The Tax 'Cuts'

First, I think it is time to retire the description of the "Bush tax cuts." The reduced tax brackets have been law for about 7 years now, so still referring to them as a "cut" is a little silly. When the law expires at the end of the year, the new tax brackets that will take effect will be correctly called a tax increase, because that is what will happen. Okay boys and girls, onto today's article:

So an article came out today where the House Republican leader, Boehner, today said he will support a law that keeps the tax rates for those earning under 200,000 the same and increases tax rates for those making over. The last paragraph says,

At a White House news conference Friday, Obama described the Republican proposal for a tax extension for the highest of earners as an effort "to give an average of $100,000 to millionaires."

What is Obama really saying here? What is this per year? Per decade? A lifetime? Because if yearly that would imply an annual salary of $3,333,333 and that would be a pretty large average salary. He certainly must not be talking about the median salary above that tax bracket. Also, he has repeatedly stated that he wants to raise taxes on those individuals earning over $200,000. Does Obama think that everybody who makes over $200,000 a year is a millionaire? I bet this is news to a lot of people.

And who are the millionaires in this country? Obama would have you believe they are only people on Wall Street bagging million dollar salaries. But Stanley's, "The Millionaire Next Door" provides some answers. Generally they are people in their 50s and 60s who have lived below their means, invested their earnings, and accumulated wealth over time. They probably had good jobs but most weren't making over $200,000 a year.

Oh and about all those Wall Streeters who are making $200-300,000 a year... to most people who live in smaller cities that sounds like a lot, but after the federal, state and local governments eat through half and then they pay 30,000 a year in rent, that only amounts to a good job equivalent for smaller cities. Think those making $85-100k a year. They've got bills too, and these people don't become millionaires overnight.

So who is getting the $100k Obama is talking about with this statement?

And really, who is doing the giving here? The government taking less of worker's own hard-earned money amounts to "giving" the worker money? Karl Marx and George Orwell would be very proud of Obama. He studied hard.

Health Insurance Rate Increase

Here's a good "I told ya so" moment. Health insurance premiums are going up for many people because of the extra benefits now required by law. The phrase, "There is no free lunch" is common to economists, but this concept has yet to be assimilated by Democrats, who apparenty think that you can legislate more benefits to Americans and those benefits will be costless.

An article worth reading. A couple of points include how Obamacare cuts medicare payments to doctors, and how federal employees already enjoy the benefit of being able to divert a portion of their social security taxes to a private account but Obama is against allowing ordinary Americans to do that.

And I'd like to mention about that bullshit promise of not raising taxes on anyone making under $250,000: he plans to raise the capital gains and dividend taxes. Duh! Not only 'rich' people own stocks!!

More false reasoning about tax cuts

Another Leonhardt article. Seriously, they need to stop publishing this guy: Tax Cuts That Make a Difference. I posted in the comments section:

Does more, eh? Where's your data? This is the problem with journalists who know nothing about economics, they just make stuff up without support. Whatever sounds good to them is what they will advocate.

Spending money is only good for the short term. Saving and investing leads to more consumption later. Like always, we face trade-offs. Advocating policy that leads to artificial spending now might make things feel better, but what do you think happens when those policies are lifted?

You think the cash for clunkers program was effective? All it did was transfer money from tax payers to the auto industries. It was a bailout, plain and simple. Just like the housing tax credits, all it did was move buying decisions around and cause the tax payer to lose. If a firm cannot earn a profit because they have promised too many benefits and cannot compete on the global economy, they should be allowed to meet their demise.

Once again Leonhardt fails to understand the concept of a control case. The economy was already on a downward spiral handed over from Clinton. What does Leonhardt expect, the tax cut takes effect and suddenly all problems are cured? No clearly things would take some time and also, what would have happened without the tax cuts? Also, you cite the 2001 cuts, but not the 2003 cuts which were stronger because they phased the tax cuts in at a faster rate (instead of the rates dropping in 2006, they dropped in 2003) and growth exploded the following quarters.

Also, I like how you provide invalid references (sarcasm). Also, you fail to understand that employment lags. The economy can start to do better but unemployment can lag for years, just like in this recession. A better metric is the GDP growth rate, and you will find that GDP grew strongly after his tax cut.

Taxes matter more than you think. Assuming all tax rates go up here: If I make 100k a year and my taxes go up an extra 3,000, do you think I don't feel that? And since my take home pay would be nearly 50k, that would represent 6% of my income. If I make 250,000 that is an extra 7,500, and that is on top of an extra progressive rate, so the actual increase in the tax burden is several percentage points higher.

Liberals like you love to tax away other people's money to spend on your socialist pet projects. You agree that taxes matter, but then downplay its importance with the caveat that follows. If taxes aren't that big of a deal, then why does the government spend so much time manipulating consumer behavior with the tax code (think cigarrette taxes, green rebates, mortgage deductions, etc.)? The tax cuts went disproportionately to high-income tax households because they pay more of their income in taxes! Why do liberals consistently rant about how the wealthly benefited the most from tax cuts.? If I am earning 100k and my taxes go down three percent (for example), I get three thousand dollars back. If Bob makes 10k and his taxes go down three percent, he gets 300 back. Is it really unfair that I got a larger dollar amount? No, especiallly since I was paying a lot more in taxes than Bob was in the first place!

Facebook: For Loving Thyself

Are you a Facebook narcissist? What is up with all the escort pictures on people's profiles?

Homesales Down Again

Shocker... home sales plunged again. Who could have seen that one coming?

Haines on CNBC

In response to:
Haines: The Real Impact of Marginal Tax Hikes on Hiring

I posted the following in the comments section:

This is the problem of what we statisticians call a "control case". You quote all these examples where job growth occurred in the presence of higher taxation, but that does not mean taxation did not negatively affect job growth. The missing question is 'what would have job growth been without the additional tax increase?" Surely, there were a bunch of things that were favorably affecting job growth. Short duration wars stimulate growth in manufacturing industries, naturally, and in the 1990s we embarked on the 4th revolution, namely, the computer revolution. Furthermore, our population dynamics has been changing with the baby boomers coming of age, the arrival of the single family household, and a changing of lifestyles from saving to consumption. There are a million variables not being controlled for in your examples. To compare taxation of different times in a vacuum will help you get your socialist ideals of raising taxes on high income earners across to other people who want to believe in it at all costs and need examples to 'prove their point', but it doesn't fool people who work with data.

"I just don’t see the correlation between raising taxes and job growth"
One must remember the saying "correlation does not imply causation."

It's absurd to think that raising taxes of any kind will promote economic activity and lead to job growth.

I have watched you on squawk box or whatever show you are on and it is clear from interviews and commentary that you want to raise taxes on the rich no matter what. Don't pretend that you are using the data to come to your conclusions.

Your last paragraph is a caveat to defend your article, but I think the intend is an implication that higher taxes do not negatively affect growth, because otherwise this article would not have even been written. Essentially with this paragraph, you are saying you don't know what to think. I applaud you for addressing comments though.

Articles

I have been a little short on time lately, so I have not been able to write any in-depth articles, but I came across some additional news articles for your reading enjoyment:

ObamaCare and the Constitution

Are Jobless Benefits to Blame for High Unemployment?

New Study Blasts Theory That Women do More Work

Thousands of Healthy Workers Still on Disability: GAO

More taxpayer waste: Thousands of Healthy Workers Still on Disability: GAO. Seriously, why do we even pay taxes?

Four Articles

Arthur Laffer (Laffer Curve) on taxation for the wealthy,

more about John Kerry's tax evasion on his yacht,
... for the comment at the end of the article: this would be the equivalent of me not factoring the cost of auto insurance on my car, but I do, and so would most people because people think at the margin. $500k is not trivial even in the face of that $231 million because most of that would be locked into long-term investments, and it would still represent .2% of his net worth.

Some examples on how 50% of Americans can avoid contributing to the federal government and its excellent point about negative tax payments representing "laundered welfare"

and finally, another Democrat is charged with ethics violations. Seriously, who isn't crooked in congress? Americans would like to know.