turn of the screw(ed)

"I can make a firm pledge. Under my plan no family making less than $250,000 a year will see any form of tax increase." - Barack Obama (2008)

he lied...

as a matter of fact, when you think about it (assuming, of course, you think), the tax increase hits the poor much heavier than the rich.
and here's the proof:

Income up to:	Marginal Tax Rate 2012	Tax Paid	Effective Tax Rate	2013 Marginal	2013 Tax Paid	2013 Effective	Difference Paid
$8,700	10.0%	$870	10.0%	15.0%	$1,305	15.0%	$435
$35,350	15.0%	$4,868	13.8%	15.0%	$5,303	15.0%	$435
$85,650	25.0%	$17,443	20.4%	28.0%	$19,387	22.6%	$1,944
$178,650	28.0%	$43,483	24.3%	31.0%	$48,217	27.0%	$4,734
$388,350	33.0%	$112,684	29.0%	36.0%	$123,709	31.9%	$11,025
example: $500,000	35.0%	$151,761	30.4%	39.6%	$167,922	33.6%	$16,161

"For they all cast in from the surplus that they had, but this one has cast in from her want, everything that she had; she cast in all her possessions." - Jesus (Mark 12:44)

the problem is simple... the poor need what little money they have... the rich can spare a dime... this is the basis for much of the liberal's arguments... tax the rich; they can afford it... unfortunately, it doesn't work that way in real life... there aren't enough rich people to siphon off.

in 2009 (which is the data i have handy... i'd look up 2011, but i'm being lazy), there were about 140.5 million tax returns in the US... 4 million tax returns (that's 2.8% of all returns) from earners of $200,000 or more... from those under that magic number, there were 136.5 million tax returns (or 97.2%).

of the income tax collected from the 2.8% of rich folk, the IRS collected $434 billion... from the other 97.2% of the poor folk, the IRS collected $432 billion... literally half of all of the taxes collected came from those bastard 2.8% rich people who aren't paying their fair share.

a good liberal will reference Mark 12:44 in an effort to squeeze more money from the rich... the problem is the rich are the ones investing in retirement accounts, investing in businesses, and hiring people... they pay salaries of everyone (economically) below them... they put the most into Social Security (which should make any good Marxist happy)... every tax on the rich is also a tax on the poor... it creates more unemployed workers... it takes money out of investment funds... it means less goes into Social Security.

and for God's sake, stop extending the Bush Era Tax Cuts... it's just less money going into Social Security... 2% every year is being withheld from Social Security because of this... end those, and cut 2% from tax payers over $200,000... they'll invest it... they'll hire people... they'll save Social Security... we'll help the poor, create jobs, and become a profitable nation again.

this is not rocket science... it's economics.

---

source:
United States: 2013 Federal Income Tax Update
23 May 2012
Article by James N. Phillips and Timothy C. Smith of Godfrey & Kahn S.C.

an inconvenient truth (about taxes)

Soak the rich? You can’t.

Higher taxes reduce the incentives to work, produce, invest and save, thereby dampening overall economic activity and job creation.

Although Hauser’s law sounds like a restatement of the Laffer curve (and Hauser did cite Arthur Laffer in his original article), it has independent validity. Because Laffer’s curve is a theoretical insight, theoreticians find it easy to quibble with. Test cases, in which the economy responds to a tax change, lend themselves to many alternative explanations. Conventional economists, despite immense publicity, have yet to swallow the Laffer curve. When it is mentioned at all by critics, it is often as an object of scorn.

Hauser’s Law via Hoover Institution
by W. Kurt Hauser and David Ranson

Mr. Hauser is chairman emeritus of the Hoover Institution at Stanford University and chairman of Wentworth, Hauser & Violich, a San Francisco investment management firm.

David Ranson is head of research at H.C. Wainwright & Co. Economics Inc.

This essay appeared in the Wall Street Journal on May 20, 2008.


See also There's No Escaping Hauser's Law in the Wall Street Journal by W. Kurt Hauser on November 26, 2010.


EDIT:
also see the following:
Millionaires Go Missing - Wall Street Journal
excerpt:

One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

what's so difficult to understand?

Thomas Sowell, a Rose and Milton Friedman senior fellow on public policy at Stanford University’s Hoover Institution and author of “Economic Facts and Fallacies,”

on taxing the rich:

The rich themselves are seldom hurt by that and often when you bring down the tax rate — the start of 1920s, also under Kennedy and Reagan, and then later, George W. Bush — as we bring down the tax rate, they take their money out of the tax shelters, they bring their money home, back home from abroad and you create more jobs.

on government health care:

What they call bringing down the cost of health care is refusing to pay the price of health care. You know, you can always bring down the cost of anything by not paying it, but of course, there are repercussions for that and you see this in countries where the government has taken over health care, you see deterioration.

on taxing oil/energy companies:

When you put huge taxes on electric utility companies... [consumers will pay] higher prices that they pay for everything from food to electricity to gasoline and so forth.

figures and liars

Obama’s Math Doesn’t Add Up On Health Care Spending - Forbes:

There isn’t enough wealth in the wealthiest Americans to tax and support our government spending.
- Larry Van Horn, associate professor of health care management and the Executive Director of Health Affairs at Vanderbilt University’s Owen Graduate School of Management.

Obama's Soak-the-Rich Tax Hikes Won't Work - Wall Street Journal (via MarketWatch)

The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama's hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.

Federal revenue from the individual income tax exceeded 9% of GDP only eight times in U.S. history—during World War II (9.4% in 1944), the recessions of 1969-70, 1981-82 and 1991-92, and the tech-stock boom-bust of 1998-2001. Revenues were a high share of GDP during the three recessions because GDP fell.
- Alan Reynolds, Senior Fellow at the Cato Institute and was formerly Director of Economic Research at the Hudson Institute.

check your memory, and vote informed

'I REMEMBER, SO I'M VOTING, AND NOT REPUBLICAN.'

let the debunking begin:

• "Tax breaks for corporations" - we addressed this in another post, but corporations are the vehicles who create jobs, not the government... and President Clinton signed NAFTA.
• "Katrina / levee failures" - while Bush did cut funds to the Corp of Engineers (who build the levees), that project would not have been completed until 2015... Clinton, however, cut funds to ALL military, from 1992 through 2000... THOSE projects would have finished before 2005 and "might" have saved portions of New Orleans.
• "Needless war in Iraq" - well, if you count harboring terrorists (proven as early as 1999 in Al-Majallah, the London arabic language magazine; to Missouri's own Dick Gephardt (D) saying in a 2002 This Week interview, "There's lots of intelligence and it's additive as you go along, of meetings between Iraqi military and intelligence officials and members of al Qaeda.")... or the weapons of mass destruction (WMD) that Iraq had and USED... if the gassing of 3000 Kurds wasn't enough proof (dead bodies don't lie), how about the uranium (a.k.a. Yellowcake) which CNN reported being found (July 7, 2008) in Iraq?... how about 500 TONS of it?... funny, they don't have those kind of reactors.
• "Record Deficit" - do we have to talk about record deficits?... Obama has you beat, buddy... and he's still passing spending bills (not to mention the Healthcare takeover).
• "Spending money on our nation is wasted money" - wait... what?... i guess you can make any spurious claim you want.
• "Wall Street Bailout" - if the Democrats hadn't placed lending rules which forced banks to give marginal loans to get FICA backing, causing banks to sell these loans to Fannie Mae and Freddie Mac (government institutions), causing Wall Street traders to trade these loans with the expectation of them collapsing (betting against them)... i won't go on... a Ponzi scheme only can run for so long before it collapses and destroys the lowest tier... and you can't secure a loan when it is a no-credit, no-collateral, no-SIGNATURE contract... ridiculous.
• "State rights / narrow point of view" - right... so when the populous votes against [homosexual marriage][marijuanna legalization][insert other liberal agenda], then it's up to the liberal judges (often appointed) to overturn the will of the majority... wait, that's the Democrats... how about when a state votes to uphold federal immigration statutes?... it was the Democrats who took the state to court; imposing their "narrow point of view" on the sovereign state.
• "Blocked healthcare for 9/11 responders" - why did the Democrats suspend House rules in an attempt to pass this bill without debate or amendments?... by doing so (suspending rules) they caused the bill to require a 2/3 majority... NOW needing 291 votes, they got 255... had they not played rule-games, they would have needed 218 votes, well below what they got... maybe it's not the Republicans who blocked the bill... they just wanted a hand in it... the Dem's were hoist of their own petard.
• "Dismantled agencies which protect food supply" - yeah, cutting government waste causes salmonella... i wonder what dismantling the US Military does?... or the CIA, FBI, DHS, ICE and Border Patrol.
• "Wealthy" - again, they make the jobs and pay the majority of the taxes... figure out economics.
• "Social Sec / Medicare" - agreed... we should funnel more money into these bottomless pits of inefficiency and fraud... they're working so well... oh, and why did the Democrats refuse to increase Social Security payments in line with inflation this year?... did we not have inflation?
• "Civil Rights" - those damn Republicans... always against Civil Rights... especially those Republicans like these guys:

Frederick Douglass
Harriet Tubman
Sojourner Truth
Booker T. Washington
Dr. Martin Luther King, Jr.

• "Civil Rights, continued" - how about these notable Democrats?

Nathan Bedford Forrest - KKK Grand Dragon
Robert Byrd - Senator
Harry S. Truman (joined the KKK in Kansas City to garner votes)
Hugo Black (FDR's first appointment to the Supreme Court and lifelong KKK member)
Albert Gore, Sr (Al's dad) opposed the '64 Civil Rights Act
AL Governor George Wallace (declared there would be segregation forever)

• "Less money = More money" - it's economics, guys!... learn the Laffer Curve... i just did an entire post on this... if you can't look that up, watch Ferris Bueller's Day Off... Ben Stein defines it well.
• "In power / Banking crisis" - yeah, arrest the paramedics at the scene of the accident... hang the janitor for cleaning up other people's messes.
• "Take our country back" - wasn't this the slogan of Obama?

Income Tax Lies

this political season, i've heard the refrain over and over again:

• cutting taxes will cost money
• extending tax cuts will hurt the economy
• reducing the income tax will reduce federal program funding

well, it's obvious that these pundits don't read history... and they've never understood the Laffer Curve (which was explained in Ferris Bueller's Day Off (1986) by none other than Ben Stein...

for those of us who don't know of the Laffer Curve (and refuse to look it up), let me explain... imagine a bell-shaped curve; low on one end, rising sharply up, the curve leveling off like a high-thrown baseball, dropping sharply back down, and ending as low as it begun... what this describes, is that the amount of money generated for the federal government by means of income taxes (height of the curve at any one point) is relative to the percent of income taxed (distance left-to-right on the curve)... for example, if you have an income tax of 0%, or no income tax, then the money generated is $0... that's obvious... but if income tax is 100% of earned income, the money generated will ALSO be $0... this is because there is no reason for anyone to earn income if it is taken away... therefore, income drops to zero, and 100% of nothing is still nothing.

the typical Laffer Curve is shown as symmetrical, but in practice it isn't... however, in practice, this concept is absolutely true... when there is no incentive to work for income, especially if your income is taken from you, then there is no reason to work... some may say that socialist or communist financial systems, where income is pooled and distributed, solves the issue of incentive... but it hardly gives one incentive if you work a 40-hour week for the same benefits your neighbor gets for doing nothing... why not do nothing, also?

well, at some point, the government out-taxes itself... but no one is going to ever come NEAR to 100% taxation, right?... that would be idiotic?... beware the idiots of Congress.

in 1916, the top income bracket paid 15% in income taxes... the lowest; 2% income taxes... by 1918, the lowest wage earners had a shock when they paid 12% income taxes... imagine the riots if we asked today's lowest earners to pony up an additional 10%!... but the highest earners of 1918 paid an astounding 77% income tax, a jump of 62%!... for the rich, there was no relief... from 1919 through 1921, they paid 73% of their income to the federal government.

well, if you apply the Laffer Curve to this, you already know what happened... those who earned less than $10,000 paid in total $155million in taxes... those who earned over $100,000 paid in total $194million in taxes... in 1921, there was the dreaded tax-cuts-for-the-rich (down to a whole 58%), after which the first group paid only $32million in taxes and the latter group paid $361million...

tax cuts yield more from the wealthy because they will invest that money into income-generating opportunities... that means, the wealthy will hire more people and produce more goods with the extra income, from which they will earn more income and pay more taxes...

tax cuts for the poor (and often for the "middle-class") yield nothing but less income tax... a 10% tax cut for a $50,000 worker (estimating $5,000 in taxes) gets $500 in savings... they may use this to pay down debt or take a long weekend vacation... it doesn't generate ANYTHING.

tax cuts of this sort do nothing for the economy... maybe a short-term bump in sales-tax, but over all, it's meaningless... so the next time you hear someone claim they want tax cuts for the poor and middle-class, you should know immediately that they are lying to you... they're lying or woefully ignorant.


and neither a liar nor an ignoramus should be running our government.