The Current Tax Code is Already Unseemly and Socialist

Because of the way it massively extracts taxes from the top 50 percent of earners and redistributes the benefits to every class of people, to be sure, but disproportionately to the poorest who pay nothing in federal taxes. They number in excess of 63 million tax filers.

So why can't Bruce Bartlett, here, just say that?

"Perhaps the right and left can at least agree that it is unseemly for those in the top 1 percent of income distribution, with incomes at least 10 times the median income, to pay no federal income taxes. It’s not socialism to ask them to pay something."


"Unseemly"? We're talking 24,000 filers in the top 1 percent. Why isn't it unseemly, and in fact a scandal, that over 5 times as many people in the lowest two quintiles pay no federal income taxes than in the highest three quintiles?

Bartlett well knows that the rich who pay no federal taxes may in fact pay capital gains taxes, and may also be massively financing America's municipalities in the bond market to escape federal taxes, just as he knows the poor who work pay Social Security taxes just like everyone else who works.

That's the problem with the tax code. It's balkanized and hyphenated, just like America, and when only looking at one part of it and from that perspective, it only provokes judgments as distorted as the code itself.

A tax code which taxed all income in all forms and at all levels without exception and at one low rate would go a long way to repairing the divisions in this country.

Unfortunately we don't have very many people in leadership advocating for this.

From the article:

Tim Pawlenty Wasn't Much of Spending Cutter in Minnesota From 2003

Captain Capitalism has the story here:

More Than Half of Real GDP Through 2010 Came from Government Spending

From deficit spending, that is, measured in the hundreds of billions per year under George Bush, and now in the trillions in just two and a half years under Barack Obama.

It ain't worth it! And the country needs a growth strategy.

Seen here at The Department of Numbers:

The Great Stagnation

"[M]ore than half of our economic growth in the past ten years has come from government spending."

Minnesota Government Employee Fears Two Month Government Shutdown

Big whoop:

State worker Lori Sobczak tried to remain optimistic.

"There's frustration," said Sobczak, a two-year Minnesota Department of Transportation employee.

The fear is "the unknown, you know," she said. "Rumors are flying around; [a shutdown] could be, you know, 45-60 days. ... That's scary."

Scary? You don't know scary. Try going two and a half years without a regular paycheck, sister, like seven million other unemployed Americans. That's why your government is shutting down, because we used to pay the taxes that made your job possible in the first place.

If I were you I'd tell my union to cut a deal.

Read all about the Minnesota government shutdown here.

Only Dreamers Think Corporate Cash Will Be Used To 'Create Jobs'

Robert Lenzner opines on the naive hopes for repatriating about $1 trillion in corporate cash, noting how corporations are already sitting on a similar sum here and could just as easily use it to create jobs if they needed to:

[Companies] aren’t in business to serve the public patriotic interest by using that money to create jobs unless there is demand over and above what is being filled today.

Which would mean that a tax break for repatriating the cash would just be a "sweetheart deal," the favor   of which would no doubt redound to the politicians granting it, in the time-honored form of campaign contributions, or revolving door jobs in industry.

It's the same story with using taxpayer funds to "create jobs." There's no economic demand for the jobs created, otherwise they'd exist already. They're a sweetheart deal, usually for the affected government and/or union workers whose jobs, and (Democrat) votes, they're designed to preserve.

Whatayah Mean 'Yesterday'?

“I thought he was a dick yesterday,” [Mark] Halperin, who also is a senior political analyst for MSNBC, said on Morning Joe, referring to the President’s conduct during his press conference.

Story here.

$280 Billion

The minimum cost to the economy when 7 million people lose the average $40,000/year job.

Inflation Analyst Says TIPS Are Overpriced

Seen here:

In terms of owning inflation protected securities (TIPS), we find that at current price levels they offer absolutely NO protection against further increases in the US inflation rate. Rather, we believe that you should (at this point) own real assets such as commodities for protection or small cap stocks, which have proven to be a decent hedge against inflation historically.

Even after yesterday's pullback to $13.44, VIPSX is trading near ten year highs.

Q1 Non-Bank Corporate Debt Surged to a Record $7.3 Trillion

And Brett Arends, same article, thinks corporations used the borrowing to finance the stock buy-backs, which kind of puts the taint on both their stocks and their bonds:

The total [borrowing] at the end of 2007, at the peak of the so-called “credit bubble,” was just $6.7 trillion.

This borrowing spree has pushed overall gearing for nonfarm, nonfinancial corporates to hefty levels. The Fed says that U.S. nonfinancial corporates now have debt equal to 50% of their net worth. It’s near record levels for modern times. As recently as 2006, it was just 40%.

When a company borrows money to bolster its own stock price, it makes me wary of the bonds. When the executives aren’t even willing to invest their own money, it doesn’t exactly make me enthusiastic about the stock either. 

Q1 SPX Rise of 5 Percent: Companies Painted The Tape

Just like they're doing in the last three days, along with everyone else, to make Q2 look better after a tough couple of months.

Brett Arends has the story here:

So who was driving up the market? What was creating this boom?

Turns out it was the companies themselves. TrimTabs says companies spent a thumping $124 billion in the first three months of the year trying to boost their share prices by buying up stock.

That works out at about $2 billion for every day the market opened.

Meanwhile, according to Trim Tabs, guess who avoided buying stock during the first quarter? Company executives. The “insiders.”

Phony as a $3 bill.

The Democrat Idea of a 50 Percent Tax Cut

Buy one, get one half off!

If Anyone's Hung Up on Taxes, It's the Democrats: It's Their Price for Spending Cuts

So says the much trumpeted Reuters story today:

Democrats say the $1.5 trillion to $2 trillion in spending cuts that the two sides have tentatively identified must be augmented by $400 billion in new tax revenue over the coming 10 years. That money would come by closing a range of tax breaks for hedge-fund managers, private jets and specific business sectors.

The Most Dangerous Combination of Four Words in the English Language

"Debt draws forward prosperity."

-- Ambrose Evans-Pritchard, here

"I Redefined the Republican Party"

"Let me tell you something. I whupped Gary Bauer's ass in 2000. So take out all this [conservative] movement stuff. There is no movement.

"Look, I know this probably sounds arrogant to say, but I redefined the Republican Party."    (source: Matt Latimer)

"And I redefined my foot in your ass"

Barack the Magic Cadger, on Vacation Every 6 Weeks, Complains Congress Takes Off

The whole debt ceiling thing is really getting under his skin. Republicans should keep it up.

Lengthy, ornery, news conference quotations here.

Bush Appointee to 6th US Circuit Court of Appeals Tilts Ruling in Favor of ObamaCare

Thanks George you mushy headed liberal.

The ruling was by a three judge panel. The Reagan appointee voted against the healthcare mandate, while a Bush appointee and a Carter appointee voted for it, proving once again that W, who aimed to redefine conservatism in his own image, was no friend of the right.

Plaintiffs can appeal to the full, currently 15 member, 6th circuit court, or to the Supreme Court.

The story is here.

ClimateGate's Michael Mann Isn't Off the Hook Yet

Larry Bell explains why here.

Rolling Irrational Exuberance . . . in Pictures

in housing from 1997

in the fed funds rate from 1990

in stocks from 1994

in oil from 2003

in gold from 2005

Liberals Blame Bill Clinton for Housing Bubble

The Financial Crisis Inquiry Commission, under Phil Angelides who had a testy, partisan, op-ed in The Washington Post yesterday, in its report sought to blame Wall Street for leading the way to the housing bubble, not government policy as mediated through the likes of Fannie Mae.

Gretchen Morgenson of The New York Times has begged to differ, and Steven Malanga provides a timely and sympathetic review of a new book she co-authored which uncovers a major impetus to the housing bubble in the administration of none other than Bill Clinton, who took a weaker form of liberalism under George Herbert Walker Bush and ran with it:

Reckless Endangerment locates the origins of the crisis in the ironically named Federal Housing Enterprises Financial Safety and Soundness Act of 1992, which was supposed to protect taxpayers from big losses by Fannie and Freddie. That law pushed the institutions into affordable housing lending and prompted Fannie in particular to adopt a strategy to disarm critics by continually arguing that efforts to rein in the company's operations, such as requiring it to back its mortgage purchases with more capital, would only hurt the goal of expanding home ownership. "You should rejoice in Fannie Mae and Freddie Mac rather than fight them," Fannie's chief executive, James Johnson, told the New York Times.

In the wake of the 1992 legislation, Fannie Mae created the Housing Impact Advisory Council, an assembly consisting of low-income housing advocacy groups and mortgage lenders. Fannie Mae also began supplying grants to the housing groups, like ACORN, which a few years earlier had criticized the GSEs in the press as "strictly by-the-book" interpreters of underwriting standards whose young underwriters, "are not sensitized to the existence of redlining, be it racial or geographic." Now Fannie was singing a different, more cooperative tune, and its new council, Morgenson and Rosner write, evolved into "the centerpiece" of President Clinton's 1994 National Partners in Homeownership program, a "disastrous homeownership policy" that played a crucial role in inflating the housing bubble.

With The Nation pinning financial deregulation on Bill Clinton in recent days, liberalism's not having a good start to the summer.

If Bill Clinton were smart, he'd respond to all this by blaming Bush, or hope people still have enough money left to go to the beach and read trashy novels instead.

Corporate Cash Earned Overseas, Presently About $1 Trillion, Cost the US Treasury About $90 Billion in 2008

So says a detailed and insightful story at Bloomberg here by Jesse Drucker, showing how companies book earnings abroad through the Netherlands, Switzerland and Bermuda, lawfully, to minimize taxation both in the US and in high tax European countries.

The next time some pinhead US politician says he wants to take away your $88 billion mortgage interest deduction, tell him this corporate tax loss expenditure is just as big, and getting bigger. 

When you consider that corporate taxes represent less than a third of the tax revenues which individual payers contribute to the federal government under current arrangements, there's plenty of room to rebalance that income portfolio more fairly.

Maybe we could start by rewarding companies for earning their money here instead of over there. If the Netherlands, Switzerland and Bermuda can do it, why can't we?

Well?