Right to Opine

Why is it that Democrats seem to see everything–at least everything done by a member of a minority group–through the myopic lens of race?

Senator Harry Reid thinks that his colleague, Marco Rubio of Florida, is a bad Hispanic because he doesn’t toe the line of the overlord party to which all real Hispanics should naturally belong.

So does Reid represent whites? Not this one, I can tell you! With any wisdom on the part of Nevadans, he won’t represent anyone at all after his next ballot appearance.

News flash for Mr. Reid: Rubio doesn’t represent Hispanics. As his office very fittingly responded,

Senator Rubio represents Florida.

The politics of division: classic Leftist tactic of which they never seem to tire.

You really have to love the NY Times. Their latest lament is that America is, apparently, out of touch with the rest of the world when you compare our Constitution with those of other nations.

Other nations routinely trade in their constitutions wholesale, replacing them on average every 19 years.

Yes, they do. Repeat after me, “Stability is a good thing.” America became a great nation because its founding principles are, in fact, timeless. Is our Constitution perfect? Probably not, and it certainly wasn’t as it was originally written. The founders knew that, and so included a mechanism for making changes. The fact that those changes are hard to make, however, has been a great benefit rather than a hindrance.

The rights guaranteed by the American Constitution are parsimonious by international standards…

I actually had to read that a few times. Parsimonious? Then I saw what was missing just a few sentences later:

But the Constitution is out of step with the rest of the world in failing to protect, at least in so many words, a right to travel, the presumption of innocence and entitlement to food, education and health care.

Yes, I see. Americans are terribly restricted in our ability to travel. Huh? And since when are we not guaranteed the “presumption of innocence” in court? It’s one of the pillars of our legal system and always has been. Then comes the kicker: entitlements. A country that is fighting an increasing epidemic of obesity lacks an “entitlement to food”? Really? The left is so preoccupied with what we are “entitled” to that it entirely ignores our responsibilities.

And then, of course,

It has its idiosyncrasies. Only 2 percent of the world’s constitutions protect, as the Second Amendment does, a right to bear arms.

That, in the end, is what guarantees our liberty. So long as Americans can arm themselves, the government cannot exert unlimited power over us. This is no small freedom.

To be fair to the authors, they concluded with a powerful and unrebutted counterpoint by Supreme Court Justice Antonin Scalia:

“Every banana republic in the world has a bill of rights,” he said.

“The bill of rights of the former evil empire, the Union of Soviet Socialist Republics, was much better than ours,” he said, adding: “We guarantee freedom of speech and of the press. Big deal. They guaranteed freedom of speech, of the press, of street demonstrations and protests, and anyone who is caught trying to suppress criticism of the government will be called to account. Whoa, that is wonderful stuff!”

“Of course,” Justice Scalia continued, “it’s just words on paper, what our framers would have called a ‘parchment guarantee.’ ”

Yeah, I really wish our country were more like Canada. It’s a great model of individual freedom and freedom of speech. I’ll take the liberties enshrined in our founding documents, thank you.

The Left, led by our Wealth-Redistributor-in-Chief, keeps hammering away at how the rich don’t pay their fair share of taxes. The latest faux example of unfairness they’re trotting out before the gullible (and sadly ignorant) public is Republican candidate Mitt Romney. In what can only be either a deliberate hit piece or shoddy journalism (or, more likely, both), the AP today asks, “ Why is investment income taxed less than wages?”

From the beginning to the end, the article is sprinkled with liberal talking points and misleading inferences.

Why do Mitt Romney and other wealthy investors pay lower taxes on the income they make from investments than they would if they earned their millions from wages? Because Congress, through the tax code, has long treated investment more favorably than labor, seeing it as an engine for economic growth that benefits everyone.

Yes, and the reason Congress has done so is that it’s true. As I pointed out before, when you tax something too much, you get less of it. If you want capital to flee the country for better business environments, raise the capital gains rate.

They throw in the obligatory comment from a conservative economist who points out that capital gains taxes amount to taxing the same income twice. This of course, is immediately rebutted with:

Lots of people are double taxed, says Chuck Marr, director of federal tax policy for the liberal Center on Budget and Policy Priorities. “Check out your last pay stub: There‘s income tax and payroll tax, so you‘re double taxed, too,” Marr said.

The problem with this—and Marr can’t possibly be ignorant of the fact—is that before a shareholder receives a capital gain from a stock investment, that money has already been taxed under both the income and payroll taxes at the corporate level. The shareholder, as an owner of the company in question, has already paid both income and payroll taxes. The capital gains tax is an additional tax on the same money, belonging to the same person. It’s as if the IRS looked at every individual taxpayer on April 16 and said, “Oh, you have money left over? Let’s take another 15% of that.”

No, it’s actually worse than that. If I want to buy shares in a company, I have to first earn the money with which to do so. That income is taxed (income and payroll) at my individual rate. With what the government graciously allows me to keep, I take a risk investing it in a company. As an owner of that company I pay taxes on its earnings (income and payroll). If there’s enough left over for the company to pay me a dividend, I now pay a third tax for capital gains.

But the real gotcha is this beautiful class warfare gem:

Romney, who released his 2010 and 2011 tax returns this week, has been forced to defend the fact that he paid a tax rate of about 15 percent on an annual income of $21 million. His tax rate is comparable to the one paid by most middle-income families. His income, however, is 420 times higher than the typical U.S. household.

It took me all of thirty minutes to research the facts that display how utterly false this statement is. If I can do it on my own time for free, why doesn’t a “journalist” do the same? Consider:

• CNN points out that “roughly 45% of households, or about 69 million, will end up owing nothing in federal income tax.”
• According to the Census Bureau, median income is $49,777 for 117,538,000 households.
• According to the IRS, the total individual tax liability was $865,948,271,000.

So even though almost half of households pay no taxes at all, the average household tax liability is just under $7400. Now 15% of $21 million is $3,150,000. So Romney paid roughly 425 times the taxes of the typical household. It doesn’t take a rocket scientist to see that 425 > 420. So Mitt Romney paid more than his fair share in taxes.

So when the prevaricator who currently occupies the White House tells you,

“Now, you can call this class warfare all you want,” Obama said. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

take a look at the facts and use your own common sense. Don’t buy the “fairness” lie.

Did anyone else just love this little nugget from Obama’s State of the Union?

Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.

By “same set of rules” I can only assume he intends to stop taking money from people who have made good decisions and worked hard—and are now enjoying the fruits of their effort—and handing it to people who haven’t. The rules I live by—I stayed in school, worked hard for my grades, spent twenty years developing marketable skills, so I am able to own a home, feed and clothe my family and enjoy the occasional vacation–now apply to everyone? Yeah, right.

There’s been a lot of overblown rhetoric coming from the Left lately about the capital gains tax. Even some big investors—like Warren Buffett—who know better have been banging their drums to raise the capital gains rate. To see why this is terribly wrong-headed we need to look at the purpose and impact of taxes and see how that relates to capital gains.

Taxes are imposed for two reasons. The first, and most obvious, is to generate revenue for the government. Everyone agrees that some level of taxation is requisite and reasonable in order to fund necessary government functions. The second, often overlooked, is to encourage or discourage specific behaviors.

Having recently moved from Arizona to North Carolina, I can attest to an obvious example of the complex interaction of these two purposes: cigarette taxes. Many states impose high taxes on cigarettes in order to discourage smoking. Arizona’s cigarette tax is $2 per pack, while North Carolina’s is $0.45. When AZ raised its rate from $1.18 to $2, total revenues from the tax fell as smokers quit. In NC, not only is the tax low, but practically everyone in the state lives within a mile of a tobacco farm—and smoking is rather prevalent. When NC initially raised its rate from $0.05 to $0.30, there was a drop in sales volume, but not enough to counter the tax increase—tax revenues increased marginally. Another interesting impact of taxation rears its head here: when NC raised its cigarette tax, sales increased significantly in neighboring South Carolina which, at the the time, maintained a $0.07 tax rate. I doubt that South Carolinians suddenly started smoking in droves—those sales were going north across the state line. In AZ, sales on Indian reservations—which do not tax tobacco—went up as well, mitigating the smoking cessation effect and leaching both cigarette and sales tax revenues from the state.

I use this as the near-perfect example because it highlights the tension between the purposes and effects of a tax. When tax rates are increased, there may be a corresponding increase in revenues, or there may be a decrease as demand for the underlying activity or product decreases. It may well be that the effect of decreasing smoking incidence is of greater societal benefit than the loss in revenue is detrimental. But that goal is diminished when demand can be met simply by taking business elsewhere. What is of importance here is not to discuss the cigarette tax specifically, but to see and understand the effects of tax increases.

Now let’s slide into the capital gains tax (CGT). Simply speaking, a capital gain is realized when an investor sells an interest in something (most often in the form of property or stocks, bonds, or fund shares in a business, or dividends) for an amount higher than he originally paid. Taxes on the gain are paid at 15% for long-term investments (reduced to 0% for the bottom two personal income tax brackets) or the personal rate for short-term investments (less than a year). Consider a simple example.

An investor buys into a company for $1000, and later sells for $2000. The capital gain is $1000, so at the current 15% rate, he would pay $150 in capital gains tax. That sounds like a screaming deal, right? The guy just walked off with an 85% return on his investment! This is exactly what the Left and their media tail-waggers want you to think. The problem is that they’ve left out a huge factor in the equation: time. If the sale were made relatively soon after the purchase, then the investor really did come out with a screaming deal. But the overwhelming majority of investments don’t double in value over a short period. In fact, when you look at the stock market as a whole you begin to see why financial advisors tell you to pick solid investments for the long-term. Suppose instead that the investor keeps his money in the company for a number of years. Well, if inflation were only 3% then in 17 years his initial $1000 has inflated to $1650 so his real gain from the sale is only $350. That same $150 tax is 43% of the real gain. If, as the Left wishes, we raise the capital gains rate to 35% to match the top personal rate of 35%, then his tax becomes $350 and completely swallows his real gain. In the end he’s only left with the money he started with at its new, inflated value.

One effect, then, of a capital gains increase is to make long-term investment less valuable. Mega-investors like Warren Buffett and George Soros are very well aware of this impact on the market, and use it to their advantage. Think of how often you read in the paper that one of those two just invested hundreds of millions of dollars in some particular venture—nearly every week. Billionaires like those two can afford to play more often in the medium-term market—and do—because they can afford to take the occasional significant loss. (Consider in particular that Soros made his name by shorting the pound in the U.K., contributing greatly to the crash of their monetary system.) Now you can see why Buffett has no problem raising the capital gains rate—because his investments are often of shorter term, they are less impacted by inflation. (Short enough to diminish the effect of inflation, but long enough to avoid the short-term CGT, which is the same as the higher personal income rate.)

The second effect of a capital gains increase is—as in the case of the cigarette tax—to move monetary transactions (and the profits they generate) elsewhere. Why do you think so many people worldwide sink their money into Asian, Caribbean, and South American banks and funds? Barbados, with no CGT, reportedly has over $25 billion in Canadian investments. Other growing economies with no CGT include Belize, the Cayman Islands and Jamaica and, on the other side of the Pacific: Hong Kong, Malaysia, and Singapore. Do you think it sheer coincidence that many of these are also major financial centers with investors from around the world? And even Brazil, with a CGT of 15%, stands to gain if we were to raise our rate to the Left’s envisioned 35%. Their economy is booming. Do you really think that if we raise our rate investors from both here and abroad will even hesitate to move their funds to Brazil? Get real.

You don’t improve an economy by undermining the capital base upon which growth is built. Before you buy into the class warfare rhetoric being spewed by the current denizens of the White House, consider the real purpose and effect of taxes and decide for yourself where the greater good of our nation lies.

With all of the recent class warfare rhetoric coming from the Left, I’ve devised the perfect economic recovery proposal for the GOP this election cycle. Why would this work for the Republicans but not for the Democrats?

• It only rewards taxpayers. Rather than redistributing wealth from those who produce to those who don’t, it would acknowledge the contributions of those who actually shoulder the burden of the federal government.
• Democrats like buying votes, but only when it increases their power and makes more people dependent on them. This plan would foster hard work and decrease overall dependence on government handouts.
• It would significantly reduce the size and power of the federal government, upon both of which the Democrats rely.

Here’s how it works. Whoever is the eventual Republican candidate should announce as part of his platform:

When I am elected, I am going to institute Taxpayer Appreciation Day, a recurring event to be celebrated on the 16th of every month. On TAD, the Internal Revenue Service shall issue a non-taxable check in the amount of $1 million to one randomly selected taxpayer per Congressional district in recognition of his contributions to this great nation. Eligibility will be determined in accordance with the following criteria:

1. He must have a positive net tax burden for the most recent tax year. This calculation shall not include Social Security and Medicare withdrawals. [If you want to include those, quit pretending that those entitlements aren’t part of the annual federal budget.]
2. Neither he nor anyone claimed as a dependent on his last tax return may have received any federal assistance in the current or previous tax year. This includes, but is not limited to:
   • food programs (e.g., SNAP, WIC, and free/reduced school breakfast or lunch)
   • federally subsidized housing (e.g., HUD housing or FHA loans)
   • tuition assistance (e.g., Pell grants and federally-backed student loans)
   • farm or other subsidies
   • medical assistance (Medicare/Medicaid)
   • retirement (Social Security or retirement pay from federal civil service)
3. Exceptions to #2 are granted to those with military service utilizing benefits such as the G.I. Bill, VA loans and medical care, service-related disability, military retirement pay, etc. This will include the commonly recognized branches of service as well as the Border Patrol, U.S. Marshal Service, Coast Guard, and personnel in government service who are/were employed in positions which either require the carry of a firearm or are otherwise life-endangering (e.g., FBI/BATFE/CIA field agents, but not office workers) for at least 50% of the employment period or the current or prior tax year.
4. He must be registered to vote.
5. He must not be a previous TAD award recipient.

Federal policies will be modified as follows:

1. All federal outlay to states for unemployment assistance, farm subsidies, funding for non-interstate roadways, etc., will be eliminated immediately.
2. Federal taxes will be simplified to a 20% rate for all sources of income, personal and corporate.
3. Personal and corporate tax deductions will be eliminated with the following exceptions. (Corporations will only be eligible for the charitable deduction.)
   • Charitable donations to organizations which expend at least 25% of their funds providing demonstrable societal benefits such as food, clothing, housing, and medical care. (No upper limit on charitable donation deductions.)
   • Medical payments for insurance premiums, annual medical/visual checkups, and non-elective procedures and prescribed medications. (No upper limit on medical deductions.)
   • Mortgage or rental payments for a single dwelling occupied as a primary residence by the taxpayer up to $12,000.
   • Food allowance of $2000 per dependent.
   • Clothing allowance of $500 per dependent.
4. The award amount and tax deductions will be indexed annually to the average rate of inflation.
5. Federal agencies and organizations not specifically authorized by the Constitution or specifically created by the Congress shall be disbanded. This will include, but is not limited to, every “czar” installed by any previous administration regardless of party affiliation.
6. All regulations created by federal agencies and organizations, which regulations were not specifically voted upon by both the House of Representatives and Senate, and signed into law by the President, shall be declared null and void.
7. DHS will grant a universal waiver for Obamacare.

The Taxpayer Appreciation Day program will cost $5.22 billion annually. This will be more than offset by the reduction in expenses due to closed federal agencies, fewer people using federal assistance (in order to attain TAD eligibility), and the increase in economic productivity as American businesses are relieved of crushing regulations.

No real surprises here. Yet another hit piece to brand Christian Conservatives as knuckle-dragging bigots. There’s nothing quite like sprinkling your piece with phrases such as,

So long as a candidate makes bland, predictable affirmations of religious faith, he or she has adequately punched the religion card.

to make your bias crystal clear. And the author’s portrayal of many Christians’ view of Mormonism betrays his ignorance of Christianity. Mormonism is a cult, and Mormons are not Christians. You can decry that statement as “utterly distasteful” but that won’t change its inherent truth.

As our nation’s debt crisis has become a central focus of our popular media, the rhetoric of class envy has been escalated to a near fever pitch. Of course this has always been the primary tactic of the political left, beginning most popularly with Marx and continuing rather visibly today in his ideological descendants. The easiest and most consistently reliable way for leftists to maintain and increase their power is to first engender envy of the wealthy, then to convince the general populace that it is not only morally acceptable, but morally right to take wealth from others by sheer might of the popular vote.

Their task really isn’t all that hard. Envy is one of the most common and basic human reactions when we are confronted with someone who has more than we. We’re warned against one variant of envy in the tenth commandment [Exodus 20:17]: “Thou shalt not covet.” (Yet another reason the left dislikes traditional Judeo-Christian values, but I digress.) But envy itself isn’t necessarily bad—like so many of life’s challenges, it depends upon what you make of it.

en-vy, n. painful or resentful awareness of an advantage enjoyed by another joined with a desire to possess the same advantage (Merriam-Webster)

The critical point in the definition of envy comes in the first three words.

One reaction to seeing others’ success—be it wealth, popularity, physical fitness—is to resent that success. This response yields a desire to level the playing field by diminishing the value of the other. After all, they can’t possibly deserve what they have when I don’t have the same. This is classical leftism at work: the success or failure of the individual is portrayed as largely beyond his own control. It’s a pretty easy sell because it doesn’t require anything of the individual.

The other, healthier, reaction is to be pained by the others’ advantage—not in a manner destructive to self or others, but rather in a way that makes you ask yourself, “What are they doing that I’m not? How should I change myself in order to achieve the same successes?” This path requires the individual to take responsibility for his own success or failure, to stop blaming others for consequences of poor personal decisions, and to take positive action to improve himself rather than tearing down another.

One thing is certain—when you see someone who has something you want but don’t have, you will envy them in some way. The only question is which direction your response will lead you. Will you tear others down or build yourself up? That choice is yours alone.