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We’re Still Going Backward
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Street Level Anti-Capitalism
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Snazzy Sequestered Screeners
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Welfare’s Failure Amid Red Ink
February 7, 2013 | 23 comments
A Further Perspective
The Cliffs of 1984
“Slavery Is Freedom” and “Tax Hikes Are Tax Relief” are the new mantras.
So we didn’t go over the fiscal cliff and instead got a deal that delivers no cuts in government spending, raises taxes on “the rich” (the definition of which consistently changes), expands the size and role of government, keeps the red ink flowing at record levels, and provides disincentives to economic growth and job creation — and, for good measure, raises taxes on nearly everyone who isn’t rich.
The bill, absurdly entitled the American Tax Payer Relief Act, is a tax-hiking measure that transfers money and power from the private sector to the increasing dysfunctional government sector.
Adhering to President Obama’s redistributionist agenda, the top personal income tax rate increases from 35 percent to 39.6 percent for taxpayers with more than $400,000 in taxable yearly income or joint filers earning more than $450,000.
Including the changes in tax deductions, and the top rate effectively rises from 35 percent to an estimated 41 percent.
Similarly, the estate tax on everything over $5 million jumps from 35 percent to 40 percent (the heirs of “the rich” might consider that a good deal, given that Mr. Obama wanted a 10-point hike in the estate tax, from 35 percent to 45 percent).
At a time when business investment is weak and trillions are sitting on the sidelines, the tax on capital gains was increased to from 15 percent to 23.8 percent for individuals making more than $200,000 a year and couples earning more than $250,000, counting the new 3.8 percent Obamacare surtax on investment income, making it the highest tax rate on capital gains in 17 years.
Adding further disincentives to new investment at a time when unemployment is high, the rate of poverty is up and the economy is sluggish, the tax on dividends was increased from 15 percent to 23.8 percent for high earners, including the new 3.8 percent Obamacare surtax on investment income.
And sure to add to the already high rate of inflation in health care, there’s a new 2.3 percent medical device tax.
Income earners who aren’t among “the rich” also get their taxes raised by way of an increase in the Social Security payroll tax.
Households earning between $40,000 and $50,000 will see an average tax increase of $579, according to the nonpartisan Tax Policy Center in Washington. Households with earnings between $50,000 and $75,000 will face an average yearly tax hike of $822.
Calling all this the American Tax Payer Relief Act is Orwellian. In the society described in George Orwell’s novel Nineteen Eighty-Four, the overpowered subjects of the state are indoctrinated to believe the mantra “War Is Peace, Slavery Is Freedom, Ignorance Is Strength.” In our time, it’s Tax Hikes Are Tax Relief.
Mr. Obama said the deal “protects 98 percent of Americans and 97 percent of small business owners.”
The “98 percent” overlooks the hikes in the payroll tax and takes no account of the job losses that in all likelihood will result from reallocating an estimated $620 billion to the government over the next decade from the income sectors of the private sector that are responsible for the greater part of the nation’s new investments and job creation.
And with Mr. Obama’s oft-repeated line of protecting “97 percent of small business owners,” he consistently fails to mention that the other 3 percent of small business owners that he’s targeting for higher taxes employ 54 percent of the total private workforce in the United States.
About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.
Bill Hussein O'Stalin| 1.8.13 @ 6:55AM
Yes, you're right. Both political parties are toll collectors on the road to serfdom.
However, I've learned to find humor in politics as opposed to the simple accurate criticisms.
For instance, Obama insisted on reviving the PEP and Pease portion of the tax codes starting for those with $250,000 in income. These provisions phase out itemized deductions and will help the big government collect 150 billion more, which is 25% of all taxes collected under the new bill.
Now, here's the humor. Most of that will come from Blue States, especially hitting California and many northeastern states hard.
More humor. The payroll tax went back to normal. However, many of Obama's fans are now beyond upset that their paychecks are being shorted. They're not being shorted but once a tax is removed perceptions are hard to change.
Lastly, the AMT is permanently gone. That alone is cause for some celebration because the toll collectors can no longer hold it over the heads of the collective tax body.
The biggest failure was the Republicans failed to get the marriage tax repealed. But was it worth it overall? That's all that counts..
When it comes to the taxpaying public though, one thing is sure. There is death and taxes and the joke is always on us.
http://online.wsj.com/article/.....03934.html
Von Mises Jr| 1.8.13 @ 10:05AM
The overall effect is that small business is being destroyed on purpose right in front of our eyes. I do not watch TV, even Fox News, except the Business News (and sports). At FBN and CNBC you can get the facts without the propaganda much of the time.
Tim Carney was on Gerry Willis yesterday and was explaining the "Fiscal Cliff" deal. We already figured out that the wealthy such as Buffet, Gates and Schmidt were untouched since the taxes are on income and not wealth. We also already knew that it was not going to affect government employees since Obama was so obnoxious as to propose a raise in Federal wages at the same time. We did understand that it was an attack on small business and high income earners in the private sector.
But here is what Tim Carney pointed out that was interesting. Green energy subsidies were included that gives GE (that paid no taxes on $15B in profits) big bucks for windmills, farm subsidies went to firms such as ADM and ConAgra, and massive subsidies were included for all kinds of crony capitalist Fortune 500 companies.
This being said, the liberals from OWS should be outraged. This scam of a "fiscal cliff" charade was not to punish the rich "fat cats" (as Barry stated), but to bailout and subsidize those fascist enterprises that play ball with the regime. It is exactly what the numb nuts that were crapping on police cars and throwing rocks at banks said they were pissed off about. No one ever accused them of being intelligent.
Al Adab| 1.8.13 @ 11:41AM
Increasing debt limit? Sure, coupled with dollar for dollar spending cuts. No cuts, no deal.
The way to increase revenue is to expand the economy.
Von Mises Jr| 1.8.13 @ 11:55AM
If we lose the culture war and have a crony capitalist/fascist cabal for a government, cutting spending and lowering taxes just gets us to Hell later than otherwise.
This is why one must point out the duplicity and not simply delay the decline.
Al Adab| 1.8.13 @ 1:10PM
Jr:
As we were once fond of saying, "Don't let them emenatize the eschaton".
Bill8472| 1.8.13 @ 1:17PM
"Immanentize."
JimH| 1.8.13 @ 1:59PM
Hail Discordia!
Al Adab| 1.8.13 @ 2:03PM
YAF!
Al Adab| 1.8.13 @ 2:03PM
YAF!
Cobalt| 1.8.13 @ 7:07AM
Rejoice Comrades! We now have the American Tax Payer Relief Act.
Pecos Pete| 1.8.13 @ 7:29AM
According to King O, reducing taxes is spending. King O believes that all income, all earnings, all wealth belongs to the federal government. His goal is to transform the USA, and he is well on the way Forward!
The only way to pay for King O's grandiose plans is to tax anyone with earnings or wealth. The fact is, taxing all of the earnings of the rich pays for only a small portion of King O's spending. Taxing annual earnings of $30,000 and up is the only way to pay for the Forward Plan (aka Redistribution Plan).
The democrat voters are beginning to find out: ObamaPhones are not Free. ObamaCare is not Free. Electricity is not Free. Only nothing is free. The tax man is coming for all.
Maxwell| 1.8.13 @ 8:23AM
Thanks a lot Pecos Pete, every time I read about the 'free Obama phone', in my mind I keep hearing that voice from the You Tube playing like an endless loop, 'people in Cleveland on Social Security get their free Obama phone'. My programming productivity for the day is shot......
Pecos Pete| 1.8.13 @ 8:32AM
Max: You are welcome. Pleased to be of service.
BTW: What programming language do you use, most of the time? That is, when actually doing the fun stuff.
Maxwell| 1.8.13 @ 9:21AM
Started back in the time when I 'wired' my own board. Now I just do COBOL. Us oldies will be in the dust bin in a couple three years. I just keep laughing at those that 'do the web'. If my systems crashed that much my back side ... well, you know.
Pecos Pete| 1.8.13 @ 11:11AM
401 Accounting Machine. Wiring was fun. Do you remember when the TWX was the keyboard and programs were stored on paper tape? 40+ years ago I taught COBOL, a great language. As for cloud computing, that's a recipe for disaster. (Amazon crashed and Netflix went down. I'd hate for that to happen in a mission critical situation.)
SUBVET| 1.8.13 @ 11:14AM
Pete...........what about DBASE II or CPM ?
Pecos Pete| 1.8.13 @ 2:56PM
dBase is still around. I've used it and liked it. Prefer SQL now with other database formats. Hell, once upon a time I'd even roll my own ISAM databases ... that was real fun.
CP/M is for real old timers. SUBVET, you ain't no spring chicken.
SUBVET| 1.8.13 @ 4:12PM
Ahhhhhhh yes I remember that green screen....it was my first business computer 1970. Before that it was an IBM Selectra w/16k memory. We could do our billing on the IBM one at a time.
spring chicken you say .....maybe your right on that, the last time I had a San Miguel it was 35 cents american.
1965 I can remember it just like yesterday.........but yesterday forget it.
Al Adab| 1.8.13 @ 4:28PM
Anybody know of a way to get old CPM files off the floppy into some other readable or printable program? I have a lot of research notes stored on 5" CPMs.
Butch| 1.8.13 @ 8:11PM
Hey, Al. There used to be a program called Crosstalk that converted CP/M data to ASCII; I used it, but it was way back in the mid-80s. I expect you're out of luck unless you can come up with some really antiquated software.
Maxwell| 1.8.13 @ 2:17PM
I remember assembler! One day I saw one of the programmers taking a deck of cards to be 'run'. The guy was a....jerk. As he was walking past me I saw a box in his way. I had a cookie in my mouth and I was told not to talk with food in your mouth. A true Animal House moment.
Pecos Pete| 1.8.13 @ 3:01PM
ASSembler. I still have code books and some original Microsoft disks for this guy. Didn't like it, but did use it for some really really tight memory situations in the early years. Magnificent Cro-Magnon stuff.
TLP| 1.8.13 @ 3:58PM
What the F*%& are you idiots talking about?
And, expect a call from PETA.
I'm just sayin.
mike 3/505| 1.8.13 @ 1:56PM
COBOL is still around? Dayum! I started out in FORTRAN...back in the day.
JimH| 1.8.13 @ 2:04PM
It’s paying my mortgage. Millions of lines of mainframe code still out there. COBOL has changed over time though. The IBM version I work with more like PL1 than early COBOL in many ways.
Maxwell| 1.8.13 @ 2:20PM
Jim, it will pay the mortgage for many years to come too. I still see ad's for CICS COBOL programmers.
Gary B| 1.8.13 @ 7:57PM
How 'bout the guys who have to send code updates to satellites sent up decades ago?
Butch| 1.8.13 @ 8:15PM
FORTRAN guy myself, Mike. Thing about it, was, though, it became sorta the "Latin" of computer languages. You could see the Fortran in BASIC, for example, which I turned into a lifelong business career.
Al Adab| 1.8.13 @ 8:27AM
The most revealing comment came from a Calif. Congresswoman a couple days ago. She stated she didn't understand why people talked so much about the debt. After all, she said, we just can print the money. So where did all those new "fees" come from? They are not taxes of course, just expenses imposed by govt. Such is our new world.
TLP| 1.8.13 @ 3:59PM
She sounds like Krugman.
Cobalt| 1.8.13 @ 9:00AM
"print the money."
"Inflation is the one form of taxation that can be imposed without legislation."
----Milton Friedman
Louis Jenkins| 1.8.13 @ 9:04AM
Doesn't understand why people talk so much about the debt? Print more money? Somebody, somewhere, someday, will have to ante-up. The plug on the printing machine will be pulled, by us, by the Red Chinese, by someone. Then who will pay for the free Obamaphone? Who is responsible for the tons of EBT money being spent in NY city strip-porno joints? Who is going to be left holding the tab?
old white guy| 1.8.13 @ 10:15AM
heck, they don't even print it anymore, it's all just digital, numbers in the air.
Bill8472| 1.8.13 @ 1:15PM
Have you noticed how many new bills there suddenly are floating around? I've experience two incidents in the past month where I've had new bills in my wallet, sticking together as new bills will. I noticed it the first time I had new bills sticking together, but the second time I was at the post office and gave the worker what I thought was a $10 bill that turned out to be two new $10 bills stuck together. Thank God the postal worker was an honest guy. He told me the way to keep that sticking problem at a minimum is to wrinkle the new bills up - apparently they'll separate.
Anyway, I've had several sets of new bills recently. I'm watching the inflation percentages now to see if I'm right, or if I just have happened in some unique circumstances to have been the only one who's been seeing a lot of new bills in circulation.
Petronius| 1.8.13 @ 1:09PM
Websters Dictionary was binned 3 generations ago. George Orwell was simply the first to notice.
Bill8472| 1.8.13 @ 1:10PM
The "Tax Payer Relief Act" as described in this commentary reminds me of the various "looter" acts perpetrated on the people in Ayn Rand's book Atlas Shrugged.
Ronsch| 1.8.13 @ 5:08PM
Did ya'all not hear? NerObama says we have no spending problems...move along, nothing to see here.
Occam's Tool| 1.8.13 @ 5:46PM
Gold's dropped a bit---for now. I nibble a bit here, a bit there.
Liberals are scum.
WaffenSS| 1.8.13 @ 10:58PM
"Arbeit Macht Frei", was a slogan of a few years ago.
lcdlover | 1.9.13 @ 11:56AM
It is a bit unfair to pound the President for reinstating the full (employees' portion) payroll tax. That was cut a couple years back as a payroll (FICA) tax "holiday". All holidays come to an end. Of course though, there are the Obamacare taxes - it is legitimate to bring those up.
Taxes need to go up for everyone except the high earner because the high earner, for one thing, already pays a high rate. Taxes need to go up on the so-called poor because they spend a lot and pay nothing. Taxes need to rise on the middle earner because if average people feel the big bite, this insanity may end sooner. Make it too easy and nobody cares.
Only when the American people feel the big bite will they start to complain about it - if everybody is off the hook (I.e. low taxes) they won't worry about the fiscal hole the gov't is driving the country into. The thing is, we spent the money, we have to pay sooner or later and the sooner the better while interest rates are low. Once those rates return to historic averages we are in big trouble if we have not paid down the debt. I liked Herman Cain's 9/9/9 plan - IF they don't "exempt" "poor" people - everybody pays 9% on everything they buy; income tax is 9% flat; corporate tax goes from 35% to 9% - the economy would have taken off like a rocket - you wouldn't even have noticed the 9%. But the poltroonish pols are to pusillanimous to recall that plan.