Archive for the 'taxes' Category

Through a glass darkly no more

Thursday, March 20th, 2014

Scott Johnson has a Tough Guy vs. Wimp visual that is pretty funny but misses an important point. The so-called wimp can be a tough guy — here and here are evidence as to whom he despises and is more than willing to act against. This is consistent with the standard religion of leftism by the way, that the US is an imperialist bad actor that has created enemies abroad and repression at home. Exactly what the faculty lounge is all about, but quite a bit more intense and ruthless. (BTW, these fellows and gals are often seriously lacking in historical knowledge, but they fill in the blanks with ideology; after all, truth isn’t about truth, it’s about a technique to get power to enforce equality of outcomes.)

Ah, but how did we get so far away from the America many of us know in our bones? The answers are the university and the media. 3% of Yale donations went to Romney, which is pretty good, by the way. The media are 12-1 against conservatives, which we think slightly understates the case. Still, it’s kind of shocking that things have gotten this bad this fast; yet we only have to look back to the cases of Iran and Honduras to see that the pattern was fully formed and evident years ago. But still, this far this fast? Well, citizens, pause to consider a breathtaking exercise in projection from five years ago, and consider what, unfettered, this level of narcissism has wrought. And there you have it, this far this fast…

The day the wheels came off

Tuesday, November 12th, 2013


“I personally believe, even if it takes a change in the law, the president should honor the commitment the federal government made to those people and let them keep what they’ve got,” Clinton said

Of course that’s next to impossible to do, since insurance companies have spent the last three years revising their systems, their underwriting criteria, their pricing, and on and on. BTW, is this a parody or what?

Will bringing back the 19th century work this time?

Tuesday, October 1st, 2013

WSJ: “Some Republicans think ObamaCare will collapse by itself. This is unlikely.” IBD: “There is much to be learned from the fact that even the Iron Lady couldn’t get rid of a government program as criminally dysfunctional as the NHS.” The permanence of the ACA is the conventional wisdom, and with good reason, given the track records of social security, medicare and medicaid, etc. However, we’re not so sure that the ACA will follow the well-worn path.

This government has specialized in awful laws that don’t solve problems and make things worse. The 2300 page disgrace, Dodd-Frank, is one example. It didn’t solve the critical TBTF problem, but it did a swell job on Chinese wallboard and Congolese minerals. No one in the public noticed, because the law is invisible to the public. Not so the ACA. Check out the California website. Not user friendly, not low-information-voter friendly. Top-down management may be a way to build railroads or establish social security, but that was a long time ago.

There are plenty of reasons to think this time might be different. It’s not just that it has been known for years that the ACA was sold on a pack of lies. It’s not just that it has crazy carve outs for favored people and institutions. It’s not just that it’s a job killer. It’s not even that a law that runs 1.2 million words might not be capable of being enforced in an environment of rapid technological change, though that’s a pretty big deal. All these elements are factors in why this time might be different. We’d add one more: the ACA rips off the Julias, the young people who are the only reason the administration didn’t have to leave town in 2013, and are the only demographic supporting the ACA. When they finally figure out that the subsidies are coming from them, things might change. We’ll see.

No surprise here

Thursday, September 19th, 2013


Fed officials decided to continue their $85-billion-a-month bond purchase program, surprising most economists

Let’s see. The labor force participation rate is the lowest in 35 years. GDP growth forecasts have been lowered again for 2013 and 2014. Fiscal policy continues to create self-inflitced head winds on the economy. Neither the unemployment nor the inflation targets set by the Fed to end QE have been met. Why is anyone surprised that the Fed took the decision suggested by all the numbers and trends?

Detroit, by the numbers

Wednesday, July 24th, 2013

Pete Ferrara:

Detroit’s bloated, overstaffed bureaucracy today employs one worker for every 50 city residents remaining. Indianapolis provides much better services, with one worker for every 223 residents. But Indianapolis has remained a Republican town. For all of Detroit’s runaway government spending, government services in the city became pitiful. The high school drop out rate in Detroit reached as high as 76 percent in recent years. Yet per pupil spending in Detroit public schools is higher than in rich and prosperous Marin County, California, where the high school graduation rate is 97%. Maybe that is because in return for the non-education of the young in Detroit, public school teachers there enjoy the highest pay in the country among major metropolitan areas, at nearly $50 an hour. For all the taxes and spending in Detroit, the city slashed its police force by 40% over the past decade…Maybe that is why the average wait for police response to an emergency phone call is 58 minutes in Detroit, five times the national average. Maybe that has something to do with Detroit suffering one of the highest violent crime rates in the country as well. That crime is effectively yet another tax driving businesses out of the city, or out of business altogether. Who is going to invest in Detroit to create jobs and increase wages when that investment is subject to plunder by criminals, and whatever survives is subject to plunder by taxes and hostile bureaucrats? No wonder one-third of Detroit residents live in poverty. The city’s own bankruptcy filing reports that nearly 70% of city parks have closed in the past five years. Four in ten street lights do not work

More: Detroit’s murder rate is 11x NYC, and only 10% of crimes are solved. 51 years of consecutive one-party rule and you have a city that’s unrecognizable as an American city.

Bureaucracies continue to argue for their own destruction

Monday, May 20th, 2013


The small glass jugs filled with green or gold coloured extra virgin olive oil are familiar and traditional for restaurant goers across Europe but they will be banned from 1 January 2014…The use of classic, refillable glass jugs or glazed terracotta dipping bowls and the choice of a restaurateur to buy olive oil from a small artisan producer or family business will be outlawed…The European Commissions justification for the ban, under special Common Agriculture Policy regulations, is “hygiene” and to protect the “image of olive oil”…”It will seem bonkers that olive oil jugs must go while vinegar bottles or refillable wine jugs can stay.”

At least they’re fiddling with olive oil. It could be a lot worse.

Just the beginning

Tuesday, April 9th, 2013


Levi currently spends about $140,000 a year on insurance premiums to cover 25 managerial staff at his business, Consolidated Management, which runs cafeterias at schools, offices and jails. Under the new law, he will have to offer insurance to all of his 102 full-time employees starting in January. Assuming all of them take the coverage, Mr. Levi says the cost of premiums could exceed $500,000. “I’ve never made a profit in any year of the company that has surpassed that amount,” says Mr. Levi, 62 years old. “I don’t make enough money.” He says it makes more sense to drop insurance entirely and pay a penalty of about $144,000…

Epstein, owner of Firstaff Nursing Services Inc. in Bala Cynwyd, Pa., has similar plans. He intends to stop offering health insurance benefits at his home health-care company. Mr. Epstein, 52, employs about 250 workers and currently provides health insurance to his 20 office personnel. If he were to start covering the 100 or so nurses and nursing assistants that work full time, his annual health-insurance costs would jump to roughly $600,000 from the current $100,000, he says. Even if he takes the penalty option, he estimates he would have to pay about $240,000—a cost he doesn’t think his business could absorb. To compensate, he plans to cut the number of hours his nurses and nursing assistants work so they will be considered part-time under the law. He says he will hire more part-timers to ensure patients receive the same level of care. “We’re going to do everything we can in order to stay in business,” he says.

So more and more people are going to have the Page 21 problem. Total disaster.

Vote present

Monday, December 17th, 2012

We utterly fail to understand what’s going on in Washington with regard to the impending tax increases. We know that the administration’s policies put the country ever more firmly on the economic road to ruin, so why have your fingerprints on any deal? Why play along? Don’t vote against a deal, vote present. That way, it will be entirely clear whose policies produced the result. This seems simple. What are we missing?

More numbers

Sunday, December 9th, 2012

Pete Ferrara talks about the 1%, the 13% and the 39%. He also discusses a certain 20%, with its 15% and 3%. Finally he reminds us of the 4% and the 25%. Hard to see how this ends well. (He has even more numbers over at Forbes.)

Bonus fun: Thomas Sowell reviews Stephen Moore’s new book.

Taxes and behavior

Saturday, December 8th, 2012

Washington Post:

The Washington Post Co. will pay its 2013 dividends before the end of this year to try to spare investors from anticipated tax increases…Since 2003 investors have paid a maximum 15 percent on dividend income…dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

AP: “Warren Buffett’s firm Berkshire Hathaway…is its largest shareholder with an estimated 1.7 million shares.” No comment.

More numbers

Monday, November 12th, 2012


“the wealthiest Americans” already pay more than their “fair share” in taxes. According to the Congressional Budget Office, the top 1 percent of US earners already pay 22.3 percent of all federal income taxes (based on 2009 figures), even though their share of total income earned is just 13.3 percent. The top 2-5 percent of American earners pay 17.3 percent of the total share of federal income taxes paid, even though their share of total income earned is 12.5 percent. The top 20 percent of Americans pay 67.9 percent of total federal income taxes, while their share of total income earned is 50.8 percent.

Soak them! It’s not going to generate significantly more revenue.

Why not weekly town hall meetings, peoples’ press conferences after 5/29?

Friday, November 9th, 2012

The navel gazing continues, and panicked Republicans appear ready to do all sorts of things, such as doing a 180 on illegal immigration and so forth. Slow down and think, people. The election was lost by fewer than 700,000 votes in key swing states, and much of that problem was self-inflicted. That’s a reason to change core policy positions? Puh-leeze. A central problem for the Romney team was that their experts wanted to run a fine 20th century campaign. It was obsolete. There were new problems for them (e.g., effective negative micro-targeting), but also new potential solutions. However, as has been outlined in detail by many people, the Romney campaign had big problems with using 21st century technology to its advantage.

Swing voters were not connecting with Mitt Romney and this was known since June at least. No doubt the negative advertising from Axelrod and Co. had a lot to do with this, and it was effective. The War on Women, rapacious Bain Capital, out-of-touch-rich-guy, and so forth. That’s why seeing a competent person who was an actual human being in the first presidential debate in September was such a shocker. By then, much of the damage had already been done.

But that was unnecessary. We live in the age of the internet and social media, so an effective response to the negative ads was both instantly available and cheap. Why wait for September and the debates to make a direct case to people? Why didn’t the Romney campaign arrange for some slots on TV news channels for long-form interviews with audience participation after May 29 and throughout the summer and fall? The White House did its share of livestreamed town hall meetings. For that matter, why not do a weekly “peoples’ press conference” on the internet? “Ask Mitt Live, every Friday at Five.” He could speak for five minutes on the subject of the day (imagine using that forum to discuss Benghazi) and then field questions from voters, friendly and hostile, both in person and via the internet. It seems to us a pretty simple way to connect with people and counter the negative advertising. In the era of twitter and social networking, interactive communication is a powerful tool.

You’d think that MSNBC would give Romney all the time he wanted for free — as long as they could choose the audience and the questions. Now that would have been interesting to watch.

Waste not, want not

Tuesday, October 16th, 2012

The Waste Book:

Since the last budget was passed on April 29, 2009, Washington has spent $11.2 trillion and added more than $4.8 trillion to the national debt. With the national debt now over $16 trillion, never before have taxpayers needed a budget blueprint more to guide our nation away from fiscal ruin. Yet, the Senate Budget Committee has failed to produce a budget -– which it is required to do by law -– in over 1,200 days. In addition to not producing a budget resolution, the committee has also failed to hold many hearings, a key tool for Congress to conduct oversight, investigate problems, seek solutions, initiate conversation and debate, and advance an agenda. The Senate Budget Committee held a mere 12 hearings in 2012 – fewer than all but five other congressional committees from both chambers…

The National Football League (NFL), the National Hockey League (NHL), and the Professional Golfers’ Association (PGA) classify themselves as non-profit organizations to exempt themselves from federal income taxes on earnings. Smaller sports leagues, such as the National Lacrosse League, are also using the tax status. Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports…NASA spends about $1 million annually “researching and building the Mars menu.” This year, NASA also awarded $947,000 to researchers at Cornell University and the University of Hawaii to study the best food for astronauts to eat on Mars. Six volunteers will head into a barren landscape in Hawaii to simulate a 120-day Mars mission. In exchange, they receive an all-expenses-paid trip, plus $5,000

There’s also a government subsidy to manufacture robot squirrels.

70 million Americans saw this

Monday, October 8th, 2012

70-19 among independents. Pretty impressive. Worth watching again.

Eek! A mouse!!!

Wednesday, September 19th, 2012

Some boring thing happened in May that we’re not interested in talking about, but others have done so. It inspired this from David Brooks: “Romney knows nothing about ambition and motivation.” Eeek! A mouse!!! The election’s over!!! Eek! Don’t you hear us? Eek!!!

George Gilder: Bain, the 1980’s takeover boom, and other matters

Sunday, September 2nd, 2012

American Spectator:

The high tax rates of the inflationary 1970s had forced a deadening siege of conglomeration and corporate bloat and resulted in a catastrophic 60 percent decline in the real value of corporate equity. This was the era of palatial new Corporate headquarters, jet fleets, and lavish entertainment budgets all serving incoherent jumbles of unrelated companies that had equity worth less than the sum of their parts. Corporations often had either to splurge or merge to avoid a suffocating confiscation of profits through the interplay of inflation with exalted tax gouges, which could rise to effective rates above 100 percent of real returns.

Conglomerates artfully combined companies nursing losses with companies harvesting profits, thereby muting the impact of the deadly tax regime.But Ronald Reagan’s counter-inflationary supply-side tax policies, coupled with Paul Volcker’s monetary contraction, made these morbid combines dysfunctional…

Between 1976 and 1993, which covers Romney’s Bain Capital years, Jensen calculates that U.S. corporations conducted 42,621 merger and acquisition deals worth a total of $3.1 trillion. Selling firms won premiums of 41 percent, generating $899 billion in constant dollar gains for shareholders (well over a trillion in today’s dollars). Buying firms also gained on average, by increments that increased over the years. Since Bain under Romney was an out-performer, its results were better proportionally.

Harvard economist (later Treasury secretary) Larry Summers speculated that these gains disguised wealth transfers from bondholders, workers, suppliers, and communities. Jensen disproved this charge, showing — in the aftermath of the transactions — sharp increases in capital expenditures, R&D, employment, and share value.

During this period, encompassing the Reagan years, the nation massively led the world in job creation with between 50 and 55 million new jobs, at steadily rising pay, compared to some 10 to 15 million jobs lost. With the U.S. generating jobs far faster than overseas rivals, this restructuring could hardly have caused job losses to foreign countries. We continued to lead the world in job creation, launched the computer revolution, and maintained our manufacturing employment level until the crash of 2000.

The disastrous economic policies of the Nixon and Carter administrations included wage and price controls, accommodation of increasing inflation, and crippling energy policies, which included bizarre price controls. As a result of these and the factors that Gilder discussed, public stocks became incredibly cheap. KKR exploited the opportunity and created the PE industry. This negative article is supposed to show how KKR did horrible things, when it paid shareholders 3x for their stock and restructured a company; in reality, it makes the opposite point.

Corporate executives who never before thought of doing a hostile takeover of a golf partner CEO’s firm were faced with the situation that sometimes not doing so amounted to ignoring their fiduciary obligations to their own shareholders. The results were sometimes strange, but often they were strightforward: buy out existing shareholders at a good premium, restructure operations, and sell subsidiaries that had a better strategic fit elsewhere. One of the ancillary benefits of this movement was that it put all the other boards and CEO’s on notice that they had better clean up their act or they were the next target.

Final point from Gilder’s piece:

If Romney had been listening more attentively when I gave my speech back in 1982, he might have been more cogent in responding to the charges of “vulture” capitalism in later years. I showed that consumer spending is nowhere near 70 percent of the real economy (GDP leaves out all intermediate transactions in the supply chain) and is nearly irrelevant to economic growth (“supply creates its own demand”). I spoke on the centrality of venture capital and the power of entrepreneurs responding to tax rate reductions: “High tax rates don’t stop rich people from being rich; they stop everyone else from getting rich,” I said. “Progressive tax rates don’t redistribute incomes, they redistribute taxpayers…from factories and offices and onto foreign beaches and early retirements,” among other old favorites that still ring true looking across to Europe in 2012. And I made my case that capitalists thrive only by serving others. But at the time, in the early 1980s, I still did not really grasp the deeper sources of the power of venture capitalists and private equity players.

Note: “consumer spending is nowhere near 70 percent of the real economy (GDP leaves out all intermediate transactions in the supply chain) and is nearly irrelevant to economic growth.” Such an interesting point, particularly regarding the Keynesians and their focus on increasing final demand. It’s not at all relevant. The 1980’s takeover boom was about lowering direct operating and SG&A costs and de-conglomeratizing companies that had become bad vessels for innovation and strategic focus. Compare today: Dodd-Frank and the ACA have produced similar corporate sclerosis from uncertainly and added costs, even as they have done almost nothing to address the problems they boast of having cured. Our very own self-inflicted 1970’s again!

What makes you think they don’t have them already???

Thursday, July 19th, 2012

We agree with Jennifer Rubin that Mitt Romney is right not to release any additional tax returns. They will just be fodder for endless and contrived stories from now until November. But we’re amused at one aspect of this debate. Knowing the way this crew operates, how on earth could anyone possibly think that Axelrod & Co. haven’t been sitting on the tax returns for a long time now, giddy to use them? No doubt the narratives for the media have already been written, and the Obama campaign is just hoping that enough stupid Republicans can pressure Romney into legitimizing scores of hit pieces on the GOP candidate. Horse stabling costs as a medical deduction? The Horror, the Horror!

Pshaw, you say; it wouldn’t be cricket for Axelrod to have the information. It’s confidential!!! Hmmm. Remember Blair Hull? Jack Ryan? Sharon Bialek? Time to wake up, folks.

Tick Tick Tick

Wednesday, July 18th, 2012


Vanguard Group Inc., whose $148.2 billion of Treasuries makes it the largest private owner of U.S. debt, says the nation has until 2016 to contain its borrowings before bond investors revolt and drive up interest rates. “In the absence of a long-term credible plan, we are somewhere around four years away on where the markets are going to say ‘enough is enough,’” said Robert Auwaerter, head of the Valley Forge, Pennsylvania-based Vanguard’s fixed-income group

As the blue state model fails worldwide, the Left seems to be cracking up. Before this is over, the blue states, as well as the feds, are going to waging war against states like Texas and South Carolina. In all likelihood this will not end well. HT: JP


Friday, July 13th, 2012

You people are all worried about nothing. You just don’t want to pay your fair share in taxes.

One definition of insanity

Sunday, July 8th, 2012

The Sacramento Bee reports on a one-way ticket to fiscal Fantasyland:

The state Senate voted by a bare majority today to fund initial construction of California’s $68 billion high-speed rail project…

The bill approved by the Senate authorizes $5.8 billion to start construction in the Central Valley, including $2.6 billion in rail bond funds and $3.2 billion from the federal government. Lawmakers tied that funding to nearly $2 billion to improve regional rail systems and connect them to high-speed rail. That regional money was considered necessary to lobby hesitant senators about the project’s potential significance to their districts.

“Members, this is a big vote,” Steinberg said as he opened floor debate on the bill this afternoon. “In the era of term limits, how many chances do we have to vote for something this important and long-lasting?”

Steinberg and other Democrats said the project would create thousands of jobs and make necessary improvements to the state’s transportation infrastructure. Republicans said it is too expensive and relies on uncertain future funding. They criticized starting construction in the sparsely populated Central Valley.

Among Republicans in opposition was Sen. Tony Strickland, who criticized a willingness by the Legislature to reduce spending elsewhere while finding money for high-speed rail. “I think this is a colossal fiscal train wreck for California,” he said.

Also the first leg to be completed — which the Obama administration insisted upon, because it’s the only portion of the route that isn’t undergoing environmental challenges — essentially leads from nowhere to nowhere.