The Fallacy of Fairness as Fiscal Policy

I don't care what Warren Bufet's tax rate is. If he paid 1%, he'd probably stil pay 1000% percent more actual tax money than if I paid 100% of what I earn. Fairness is not a fiscal policy, because it is by definition a subjective concept. Yet Pres. Obama is camaigning for "the Buffet Rule," based on his idea of fairness.

"Fairness" is not a new theme for our President. I remember an interview from '09, where he was asked specificallly about getting less revenue by raising capital gains taxes, and he said he would sacrifice the tax revenue in the interest of fairness. I was dumbstruck. Maybe he didn't believe the premise of the question, or saw it as a political jab, so he used his fallback slogan: fairness.

When I was a liberal, I thought that more money was needed for the government to protect and serve the neediest amoung us. I was certain that raising taxes on everybody was fair. I was willing to give up another 1 or2% off of my pay, if if would expand the role of government in "helping" poor and needy people. In those days, I was making barely above minimum wage!

That's not what today's liberals think of as "fair," anymore. A good example of this is Pres. Obama's position on killing the "Bush tax cuts" (which he already renewed once, so they should be called the "Obama tax cuts"). The President set a line of $200K for singles, and $250K for couples as being "millionaires." People above that level will revert to the Clinton- era rates, while people below that line will retain the lower "Bush" rates that Obama ratified.

At the time this was first being debated under Pres. Obama, the CBO estimated the 10-year revenue from the "millionaire" part would be 700 billion, and undoing the Bush tax cuts for everyone else would bring in over 3 trillion during that same 10 years. Pres. Obama likes to talk about how good things were under the Clinton tax rates? Apparently, not good enough to get Democratic majorities in either house of congress to reinstate them.

Two years later, our president is still trying to divide American taxpayers along financial lines. He obviously thinks that "raising taxes on the rich" is a "no brainer" attack against Mitt Romney, and the GOP in general, with so many people struggling. The use of the word "fairness" by our president is getting old, though. People are realizing that the president has no control over fairness in their lives, regardless how much tax the rich pay.

Politics dictate that campaigns use poll-tested language to sell their policies, and "fairness" polls well. The policy it is being used in support of, though, is the classic "tax and spend" liberal progressive agenda: increase taxes, spending, and entitlements. Whether taxes are raised on the rich, or all of us, it won't help me, or the economy much. All it will do is feed the ravenous maw of government spending. That is the ugly truth that the president is hiding beneath his calls for fairness.

Election Year, Again! Are Ya Happy With Pres. Obama?

2012 has been quite am interesting new year, in US politics. Limbaugh is still offending the left, and the right isn't bowing to the usual media pressure over it. President Obama is presiding over a recovering economy, but gas prices threaten to turn that around before the election. Were the Mayans right, and 2012 is "the end of the world" - at least as liberal politicians (like the president) know it?

XL Pipeline Politics Attached To Middle Class Tax Cuts: House Gives Senate A "Poison Pill"

President Obama has indicated that he will veto any tax bill that has language forcing him to approve the Keystone XL pipeline project. The House has passed legislation to that end, and now the Senate will be forced to deal with the pipeline issue. That's not something Obama or the Senate Dem majority would like to deal with, right now

Look for it to be called a "poison pill" strategy, perpetrated by the House GOP, because they don't want to extend the payroll tax cut. Others, like me, will see it as linking tax cuts to greater employment, and daring the Dems to shoot it down. It's almost 2012, and both sides are pullin' out all the stops!

We'll have to see if Sen. Reid brings it up, but the pressure is enormous. I think it's perfect political Jiu Jitsu, with the GOP calling out the President with his own words... "pass this bill, now!" Remember, Reid didn't act on the President's jobs bill, so it would be a big-ass "cave" if he moves on an issue raised by the House GOP. Too bad, if it happens, because it will just prove that the "political center" has moved somewhat to the right, again. No hard feelings, just cold facts....

Let's see what the Senate does about sustaining this payroll tax cut. Nothing, or Something...

"Fast and Furious" and "Solyndra" Show Incompetence, If Not Political Corruption

Two things that may combine to hurt the Obama Administration are the growing "Fast and Furious" scandal, where the US sold guns to the Mexican drug cartels, with no way of arresting anyone. The other is the scandal involving Solyndra, a bankrupt solar panel manufacturer based in California, which cost the US taxpayer around half a Billion dollars. Both are going to be thoroughly investigated in the near future, and the OA doesn't seem to have an adequate response, so far.

These are examples of stories the "in the tank for Obama" media stay away from, until they "have legs," meaning they get too big to ignore. While Solyndra is fading from the fleeting media mentions it got, it will not be the last "green" initiative of the OA's that will be scrutinized (link). Any other one (or more) that was a bad deal may end Obama's political chances at enacting any of that agenda. The Justice Department is investigating, but they can't afford another "cover-up" right now, which leads me to the second scandal...

"Fast and Furious" was an ill-designed operation, which consisted of telling gun shops and dealers to sell weapons illegally, and waiting to find out where they ended up, often after they'd used to kill someone. Eric Holder has yet to give his version of what this operation amounted to, but since he's called the House GOP's investigation "partisan," I'm guessing there's something he's hiding, for political reasons. It's always the coverup that's criminal, and AG Holder is stickin' to his story about only hearing about the operation "a few weeks" before his congressional testimony, on May 3rd. Now, he's claiming that the emails from a year earlier about the operation were not shown to him, or that he didn't read them. In other words, he's pleading ignorance, and incompetence, rather than a corrupt attempt to "cover up" an ill-conceived law enforcement operation (link).

These two scandals are "body blows" that this administration can't afford to let "drag out," but that seems to be their strategy. Right now, Dems seem happy to revel in the "Occupy Wall St (or name your city)" protests, because it is taking the media spotlight off of the OA's predicament. The "Wall St. protesters," and their cacophony of leftist cliches will fade, but these scandals, and the issues they raise about the OA will not go away. I expect Holder to go "under the bus" soon, but it won't look good, in any case.

Wall St. Protesters Agree With TEA Party On Bailouts

Ask any of the Wall St. protesters if they agree with Republicans, or the TEA Party, and they'll say "Hell, NO"! How many of them know that the GOP actually blocked the bailouts, the first time they were voted on. When the bill came up for a second vote, the "moderate" Republicans voted for the bailout, along with all of the Dems. The ones who still opposed them, in the face of withering political pressure, were the TEA Party caucus members. I'd like to see someone ask the protesters what they think about that. They should all support Michelle Bachmann for President.

Bank of America "On the Ropes": Thanks, Sen. DICK!

If there was any doubt that Senate Democrats' attempts at "regulating" US banks is a thinly-veiled attempt at crippling them, Sen. Dick Durbin's latest comments about Bank of America just removed it. On the Senate floor, he suggested that BoA customers pull their money out of their accounts there, and deposit it in another bank. Rush Limbaugh mentioned this today, and how (my) NY Sen. Chuck Shumer's comments caused another "run," on a smaller bank, a while back, which resulted in it not existing anymore. BoA, however, is already a recipient of a taxpayer bailout, so it's doubtful that will happen. There is also the example of Lehman, which the government declined to "bail out." The Dems attitude toward the US banking industry seems to be like a "mob" money collector: "We don't wanna kill you, we're just gonna break your legs."

The point that stands out to me is that "taking your money out of BoA" was the answer in the first place, before Durbin decided to switch debit fees to the banks, who passed it on to their consumers. If he feels the need to tell people that, from the Senate floor, after the "Dodd-Frank" bill, and his "Durbin amendment" passed, why didn't he tell BoA's customers to get out before that law was passed? I see commercials all the time for BoA's competitors, and haven't had an account with BoA since the 1980's, when I was getting 10% on an annual CD (full disclosure). There are plenty of smaller banks that offer better terms on accounts, and none of their personal account business had anything to do with the financial crash of '07, anyway.

Why did the "Durbin amendment" cap "debit transaction" fees? Well, those fees came from "small businesses," and Sen. Dick just wanted to help them out of being screwed by the banks. He didn't think of all the constituents that he would screw over, when BoA reacted to this deprivation of revenue from retailers by transferring the fee to the debit cardholders. Of course, the customers have less political clout than small businesses, who supposedly have less clout than big businesses, like BoA...crap rolls downhill, until it gets recycled by some pol, like Dick Durbin!

The new fees that BoA and the others are imopsing are expected to bring in more revenue than their old fee structure did, even with fewer debit card customers...the only ones getting screwed here are the people who work for Bank of America. Every employee of that bank has to wake up every day wondering how long they'll have a job. They were already planning on laying off tens of thousands of workers, and this won't help.

It's more than Dick Durbin, Chris Dodd and Barney Frank's insane ideology that got this bill signed into law. President Obama buys into it, as well. He signed it, and I was as pissed as I was at Pres. Bush for signing McCain-Feingold! I don't care about party politics or ideology, I don't like legislation that has a bad outcome. He still supports it, with a weak cry that banks should "eat" the lost profit he took away from their debit card transactions...he sounds like Michael Moore, who's out selling his new book on the liberal circuit.

Michael Moore and Obama can rail against outrageous "corporate compensation," and there is a real problem with failure being rewarded. Unfortunately, this is a situation that government regulation created. Attempts to limit "monetary compensation" led to huge "benefits" and "stock option" packages, and indeed caused our whole system of "employer provided health care," as well as "corporate stock options," (which were ironically designed by the market to "regulate" executive compensation). Attempts to tax "medical benefits" led to the issuance of hundreds of waivers to "Obamacare." If Obama gets to raise "capital gains" taxes, expect waivers to be given to every company that any public pension fund invests in, which means all of the "large cap" companies, unless they're "excessive polluters," or something as politically incorrect. BoA is "too big to fail," but may be thrown under the bus, if Obama's radical side takes over!

I'm only being half sarcastic, because the economic problems we face are all to real. Maybe BoA should go under, and all of the other "big banks," as well. How else will we unwind the question of who owns the debt on all of the "underwater" mortgages, at least in the US? OK, we sold those crappy bonds to the rest of the world...so any US housing market devaluation will be a bigger "hit" than the world markets can take right now. If Obama's supporters want to "destroy capitalism," this is the best shot they'll ever get...this is what scares me; if they accept that he'll be a "one termer," will the economy repeat what happened at the end of Bush's second term? Paging George Soros, are you coming back?





Could BoA be the next "Lehman," brothers? Thanks, Senator Dick!

Tax The Millionaires! Again!

Several decades ago, it was discovered that sixteen people with incomes over one million dollars paid no tax on it. The result of this discovery was that the Congress created the "Alternative Minimum Tax." People in the highest tax bracket had to hire an accountant to calculate their taxes under the regular tax code, and the AMT code, and pay whichever amount was greater. The only problem was that the AMT was not pegged to inflation. This has forced successive congresses to pass "patches" to keep it from affecting millions of current-day middle class taxpayers. For some reason, they've never gotten rid of it.

Recently, I read that over one thousand people who earned over one million dollars in income paid no tax on it. I guess that not pegging the AMT to inflation wasn't the only problem with it, after all, if the number of million-dollar earners who paid no tax grew by around 7,000%. I don't know what percentage of all US million-dollar earners those 16 people were all those decades ago, but the thousand or so today make up less than three percent of that population. In fact, the average tax rate on that group today is somewhere between 27 and 29 percent, according to the IRS.

I have to laugh all the farcial presidential rhetoric about "making the rich pay their fair share," especially when he trots out Warren Buffet to say "tax me more"! This is a man whose core business is built on avoiding the payment of taxes! If the President and the Congress want to actually fix the problem of million-dollar earners paying no tax, here's an idea. Have the nice people from the IRS come in and explain which tax "loopholes" these people are using, and close them.

Of course, that's not what happened in the past with the AMT, and not likely to happen today, under this president. Instead, he proposes "carpet bombing" all wealthy Americans with a higher tax burden. Many of these people are the backbone of the US economy, small business owners, and others are senior executives at many mid-sized corporations, and junior executives at most large corporations. Remember, this president is classifying people who make two hundred thousand dollars a year as "millionaires," which is only the least of faults with his plans. Most of these people already pay a higher tax rate than middle class taxpayers, and inflation has made that income bracket "middle class" in places like NYC and parts of California. It's the 1970's all over again, in more ways than one, under this president.