Tag Archives: Politics

The Debt Ceiling, The Budget and The Deficit

In April I spoke about taxing the rich.  Basically, you can’t tax ’em enough.

But for fun, let’s try; the highlights:

  • The deficit is $1.5 trillion.
  • People making more than $200,000 a year paid $5.3 billion.
  • Back out those taxes and the deficit is about $2 trillion.
  • People making more than $200,000 a year made, in total, $2.4 trillion.

If you tax the people making more than $200,000 a year at a rate of 100%, you cover the deficit and have $400 billion left over.

You would have to tax every single dime those people made.

At what point would taxing the rich reach the point at which the Leftist would be willing to cut Social Security?  Medicaid?  Medicare?  Unemployment?

If it were me, I’d compromise.  I’d offer $1 in tax raises for each $10 in spending cuts.

“Raise taxes on airplanes?”  Fair enough, cut spending 10 times that much.

I Have No Words

Words To Live By: Or Govern

New material out recently.  Even before the official body of work begins I’m impressed:

10 Golden Rules of Effective Taxation

This is gonna be good, I can just TELL!

1.  When you tax something more you get less of it, and when you tax something less you get more of it.

It is wise to keep taxes on work, savings, and investment as low as possible in order not to deter people from participating in these activities.

2.  Individuals work and produce goods and services to earn money for present or future consumption.

Workers save, but they do so for the purpose of conserving resources so they or their children can consume in the future.

3.  Taxes create a wedge between the cost of working and the rewards from working.

This is why all taxes ultimately affect people’s incentive to work and invest, though some taxes clearly have a more detrimental effect than others.

4.  An increase in tax rates will not lead to a dollar-for-dollar increase in tax revenues, and a reduction in tax rates that encourages production will lead to less than a dollar-for-dollar reduction in tax revenues.

Lower marginal tax rates reduce the tax wedge and lead to an expansion in the production base and improved resource allocation. Thus, while less tax revenue may be collected per unit of tax base, the tax base itself increases. This expansion of the tax base will, therefore, offset some (and in some cases, all) of the loss in revenues because of the now lower rates.

5.  If tax rates become too high, they may lead to a reduction in tax receipts. The relationship between tax rates and tax receipts has been described by the Laffer Curve.

…within what is referred to as the “normal range,” an increase in tax rates will lead to an increase in tax revenues. At some point, however, higher tax rates become counterproductive.  Above this point, called the “prohibitive range,” an increase in tax rates leads to a reduction in tax revenues and vice versa. Over the entire range, with a tax rate reduction, the revenues collected per dollar of tax base falls. This is the arithmetic effect. But the number of units in the tax base expands.  Lower tax rates lead to higher levels of personal income, employment, retail sales, investment, and general economic activity. This is the economic, or incentive, effect. Tax avoidance also declines.

6.  The more mobile the factors being taxed, the larger the response to a change in tax rates. The less mobile the factor, the smaller the change in the tax base for a given change in tax rates.

A study by the American Enterprise Institute  has found that high corporate income taxes at the national level are associated with lower growth in wages. Again, it appears a chain reaction occurs when corporate taxes get too high. Capital moves out of the high tax area, but wages are a function of the ratio of capital to labor, so the reduction in capital decreases the wage rate.

7.  Raising tax rates on one source of revenue may reduce the tax revenue from other sources, while reducing the tax rate on one activity may raise the taxes raised from other activities.

…an increase in the tax rate on corporate profits would be expected to lead to a diminution in the amount of corporate activity, and hence profits, within the taxing district. That alone implies less than a proportionate increase in corporate tax revenues. Such a reduction in corporate activity also implies a reduction in employment and personal income.

8.  An economically efficient tax system has a sensible, broad tax base and a low tax rate.

Ideally, the tax system of a state, city, or country will distort economic activity only minimally. High tax rates alter economic behavior. Ronald Reagan used to tell the story that he would stop making movies during his acting career once he was in the 90 percent tax bracket because the income he received was so low after taxes were taken away.

9.  Income transfer (welfare) payments also create a de facto tax on work and, thus, have a high impact on the vitality of a state’s economy.

Unemployment benefits, welfare payments, and subsidies all represent a redistribution of income. For every transfer recipient, there is an equivalent tax payment or future tax liability. Thus, income effects cancel. In many instances, these payments are given to people only in the absence of work or output.

In some high benefit states, such as Hawaii, Massachusetts, and New York, the entire package of welfare payments can pay people the equivalent of a $10 per hour job (and let us not forget: welfare benefits are not taxed, but wages and salaries are). Because these benefits shrink as income levels from work climb, welfare can impose very high marginal tax rates (60 percent or more) on low-income Americans. And those disincentives to work have a deleterious effect.

10.  If A and B are two locations, and if taxes are raised in B and lowered in A, producers and manufacturers will have a greater incentive to move from B to A.

No explanation given.

North Carolina’s Unemployment

Unemployment across the State remained basically steady.  Officially the rate moved from 9.6% in April to 9.7% in May.

I suspect that this number not moving down causes great worry in the governor’s office.  And it should; she is contributing to the rate staying so high.


A job at minimum wage over 40 hours is $7.25 x 40 = $290.00

Unemployment benefit c heck is $297.00.

The marginal benefit of working 40 hours is $7.00.

Do you think that pressure is going to add to unemployment or reduce it?

Governor Purdue, please remove your executive order restoring benefits with that Federal money.  You are making it harder to bring that number down.

Anything I Can Do You Can Do Better…

Wait – wait.  That’s not how that goes.  Not at all.

However, for this purpose, it provides an interesting illustration.

For example, consider two bills:


Raleigh, N.C. — Businesses, cities and counties in North Carolina are going to have to start checking the immigration status of new hires.

Gov. Beverly Perdue on Thursday signed into law a bill directing employers to use the federal government’s E-Verify system to prevent illegal immigrants from landing jobs. The legislation makes exceptions for companies that employ fewer than 25 people or which use seasonal workers.

Then, the other:


Gov. Bev Perdue has vetoed a controversial proposal to require voters to show photo ID at the polls.

Her statement:

“The right to choose our leaders is among the most precious freedoms we have – both as Americans and North Carolinians. North Carolinians who are eligible to vote have a constitutionally guaranteed right to cast their ballots, and no one should put up obstacles to citizens exercising that right.

Get that?

If you are a business and wanna  hire someone, you have to check and verify valid ID and legal status.

If you are a government and wanna protect the right that thousands have died to protect – not so ‘effin much.

The way of the Leftist ya’ll, the way of the Leftist.

Shrinking The Income Disparity Gap: What Would It Mean?

So, I had an interesting discussion with reflectionephemeral over at Poison Your Mind.  We were discussing the meaning of income disparity here in America and then around the world.

I acknowledge that such disparity is increasing; the gap between the rich and the poor seems to be getting wider and wider all the time.  And America is much less income level mobile.  That is, it is more difficult here in America to move from one income bracket to another than it is in say, Europe.

However, I make my point that while the gap may be larger, the rich may indeed be getting a larger slice of the pie, that the slice the poor DO get is much bigger than they otherwise would.

In my conversation, I envisioned two scenarios:

A. On a scale of 1 to 10, with 1 being poor and 10 being rich, the poorest averaged a 2 while the rich averaged a 3.

B. On a scale of 1 to 10, with 1 being poor and 10 being rich, the poorest averaged a 4 while the rich averaged a 9.

In world B, the poor earn MORE than the rich in world A. However, in world B, the rich are wealthier in relation to the poor in world A.

Which would you pick?

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Immigration Law

I’ve been living in Carolina for awhile now.  Today represents the 4,423rd consecutive day that I’ve left my property carrying my ID.

This includes 100% of my trips to the ice cream cone store.

Just sayin’.

Unintended Consequences: California Style

There are some good things in California.  For example, I can think of two:

1.  California Pizza Kitchen

2.  That little corner store on Inter-State 8 East just before you hit the Arizona line.  How can’t you like the last thing in California?

But seriously, California must be a nice place to live.  It HAS to be, or so many otherwise sensible people wouldn’t live there.

But that doesn’t mean business find it a nice place to live.

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Governor Perdure Vetoes Budget

Republicans hold both houses of congress here in North Carolina for the first time in about 140 years.  That’s a long time to wait.

For once, it’ll be a Republican lead agenda that shapes the fiscal direction in Raleigh.  Whatever bill ends up being passed into law will be one the Republicans drafted, and built and approved.  And it looks like Governor Purdue is making sure that the folks of North Carolina know that.

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NY Democrats Get It Right On Abortion

I often hammer the Left.  And for good reason.

However, I don’t work hard enough to hammer the Right when they are wrong or praise the Left when they are right.  [hee hee].

I wanna work on that, and so, to this end, I support the pro-choice legislation introduced by the 2 NY senators.

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