Bloodthirsty Liberal

The rest of the MSM is sitting on this quote like Horton the elephant on the egg.

I heard it on Rush, and searched for it on Yahoo News.

Exactly three responses.

“We’ve got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can’t be demonizing every bank out there,” Obama said. “We’ve got to be the party of business, small business and large business, because they produce jobs.”

This is controversial? Democrats need to “understand” this, “like it or not”?

And who’s been demonizing banks more than anyone since William Jennings Bryan?

When President Obama stages his little dog and pony shows (he calls them “jobs summits”)…

… he asks everyone to come up with ideas, form little working groups, break for juice and crackers, and then present their ideas to the class.

Are we to believe that not one participant has suggested an across the board tax cut, a la Kennedy, Reagan, and Bush? I know he wouldn’t do it—I’m not an “effing re**rd”, in Rahm Emanuel’s words—but why won’t anyone stand up to the emperor and tell him his Johnson is hanging out (economically speaking)?

While President Obama decides what to do about the economy, I have some free (the word itself is and aphrodisiac to socialists) advice: do nothing, nada, niente, rien, nichts.

Look what happens when you get a bright idea in your head to raise revenue?

Massachusetts shoppers are fleeing the state’s rising sales tax in droves and shopping in New Hampshire. Fueled by necessity - and in some cases anger - customers said they were heading over the border to save money and score deals. Cars with Massachusetts license plates clogged the roads and lots across Salem. And through the early evening yesterday, the Mall at Rockingham Park in Salem and Pheasant Lane Mall in Nashua - both just a few miles over the border - reported spikes in traffic over last year, according to Laurel Sibert, a spokeswoman for Simon Malls, which runs both shopping centers.

“The New Hampshire malls have definitely benefited from the sales tax increase in Massachusetts,’’ Sibert said.

In August, state officials increased the Massachusetts sales tax to 6.25 percent from 5 percent as a way to help fill holes in the state budget.

With what result?

A survey of the 3,100 retail business members of the Retailers Association of Massachusetts (RAM) concluded that 2009 holiday retail sales declined this season 2.6% over the same period in 2008. The decline was significantly less than the 7% decline that occurred in 2008, but more than the 1% decline in 2007. The 2.6% decline marks the 3rd straight year holiday sales have decreased in Massachusetts according to the RAM survey.

…

A 25% sales tax increase in Massachusetts passed into law last August may have made a competitive problem even worse for local stores competing with New Hampshire and the Internet. A poll released today by the Boston Globe showed that 36% of the respondents indicated either having shopped out of state or spent less due to the 2009 sales tax increase.

In fact, the Commonwealth’s Department of Revenue sales tax collection reports for August through November have reflected retail sales drops versus prior year each month since the tax took effect in August, with double digits drops in both August and September.

…

“Massachusetts continues to be a challenging place for retailers to operate,” said Hurst. “In addition to a sluggish economy, our members are dealing with double digit health insurance premium increases and a very difficult regulatory environment.”

Yeah, but that’s business… you know, commerce. Eww. Who want to get their hands dirty with that?

You think we’re stupid? Who wouldn’t drive to New Hampshire to save a bundle on their purchases? (Well, I wouldn’t, but I’m lazy.) As we reported a few months ago, this guy would:

A Westport lawmaker who voted to hike the state sales and alcohol taxes was spotted brazenly piling booze in his car - adorned with his State House license plate - in the parking lot of a tax-free New Hampshire liquor store, the Herald has learned.

Michael J. Rodrigues’ blue Ford Crown Victoria, emblazoned with his “House 29” Massachusetts license plate, was parked outside a Granite State liquor store on Interstate-95 South over the weekend, according to a witness who provided pictures to the Herald.

The witness, who requested anonymity, claimed he approached Rodrigues, noted his State House plate, and asked if he was on personal or official business. Rodrigues, who was loading booze into his car, snapped “mind your own business,” the witness said.

This guy is Scott Brown’s colleague. and he is much, much, much more typical than Scott of our local fauna.

Hope, Change, Stimulus Money, and the Law of Unintended Consequences

Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future.

The combined deficits of the states for 2010 and 2011 could hit $260 billion, according to a survey by the liberal Center on Budget and Policy Priorities. Ten states have a deficit, relative to the size of their expenditures, as bleak as that of near-bankrupt California. The Golden State starts the year another $6 billion in arrears despite a large income and sales tax hike last year. New York is literally down to its last dollar. Revenues are down, to be sure, but in several ways the stimulus has also made things worse.

First, in most state capitals the stimulus enticed state lawmakers to spend on new programs rather than adjusting to lean times. They added health and welfare benefits and child care programs. Now they have to pay for those additions with their own state’s money.

For example, the stimulus offered $80 billion for Medicaid to cover health-care costs for unemployed workers and single workers without kids. But in 2011 most of that extra federal Medicaid money vanishes. Then states will have one million more people on Medicaid with no money to pay for it.

A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable. “One of the smartest decisions we made,” says Mr. Daniels. Many governors now probably wish they had done the same.

Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries.

Worst of all, at the behest of the public employee unions, Congress imposed “maintenance of effort” spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes.

Oy yi yi, read it all.

- Aggie

So it would seem:

Does living in a blue state make people blue? It seems so, according to a new study in Science magazine that ranks states according to their happiness. The study finds that New Yorkers are the unhappiest people in America and their neighbors in Connecticut come in a close second, followed by Michigan, Indiana, New Jersey, California, and Illinois. And the happiest states? Drum roll, please…Louisiana, Hawaii, Florida, Tennessee, and Arizona.

Eight of the ten happiest states lean right while eight of the ten unhappiest tilt left. While the study by no means proves that being liberal makes people unhappy, it does reflect some of the unfortunate implications of living in a blue state.

…

According to the Tax Foundation 2008 analysis, three of the top five unhappiest states—New York, Connecticut and New Jersey—have the highest state-local tax burdens. On the other hand, four of the top five happiest states—Louisiana, Florida, Tennessee and Arizona—are among the states with the lowest state-local tax burdens. True, correlation doesn’t prove causation, and high taxes alone don’t always make people miserable, but there’s something going on here.

In states with high property, income, and sales taxes like New York, people have less money to spend on other things that make them happy. They have less money to spend on vacations, hobbies, home improvements, eating out and child care. Another problem may be that people receive a low return on their tax dollars. The study’s authors note that people are least happy in states that impose high taxes but don’t provide matching public benefits (e.g. good highways to relieve congestion and reduce commute times). It’s in states where taxes disproportionately subsidize public employee pensions and entitlement programs, but don’t much improve the general public’s quality of life, that people are most unhappy.

Cripes, it’s like the writer is inside my head!

It’s in states where taxes disproportionately subsidize public employee pensions and entitlement programs, but don’t much improve the general public’s quality of life, that people are most unhappy.

That kinda crap makes me furious. But while I just sit on my ass and spit out angry blog posts, others are taking more effective actions:

Taxpayers, however, aren’t just getting unhappy. They’re getting out. United Van Lines’ 2009 annual study shows that New York, New Jersey, Michigan and Illinois are among the states with the highest outbound migration while Alabama and Tennessee are among the states with the highest inbound migration.

This doesn’t bode well for high-spending, high-tax states like New York where outbound migrants’ income is 13% greater than that of inbound migrants. In 2006, this differential meant a loss of $4.3 billion in taxpayer income for the state.

Rush famously pulled up stakes from NYC after the most recent tax hike, and Gov. Paterson famously said good riddance to bad rubbish. But Rush was only one of many, many and more and more. The only thing that keeps me sane is that the likes of Barney Frank are dinosaurs (a meat-eater, if you will) and the likes of Eric Cantor are mammals (a cute little furry one with whiskers and sparkly eyes).

Our friends in Tennessee and Alabama (and Texas, which we’ve already reported is expected to gain four seats in Congress after the 2010 census) had better get used to hearing “youse guys” for “y’all”.

Say it ain’t so!

There is a middle-class tax time bomb ticking in the Senate’s version of President Obama’s effort to reform health care.

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy. In fact, it’s a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Which is exactly what the tax is designed to do.

The tax would kick in on plans exceeding $23,000 annually for family coverage and $8,500 for individuals, starting in 2013. In the first year it would affect relatively few people in the middle class. But because of the steadily rising costs of health care in the U.S., more and more plans would reach the taxation threshold each year.

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress’s Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

Proponents say the tax will raise nearly $150 billion over 10 years, but there’s a catch. It’s not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.

Notice, what remains unsaid. The government starts collecting money to implement the health care plan immediately. The health care plan kicks in after four or five years of collection. And middle class tax increases happen a few years after that. So… if you are Barack Obama, you haven’t raised taxes in middle income folks; the next President has.

The laws of physics hold true: There Is No Such Thing As A Free Lunch.

- Aggie

Coming to a checkbook near you

Runaway federal deficits have thrust a politically unsavory savior into the spotlight: a nationwide tax on goods and services.

Members of Congress, like their constituents, are squeamish about such ideas, instead suggesting spending cuts or higher taxes on the rich. But with a lack of political will to do the former, and a practical ceiling to how much revenue can be milked from the latter, economists across the political spectrum say a consumption tax may be inevitable once the economy fully recovers.

“We have to start paying our bills eventually,” said Charles E. McLure, a tax economist who worked in the Reagan administration. “This strikes me as the best and most obvious way of doing it.”

The favored route of economists is known as a value-added tax, which is a tax on goods and services that is collected at every step along the production chain, from raw material to a consumer’s shopping bag. Similar to a sales tax, it generally results in consumers paying more for the things they buy. The revenues could be used to pay for health care or other social programs, or just to pay down existing debt.

Like universal health care, every other industrialized country in the world already has a value-added tax (as do about 100 emerging countries). And also like universal health care, this once-taboo policy option has recently been invoked, at times begrudgingly, by many prominent Washingtonians, including the House speaker, Nancy Pelosi; John Podesta, who was co-chairman of President Obama’s transition team; and two former Federal Reserve chairmen, Alan Greenspan and Paul A. Volcker

Here’s how it works (and why politicians love it so dearly):

¶A fabric store sells a tailor enough silk to make one dress, at a total price of $10 before taxes;

¶The tailor sews a dress and sells it to Macy’s for $30 before taxes;

¶Macy’s then sells the dress to a shopper for $50, before taxes.

Let’s say the value-added tax is 10 percent. The government will collect some tax revenue in each step of the production process, from roll of fabric to cocktail-party scene-stealer, but each business in the chain gets credit for the tax already paid by other suppliers.

When selling the cloth to the tailor, the fabric store adds a tax of 10 percent, or $1 on the $10 of supplies the tailor purchases. The tailor pays the fabric store $11, and the store remits $1 to the government.

When the tailor sells his dress to Macy’s, he calculates the value-added tax as $3, or 10 percent of his $30 pretax price. Macy’s pays the tailor $33.

But instead of sending the full $3 to the government, the tailor gets to subtract the $1 of taxes he had already paid to the fabric store. So he sends $2 to the government.

When Macy’s sells the dress to a shopper, it adds another 10 percent, so the shopper pays $55, or $50 plus $5 in tax. That would be in addition to any state or local sales taxes consumers have to pay, depending on the locale.

Macy’s checks to see how much the previous companies in the supply chain — the fabric store and the tailor — have already paid the government in value-added taxes, and subtracts that from the $5. Macy’s ends up remitting just $2 to the government.

The government receives $5 total, or 10 percent of the final purchase price, but from three different businesses.

You wanted Change, O-Bots? You’ll be lucky to find it under the sofa cushions. I Hope you learned your lesson.

- Aggie

Taxes are not for little people. More and more of them don’t pay a penny:

I suppose we all have different beliefs on what’s “fair”, but we should all agree that it’s not healthy. If forced, wealth will go elsewhere in order to protect itself. Capital flight has afflicted every other country with confiscatory taxation; it will happen here.

But even worse is the free ride taken by more and more. They’re takers, not contributors, and when their number grows sufficiently large, theirs becomes the dominant voice in the political discussion.

Which brings me to this chart:

Sorry about the cutoff, but you can probably see that one-third of all returns show no tax paid. Great if it’s you, but, as with elections, there are consequences:

American Enterprise Institute economist Alan Viard commented on Fox News that “there’s concern that when you have so many people not paying the most visible tax—the individual income tax—you might lose a certain check that otherwise would be in place on government spending.”

It also means that the burden of income taxes is falling on a shrinking percentage of income tax filers who actually pay taxes, especially higher income groups. [See first chart.]

Bottom Line: Taken together, the data in these graphs challenge the rhetoric that the Bush tax cuts were “tax cuts for the rich,” by showing first that there were more Americans, both in total numbers and as a share of the total, who paid no tax after the Bush tax cuts than before. One could even argue that the Bush tax cuts of 2001 and 2003 were actually huge “tax cuts for the poor and middle class” because they helped to increase the number of “non-payers” by more than 14 million Americans between 2000 and 2007. Secondly, the tax burden on “the rich”—the top 1 percent of taxpayers—reached a record high in 2007 of more than 40 percent, and was higher after the Bush tax cuts than before.

And again, the fewer people who pay any tax at all, the fewer who have a stake in responsible government spending. I’m for cutting taxes overall—but everyone who earns (or spends, or owns) should have to pay something. It’s fair, and it gives everyone skin in the game.

As I believe I just was.

President Obama has asked for some good ideas on how to create jobs. Maybe his big ears missed this from El Rushbo back in January:

I don’t believe his is a “stimulus plan” at all — I don’t think it stimulates anything but the Democratic Party. This “porkulus” bill is designed to repair the Democratic Party’s power losses from the 1990s forward, and to cement the party’s majority power for decades.

Keynesian economists believe government spending on “shovel-ready” infrastructure projects — schools, roads, bridges — is the best way to stimulate our staggering economy. Supply-side economists make an equally persuasive case that tax cuts are the surest and quickest way to create permanent jobs and cause an economy to rebound. That happened under JFK, Ronald Reagan and George W. Bush. We know that when tax rates are cut in a recession, it brings an economy back.

…

Congress is currently haggling over how to spend $900 billion generated by American taxpayers in the private sector. (It’s important to remember that it’s the people’s money, not Washington’s.) In a Jan. 23 meeting between President Obama and Republican leaders, Rep. Eric Cantor (R., Va.) proposed a moderate tax cut plan. President Obama responded, “I won. I’m going to trump you on that.”

Yes, elections have consequences. But where’s the bipartisanship, Mr. Obama? This does not have to be a divisive issue. My proposal is a genuine compromise.

Fifty-three percent of American voters voted for Barack Obama; 46% voted for John McCain, and 1% voted for wackos. Give that 1% to President Obama. Let’s say the vote was 54% to 46%. As a way to bring the country together and at the same time determine the most effective way to deal with recessions, under the Obama-Limbaugh Stimulus Plan of 2009: 54% of the $900 billion — $486 billion — will be spent on infrastructure and pork as defined by Mr. Obama and the Democrats; 46% — $414 billion — will be directed toward tax cuts, as determined by me.

Then we compare. We see which stimulus actually works. This is bipartisanship! It would satisfy the American people’s wishes, as polls currently note; and it would also serve as a measurable test as to which approach best stimulates job growth.

I say, cut the U.S. corporate tax rate — at 35%, among the highest of all industrialized nations — in half. Suspend the capital gains tax for a year to incentivize new investment, after which it would be reimposed at 10%. Then get out of the way! Once Wall Street starts ticking up 500 points a day, the rest of the private sector will follow. There’s no reason to tell the American people their future is bleak. There’s no reason, as the administration is doing, to depress their hopes. There’s no reason to insist that recovery can’t happen quickly, because it can.

Admit it: even if you don’t care for Rush, don’t you wish we had tried that? Don’t you wish we still would?

You can bet JFK would.

Abraham Lincoln declared in the darkest days of the American Civil War:

[T]he country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.

No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy.

It has seemed to me fit and proper that they should be solemnly, reverently, and gratefully acknowledged, as with one heart and one voice, by the whole American people. I do therefore invite my fellow-citizens in every part of the United States, and also those who are in foreign lands, to set apart and observe the last Thursday of November next as a day of thanksgiving and praise to our beneficent Father who dwelleth in the heavens. And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners, or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the imposition of the Almighty hand to heal the wounds of the nation and to restore it, as soon as may be consistent with the divine purpose, to the full enjoyment of peace, harmony, tranquillity, and union.

What he said.

And may I add to the list of things for which to give thanks… the taxaholic state of Massachusetts:

The Patrick administration intends to double a key tax on employers in an effort to save health insurance for thousands of laid-off Massachusetts workers, after a fund to help them has been virtually drained by the highest unemployment rates in three decades.

The administration’s plan would also require the unemployed to shoulder more costs for certain doctors’ visits.

The emergency measures would keep the Medical Security Trust Fund solvent through the end of 2010 and preserve roughly $300 million in federal Medicaid reimbursements that Massachusetts would lose if the program failed, Labor and Workforce Development Secretary Suzanne Bump said in a telephone interview yesterday.

…

Businesses pay $16.80 per employee, per year into the trust fund, a tax that will double to $33.60 under the administration’s plan. To cushion that impact, the administration also intends to ask the Legislature to lessen the planned increase in another tax businesses are required to contribute for unemployment benefits.

…

“We are aware that the ability of the business community to shoulder these burdens is finite,’’ Bump said.

Aware, but evidently unconcerned. But maybe you think I’m cruel and heartless at a time of year when generosity of spirit should reign supreme.

Bah, bull[bleep].

A three-member board - Patrick’s commissioners of insurance, Medicaid, and unemployment assistance - are scheduled Monday to approve the plan to double the business tax to keep the health insurance program afloat. That increase would take effect in January.

Yesterday, business leaders seemed resigned to the hikes.

“It’s a good-faith effort by the administration to try and cushion the impact here, but it’s still going to be a major blow to employers,’’ said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business group. “We already have the highest unemployment insurance costs in the nation, we and the state of Washington.’’

We have commissioners of insurance, Medicaid, and unemployment assistance? With requisite staffs, offices, and budgets? And they rubber-stamp whatever the governor puts in front of them? I think I see an opportunity for savings right there.

But only in this state does an organization called the Massachusetts Taxpayers Foundation—with a shrug and a sigh—work hand in glove with the government to approve state tax hikes, over and over and over and over again.

Here and Washington: no wonder we connect with certain readers out there. For which we also give much thanks.