Libertarian Leanings

The "Atruthful" Obama

Amoral is defined this way:

1. not involving questions of right or wrong; without moral quality; neither moral nor immoral.
2. having no moral standards, restraints, or principles; unaware of or indifferent to questions of right or wrong: a completely amoral person.

Substitute the words "truthful" and "untruthful" for "moral" and "immoral" in the definitions above, and you get a pretty good feel for Barack Obama's politics.  For Obama, truth is completely irrelevant.

Benghazi is a good example.  Five days after the murder of Ambassador Christopher Stevens and three other Americans at the consulate in Libya, Obama ordered his UN ambassador Susan Rice to go out to all the Sunday news shows to blame their deaths on a Youtube video that was supposedly so insulting that it sparked rioting throughout the middle east.  It was such an unlikely story, but it was one that fit in with Obama's image.  His presidency by itself was supposed to cast a new and attractive light on America for the Muslim world to see.  The planned terrorist attack destroyed that narrative.  Benghazi was a protest. 

Later on President Obama himself went to the UN where he repeated his protest story in a speech to the General Assembly.  Then weeks later during a presidential debate against Mitt Romney he contradicted all that.  To Romney's obvious bafflement, Obama said that he had called the attack in Benghazi an act of terror the day after it happened.  Almost everybody was caught be surprise, except the debate moderator.  In what looked to have been a beautifully choreographed move, Candy Crowley jumped into the debate to declare that, yes, it was true.  She had specifically looked into it and she could confidently support what the president said.  Time to move on to our next debate topic.  Sorry, we really don't have time for more questions on this.  Obama would not have to face questions on where the protest story came from.

Remarkably, Barack Obama went on to win the election.  In the midst of the most dire economic circumstances we've experienced in the last half century, Obama managed to beat out the guy who made a fortune rescuing companies from their own dire economic circumstances and putting them back on their feet.  If ever there was a man equipped to deal with the hardships facing our country, it was Mitt Romney.  Yet the atruthful Obama beat Romney, the turnaround artist.

He did it without offering any kind of a plan to deal with the worst unemloyment in 30 years, or any plan to deal with the rest of our economic problems.  After running trillion dollar deficits for four straight years, boosting the national debt from $10.6 trillion to more than $16 trillion, he managed to sucker just enough people into believing he would fix everything by taxes on 2% of American taxpayers.  Arithmetic anyone? 

Obama said what he had to say, himself and through surrogates.

He said that Romney and the Republicans were waging war on women because they didn't believe the Catholic Church should be forced, against Church doctrine, to pay for women's birth control.  He said that Romney got rich destroying companies, not rescuing them.  He said Romney was a felon, that he misrepresented his position on corporate filings to the SEC.  He said Romeny was responsible for a woman's cancer death.  Her husband lost his job when the company Romney rescued went under, long after the rescue and long after Romney's involvement.  The woman died six years later.

No matter that there was no truth to any of it.  Barack Obama said whatever would defeat Mitt Romney.   And that's where we are now.  America's rescue has been put on indefinite hold.  Obama won.

In place of any expectation of economic growth we have a "fiscal cliff" before us.  A confrontation between Obama and Republicans over spending and taxes looms.  It was contrived by Obama because he thinks that any confrontation with Republicans is one that he will win it.  He might.   Obama will say whatever he has to say to do it.  He said so.

In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn't reach agreement, he would use his inaugural address and his State of the Union speech to tell the country the Republicans were at fault.

It will be hard for the two sides to reach an agreement.  The give and take one might expect during any negotiation are not there.  Obama won the election.  End of story.

At one point, according to notes taken by a participant, Mr. Boehner told the president, "I put $800 billion [in tax revenue] on the table. What do I get for that?"

"You get nothing," the president said. "I get that for free."

There is no middle ground.  In one sense that's a benefit.  There is next to no time left for negotiating any kind of a deal.  When there is no middle ground there's not much to be negotiated.  The process won't take a lot of time.

After the election, Boehner aides tried to shape the debate by offering early concessions, including that the GOP would agree to raise new tax revenue. A speech Mr. Boehner planned to give was rewritten 18 times and included input from top Republican leaders.

He and Mr. Obama didn't sit down together for another 10 days.

So many other things to do.  Most recently it was vacation.  With only days remaining the Obamas jetted off to Hawaii.  He doesn't want an agreement.

One of the speaker's aides, Brett Loper, asked the president's legislative liaison, "Can you get back into the zone of where you were in July 2011?"—when Mr. Obama and Mr. Boehner were close to a large deal on revenues, spending and entitlements. The president's man replied, "No, we were probably overextended then, and there's no way we would do it now."

July 2011.  Think about that.  Here we are a year and a half later, still, with no agreement on revenues, spending, and entitlements.  For a year and a half Barack Obama has been inching the bar higher.  When agreement seems close Obama backs away.  He preserves the confrontation.  Suddenly there are new demands, ones that Obama knows are unacceptable to Republicans.  How about let's permanently raise the debt ceiling?

It's pretty safe to say no opposition congressional majority is going willingly cede power to a president.  If Obama's condition for reaching a deal is permanent removal of the debt ceiling, there will be no deal.  Obama is content with that.  His governing purpose is partisan advantage above all else.  As Kimberly Strassel wrote in the Wall Street Journal today,

For all the ugliness of this lame-duck session, it did have one merit: It has exposed how President Obama intends to govern in a second term. He's intent on narrow political victories and on damaging his opponents.

Where confrontations don't exist, Obama will contrive one.  He'll say what he has to say so that Republcans are blamed for something.  The country will suffer damage as well, but like the truth, that's irrelevant.

Tax Hike Champions

Among the billionaires favoring higher taxes on people earning more than $250,000 per year are Bill Gates, Charles Munger, and Jim Sinegal.  Aside from their billionaire status their stance on raising taxes, what might these three gentlemen have in common?  Well, they're all on the board of directors for Costco.  In fact, Jim Sinegal is a founder and former CEO of Costco. 

There is newsworthiness here.  It came about when the Costco board voted voted itself a $7.00 per share stock dividend in time to beat the Obama tax hikes.  Not only that, they're borrowing $3.5 billion to do it.  The payout to the board amounts to about $29 million, of which $14 million goes to Sinegal.  He will pay taxes on his $14 million at the rate of 15% instead of up to 43.4% if they had waited until the first of the year.  That 's a difference of about $4 million in taxes that Sinegal won't pay.

The Wall Street Journal writes:

We emailed Mr. Sinegal for comment but didn't hear back. Mr. Galanti explained that while looming tax hikes are a factor in the December borrowing and payout, so are current low interest rates. Mr. Galanti adds that the company will still have a strong balance sheet and is increasing its capital expenditures and store openings this year.

As it happens, one of those new stores opened Thursday in Washington, D.C., and no less a political star than Joe Biden stopped by to join Mr. Sinegal and pose for photos as he did some Christmas shopping. It's nice to have friends in high places. We don't know if Mr. Biden is a Costco shareholder, but if he wants to get in on the special dividend there's still time before his confiscatory tax policy hits. The dividend is payable on December 18 to holders of record on December 10.

To sum up: Here we have people at the very top of the top 1% who preach about tax fairness voting to write themselves a huge dividend check to avoid the Obama tax increase they claim it is a public service to impose on middle-class Americans who work for 30 years and finally make $250,000 for a brief window in time.

Whenver those those billionaires favoring higher taxes are asked why they just don't write a check to the treasury if they don't think they're paying high enough taxes, they say no.  They say how we're all in this together so we all should make the sacrifice.  Well... Here's their idea of how the sacrifice should be shared.

Hat tip to reader Marian for pointing out this story.

The Balanced Approach BS

Two things about Obama's famous "balanced approach" to paying down the debt.  First, there's not a soul on the planet who believes there will be any pay-down while Obama is in office.  The national debt is projected to reach $20 billion at the end of his next term — up $4.4 trillion from the end of this one.

Trilion dollar deficits are in store for each of the next four years, and Obama's only solution is "asking the wealthiest Americans to pay a little bit more in taxes."  We have to combine cuts with revenue, he used to say.  But now Obama wants to raise taxes this year, then talk about spending cuts next year.

So spending restraint is out.  As is usual with Obama's promises — closing Guantanamo, keeping unemployment below 8%, the list goes on — a promise to address spending cuts next year will have its expiration date. 

That leaves only tax hikes to fill in the budget hole.  So, how's that going to work?  Well, how did it work in England?

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

Can there be much hope that things will be different here?  Even if we actually get the revenue that Obama's tax hike on the wealthy is calculated to produce, it will only give us enough money to run the government for about week.  Eight and a half days, actually.  The greater likelihood is that raising taxes in the way he proposes won't raise the revenue Democrats say it will, and it may not raise any revenue at all.

Obama's re-election has immunized him from accountability for our dismal economic growth.  His place in history is secure.  Left leaning media and academia will glorify Barack Obama no matter what happens.  He doesn't need the economy to get better.

Obama's insistance on tax hikes, and now his plan to skip the part where we cut spending, are calculated to be unpalatable for House Republicans.  It's part of a political bet.  Since a recession is coming anyway, everything will be aimed at focusing blame for it on the Republicans.

So let's let him have his due.  I'm with Ann Coulter on this one.  Repubicans should give in on taxes.  Let's see how the Obama plan works.

Republicans have got to make Obama own the economy.

They should spend from now until the end of the congressional calendar reading aloud from Thomas Sowell, Richard Epstein, John Lott and Milton Friedman and explaining why Obama's high tax, massive regulation agenda spells doom for the nation.

Then some Republicans can say: We think this is a bad idea, but Obama won the election and the media are poised to blame us for whatever happens next, so let's give his plan a whirl and see how the country likes it.

Republicans need to get absolute, 100 percent intellectual clarity on who bears responsibility for the next big recession. It is more important to win back the Senate in two years than it is to save the Democrats from their own idiotic tax plan. Unless Republicans give them an out, Democrats won't be able to hide from what they've done.

Even Democrats might back away from that deal.

Give Obama his tax hikes.  Then we'll see the true balance in Obama's BS.

The States

Arthur Laffer and Stephen Moore write that the 50 states offer a "teachable moment" for Obama if he would only pay attention.

In California, a union-backed ballot initiative would raise the state's highest tax rate to 13.3%. Union-funded groups in Illinois aren't satisfied with last year's income tax rate hike to 5% from 3%, so they now want to go as high as 11%. That would put them in the big leagues with California and New York. And in Oregon, lawmakers are considering raising the highest rate to 13% from 9.9%. In all of these states, proponents parrot Mr. Obama, insisting that the rich can afford it.

They can, but they can also afford to save hundreds of thousands or more each year by getting out of Dodge. Every time California, Illinois or New York raises taxes on millionaires, Florida, Texas and Tennessee see an influx of rich people who buy homes, start businesses and shop in the local economy.

Republican governors in Florida, Georgia, Idaho, North Dakota, South Carolina, Ohio, Tennessee, Wisconsin and even Michigan and New Jersey are cutting taxes to lure new businesses and jobs.

Asked why he wants to reduce the cost of doing business in Wisconsin, Gov. Scott Walker replies: "I've never seen a store get more customers by raising its prices, but I've seen customers knock down the doors when they cut prices."

Georgia, Kansas, Missouri and Oklahoma are now racing to become America's 10th state without an income tax. All of them want what Texas has (almost half of all net new jobs in America over the last decade, for one thing).

Déjà Vu All Over Again!

As you've probably heard by now, legislation to codify the "Buffett Rule" into tax law was introduced and then analysed by the Joint Committee on Taxation who estimated that the bill would rake in $47 billion over the course of eleven years. 

The plan is named for billionaire investor Warren Buffett, who has said taxes on the rich are too low. Obama has proposed requiring that people earning at least $1 million annually pay at least 30 percent of their income in taxes, but has provided few details.

In an analysis provided to The AP on Tuesday, Congress' Joint Committee on Taxation estimated that a bill introduced last month by Sen. Sheldon Whitehouse, D-R.I., attempting to enshrine Obama's proposal into law would collect $47 billion through 2022. The measure has little chance of advancing soon, especially before the November elections.

That's a much less rosy prediction than the estimate put forth by the The Tax Policy Center which had projected a $114 billion gain over the next ten years.  Either way, it's not much of a dent in the deficit.

This year, the Buffett rule would increase federal revenues by all of $1.1 billion.

That's less than one-tenth of one percent of the $1.2 trillion budget deficit Mr. Obama is scheduled to run this year. Through 2022 Joint Tax expects less than $47 billion in total new revenues from the Buffett rule while the government will be adding trillions of dollars to the national debt. Joint Tax even concedes, as it is rarely wont to do, that the rule will affect taxpayer behavior: By raising the effective tax rate on capital gains, the rule will encourage people to realize fewer capital gains.

Since Mr. Buffett has never been shy about touting his ability to avoid capital-gains taxes, the sage of Omaha was never going to take much of a tax hit himself.

In other words, the only way we're going to keep up with President Obama's spending habits is by raising taxes on more of us than just the "millionaires and billionaires."  How?  Stealth.

If the Buffett ruse is ever enacted, expect it to become a kind of Super Alternative Minimum Tax, slowly grabbing less affluent taxpayers—perhaps even Mr. Buffett's secretary—as inflation and income growth push people into higher tax brackets. That's where the real money is.

Welcome to 1981!  A key feature of the Economic Recovery Tax Act of 1981, also known as the "Kemp-Roth Tax Cut," was the indexing of tax rates to inflation.  Oh yippee... We get to fight that battle all over again.

Buffet's Doubletalk On Capital Gains

Ira Stoll raises questions that conservatives should insist be explored when we start talking about raising taxes on the rich.

...by framing the fiscal-policy discussion this way, as a debate over whether the “super-rich” should pay more, Buffett and his allies in politics and the press avoid certain other questions. And those questions are more important ones. Questions like:

• Who should allocate capital, the people who earned it and own it, or the politicians in Washington as influenced by their lobbyists and campaign contributor cronies?

• How did we accumulate $14 trillion in debt so rapidly, and what are the consequences of that?

• How and why has federal spending grown to $3.8 trillion in 2011 from $1.8 trillion in 2000?

It is implied, in the tax fairness argument, that this monstrous boost in federal spending is both fair and necessary.  Is it?

But I was struck by this bit of wording that seems to have skipped by unchallenged for quite some time.  Now, I don't want to put myself in the same league as Warren Buffett on investments, but I take issue with what Buffett said on capital gains.  Here's what he said:

“I have worked with investors for 60 years and I have yet to see anyone—not even when capital gains rates were 39.9 percent in 1976–77—shy away from a sensible investment because of the tax rate on the potential gain.”

One thing that nobody seems to have picked up on, is that Buffett is talking about investing — buying an asset.  What about the other side of the deal?  Though Buffett says he's "never seen anyone shy away from a sensible investment," can he also say he has never seen anyone shy away from the sale of an asset because of the potential capital gains hit?  I'm skeptical.

And another question.  Rube that I am, it's hard for me to imagine a serious investor not considering the tax consequences of a deal.  But what do I know?  I'm not Warren Buffett. 

Still, I have to ask the question, what is a "sensible investment?"  I have this picture of an investor who has a particular target for return on investment.  He knows all the costs, but has to guess at the return.  If his guess hits the target the deal's a go.  If not, then in the investor's view it's not an acceptable, or sensible, investment.  So, Buffett is trying to tell us that taxes aren't part of the calculation of return?  I'm skeptical.

Taxes and the Warren Buffett Business Model

Christopher Chantrill has a story about Warren Buffett, the estate tax, and life insurance.

Did you know that Warren Buffett owns six life insurance companies? Did you know he supports the estate tax? You do now.

Warren Buffett isn't just noted as an owner of life insurance companies and a supporter of the estate tax. He's also noted as a buyer of family businesses. As Dick Patten shows, these two business strategies support each other.

A family business owner or farmer takes out a large life insurance policy which he sinks tens or hundreds of thousands of dollars into each year. When he finally passes away, the life insurance pays out his policy to his family--tax free...

Even as Mr. Buffett's insurance companies are "protecting" family businesses from the IRS, he is buying companies that are forced to sell themselves to pay the death tax. Mr. Buffett's ability to buy family businesses at bargain basement prices depends on families being desperate to sell-and nothing produces family businesses desperate to sell quickly like a 55% bill from the IRS on all of the businesses' assets.

Taxation Fixation

We get it again today, this time from Peter Beinart who says,

In the short term, America needs stimulus. But in the longer term, virtually every graybeard ex-senator and blue-ribbon panelist agrees that the only way to confront our frightening national debt is to cut health-care spending, cut defense, and raise taxes, beginning by letting some or all of the Bush tax cuts expire.

The last is crucial for two reasons. First, because the Bush tax cuts really do constitute a large part of America’s structural deficit.

Oh, really?

Revenues fell in Bush's first two years because of a combination of the tech bust and the start of the tax cuts. But then things took off. After taking in $1.782 trillion in tax revenues in 2003, the government collected $1.88 trillion in 2004; $2.153 trillion in 2005; $2.406 trillion in 2006; and $2.567 trillion in 2007, according to figures compiled by the Office of Management and Budget. That's a 44 percent increase from 2003 to 2007. (Revenues slid downward a bit in 2008, and a lot in 2009, when the financial crisis sent the economy into a tailspin.) "Everybody talks about how much the Bush tax cuts 'cost,'" says one GOP strategist. "We're saying, no, they led to a huge increase in revenue."

And deficits shrank. After beginning with a Clinton-era surplus in 2001, the Bush administration ran up deficits of $158 billion in 2002; $378 billion in 2003; and $413 billion in 2004. Then, with revenues pouring in, the deficits began to fall: $318 billion in 2005; $248 billion in 2006; and $161 billion in 2007. That 2007 deficit, with the tax cuts in effect, was one-tenth of today's $1.6 trillion deficit.

I used to believe that liberal elites such as Beinart had to be either ignorant or dishonest.  I know better, now.  They're both.

Obama: Americans Want Higher Taxes

At his press conference yesterday President Obama made the ridiculous claim that 80 percent of the American people support his demand for tax increases.  He's been after Republicans to raise taxes for him ever since he took office, his latest ploy being to build tax hikes into a deal to rasise the debt ceiling. 

President Obama on Friday kept up the pressure on Republicans to agree to revenue increases in a deal to raise the debt ceiling, claiming 80 percent of the public supports Democrats' demand for tax increases.

"The American people are sold," Obama said. "The problem is members of Congress are dug in ideologically."

Analysis by Aaron Blake of the Washington Post identified the opinion polls that Obama had both cherry-picked and misrepresented in order to justify his claim.

A Gallup poll this week showed that just 20 percent of Americans – including 26 percent of Republicans – say the deficit should be reduced solely through spending cuts. This leaves 80 percent of all Americans who don’t rule out tax increases. (Important note: Some were undecided and 4 percent said only to use tax increases, so the actual number who support using both spending cuts and tax increases is actually less than 70 percent.)

Quinnipiac University put those ruling out tax increases at 25 percent overall, including 48 percent of Republicans — much worse numbers for Obama’s argument. But for our argument’s sake, we’ll use the numbers more favorable to Obama.

For one thing it's quite a stretch to go from 20 percent who support only cuts to reduce the deficit, to 80 percent who favor higher taxes.  Even Gallup hadn't put that dramatic of a spin on the numbers, arriving instead at this conclusion, that Americans prefer spending cuts over tax increases:

Total: Only/Mostly with spending cuts	50
Total: Only/Mostly with tax increases	11

A Rasmussen poll bears out that result.  Earlier in the week Rasmussen asked the question, "As part of legislation to raise the debt ceiling, should congress and the president raise taxes?"  According to Rasmussen, 55% of voters said no.

Just 34% think a tax hike should be included in any legislation to raise the debt ceiling. A new Rasmussen Reports national telephone survey finds that 55% disagree and say it should not. (To see survey question wording, click here.)

There is a huge partisan divide on the question. Fifty-eight percent (58%) of Democrats want a tax hike in the deal while 82% of Republicans do not. Among those not affiliated with either major political party, 35% favor a tax hike and 51% are opposed.

It is interesting to note that independent voters are opposed by a margin of 51 to 35, yet in his press conference Obama claimed Americans are sold on higher taxes. 

Right about the time Obama was lecturing about how time is running out, House Republicans announced plans to vote on a proposal to raise the debt ceiling by $2.4 trillion, along with cuts in the same amount spread over ten years.  The Republican proposal does not include tax increases. 

It's hard to imagine Americans punishing Republicans if this legislation passes, raising the debt limit without imposing a tax hike.  But its not hard to imagine Americans punishing Obama if he vetoes this legislation and the debt ceiling is not raised.  Either way, we fervently hope that time is running out on this debacle of an Obama presidency.  He has been just awful. 

Obama would like nothing more than to ram through major tax legislation under the pressure of a U.S. default.  As with ObamaCare, we could find out what's in it after they pass it.  No thanks.

We Need New Taxpayers

According to Marco Rubio, "We Don't Need New Taxes, We Need New Taxpayers." He went on to give it some perspective.

"So, I looked at it because ultimately this is a serious issue. So, let's explore this with an open mind. Let's not be doctrinaire, let's not be blindly ideological. Let's look at this from a common sense perspective, this idea that all these millionaires and billionaires, if they just paid more taxes, these problems would be solved. Let's analyze it. This is all about math.

"And here's the fact: the fact is it doesn't solve the problem. First of all, if you taxed these people at 100 percent, basically next year you said, 'Look, every penny you make next year the government's going to take it from you,' it still doesn't solve the debt. Not only does that not solve the debt problem, but I looked at a host of other -- a great publication that came out today from the Joint Economics Committee, our colleague Sen. DeMint chairs it. And it kind of outlines some of the tax increases being proposed by our colleagues in the Democratic Party and the president to solve the debt problem. And you add them all up, you add all of these things up -- the jet airplanes, the oil companies, all of the other things they talk about -- you put them all together in one big batch, and you know what it does? It basically deals with nine days and 23 hours worth of deficit spending. Nine days and 23 hours of deficit spending. That's how much it solves. So all this talk about going after people that make all this money, it buys you nine days and 23 hours. Let's round it off. Let's give them the benefit of the doubt. It buys them 10 days of deficit spending reduction. That's what all this stuff rounds up to.

...

"And so my view on all this is I want to know how many jobs these tax increases the president proposes will create because if they're not creating jobs and they're not creating new taxpayers, they're not solving the problem." 

For ten years the Democrats have been railing against the Bush tax cuts and for what?  Ten days worth of deficit spending reductions.  This perfectly captures the uselessness of the Democrats on economic issues.  (My emphasis in the excerpt above.)