Math Challenged Democrats

I just saw a news article on MSNBC relating to the Senate vote which failed to pass legislation which would have extended tax cuts for 'all but the highest' income levels. Accompanying the story was a picture of Democrats standing next to a big poster with the headling 'GOP Plan'. The poster was supposed to show how unfair the Republicans are being to the middle class and said the following:

Middle class family making $60,000 ... get $2,500 Make $1 million ... get $43,000 Make $100 million ... get $3,800,000

This information is supposed to show you how unfair the Republicans are to working people. However, if you think about this information for more than a few seconds you would actually see that all three income groups are being treated fairly equally. Unfortunately there is a large percentage of the population, including most of the media, who would simply look at these raw numbers without actually thinking about what they represent. Naturally Democrats would rather pander to laziness or ignorance than to have an honest debate about the subject. There are two things to consider with the information presented by Democrats. First is the notion that any taxpayer is getting anything from the government. Taxpayers don't get money from the government when they get a tax break, they get to send less money to the government. Obama and Democrats continue to act as if all income belongs to them and they get to decide how much each person gets to keep. Since this isn't the case, a more honest wording would be:

Middle class family making $60,000 ... send the government $2,500 less Make $1 million ... send the government $43,000 less Make $100 million ... send the government $3,800,000 less

This still leaves us with the second problem that the uninitiated would still have the impression that high income earners are somehow getting a better deal than middle class workers. As usual, the Democrats, and those involved in class warfare, like to fool people with big numbers. However, if you break down the chart by percentage a different story would be told:

Make $60,000, send the government 4.17% less in taxes. Make $1,000,000, send the government 4.3% less in taxes. Make $100,000,000, send the government 3.8% less in taxes.

Doesn't quite have the same 'evil' ring to it, does it?

Obama really does believe Americans are idiots

I've always found President Obama to be arrogant and condescending. Watch any speech he gives and he is always pointing and lecturing as if he knows all. My opinion of his attitude was reinforced when I read this quote of his given at a recent fundraiser:

"And so part of the reason that our [Democrat] politics seems so tough right now, and facts and science and argument does not seem to be winning the day all the time, is because we're hard-wired not to always think clearly when we are scared." (emphasis mine)

We are in an anti-Democratic mood because of

"having gone through this trauma."

So, what our dear leader is telling us is that those who oppose his policies are just scared, and scared people don't think straight. What other reason could there be for America to reject his wise and grand vision? Can you say 'arrogant and condescending'? I thought you could. Actually, the President may be on to something. I do believe that people are scared. We're scared that his health care monstrosity is going to swallow up the medical field and reduce quality and quantity. We're scared that his grand spending programs are going to bankrupt the country, turning us into Greece. We're scared that his support of public sector unions and the European style corporate state is going to turn us into France. In short, were scared that his policies are going to make us all worse off. Unlike our President, however, I don't think being 'scared' is making us think less clearly. Instead, I think we are starting to think more clearly. More people are seeing the destruction caused by Washington, by both Democrats and Republicans. We still have a ways to go, however. Too many people are still swayed by politicians who claim they can 'fix' things. Government cannot 'fix' things, it typically makes things worse. The Founders had the right idea in creating a government with a limited set of powers. They saw first hand the destruction of freedom that government power causes. I believe we are starting to learn what the Founders knew. What this country needs are representatives (I refuse to call them 'leaders') who understand that government is force, and as such it should only be applied in very specific circumstances. We don't need a bunch of technocrats in office who believe they can harness the power of government to do their definition of 'good'. Instead, we need representatives who recognize that the true power that drives this country is freedom, not government command and control. A free society has no place for arrogant technocrats like our President and most members of Congress. Time to vote them all out. Then maybe we can all be less scared.

Outsourcing

We're coming into the final stretch on the mid-term elections and it seems that not a day goes by that I don't receive some mailing from the Democratic party denouncing the other candidate for the crime of supporting 'outsourcing' or having had worked for a company which 'ships jobs overseas'. You can see the same narrative coming out of our so-called leaders in Washington as well. Outsourcing is one of those tough topics, like foreign trade, which requires careful thought rather than a knee-jerk reaction. On the surface, opposing outsourcing seems rational, after all some jobs are lost here while others are gained in a foreign country. When our country is going through tough economic times it seems wrong to be 'shipping' these jobs overseas. Of course, those who are opposed to outsourcing are guilty of only looking at what is seen, not what is not seen. What is seen are jobs that have disappeared from this country. What is not seen are the benefits of outsourcing. Companies outsource as a way to manage costs. If a company can save costs by moving some activity off shore they are going to do it. By lowering costs, they increase their profit. This gives the company more resources to grow. When the company can grow, it can afford to hire additional workers in different parts of the business. In the end, outsourcing creates increased and better job opportunities in this country. According to a 2007 study by Matthew Slaughter, an economist at Dartmouth's Tuck School of Business, when U.S. firms hired lower-cost labor overseas through foreign subsidiaries, the parent companies in the U.S. hired even more people in the US to support expanded operations. For example, between 1991 and 2001, foreign employment of U.S. subsidiaries grew by 2.8 million jobs, but during the same time frame, the parent firms in the U.S. increased employment by 5.5 million jobs. Effectively, for every outsourced job, two new jobs were created in the U.S. There is no doubt that if you lose your job because it is outsourced to another country it is bad for you. However, this really isn't any different than if your job was 'outsourced' to another state, or if your job was eliminated due to automation. Companies will always find ways to lower costs and on aggregate this is a good thing for everybody. It lowers the costs of goods and services, freeing resources to be applied to other goods and services, driving their costs down as well. This 'creative destruction', as described by economist Joseph Schumpeter, is the engine behind increased prosperity. If Democrats, and those who mindlessly oppose 'outsourcing' , succeed in impeding outsourcing, we will all be worse off. Rather than opposing a candidate who understands the benefits of outsourcing, they should be supported. We need people in Congress who actually understand business and economics, not a bunch of lawyers who think they can control the world at the stroke of a pen.

Stimulate Consumer Spending? Why?

In an excellent article in the Sacramento Bee, Robert Higgs discusses some interesting facts about spending in the economy. We are told by politicians that we need to stimulate consumer spending so the economy can get back on track. Yet, according to data presented by Higgs, consumer spending during the downturn actually increased and is currently at 71% of GDP. However, investment spending fell some 36% from a peak in 2006 and has yet to recover. From the article:

When private domestic investment last peaked, in the first quarter (January-March) of 2006, it was nearly $2.3 trillion (in dollars of 2005 purchasing power), or 17.5 percent of GDP. When it hit bottom in the second quarter of 2009, it had fallen by 36 percent to $1.45 trillion, or 11.3 percent of GDP. It is still far below the 2006 peak. By contrast, in the second quarter of this year, personal consumption was actually at an all-time high, at nearly $9.3 trillion (in 2005 inflation-adjusted dollars). If stimulating consumption were the key to an economic recovery, we would have achieved one already.

Investment is crucial to growing an economy and it is lagging. Consumer spending, while important, is already at an all-time high. But what do our brilliant solons keep pushing? More consumer stimulus. What else are they pushing? Higher taxes on investment. At the same time they wonder why the economy isn't performing better. It's far past the time to send these idiots packing.

Stimulus?

Regardless of whether or not you believe that an economy can be 'stimulated' by government spending, it would seem that if you are trying to get out of a recession, you would spend the stimulus money now, not later. However, according to the Congressional Budget Office, of the $787 billion appropriated in the final bill, $236 billion won't be spent until 2011. That's 41% of this monster. If the true nature of this bill was to stimulate the economy, $236 billion could have been cut and still provided the necessary stimulus. The truth is that this bill is a sham and will burden current and future generations with a mountain of debt. George Bush and Congress (both parties) took 8 years to dig a deep deficit hole, it has only taken Obama and Congressional Democrats days to dig a deeper one.

I Fear for the Future

On the front page of The Ann Arbor News today there was a little box with a letter to incoming President Obama. In part the letter said:

[...]I think you deserve to be the president because you are going to do smart and good stuff, like give poor people homes and a life.

Granted this letter was from an 8 year old, but this thinking of the President as some sort of Superman is pretty pervasive, and to some degree represents the type of thinking taught in our schools today. I've seen similar comments from adults as well, which is also pretty scary. I really hope that Obama does well as President, but based on concepts and policies coming out during the transition I can't say that I'm very hopeful. Couple many bad ideas with a Congress that is even worse and I fear that a return of the Carter era 70's is quite likely, and possibly something much worse.

Wishonomics

It's really disappointing that the McCain campaign isn't doing a better job exposing Obama's economic plans for the sham that they are. They should be pointing out wherever they can that raising taxes, particularly during an economic slowdown, is a recipe for failure. Spending money you don't have compounds the problem. I call this 'wishonomics' because you have to wish that economic realities don't exist in order to believe it will work.

Obama wants to raise taxes on dividends and capital gains. History has shown that when you raise these taxes you get less revenue. Obama knows this, but is on record as saying he doesn't care. He will do this to impose his notion of 'fairness'. Raising taxes on investment will result in less investment, or misallocated investment. Instead of investing in higher risk, perhaps a new business or idea, investors will stick with safer investments. Capital which has gains, will stay locked up as people avoid paying the higher tax rate in the hopes that down the road saner heads will prevail. The net effect of raising taxes on dividends and capital gains is to reduce revenue to the government at a time when it will certainly be needed, and to reduce investment in productive economic activity, again, at a time when we desperately need it.

Obama also wants to raise taxes on people earning over $250,000. IRS data shows that the majority of individual filers who report income over $250,000 are actually people who own businesses and are reporting business income on their personal return. Raising rates effectively reduces the amount of money that these business owners can use to invest in making their business grow. Small businesses are the largest employers and hurting them seems counter productive. People who cheer the idea of making the rich 'pay their fair share' should realize that they are simply shooting themselves in the foot. People like to mock 'trickle down' economics, but the simple fact is that if you hurt the ability of small businesses to grow, by reducing their access to operating capital, you will cause businesses to either fail or grow slowly or not at all.

In the face of a recession, where tax revenue will naturally decline, and with the almost certainty that his tax policies will futher reduce revenue, Obama then proposes spending even more money than Bush. Everywhere he appears, he is promising that he will have a refundable tax credit for this, that or the other thing. If these promises are kept, all that will be accomplished is an explosion of debt. I really fear that we are entering a period very similar to the 1930's. I don't think we will go into a deep depression, but I feel that the poor economics of our current president (playing the role of Herbert Hoover) will lead to the election and destructive policies of Obama (playing the role of FDR). I expect that there will be plenty of stupid laws passed and further restrictions of freedom that will take decades to repair.

Is it a tax or forced savings?

When the subject of taxation is brought up, particularly in who shoulders the most burden, defenders of Obama's tax plan like to claim that it is the lower and middle classes who have the tax burden, and those in the top 5% who aren't paying their 'fair' share. This flies in the face of the facts which clearly show that those making over $250,000 pay a far greater share in federal income taxes than do the remaining 95% of earners. Ah, but this excludes the payroll tax, say Obama's supporters. When you factor in that regressive tax, things change.

So here's my question. For years we've been told that the payroll tax, i.e. FICA, is going to fund Social Security and Medicare. Social Security is continually sold to us as a form of retirement savings. Social Security payments are made in a decreasing proportion to the amount of money collected from payroll taxes over an employees working career. Those who make less and paid in less, receive a higher percentage payback than those who earned more and paid in more. So, if people are getting a retirement benefit based on their 'contributions' to Social Security via FICA, doesn't that mean that FICA isn't really a tax? Isn't it more of a forced savings plan? If so, then we certainly shouldn't be counting FICA as part of a persons tax burden any more that we should be counting any savings the person makes as a tax burden.

On the other hand, if people want to claim that FICA is a tax, then let's admit that Social Security is nothing more than a welfare program and simply eliminate it. If we want to keep the payments, have them come from the general fund. Eliminate the payroll tax entirely. At least then we might be able to have a rational discussion about true tax burden, rather than having FICA muddy the waters.

Tax. Spend. Dictate.

Tax. Spend. Dictate. These three words completely summarize the economic policies of Barrack Obama.

On taxation, Obama believes that the 'rich' pay too little in taxes so his plan is to raise taxes on those earning more than $250,000. Why $250,000? I assume because he feels that the number of people earning more than that are in sufficiently small numbers that they won't affect his polling numbers. Obama also wants to increase taxes on dividends and capital gains, again playing to a myth that only the 'rich' will be hit by these taxes. Obama doesn't even care if these higher taxes will actually raise revenue, he wants to do it simply to fit his notion of 'fairness'. Of course he doesn't stop there. Obama also wants to change the way Social Security gets funded so that people earning over $250,000 will have to pay additional taxes over and above the wage cap. This completely eliminates the charade that Social Security is anything but a welfare program. Finally, as part of Obama's energy policy, he wants to tax the 'windfall' profits of oil companies. Of course, what defines 'windfall'? In Obama's world it must simply be a large dollar number earned by an unpopular industry, because on a profit as a percentage of sales, the oil industry is positively middle of the road. Again, in a zeal to appeal to populist instincts, Obama would prefer to do something harmful rather than being courageous and doing something sensible.

Other than increasing 'fairness', what does Obama plan to do with all this extra cash he hopes to raise? Why spend it, of course. Every day there is an article in the newspaper about how Obama is going to give $x billion dollars to support this, that or the other thing. If there is a problem, Obama's solution is to throw money at it. It doesn't matter if this is a good solution, it doesn't matter if the origin of the problem is government meddling, if you throw money at it, the problem will go away, right? It's worked so well in the past. Obama wants to be the national Santa Claus, handing out goodies paid for by people who work for a living while he takes the credit. None of this, of course, is the President's job, but that doesn't stop him from convincing an ignorant electorate that he should be elected because of his generosity.

Tax and spend are two big impediments to true liberty. Taxation takes money by force. Your labor isn't all yours, part of it is owned by the government. Government spending is taking decisions away from the people and replacing them with decisions made by the political class (which includes corporations and other influencial people) However, Obama isn't content with attacking your liberty through tax and spend, he also want to dictate how you live your lives. For example, as part of his energy policy, he wants to ban conventional light bulbs, forcing everyone to buy CFL's. I have no problem with CFL's, they have there place, but I certainly don't want to replace every light in my house with a high mercury device which is expensive, ugly and has a host of other problems. This doesn't matter to Obama, he and his technocrat advisors know what is best for you and me and therefore he will use his power (not really granted by the Constitution) to force us to live the way he wants us to live. Health care will be a similar thing. Obama wants to implement a medical insurance scheme which will continually force us to obey new government restrictions. I predict a host of new laws to promote a 'healthier' person so that we don't cost the government so much money in health care. Again, dictate it and it will be so!

Obama is campaigning on 'Change'. I don't see this as change, but more of an acceleration. We've had continual growth of government and continual reduction in liberties. Under Obama I would expect this trend to continue. Make no mistake, John McCain isn't much better, but at least he would be a Republican President presiding over a Democrat controlled Congress. Some gridlock is bound to happen. With Obama as President and a Democrat controlled Congress there is virtually no limit to the damage they could do to this country. Just look at what happened when Bush presided over a Republican Congress.

No Surprise

I was reading this weekend that Hillary Clinton has chosen not to listen to economists regarding her gas tax holiday. Big surprise there since it's obvious from her other economic positions that she chooses to ignore sound economics on a regular basis. She has an amazing ego which convinces her that whatever she wants she will get, regardless of reality. More likely, she feels that if she appears to be attacking a problem she will get credit, and when it doesn't work she'll have some other scapegoat for why it didn't happen.

On the gas tax proposal, she is completely out of touch with reality. She claims that her proposal will help those people who are struggling with high gas prices, when in fact the opposite will occur. Gas prices, like all prices, are driven by supply and demand. When demand is high and supply is low, prices will rise. Cutting the gas tax will, for a short period of time, reduce prices. However, lower prices will release additional demand and prices will soon move up again. In addition, her idea to implement a windfall profits tax on oil companies will actually reduce supply. Why would an oil company spend valuable reasearch and development dollars trying to find and produce more oil, only to have profits from those risky ventures taken by government. The net effect will be to reduce supply, thereby raising prices even more. It's not like this is rocket science. The same thing happened the last time we had a windfall profits tax on oil.

Hillary has some other proposals which are equally bad from an economic point of view. She wants to raise taxes on capital gains and dividends. Of course this will just cause people to hold on to profitable investments longer than they would like, rather than being able to take their gains and move into other investments. This has the effect of hindering mobility of capital. Capital is what is needed to start and keep new businesses running. It is this business creation which creates the jobs which help everyone. Ms. Clinton's short sited fixation on 'fairness' ignores the greater reality that she is really hurting the very people she claims to want to help. We only need to look at the infamous 'yacht tax' to see what happens when you try to punish the rich through excessive taxation.

The policies that Hillary Clinton proposes are almost universally bad from an economic standpoint. However, there are places in the world where such policies may be welcome. I understand that Cuba will likely be looking for a new president in the near future. Perhaps Ms. Clinton should take up residence in Cuba and run for president of that country. Certainly her policies are more consistent with Cuba's socialist paradise than the capitalist United States.

Hillary for Benevolent Dictator '08 - Part 3

In another example showing how much contempt Hillary Clinton has for freedom and the U.S. Constitution, we have this gem of a quote (courtesy of the New York Times)

We need a president who is ready on Day 1 to be commander in chief of our economy.

First, I would like to know where the Constitution grants such a power to the President. Commander in Chief of the armed forces, yes, economic ruler, I don't think so. Second, the economy is not something which can be given orders on how to behave. An economy is the result of individuals going about their lives, trying to make them better. No president or ruler can change that. Many have tried and the result is always the same, less freedom, smaller economy. Just ask the former Soviet Union. I'j sure that Hillary has the ego to feel that she can to better, however.

Very scary.

It's the Attitude, Stupid!

A new study by Michigan Future Inc. finds that, no surprise, Michigan is a lagging in the creation of high-wage jobs requiring as least a bachelor's degree. The study says that states with an abundance of information, finance, insurance, professional and technical services and other similar occupations have the highest per capita income. Not surprising, Michigan is lacking in these areas.

When discussing what can be done about this situation, one of the study's authors claims that rather than providing tax breaks and incentives to attract businesses to come to Michigan, the state needs a base of highly educated workers. That's fine, but does he expect that highly educated workers are just going to hang around Michigan waiting for some company to move here? I don't think so. People who live in the state and get a good education are likely to look to places where they can put their expensive skills to work, not hang around waiting for some high end company to come along.

The problem with Michigan is that it is mired in the past. The attitudes of many of its citizens, and certain of the government, are tied to Michigan's manufacturing past. This past is marked by animosity between labor and management. People have the attitude that companies are evil creations. As a result we have more expensive labor laws and regulations.

What Michigan needs are companies that are willing to take a chance to move here. In order to do that, the state needs to be a place that people will want to move. Companies aren't going to move to Michigan as long as they think that the state is hostile to business. If some desirable companies move to the state, desirable workers will come with them. Once a few companies locate here, more of our educated citizens will decide to stay and work here. We need to change our entire attitude toward business if we are going to attract the kind of companies which will help Michigan move forward once again.

Hillary for Benevolent Dictator '08 - Part 2

In an earlier post I made reference to a comment made by Hillary about all the expensive ideas she had to make this country great. Well, she's at it again. In a recent post on the Cato@Liberty blog, David Boaz writes about a Clinton ad which ran before Christmas in which our heroine is shown wrapping gifts and putting lovely tags on each one with titles such as 'Universal Health Care', or 'Universal Pre-K'. The implication is that she is somehow Santa Claus and wants to give these lovely gifts to all her adoring subjects. Makes me sick just thinking about it.

Like most politicians, and presidential candidates in particular, she loves to make promises about all the things she will 'do' for the country and completely ignores the fact that the only way she can make it happen is through coercion and force. For example, candidates talk about how 'they' will bail out mortgage holders. Or they talk about how 'they' are going to make sure that everyone will have health care. It sounds as if they personally will be paying for this. Unfortunately while most people realize that the candidates themselves aren't going to foot the bill, they somehow think that the costs will ultimately be borne by someone else and not themselves. Depressing to think about.

How to make the Michigan economy worse

There is a petition drive going on in Michigan to place a ballot proposal on the November ballot which would force the state government to come up with a plan for universal health care in Michigan. If passed, the bill would amend the state constitution to require that the government "make sure that every Michigan resident has affordable and comprehensive health care coverage through a fair and cost-effective financing system". Not content with policies which have put Michigan's economy in the dumpster, our governor, Jennifer Granholm, threw her support behind the bill because she says that it would help Michigan businesses become more competitive. Of course this won't really happen, but what it will do is saddle Michigan with the prospect of higher taxes and more misery long after Granholm has left office. Thanks, but no thanks.

While it is certainly true that some of Michigan's largest employers (read Big 3 auto makers) might benefit from reduced health care costs, she completely ignores the fact that the costs have to go somewhere. If the Big 3 isn't paying it, then it will either fall to other employees or more likely individual citizens. A constitutional amendment which contains nebulous terms like 'affordable' and 'fair' and 'cost-effective' is like opening a Pandora's box of unfunded entitlements. Every lawyer in the state will be suing on behalf of some client to claim that the state isn't doing enough to provide 'comprehensive' coverage. Every medical practitioner of all stripes will be lobbying to have their service included in the package. This amendment will be an economic disaster for the state. If costs can't be controlled, you can bet that subtle rationing and new nanny state laws will be passed to ensure that people don't live a lifestyle which is too 'costly'. Unfortunately, economic realities never seem to get in the way of politicians who want to act like benevolent dictators, handing out 'goodies' to the populace. Both this ballot proposal, and our governor, just need to go away before they do any more damage.

A Living Constitution?

Recently there has been several letters to The Wall Street Journal concerning the notion of a 'Living Constitution'. The idea is that times change and the founders didn't expect us to be tied down to concepts from the past. The 9th amendment was mentioned as explicit proof that the founders intended the Constitution to be a living document.

On one level I agree with the argument. Certainly the 9th amendment allows for the people to retain rights which weren't explicitly mentioned in the Constitution. In fact, that was the primary purpose of this amendment. However, whenever I hear people talking about a 'living' Constitution, most of the arguments seem to be in favor of expanding government power, not individual freedom. New interpretations are given on specific limitations on government set forth in the various articles. We've seen government expand as the courts give unique interpretations to the commerce clause, the 'general welfare' clause, etc.

The key thing that most people seem to ignore is that the only reason the Constitution exists is to create a government and grant it certain powers. The founders knew that governments have been the greatest impediment to freedom throughout history and they sought to create a document which would strictly limit the power of the government. The last thing they would have wanted to create was some sort of 'living' document where new interpretations could expand the power of government without the explicit will of the people. The only way government power was to be expanded (or contracted, for that matter) was through the amendment process, which they made difficult for a reason.

It's vitally important to remember why the Constitution exists. It's not to grant rights to the people. It's to grant power to the government. As such, it needs to be as tightly focused as possible. For freedom to reign, we must continue, as Jefferson wrote, to bind the government to the chains of the Constitution. What point are chains if they are made out of bungy cord?

I'm a Masonomist

Great column by Arnold Kling on the type of economics taught at George Mason University. If I were looking for a place to get an economics education today, I would attend George Mason.

Government is Good?

Government is Good is a web project by Douglas J. Amy, a Professor of Politics at Mount Holyoke College. The site describes itself as providing "An Unapologetic Defense of a Vital Institution". However it's more unthinking than unapologetic. A perfect example is provided by the author's writing on "A Day in Your Life".

The article starts with the claim that "Though we usually fail to notice it, government programs and policies improve our daily lives in innumerable ways." and then proceeds to document all the nice things that government does for us. The problem with this tome is that the author presents things as if only the government could provide the services he mentions. For example, he mentions getting weather information from the National Weather Service, completely ignoring the fact that there are numerous private companies in existence which provide weather information, some of it more accurate than the NWS. He talks about how wonderful and cheap our postal service is, as if private companies would somehow not fill the gap should the postal service not exist. Item after item are things which could (or have been in the past) provided by private firms. TJIC provides a better, point by point dissection.

In addition to overlooking the fact that private companies can and do provide the same sort of services, he makes a big omission by failing to address costs. It's easy to say that government is providing all these great services, but a what cost? When free people want to make use of a service, they evaluate the cost and benefit of the service. They look for a good value. Are the services government provides a good value? Nowhere does he talk about this. Not surprising, since he is a professor of politics and not economics.

It's not that I'm anti-government (although David D. Friedman's book The Machinery of Freedom makes a compelling case for why government isn't really necessary) but I believe that government's only legitimate purpose is to protect individual freedom. As George Washington stated so eloquently:

Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.

Supporters of big government who ignore this simple fact ignore history. They think that past governments have done bad things because bad people were in a position of power. The feel that government will work if we put good people in charge. History has not shown this to be the case, however. What has been shown time and time again is that government in only good at one thing, and that's to kill people.

Another take here

Interesting Federal Tax Reform Proposal

I just read about a new tax reform proposal offered up by a couple of House Republicans that sounds interesting. It's called the "Simplified Tax" system and it comes close to being a flat tax. It has two rates, 10 and 25 percent, with a large standard deduction of $25,000 for married filers and $12,500 for singles. It supposedly would eliminate all other deductions and credits. Dividend and capital gains would be set to 15%.

Overall this is a drastic improvement over what we have now. Simplification would reduce costs of compliance. Less need for tax accounts and lawyers, for example. Reducing taxes on dividends and capital gains would also free investment capital to move to better uses, helping the economy as a whole. Of course tax accountants and lawyers would stand to lose, as well as other groups who benefit from tax favoritism which is why I wouldn't expect this bill to pass, at least not without adding back some key deductions. Still, it's nice to see something positive coming out of Republicans for a change.

Best quote from the Michigan Republican Presidential debate

In response to Mitt Romney's comment that he would have to consult attorneys before going to war, presidential candidate Ron Paul quipped:

Why don't we just open up the Constitution and read it?

Buying Votes

I see that Hillary Clinton is once again attempting to buy votes. On Wednesday, Clinton proposed tax cuts up to $1,000 per year to encourage millions of working-age families to open 401(k) accounts. If she had stopped right there I wouldn't have much of a problem. I'm always in favor of ways for people to keep more of their own money and to give the government less. However, as always, there is a catch. To 'pay' for the cuts, Clinton advocates higher estate taxes. Simply a case of taking money from some people and giving it to someone else. Perhaps Clinton should just come clean and announce a program to take everyone's money and give it back to people in the portion she feels is fair. It would be more honest.

(h/t Cato@Liberty)