasons. One of the best (and worst) is that the Proposition system allows for a modicum of true democracy to occur. Every election the people get to vote directly for measures the legislature is either unwilling or unable to address on its own. Unfortunately, this means the citizens need to wade through the language of many bills to get educated on what they will really do. Since most people, unlike me, have a life, they rely on voter guides. Well here is mine:
1A Bond Measure for High Speed Rail — NO
2 Cage standards for livestock — NO
3 Bond Measure for Children’s Hospital — NO
4 Notification for Underage Abortions — YES
5 Lighter Sentences for Drug Criminals — NO
6 Minimum Funding for Police — NO
7 Renewable Energy Requirements — NO
8 Define Marriage as 1 Man 1 Women — YES
9 Victims’ Rights — YES
10 Bond Measure to Subsidize Hybrids — NO
11 Bi-Partisan Redistricting Commission — YES
12 Bond Measure to Provide Loans to Vets — YES (read more…)
After 2 years of focusing exclusively on technology, I’ve decided to add politics to the menu of this blog. The reasons are simple. This country is headed down a dangerous path. The likely victory of Obama is a hard turn to the left. The next 4 years will be rocky, and there will be much that outrages me. I feel the need to rant, and this is my place to do it. As usual, all posts here will be my personal opinions. Feel free to disagree.
