Obama's Tax Guru

Seventy-five percent of the candidates for elementary teacher positions in Massachusetts failed mathematics in the entrance exam. Now here is a surprise. The academic establishment (read teachers union) blamed the test. The examination probably asked questions that involved numbers.

It’s difficult to conjure up the mental agility of a college graduate unprepared to teach arithmetic to a grade school pupil. It makes one wonder what they learned in four years. Let’s hope they didn’t go into debt for an education that they obviously didn’t receive.

They won’t qualify for one other government job in Massachusetts. Failing arithmetic pretty much disqualifies them from raking in $75,000 a year as a toll taker. Making change is obviously out of their league. But they shouldn’t be discouraged.

There is plenty of room for the arithmetically challenged in the budget offices of the state and towns. The state legislature automatically increases taxes to cover any revenue shortages, which negates the need to understand annual budgets. Besides, budgets are filled with near endless rows of numbers; so who really cares?

No one can remember if the state or any town in Massachusetts ever actually had a surplus, so the budget bureaucrats only need a rudimentary knowledge of subtraction.

Here is the exam question for the state treasurer. If the state collects $10 and spends $13 how much more revenue is needed to balance the budget? The answer would appear to be that $3 in additional taxes would cover the shortfall (For the recent college graduates: $13 - $10 = $3).

But we are talking about Massachusetts.

The calculation necessitates adding a minimum of 30% for graft and corruption, and at least 10% more for friends and family kickbacks. And then the traditional piling-on begins. For the politicians this is the prime season to sweeten the pot.

A couple of rounds of pay raises are always in order. And they never forget to fatten their retirement programs. And pay increases for teachers, police and firemen protect their careers.

This part of the equation makes taxpayers a bit testy, so the final costs are always underestimated for political reasons. They know that they can come back for more next year. This year the Massachusetts state legislature plans to increase the highway tolls, the state sales tax and taxes on gasoline and beer.

Rumor has it that Mr. Obama asked his good friend, Governor Deval Patrick, not to raise the state income tax as Obama wants these potential revenues reserved for the federal government. As a quid pro quo, Obama promised to start the printing presses to bailout Massachusetts’ extravagant welfare schemes.

Governor Patrick had to accept this deal. Every time Massachusetts increases the taxes on alcohol, gas and the state sales tax, more of its citizens head to New Hampshire to do their shopping. Governor Patrick figured it was about time the residents of New Hampshire started supporting Massachusetts. He is a big advocate of shared responsibility.

In addition, Governor Patrick’s lawsuit to force New Hampshire businesses to collect and forward sales taxes on purchases made by Massachusetts citizens is already winding its way through the courts.

And you were wondering from whom Obama, Barney Frank and Geithner got their tax and spend ideas.

Pork Land Vs. Reality

The tug of war over the content of the stimulus package does more than exemplify the gulf between conservatives and liberals.

The final version of the appropriation will determine whether Mr. Obama’s presidency will be a prolonged national agony or the gate to a successful economic triumph. And don’t be deceived. He has only one chance to get it right.

The time for pretense is over. Neither he, nor Speaker Pelosi and Senator Reid can make a trillion dollar mistake and recover. The stone and chisels are out, ready to engrave his epitaph. No amount of soaring rhetoric will camouflage the outcome. In sports jargon, this is match point.

It is understood that Obama won the election promising a massive income redistribution. His recent statement condemning companies that make profits during a recession either epitomizes his utter lack of business acumen, or is an acknowledgement that he is an anti-business socialist. There is no middle ground to plant another interpretation.

It’s clear that Obama’s advisors have enough historical perspective to delay raising taxes during a recession. They know the economy would completely unravel. Of course, this hasn’t stopped Speaker Pelosi’s quest to vanquish the last remaining productive segment of society. It’s equally clear that Obama is dithering over the subject.

His advisors are also aware that no government can spend itself out of a recession. But it can spend itself into a depression. So far it appears that Obama is prone to ignore the odds predicated on a century of economic experience.

Pelosi’s proposed stimulus legislation is a trillion dollars of pork. This welfare bazaar satiates the appetites of every loony leftwing cause. This feast will relinquish America’s control of its economy to the Chinese (the money lenders), and/or send inflation into the stratosphere.

Obama is at a crossroad. Will he appease his fellow socialists or strengthen the engine of capitalism with tax cuts? The Great Society legislation of the 1960’s, and the cascade of entitlements that followed, confiscated the seed money needed for personal growth. Income, payroll, excise and sales taxes have since choked the upward mobility of Americans, and have kept them swimming against the tide of prosperity.

Today, a decent standard of living generally requires both parents in the job market to merely survive from payday to payday. This standard is not remotely equal to the Middle Class standards of the 1950’s and 1960’s. The advent of daycare centers should have been a warning.

Currently more people are employed in government than in manufacturing. In a time of fiscal crisis, no sound company adds to its overhead. If corporations can’t stop the growth of government and the taxation required to pay this overhead, they are forced to slash employment, or move their operations off-shore.

Of course, they have a third option. About 35,000 registered lobbyists work diligently to encourage the members of congress to share the tax receipts with them in return for political contributions.

This coziness explains congress’ reluctance to stop the influx of cheap illegal labor coming in the backdoor, and the 1.5 million HB-1 workers scheduled to come through the front door. No wonder wages are stagnant.

If you are not worried about the tax and inflationary consequences of the Pelosi welfare bazaar, you are probably among the Americans who have moved $13 trillion off-shore to avoid the confiscatory taxation, or you simply can’t count. Or maybe you are one of the lucky few who will be considered for a post in the Obama administration.

Franchising Corruption

The recent article, Ten Myths about Budget Deficits and Debt, by Brian M. Riedl, The Heritage Foundation, balances the economic causes, effects and conditions that America faces.

Anyone interested in cutting through the political mudslinging in this election cycle will be well served spending fifteen to twenty minutes reading this non-partisan review which places the numbers in context. The complete article with graphs and sources can be found at www.Heritage.org.

The article doesn’t address the pessimism documented in the national polls; nor was it intended to do so. It calculates the economic health of the nation in objective dollar terms. Mr. Riedl’s calculations are cerebral and honest. He doesn’t play with statistics.

Mr. Riedl, an economic wonk, concludes the country is doing okay, but he doesn’t consider the human condition in his analysis. There is no sympathy or empathy in numbers. He leaves these morsels to the pandering politicians and internet scribes.

By definition the country is not in a recession. That’s hard to believe, but technically true. Productivity and the GDP are up because the US economy is entwined with the global market.

It’s wonderful that the workers in China and Indonesia are doing more with less. This improves the profit margins of the US corporations that have abandoned American workers. Of course, their investors are happy and the annual bonuses of executives will be bountiful.

Once proud American corporations are now foreign employment franchises. To maintain the pretense of being American, most of these companies keep their headquarters stateside. Their stocks trade on US exchanges and their annual reports are still available in English.

The Reagan Administration opened the doors to illegal immigration by handling the issue benignly. Granting a “one time” amnesty all but franchised illegal immigration. It looked like a blank check to the fifteen million illegal aliens that have since swept across our open borders.

This unintended consequence provides at least fifteen million people, ready to accept sub-standard wages. Now throw in millions of underpaid HB-1, educated workers to displace Americans who demand a decent wage and presto, profits soar.

In his book, Lion in the White House, the author, Aida D. Donald, quotes Theodore Roosevelt, then a Manhattan State Assemblyman, about the owner of New York City’s elevated railway, Jay Gould. Roosevelt said that Jay and his partners “belong to that most dangerous of all classes, the wealthy criminal class."

This seems to capture the essence of today's meltdown of Freddie Mac and Fannie Mae. The only goal of their executives was the rapid accumulation of personal wealth. They disregarded the well-being of the companies, the employees, the stockholders, and, most importantly, the nation.

Senator Obama recognizes the problem. His solution: Raise taxes on these robber barons and automatically distribute the revenues to the victims. Rather than eliminating the core problem, his solution franchises it. Obama’s plan legitimates Congressional corruption.

The fraud in Washington, DC won’t end until national revenues are off limits to business. As boring as Senator McCain is, if he cleans government of the lobbyists and the legislation (earmarks and subsidies) that their clients are buying, he will restore confidence in government.

Kitty Litter Economics

Educated Americans understand the Kitty Litter Principle underpins the Democratic Party’s theory of economics. Thus, the backdrop of Senator Obama’s acceptance speech in Denver would have been more representative of his politics if pallets of kitty litter ensconced the stage.

It would have been an inclusive symbol, representing the productive segment of society he plans on soaking, which was the essence of his message.

His heart went out to the disappearing Middle Class. He forgot to mention that this once robust segment of society has been nearly taxed and legislated out of existence. This backbone of America’s progress was crushed by sales, toll, excise, income, property, inheritance and capital gains taxes. Even their savings, retirement programs and Social Security benefits are taxed.

America’s bread and butter core has endured fifty years of legislation that debunked opportunity built on personal initiative, merit and savings. They lost out to legislation that pitted their aspirations against those who loot the system. And here’s the irony. The Middle Class was forced to fund its own demise.

Now they are contending with illegal aliens for the scraps.

The Middle Class has been robbed blind. They have nothing left to give after five decades of being treated like kitty litter. They can’t absorb any more. And what have they received for bankrolling the Democrats’ scheme to share the responsibility? They are drifting into the ranks of the poor.

The Democrats in local, state and national politics have drained the Middle Class. Now they are targeting the wealthy and Upper Middle Class. And the stakes are getting higher because these survivors are expected to support the expanding ranks of poor created by confiscatory taxation.

It’s a vicious cycle. Taxation and over regulation have already destroyed the mainstay of Middle America, namely, manufacturing jobs. Made in America labels have all but disappeared, along with the Middle Class. This is not a coincidence. When large manufacturers fled the US, they took the jobs with them.

Obama plans on expanding government and increasing benefits to all who knock, including twenty to forty million illegal immigrants. Where will the money come from to achieve these goals? His answer: Raid the remaining businesses for the new revenues.

Understand! Senator Obama’s promise to reduce taxes on the Middle Class is a hideous deceit that will bring Americans to their knees. His proposals will result in a greater economic catastrophe than has befallen the Middle Class.

His plan will suck the economy dry of its last source of investment capital, which in turn will send unemployment beyond anything experienced during the Great Depression.

And here is the kicker. Tax revenues will plummet and government welfare will collapse under its own weight. If the Democrats have not been discredited by this time, they will again raise taxes to protect the poor created by their confiscatory tax policies. This is the hoax that will drive the last nail in America’s economic coffin. And this is what Obama has promised.

The Media & Senator Obama

Has Senator Clinton fallen off the planet? It seems she was handed her hat and coat the moment she suspended her campaign and wished Senator Obama good luck. It’s as if she was sucked into a galactic black hole as she stepped away from the podium.

There is nary a reference to her in the newspapers, on the broadcast and cable news, on the internet, or in the weekly news publications. It’s conceivable that she is holed up in some private compound licking her wounds after an arduous campaign.

To pretend the disappearance of the Clintons isn’t a blessing would be disingenuous. About as many are thrilled to be living in a Clinton free zone as those who are looking forward to the Bush family permanently retreating to Texas. Twenty years of these families is enough.

But Hillary is not old news. She has enough delegates and ardent supporters to turn the Democratic convention into a socialist blood bath. So even granting her apparent loss and the Democratic Party’s need to unite its base, her out-and-out disappearance is suspect.

There can only be one plausible reason for this anti-matter phenomenon. Our illustrious liberal dominated media is in full throttle to canonize its favorite Christian convert. To accomplish this mission they must capture the hearts of the eighteen million Hillary voters.

They are in full erasure mode; convinced Hillary’s non-existence will swing the Democratic moderates into the Obama camp. This is the same media that slapped her around with the long end of the publicity stick once Obama’s ethnicity and brand of politics inspired its ranks.

There is nothing new about the media’s strategy. For months now it has ignored the volume of good news emanating from Iraq. The stabilization of this country since the military surge is incredible. It worked. A US victory is within grasp.

This substantiated fact makes Senator Reid, Speaker Pelosi and their anointed candidate real losers. That’s why the subject of Iraq is in full erasure mode.

This is the same media that would have Americans believe that Rev. Wright, Bill Ayers and Michelle’s anti-America rhetoric aren’t worthy of its attention. Nor do they believe the US electorate should be informed that Senator Obama voted against adopting English as the official language of government.

This is the same media that hasn’t protested the fact that Senator Obama refuses to make his birth certificate available to the public. Strange, isn’t it? They don’t care what he is hiding although they attempted to have Senator McCain’s candidacy disqualified because he was born in Panama.

This is the same socialist bent media that ignores the 2000+ corporations that have been scooped up by foreign interests since George W. Bush was inaugurated. This detail is difficult to explain without examining the US corporate tax structure.

Is it possible that these media tax & spend aficionados don’t want the public to know the economic consequences of having the second highest corporate taxes in the world? This knowledge puts their candidate’s higher corporate taxes prescription at odds with America’s security.

And why isn’t the media screaming for Obama to participate in the give-an-take, town hall style forums? The answer is obvious. The questions can’t be vetted, nor can the questioners be vetted. The media realizes that he would be ripped to shreds without it running interference for him.

Obama owes his political existence to the media’s protective cocoon.

Listen Carefully, Choose Wisely

America is in an economic weed patch.

The cost of energy and groceries is hitting every American family right between the eyes. Once Sniper-Gate and Reverend-Gate fade, the economy will emerge as the primary issue in the general election.

The outcome of the fall election will determine the direction of the government’s intervention and cure. The timeframe for withdrawal from the Iraqi battlefield is barely divisive compared to the substantial differences in the fiscal remedies offered by the Democratic and Republican candidates.

Choose wisely! The platitudes and political pandering we hear prior to the fall election will be cemented to your family budget in 2009.

Don’t let the candidates insult your intelligence. Every prescription touted for your economic salvation, if enacted, will be paid with your tax dollars—or be added to the national debt.

On average, state, county and town governments siphon off about 24% of a family’s earnings. Families with incomes under $90,000 send 7.65% to of their gross income to the federal government for Social Security and Medicare.

Thus, about 32% of a family’s income evaporates before one penny is claimed for federal excise and income taxes. Now take a careful look at your last pay stub. How much more do you want withheld for the care and feeding of government entitlements?

The federal tax burden has increased 60% since 1965. Last year Washington raked in 2.7 trillion dollars. And that didn’t cover the cost of the current programs. The US debt has spiraled to 9 trillion dollars. That is equivalent to a family earning $40,000 a year accumulating $133,000 in unsecured debt.

The politicians pretend it’s a big deal when federal spending patterns predict a balanced budget in three to five years. That means in three to five years they can pay the bills they have incurred, plus the $400 billion required to pay the interest on the national debt.

In the meantime, the national debt keeps growing, which depreciates every dollar you earn.

Now, let’s pretend that the candidate of your choice is sincere when he/she promises the trillions of dollars required for the new programs he/she is advocating will be paid by the other guy.

Then listen carefully! There is a mighty good chance that this is the same candidate that is recommending higher taxes on your 401K, higher taxes for natural resource consumption (electricity, heating oil, water), and tax penalties on homes over 2400 square feet.

This could be the same candidate that wants higher capital gains taxes on stocks, mutual funds and IRAs, higher corporate taxes which increase the cost of the goods and services you buy, and higher taxes on gasoline.

It’s possible that this candidate wants the Bush tax cuts to expire, and is willing to kick a solution for fixing the Alternative Minimum Tax into a dark corner.

Now look in the mirror. If you can tell yourself that your taxes won’t increase if Senator Clinton or Senator Obama is elected, it means one thing. You don’t live in the United States.

Reserve Your Sympathy

The state of Michigan is in an economic freefall. The deterioration of its financial system is a shining example of government overregulation, over taxation and the enforcement of right-to-work laws.

The state’s unemployment is the highest in the nation at 7.4%, and its residents are bailing out at the fastest pace in the nation. For every two residents that escape Michigan, only one enters. Including births and the onslaught of impoverished illegal aliens, its population grew a paltry .1%.

This explains why housing prices are plummeting. There is a good chance Michigan will lead the nation in 2008 for having the fastest decline in property values—and the most bank foreclosures per capita.

Like all the top ten states with the highest taxes and uncontrolled spending, Michigan’s residents are experiencing income growth about one-third less, and about one-half the job growth as the ten states with the fastest growing economies.

Michigan is a perfect example of big government’s willingness to defy gravity. To compensate for the declining revenues from state income and property taxes, the crack Democratic troops that manage the state, legislated a $1.4 billion tax increase on businesses.

Of course, this liberal version of an economic solution is a Ponzi Scheme. The scheme works until it runs out of new investors to feed the growth of government.

This is what is happening in Michigan. Business and the productive members of society are abandoning the state. The state is collapsing under the weight of taxation. It’s running out of people and things to tax.

No one would complain if the state government just collapsed on itself. But it doesn’t work that way. Everyone sinks with it; everyone is harmed except the entrenched bureaucrats. The state’s bloated bureaucracy—the non-productive segment of society—won’t suffer any deprivation.

Michigan is a microcosm of the Democratic blueprint for the future of all America. All of its presidential candidates are demanding higher taxes on business, the wealthy and greater regulation of the economic engine driving growth.

The left’s need for greater tax revenues is unquenchable. It’s what keeps the entitlement engine afloat. And entitlements keep the Democrats afloat.

Must people have suffered hard times. It’s natural to be sympathetic to the plight of Michigan’s citizens. But sympathy is elastic. It constricted when the victims of Hurricane Katrina in New Orleans re-elected that scoundrel, Mayor Ray Nagin.

If Michigan goes Democratic in the fall election, they get what they deserve. So reserve your sympathy.

Please note: The statistics were assembled by Michael D. LaFaive, Director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy.

Now That's Republican!

It would be wonderful if our medical scientists could assemble a presidential candidate, grafting traits and features from all the current hopefuls.

The composite could look like Governor Romney, have Senator Clinton’s ambition and Senator Obama’s gift for oration.

Insert Senator McCain’s senior statesman qualities, Senator Edward’s smile, Mayor Giuliani’s quick wit, Governor Richard’s voice, Governor Huckabee’s decency, Representative Paul’s intensity, Representative Hunter’s clarity, Representative Tancredo’s sense of mission, Representative Dennis Kucinich’s honesty, and Senator Dodd’s determination.

Of course, if the experiment failed, we could be stuck with a candidate who looks like Kucinich, with Clinton’s ad hoc ethics, Edward’s shallowness, Obama’s inexperience and Dodd’s partisan fever—one who would regard the voters as the proletariat.

As is, all the Republican candidates stand head and shoulders above the pack of Democratic contenders. Yet, there is no traction in the Republican ranks. They are flailing about. The candidates’ campaign chests are filled with cobwebs, their vision unheralded and their talent muffled.

The Party’s principles were sidetracked by the Bush administration’s lack of fiscal restraint, the Iraqi theater, the push for amnesty and the decision to leave the southern border uncontested, Attorney General Gonzales’ incompetence, the usual congressional corruption, the President’s eagerness to contract the management of our ports to a Muslim nation, and his willingness to appease the opposition on domestic issues.

In summary, President Bush capitulated every time Republican principles were challenged. He never stood his ground, except for his position on Iraq and the struggle against terrorism. And his steadfast refusal to abandon Iraq has slowly convinced the majority of Americans that victory in Iraq is critical and achievable. He has the savvy Democrats running for cover on this issue.

There is something to be learned here. Americans are looking for an ethical person who takes and defends hard nosed positions—a candidate with a realistic, achievable agenda.

While the Democrats sing the song of shared responsibility, the code phrase for higher taxes, open borders, more entitlements and government encroachment, let’s pray that one Republican addresses the issues that outrage Americans. We are not asking for a lot. Just promise:

1) To use this nation’s might and economic influence to crush terrorism and to go nose-to-nose with the countries sponsoring these murderers.
2) Guarantee only English will be used in our government and our schools.
3) Lead us down a path toward energy independence.
4) Stop illegal immigration and demand legislation that discourages their stays.
5) Balance the budget without new taxes.
6) Protect our natural environment without hysterics.
7) Veto any new programs until Social Security and Medicare are financially sound.
8) Replace the current tax monstrosity with something simple.

Please note Republicans! With the exception of the cost of a fence and additional personnel on our borders, no new spending is required to close the deal with America’s voters. Now, that’s Republican!

Compassion Weariness

Middle and upper class Americans are choking on the cost of equality and fairness. Since the Democrats launched the Great Society in the mid 1960’s, wage earners have willingly financed the well intentioned, government remedies to end poverty, intolerance and racism. This era is coming to an end as more and more Americans come to understand that government entitlements are the problem and not the solution.

The leftwing agenda is unraveling. Their glorious success in preying upon America’s compassion has been found to be disingenuous. It’s become evident that their love of the downtrodden is little more than a ploy to build and retain a dependable, political constituency. The productive segment of society has become weary of being chastised and financially punished for being successful. Where is the proof?

The backlash against amnesty for illegal aliens was a bell weather reaction. The leftwing portrayed the rejection of amnesty as anti-Latino and anti-immigration sentiment. It wasn’t; it was a revolt. Average Americans ran out of patience. They are tired of watching their tax dollars being flushed down a sinkhole. This intransigence will reach a crescendo in the 2008 election cycle because good will is elastic.

The left’s pleas for affirmative action, busing, sanctuary states and communities, higher taxation, gay rights, animal, criminal and terrorist rights, illegal alien rights, socialized healthcare, government funded community service and daycare, welfare and entitlements and open borders no longer generate the key ingredient—sympathy.

After the Democrats drained this reservoir, they resorted to class warfare, reverse discrimination, religious bigotry and secularism to maintain their grip on the electorate’s conscience.

But the personal generosity of America’s taxpayers has reached a saturation point. They are tired of deficits, failed programs and broken promises. Democrats overreached and the Republicans cowered. That’s a major reason why the conservatives were run out of DC in 2006.

The near universal rejection of amnesty was shrill and remains unabated. In one voice Americans spoke: enough is enough.

The Democrats old reliable tactic of “moral indignation and intimidation” is faltering. The taxpayers see no reciprocity, no successes and no end to the left’s demands. The $9 trillion in taxes used for income redistribution (not including Social Security or Medicare) generated next to nothing, except for creating unending generations of welfare dependents.

The recent bridge collapse in Minneapolis begs the questions: Would the $9 trillion in tax funds spent on entitlements have been better spent on infrastructure? How many millions of people would projects of this scope employ? How many schools built? How many kids educated? How many diseases cured? How many environmental and energy solutions found?

The leftwing hasn’t gotten the message. They’re still sneering at private enterprise, personal responsibility, the US military, the wealthy, capitalism, Judeo-Christian principles, the religious, the entrepreneurial spirit, profits, judicial strict constructionists, English language only adherents, Fortune 500 companies and the American taxpayer.

Let’s hope Middle Americans, burdened by the highest taxation in the nation’s history, will sneer back in 2008, and demand the respect they deserve.