Tag: tax

Election contrast

Republicans are set to release a second round of tax cut proposals heading into the November elections.  Actually, it’s not so much a second round as it is taking the individual tax cuts and making them permanent.  Republicans estimate it would add another 1.5 million jobs to an already pumping job market.  That would cause wages to continue their rapid growth as well as employers have to offer more pay and benefits to keep good help.  Passage isn’t guaranteed as deficit questions remain.

GOP to propose making tax cuts permanent

Meanwhile, the party of tax and spend is at it again.  Democrats have promised to repeal the Trump tax cuts and double national spending to achieve their goals of Medicare for all, free tuition, and guaranteed employment.  They have hinted at massive new taxes as well to try to cut into their proposed $4 trillion annual deficit.  They would in fact need to double taxes on every person and business to avoid the country going bankrupt by the end of Trump’s second term.

But there’s plenty of opportunity for Democrats to tax things.  In fact, they can hide a lot of taxes behind what they believe are good causes.  California is getting ready to break their promise with the beverage industry by raising billions of dollars in new soda taxes.  The ballot measure is expected to show up in 2020.  Soda taxes, gasoline taxes, cigarette taxes, marijuana taxes, the Democrats have a lot of options when it comes to taxing sin.  But they also want to tax the good stuff.  Ministry giving and clergy housing is certainly a target of pro-tax liberals as well.  They supported tariffs, until Trump did it.

Democrats look for things to tax, target soda in California

Former President Obama said in his speech last week that Republicans are having a hard time “calling Nazis bad”.  We don’t.  Nazis, along with mass murdering minority populations, supported things like universal healthcare, guaranteed employment, regulations on businesses to prevent greed and profits, and confiscation and redistribution of wealth.  They also liked to divide people based on race and use those divisions to control the masses.  Nazis were Socialists.  So Conservatives and Libertarians find it easy to say Nazis are bad.

What I want to know is how hard is it for Obama to say Socialists are bad?  Communism, which is another form of Socialism, has resulted in 100 million dead over the last century.  Put that up against Hitler’s murder of 6 million Jews.  Socialism, in the form of Communism, killed at the same rate as Hitler.  But the Left struggles to say Socialism is bad.  They, like today’s Neo-Nazis, simply maintain that it hasn’t worked because it hasn’t been tried right.  In fact, today’s Neo-Nazis are out there rallying and screaming and acting generally like fools, but with no masks and no violence.  Antifa Anarcho-Communists meanwhile are donning masks, attacking cops, and beating anyone who comes near them who might have an opposing viewpoint.

Nazis are bad.  Communists are bad.  Socialists are bad.  It’s easy to say.  How about you, Mr. Obama?  Can you say it?

Communists are bad, they killed more than 10 times as many as Hitler’s Nazis.

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Read my lips: I was against taxes before I was for them

In what will go down in history as one of the fastest reversals of position, Andrew Gillum said on Sunday that he won’t raise taxes to pay for Medicare for all.  After several deflections, he softened his stance to say he won’t raise taxes on “every day working” people.  I’m not sure how that works, since it’s hard to raise taxes on people who don’t work.  But finally, Gillum admitted he actually will raise taxes.  In fact, what Gillum has revealed of his tax plan makes Florida the most expensive state in the south to do business.  But there’s one problem: his plan has already spent the corporate tax rate hike on education.

According to Gillum’s website, the 40% tax hike on Florida businesses will be used to pay for his “fair share” education program.  So how is he going to pay for Medicare for all?  Gillum can honestly say he won’t raise taxes because he supports the Federal Government footing the bill, and taking over healthcare.  Gillum knows this will require a 100% tax hike on “every day working” people, and he knows that Florida can’t possibly afford it on their own.  But since he’s running for governor, he is refusing to answer the question.  Once we realize this and remove federal healthcare overhauls from his campaign website, he’s left with little more than rampant tax increases, sanctuary state status, gun control, and the rest of the Democratic Socialist agenda.  Gillum doesn’t have a healthcare solution.  That’s why he can’t answer the question.

Andrew Gillum against tax cuts before he was for them…in the same interview

Beto O’Rourke in Texas is starting to look less and less like a golden boy.  New details are out about his 20 year old drunk driving crash.  O’Rourke apparently tried to flee the scene and then lied about how much he had consumed.  Of course, fleeing a drunk driving accident is sort of a staple of the great Democrat senators of history.  At least he didn’t leave someone in the car to die.

O’Rourke also supports a single payer healthcare system and has made that central to his campaign.  But like his fellow Democratic Socialists, O’Rourke hasn’t quite articulated how he would pay the $3.2 trillion annual bill.  In fact, his website is more platitude than plan.  If people wanted unicorns, I’m sure free unicorns would be in his platform.  At some point someone will need to ask him how he’s going to pay for it all.  That one question seems to be the Achilles heel of the Democratic Socialist movement.

Beto O’Rourke bets on healthcare

The family of Aretha Franklin made a statement that the eulogy given at her funeral by Rev. Jasper Williams, Jr was offensive.  Williams didn’t really talk about Aretha, but instead spent the entire eulogy talking politics.  At one point he made a statement that black lives don’t matter as long as blacks are killing each other.  The statement was met with shock and calls of “black lives do matter” from the crowd.  The funeral was attended by controversial figures as well, including Fascist minister Louis Farrakhan.  At points in the funeral it turned into a Trump roast.

Franklin family bemoans political speech at funeral

Manafort and Cohen Guilty

On Tuesday, Paul Manafort was found guilty on 8 of the 18 charges against him.  The jury was hung on the other 10 charges.  All of the charges were related to Manafort’s actions before working with the Trump campaign.  They included tax and bank fraud and hiding a foreign account.  This was when Manafort was working with the Podesta Group.  None of the charges had any relation to Russian collusion or the 2016 election.

Michael Cohen plead guilty in a plea deal to tax and bank fraud and is facing 3-5 years in jail.  Cohen was Trump’s personal attorney.  While this had nothing to do with Russia, collusion, or election meddling, there is a charge with Cohen that could touch Trump.  Cohen is charged with two counts of illegal campaign contributions related to his paying off two porn stars who had alleged affairs with Trump.  The key here is that in Cohen’s plea he said he was directed by the candidate to make those payments.

If Trump directed Cohen to pay off Stormy Daniels, and then reimbursed Cohen from the campaign, that could be trouble for Trump.  However, if Cohen was paid by Trump’s company as a reimbursement as deputy US attorney Robert Khuzami explained, it could result in nothing more than an IRS issue for the President.  Even then, a prosecutor would have to prove that Trump knew Cohen’s invoice was fraudulent.  Cohen is less than trustworthy as a witness and had great incentive to rat on Trump.

Cohen also indicated that he would be willing to testify to Mueller that Trump knew about the Trump Tower meeting between his son and a Russian attorney, but there doesn’t seem to be anything illegal about that meeting even if he did.

The two biggest takeaways from these huge stories is that Russian collusion still has not materialized, but that Trump likely has not been honest about his affair with Stormy Daniels.  That leaves Trump in the same boat as Bill Clinton in 1998, but without the perjury or obstruction of justice.

Supply, Demand, and Economic Cycles

Before engaging in political debate, it’s good to have a knowledge base built up to help your arguments.  It is also helpful to challenge your presuppositions and make sure that you have a good foundation from which to build your positions.  One of the issues that throws off both sides of the aisle is a basic lack of understanding when it comes to economic cycles.  For example, without a good understanding of cycles someone would look at the Clinton economy and Bush economy and think that Bush had bad economic policy while Clinton had good economic policy.  That is a simplistic understanding if you don’t factor in the cycles that played into their success and the difficulties they overcame.

To understand economic cycles, let’s start with a brief discussion of supply, demand, and equilibrium.  Equilibrium is the price at which those who sell and those who buy come to agreement to the point where every product produced is sold and every buyer is satisfied.  As you can imagine, equilibrium is more theoretical than practical.  Whenever the market is not at equilibrium, there is a vacuum that drives economic decisions to produce more, seek alternatives, etc.  For example, if you have five people buying and four bananas for sale, the price of bananas will go up until only the people who want the bananas enough to pay more will buy them.

In a free market society, producers will produce what consumers want and need at a price they are willing to pay.  While the market finds it’s way towards this ideal, there is a vacuum between equilibrium price and surplus on one side or shortage on the other.

Economic growth and retraction occurs in this vacuum.  When there is an oversupply, producers will cut back production to stabilize the price and bring it up.  When there is a shortage, producers will find ways to produce more to take advantage of higher prices, which will drive the price down.  This means economic growth or retraction.  On the flip side, when prices are too high buyers will seek alternatives.  When prices are too low, buyers will increase consumption.  These also lead to economic growth, enrichment, and opportunity.  When a pricey product is replaced by a better or lower cost product, this leads to the enrichment of the innovator and losses by those who previously had control over the market.  This idea of self correction was the idea behind Adam Smith’s invisible hand.

Forces exterior to the free market can also have an effect.  For example, if the government lowers taxes, that puts more money in the pocket of consumers and shifts the demand curve.  That means they can buy more because they can afford higher prices.  Equilibrium price goes up and producers produce more.  When the government takes money out of the economy, the opposite happens.  If there is a discovery of new sources of a product or commodity, for example the innovation of the shale industry, the supply curve shifts and prices go down.

Economic cycles happen as the vacuum in the supply and demand system flips from prices being too high to prices being too low, or when we go from shortages to surpluses in the market.  We saw this with the housing market in 2006.  Supply could not keep up with demand, so prices of real estate went up.  There were winners, those who sold high, and losers, those who had to buy less house for their money.  Then in 2008 we saw a reversal of fortunes.  The winners were those picking up foreclosures and cheap houses off an oversupplied market, while the losers were those stuck in a house they couldn’t afford in the first place.

John Maynard Keynes believed the government could play a role in efficiently managing economic cycles.  For example, he understood that deficit spending by the government artificially grew the economy.  Higher taxes and less spending would slow down an overheating economy and soften the blow of a future crash.  When Clinton left office, we were heading for a severe market correction caused by the tech bubble crash and 9/11.  Bush, a Keynesian, cut taxes and increased spending to turn the economy around.

Some take it too far.  Obama believed he could eliminate economic cycles through massive government stimulus and regulation.  His theory actually worked.  For nearly 8 years the natural economic cycle was suppressed.  Unfortunately this was while we were due a recovery.  Once Trump cut taxes and lifted thousands of burdensome regulations, the economy resumed it’s normal cycle by overcoming years of repressed growth.

Socialists, the most extreme of which are the Communists, believed that government could effectively control equilibrium prices by controlling supply.  As a most egregious example, Communism determined exactly what a person needed and attempted to provide it.  Unfortunately the government could not provide what it did not have, and without a free economic cycle there was no impetus outside of government force to cause people to produce.  Eventually as resources run out and incentives are withheld, Communist systems beyond the tiniest scales will collapse.

More moderate Socialist systems such as Liberalism rely on marginal incentive by only seeking to control certain aspects of the economy.  However, even in these modules of the economy, the loss of incentive to produce or value of the product is devastating.  For example, in the education system Liberalism creates artificial demand.  They do this by hiding the true cost of education from the consumer.  As a result, the increase in demand produces a higher price point.  The higher price point draws more suppliers into the market, but there is no economic impetus to produce a superior good.  As a result, we have high cost education with a reduction in quality.

Every economic decision should be considered in light of how it affects the supply and demand dynamic.  For example, allowing bankruptcy for student loans sounds great on paper.  But when you do that, it means there will be an artificial increase in demand.  The artificial increase causes the price of student loans, or the interest rate, to go up.  Government control over interest rates causes suppliers to be artificially repressed which also puts pressure on prices to go up.  When the government runs out of suppliers for a regulated product like student loans, the government must become the supplier in order to maintain the product.  But government can’t just print student loan dollars without devaluing the dollar and crashing the economy.  Someone has to pay.  Now suddenly bankruptcy on student loans means taxpayers are being forced to subsidize a product regardless of demand.  Consumers no longer have the freedom to choose whether or not to buy student loans; they are compelled to through taxes.

Libertarians tend to hold to Adam Smith’s view of the economy.  Give consumers choice and liberty, and the economy will correct itself.  If the government doesn’t build roads, consumers will demand roads and suppliers will build them.  Bridges to nowhere won’t exist because there will be no demand for them.  Those who cannot afford roads will invent alternatives.

Republicans and some of the most moderate Democrats hold to Keynesian economic models.  Republicans tend to see tax cuts as the way to spur economic growth, while leaving the consumer with freedom to buy what they demand.  Democrats look to spending increases to spur the economy.  Stimulus and government programs inject dollars into the economy.  The consumer buys what the government compels them to, such as healthcare, failed solar companies, and someone’s old “clunker” car.

In the extreme of Marxism, the government under the false guise of representing the “people”, seizes the means of production and controls supply and price regardless of consumer demand.  In these models, most recently touted by Democratic Socialists, the government gives you what the government believes you need.  Much like a slave, you receive food, shelter, government approved education, and government guaranteed income.  And like a slave, you are required by the government to do your duty to the people by working, buying and supplying as the government sees fit. Those who do not fit within the system are eliminated from the system because there is no other way.  This is why every Communist regime devolves into intense human rights abuse, and often genocide.  In lesser extremes we see penalty taxes for refusing to buy and vilification of those who have untaxed means.

Every political question of economics should be viewed through the lens of supply and demand, and the validation of good policy should take into account where we sit in an economic cycle.  Generally, the freer the market, the faster the growth, retraction, recovery cycle will go.  But in the end, the most important thing is economic liberty for the consumer and the supplier.  Liberty for the consumer creates an efficient market where people can choose to buy what they want and need.  Liberty for the producer allows them to freely produce what consumers desire or create new products for lower prices that exceed consumer expectations.  This is what creates wealth and consumer satisfaction throughout an entire economic system.

Both parties have one thing in common: they are running against Nancy Pelosi

Even if Democrats win the House in November, Nancy Pelosi is unlikely to be the next Speaker of the House.  The much anticipated Blue Wave set to hand Democrats control in November has had it’s share of roadbumps.  While Democrats cheer close races in red districts and claim moral victories when they lose, the Blue Wave theory definitely has it’s skeptics.  One reason for the skepticism might be how fast Democrats are running away from themselves.

Democrats breathed a sigh of relief as every candidate Bernie Sanders and Alexandria Ocasio-Cortez endorsed last Tuesday lost.  Saturday saw another Democratic Socialist loss as Hawaii chose a so called “fiscal conservative” Democrat Ed Case over rabidly anti-Trump Democratic Socialist Doug Chin.  The battle to beat back the Democratic Socialists in the DNC seems on track.

But Democrats are also running against Nancy Pelosi.  In fact 49% of Democrats want Pelosi out of Democrat leadership.  79% of independents don’t want Pelosi running the party.  Many Democrat candidates for the House have also promised to replace Pelosi.

The Democrat blue wave relies on history and political theory.  History says the President usually loses the House in his first midterm.  Political theory says congressional elections are all local.  In other words, people care less about party than they do the individuals who are actually running.  At the same time, the Democrat party is struggling.  Their “abolish ICE” movement exposed their activist wing as idiotic.  But Pelosi has also failed to produce anything other than extreme hatred for Trump as a platform.  The best thing they’ve come up with is how important it is to raise taxes again.

There is no plan B.  Joe Crowley was destined to be Pelosi’s replacement, until he lost to an upstart Democratic Socialist in New York.  For the blue wave to work, Democrats will need to continue to keep it quiet that a Democrat House will be led by Nancy Pelosi or Alexandria Ocasio-Cortez.

Leftists admit Socialism is unaffordable

“The democratic socialists may do well in November.  Yet upon arriving in Washington, they will discover that even their revolution cannot repeal the laws of math.”  That is how an article with Vox by Brian Riedl ends.  Riedl uses leftist and Democrat sources to compile the costs of the Democratic Socialist agenda and finds that even the most generous sources leave them with $3.4 trillion per year to make up in tax revenues.

Democrats have gained traction in the coming election by claiming that deficits are bad and we need to tax the rich to fix it.  But don’t mistake their feigned concern for actual fiscal sanity.  Even the extensive list of new taxes laid out by Alexandria Ocasio-Cortez wouldn’t cover 10% of the cost of their agenda.

According to Reidl, Democratic Socialists could pay for all the free stuff they are promising with a 100% tax on all corporations and 100% tax on all family income over $150,000 for married taxpayers and $90,000 for singles.  This would be on top of the current tax structure and assumes the willingness of business owners and capital providers to devote their hard work to charity rather than profit.  Another idea to add on to our current taxes would an 87% value added tax.  Basically, in every step of the manufacturing process, the government gets 87 cents of every dollar made.  The inflation would kill the middle class.  Lastly, we could do it if we added a 37% flat payroll tax on top of the current tax structure.  For the middle class this would mean an all in tax rate of 77%.

So let’s talk about this blue wave?  Are voters really ready to kill the economic growth by ending the Trump tax cuts?  Are they really ready to hand over their healthcare decisions in exchange for giving 77 cents of every dollar they make to the government?  Is this what people really want?  It’s not like the Left is running on anything else, except for extreme Trump hate.  Well, now you have an idea of how much that hatred will cost you just in taxes.

Need to Know 7/30/18

How much will Democratic Socialism cost?  How about triple what our government costs now.  Over the weekend I mentioned how Ocasio-Cortez wants to raise taxes by $4 trillion to have an eco-friendly liberal economy.  Government guaranteed jobs comes in at another $543 billion.  A new study is saying universal healthcare through Bernie Sanders’ Medicare for All plan would cost another $3.2 trillion per year.  That’s makes for an annual budget of $12 trillion per year to cover the Democratic Socialist agenda.  The current budget is $4 trillion and we have annual deficits of about a half a trillion.  Extrapolating that out, we’d not just have to increase taxes 3x.  We’d also have to cover another 1.5 trillion dollar deficit.

How would you like to pay three times the taxes you are paying now and still have our government crushed with debt?

Study: Medicare for all completely unaffordable

President Trump is calling for a government shut down if Democrats continue to obstruct immigration reform.  But you need to remember how this works.  If a Republican Congress puts together a spending bill that Democrats obstruct, then it’s a Republican shutdown.  If a Republican President refuses to sign a bill that doesn’t take care of problems like immigration, then it’s a Republican shut down.  If Democrats can’t get enough votes to pass their agenda because Republicans are obstructing, then it’s a Republican shut down.  If Democrats control both houses and the Presidency, but can’t get their agenda passed, it’s a Republican shut down.  Basically, it’s always the fault of the Republicans.

Trump says fix it or shut it down

Trump’s tariffs have created odd bedfellows.  Democrats, who up until Trump did it supported protective tariffs, are now 100% anti-tariff.  Not really, but whatever it takes to win elections.  Meanwhile, the hated Koch brothers have signaled they will work with Democrats who oppose tariffs and support them.  So you have a Republican President who supports tariffs, Democrats who suddenly oppose them, and Libertarians who are going to put up money to elect Democrats who are anti-libertarian on everything but tariffs.  What a weird world we live in.  I wonder who Democrats hate more, Trump or the Kochs?

Koch brothers to back Democrats over tariff spat