What We Believe, Part 3: Wealth Creation

Part 3 of a Series, Bill Whittle covers the concept of being wealthy: what it is, how it is created, and how society progresses as a direct result of it. 

EVIL RICH PEOPLE! (Election Shenanigans)

Steven Crowder came back with this important message:

What We Believe, Part 2: The Problem with Elitism

In Part 2 of his series on what Tea Party Conservatives believe, Bill looks at the problems and dangers associated with elitism and elitist philosophy.

Restoring America's Promise

Proposed presentation by Paul Ryan used at a fiscal forum hosted by the Concord Coalition.

What We Believe, Part 1: Small Government and Free Enterprise.

Part 1 of a series of videos from Bill Whittle explaining conservatism and the idea of small government. As he states in the video, the concept is misrepresented in various ways by certain Liberal/Progressive individuals that either do not understand or intentionally mislead others into thinking of it as a call to abolish government entirely or regulations. Bill does an EXCELLENT job in getting the message across clearly:





You can find Bill Whittle on Facebook or subscribe to his Youtube channel

Reason TV: 3 Reasons Obama's Education Vision Deserves an F

Dan Mitchell Breaks it Down: It's Simple to Balance The Budget Without Higher Taxes

Even at the current spending levels, tax hikes aren't needed.....





We can simply start cutting vast amounts of federal agencies in jurisdictions outside those granted the federal government by the Constitution.  But as Mitchell puts it, no one in Washington cares about the Constitution anyway.  If we just put a hard cap on spending, the budget would naturally balance itself in five years — with the Bush tax cuts still in place.  The only reason to raise taxes is to allow Congress to spend more … which is the real reason for our massive deficits.

Think We're Headed For a 2nd Collapse? You aren't alone...

In his new treatise published by Encounter for its Broadsides collection, Broadside No. 17: President Obama’s Tax Piracy, Ferrara notes that Barack Obama has chosen the opposite strategy in economic policy from Ronald Reagan. Reagan cut taxes, especially on capital gains and dividends, and broke down regulatory hurdles.  Obama wants not only to raise taxes on those who have the most capital, he wants to make it harder for them to use it as well, quoting a similar analysis by Arthur Laffer:

[W]hen the U.S. economy comes to 2011, the train’s going to come off the tracks. . . . The tax boundary that will occur on January 1 , 2011 tells me that GDP growth in 2010 will be some 6 percent to 8 percent higher than GDP growth in 2011 . A year on year decline from trend of some 6 percent to 8 percent in 2011 growth would represent a larger collapse than occurred in 2008 and early 2009 .

Ferrara includes this helpful and rather cheerless chart to emphasize what Laffer predicts:

On top of that, the government won’t see the revenues it expects, either:

President Obama’s budget projects that his tax increases on “the rich” (singles making more than $200,000 and couples making more than $250,000) would raise $678 billion in increased revenue during the next 10 years. The ObamaCare legislation projected another $210 billion from the increased payroll taxes on those workers for a total of nearly $1 trillion. But these tax increases won’t raise anywhere near the revenue projected. Obama will be lucky if this tax piracy doesn’t result in less revenue. …

The projections of higher revenues from the other tax rate increases all fail to take into account the negative incentive effects discussed above and the counterproductive interactions from all those effects. Since we know from experience that those incentive effects are powerful and real, the result at a minimum will be less revenue than expected, if not less revenue overall.

All of this is based on the assumption that the changes in tax policy sets up no other incentives or changes any behavior.  Of course it does, though, as do even threatened changes.  This is called a static analysis on tax policy.  Ferrara believes that the economy may actually look better than it is this year because capital holders are moving gains and income into 2010 to avoid higher taxes next year.  After we hit the tax boundary, all the incentives go the other direction, and that means negative growth across the board. Essentially, that is why capital is moving about the economy, albeit at a slow pace.  Businesses are shoring profits by selling assets, limiting hiring or sitting on savings.  All of this to be ahead of the potential costs
 
Congress left Washington without addressing the massive tax hikes that will come at the end of the year as the tax-rate reductions of 2001 and 2003 expire.  Absent action on Capitol Hill, those increases will take $4 trillion out of the economy over the next ten years — and even if the lower tax bracket reductions get extended, $700 billion of capital will get redirected from the private sector to Washington.  How do you think that will that impact economic growth in the US?

Dick Blumenthal Stumped On How To Create A Job

Man, I wish I could participate in the CT election this year.....



“Creative policies” don’t create jobs. Creative policies usually interfere with job creation. We’ve seen that clearly enough in this administration.
McMahon (in a shorter amount of time) describes how jobs get created, but also consider the role of government in the process. Government has no direct role in the process. Government has a role in creating an environment in which entrepreneurs can create jobs by doing the following:

• securing a stable, predictable market without bias or tilt
• with a reliable rule of law rather than arbitrary interventions for preconceived outcomes
• utilizing a tax policy that encourages people to keep the fruit of their labor and investments to the greatest degree possible.

This will offend many public servants in the political world, but you shouldn't create laws pertaining to the economy if you don't know squat about business.

Taxes and Small Business Job Creation: How to get it done

From Chris Edwards at the Cato Institute:

A little background first, Taxes and Small Business Job Creation to get you started.

• 
  
  The chart shows that the average top OECD rate fell from 46.7% in 2000 to 41.5% in 2009. If we let the Bush tax cuts expire, we won’t be simply going back to our situation in 2000—the world has changed since then as other countries have adopted more competitive tax rates.

• President Bush cut the top federal tax rate by 5 percentage points, but the average top rate in the 30 OECD nations has also fallen by 5 percentage points since 2000.
• Unless policymakers extend current tax relief, the combined U.S. federal-state top rate will increase from 41.9% to about 46.5%, based on OECD data. That will give us about the tenth highest rate among the 30 OECD nations.
• President Obama’s proposed top federal rate of 39.6 percent is 41-percent higher than the 28-percent top income rate achieved in the late 1980s after the bipartisan Tax Reform Act of 1986.

Chris has many bulletpoints on the case for extending the Bush tax cuts.  Be sure to read them all. In other news, forty-seven Democrats have publicly demanded that Pelosi acquiesce to an across-the-board extension of existing tax rates on capital gains and dividends:

The debate over what to do about the expiring Bush-era tax cuts has focused mainly on income tax rates and the fight between Democrats and Republicans over maintaining the tax breaks for the wealthiest Americans. But in a letter to the House speaker, Nancy Pelosi, 47 rank-and-file Democrats urged Congressional leaders to maintain lower tax rates on dividends and capital gains that are also due to expire on Dec. 31.
“Our fiscal policy should be one that maximizes economic growth and private sector job creation,” the lawmakers, led by Representative John Adler, Democrat of New Jersey, wrote.
“By keeping dividends and capital gains tax rates linked and low for everyone, we can help the private sector create jobs and allow seniors and middle class households to save and invest more,” the Democrats added in the letter.

Note the phrase for everyone.  A hike in capital gains tax rates will discourage both initial investments and turnover in capital, both of which are necessary to expand the economy.  It has to apply to those with the most capital on hand in order to have the maximum effect.  It doesn’t do a lot of good to penalize those with the most potential to expand the economy through new ventures and significant expansion of existing projects and companies. This also extends to income taxes as well, since many business owners file their business income as individual income  (pushing them over the $250,000 limit).  Taking more money from this class of entrepreneur means less capital for hiring and keeping employees, capital investment, and so on.  The exact same arguments apply to income tax rates, perhaps even more so since the very wealthy can usually structure their cash flow as income, dividends, or capital gains depending on which method provides the least amount of loss.

Troubleshooting issues, but I'm BACK!

Site had some techincal issues to resolve, but i've fixed the issues.  26 posts should be up as a result since July 27th and through September 26th.  You can now follow me on Google Reader and keep up with the information.  I'm still heavily involved in discussions on liberal sites like Global Grind (their news channel) and the Huffington Post sites, so look for my tag: Cmyst82 if you want to get in the discussions.  I have a Youtube channel so videos may be up from time to time (as I try to figure out how to edit and post them).  I'll see how I can work that with this site.
As always, it's about educating people on what's going on.  I'll do my best to continue on that path.

Paul Ryan's attempt for an Adult Conversation on Debt & Entitlement Reform

Ryan tries to explain that his plan for reform focuses on any person younger than age 55. That group would have 3% of their Social Security savings (at the current withdrawal level) put aside into their own private account (not pooled) which is monitored and maintained by the Federal Government and not by Wall Street. The best part about it.....it's optional, thus giving Americans the choice to stick with the current system, or have the additional option of guaranteeing 3% of their Social Security investment.

Watch who's trying to scare the 55 and up retirement group.