Ohio Liberty Coalition opposes Kasich's severance tax

The Ohio Liberty Coalition agrees with me that taxing one entity more to give a break to others is nothing more than redistribution of wealth. It's not a conservative position, a moral position, a good-government position, nor is it good policy.

OH: Kasich renews call for higher oil, gas severance tax has more information about Gov. John Kasich's tax increase proposal.

Here is the Press Release:

Columbus, Ohio – The Ohio Liberty Coalition today came out against Governor Kasich’s proposed tax increase on the Ohio oil and gas industry. Tom Zawistowski, President of the OLC said, “What Governor Kasich is proposing is unnecessary and unwise. Under the current rules, the severance tax on oil and gas produced $11 million in state taxes in 2009, and by 2014 it is projected by the Ohio Chamber of Commerce to increase to $433 million per year. If the Governor wants to cut personal income taxes he can use that new money to do so. It is unnecessary to raise taxes when this industry is already on track to dramatically increase tax revenue. It is also unwise to throw roadblocks in front of an industry that is critical to the economic future of our state. Some companies are already leaving Ohio. That is not what we want.”

He went on to explain, “We understand the argument that the Governor wants to bring energy taxes in line with other states, but we do not agree that this is what Ohio should do. If we have a tax advantage then we think we should exploit that advantage and use it to attract more businesses. Then we will get more tax revenue from taxes generated by ‘downstream’ industrial and business activity.”

Zawistowski concluded by saying, “From a TEA Party perspective, to raise taxes on one group to give a tax cut to another group is simply redistribution of wealth. It is not the Governor’s job to pick winners and losers; his job is to run the state government as efficiently as possible. If he wants to cut taxes, he should cut state spending so he can cut taxes. We will encourage our member groups to contact their state senators and house representatives and ask them to oppose the Governor’s proposal.”

The Ohio Liberty Coalition is a coalition of Ohio Liberty Groups whose purpose is to unite conservative grassroots organizations for greater effectiveness in the state and nation, and to provide resources for member organizations to strengthen their groups. The OLC currently has over 75 liberty-minded groups across Ohio who are members of its coalition.

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Quote of the Day - redistribution

You'd think our Governor and our President would understand this concept....

"To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it." ~ Thomas Jefferson, letter to Joseph Milligan, 1816

Quote of the Day - 2012 Election

Victor David Hanson has a great column on Pres. Barack Obama and his lawlessness. I hope you'll read the entire article.

What makes Barack Obama a different president is not his racial heritage, his liberal outlook, or his mellifluous cadences, but rather the banal idea that the United States is fundamentally in need of this sort of radical change, and that only a select few like himself have the insight and skills necessary to both implement and preside over it. We simply have not seen that redistributive ideology in a president since Jimmy Carter, and then only in part. So far the biggest edge for Obama is his inability to push more of his agenda through first a friendly and now a not-so-friendly Congress — as if to say, “How could I be a redistributionist when they did not let me redistribute as planned?”

The fulfillment of that old vision of mandated equality of result is what the 2012 election is about — nothing more, nothing less.

Quote of the Day - redistribution of wealth

"Whoever claims the right to redistribute the wealth produced by others is claiming the right to treat human beings as chattel." ~ Ayn Rand

Filling in on WSPD

I probably won't do much posting today or tomorrow as I research various topics for filling in for Brian Wilson on WSPD tomorrow from 3-6 p.m. I hope you'll tune in on AM 1370 or online and be part of the conversation.

In the meantime, here are a couple of items for your to read on your own:

Denmark's new fat tax

First Lady Michelle Obama's trip to Target was staged - perhaps because of the criticism she received for wearing $42,000 worth of diamonds on her wrist - and rather than be skeptical of the timing and the action, the liberal media swooned! No bias there.

And, in case you missed it, BET's Robert Johnson tells Pres. Obama to stop attacking the wealthy.

"Well, I think the president has to recalibrate his message. You don't get people to like you by attacking them or demeaning their success. You know, I grew up in a family of 10 kids, first one to go to college, and I've earned my success. I've earned my right to fly private if I choose to do so.

"And by attacking me it is not going to convince me that I should take a bigger hit because I happen to be wealthy. You know, it is the old -- I think Ted and Fred and I we both sort of take the old Ethel Merman approach to life. I've tried poor and I tried rich and I like rich better. It doesn't mean that I am a bad guy."

America heading down the wrong path

"A recent poll showed that nearly half the American public believes that the government should redistribute wealth. That so many people are so willing to blithely put such an enormous and dangerous arbitrary power in the hands of politicians -- risking their own freedom, in hopes of getting what someone else has -- is a painful sign of how far many citizens and voters fall short of what is needed to preserve a democratic republic." ~ Thomas Sowell

That was my thought when I read the release on the Gallup's 2011 Economics and Finance poll, conducted April 7-11.

According to Gallup, 47% believe the government should "enact heavy taxes on the rich to redistribute wealth in the U.S," while 49% disagree. At least this is better than in 2007 when the results were exactly opposite ... but with a margin of error around +/- 4%, that isn't saying much.

The breakdown is even scarier:

* 71% of Democrats believe in redistribution
* a majority of Republicans disagree, but a whopping 28% agree.
* 64% of non-whites agree
* the more money you make, the less you tend to agree. 63% of people with incomes under $30,000 agree.

Another finding in the poll indicates just how far we've come from the American Dream of working hard to better yourself: "...more believe there are too many rich people than too few, 31% vs. 21%."

Wikipedia defines the American Dream thusly:

The American Dream is a national ethos of the United States in which freedom includes a promise of the possibility of prosperity and success. In the definition of the American Dream by James Truslow Adams in 1931, "life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement" regardless of social class or circumstances of birth.

We still have the possibility of prosperity and success, but too many people see themselves as victims (constantly promoted by so-called leaders) and now believe that they needn't work for their achievements, but that the government should take from those who have worked and achieved and give it to others who haven't, simply because.

These polling numbers reflect a trend, especially among Democrats and their proclaimed constituent groups (non-whites and the less well off), toward Marxism:

“From each, according to his ability; to each, according to his need."

President Barack Obama and other Democrat leaders routinely espouse class warfare - pitting the haves against the have-nots. How far the Democratic Party has come since John F. Kennedy said:

“Ask not what your country can do for you. Ask what you can do for your country.”

This poll shows that a large majority of Democrats want the government (the country) to take from others and give to them, rather than asking what they can do to make their own lives (and thus the country) better. They no longer assume individual responsibility for themselves and their welfare.

The entitlement attitude is promoted by not only the history since President Roosevelt's 'new deal,' but also in the rhetoric of today's politicians. It is promoted in the union/democrat-dominated school systems and perpetuated generationally through welfare.

And this isn't a new perspective - it's a growing one. A nationwide survey by Columbia Law School in May 2002 of voting age Americans found the following:

Almost two-thirds think Karl Marx's dogma, "From each according to his ability, to each according to his needs" either was, or may have been, included in the Constitution.

Question:

Does the Constitution include the following statement about the proper role of government: "From each according to his ability, to each according to his needs"?

Answer:

Yes: 35%
No: 31%
Don't Know: 34%

Have we come to the point where we're a democracy instead of a democratic republic? Are we already in the dependency to bondage stage as noted below?

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

* From bondage to spiritual faith;
* From spiritual faith to great courage;
* From courage to liberty;
* From liberty to abundance;
* From abundance to complacency;
* From complacency to apathy;
* From apathy to dependence;
* From dependence back into bondage.

When I read the results from Gallup's poll, I cannot help but wonder if we are too far gone from the path of individual liberty and freedom that our Founders set us upon.

But then I see Tea Party groups and events like the We The People Convention and I'm encouraged.

I just don't know if it's too little - too late.

Random Thoughts: school lunches, EITC, election mandate

*** I hear liberals and many elected Democrats talk about 'fairness' all the time - usually in the context of "rich people" or "evil corporations" not paying their 'fair share' of taxes. But I never hear them talking about how UNfair it is for people who don't pay any taxes at all to get refunds.

Through the Earned Income Tax Credit (EITC), which politicians have publicly pushed in the past, people with lower incomes complete their tax forms, report how much they've paid in taxes and often owe no more or might get some back. But many individuals, because of the EITC, get back more than they paid in.

For instance, a low-income family might actually owe $0 in taxes after completing their tax forms. But a single parent-two child family earning around $12,000 could still get around a refund of about $5,000, according to the Piton Foundation which has been 'helping' working families get their credits for about 20 years.

Also according to Piton, that family could get $1,000 per child for the Child Tax Credit, even if they owe no income tax.

So how, exactly, is it "fair" to just give people money ... because that's what this is - a blatant, outright payment to certain people. This is not money they've paid and they're getting a portion back. In fact, since the government doesn't have anything it hasn't taken from someone else, this is money other people have paid that is then 're-distributed' to people who didn't pay anything.

How can people who advocate 'fairness' ever support such a direct taking from one to give to another? If anyone can explain this to me, I'd appreciate it.

***Too often it seems that when Democrats win, they say it's because the public has spoken and they proceed with the attitude of a 'mandate' to implement their policies and goals. But those same individuals have a different opinion when Republicans win. When the GOP gets elected, they expect 'compromise' and complain - loudly and often - that the Republicans are enacting 'extreme' agendas.

Both cannot be true.

Either you get to enact your agenda when you get elected or you don't. Either you must compromise when you get elected or you don't. Either you have a mandate or you don't. It's hypocritical to say you have a mandate when YOU get elected, but your opponent doesn't have a mandate when THEY get elected.

As President Barack Obama told the Republicans after HE took office, elections have consequences.

*** Banning bringing school lunches from home isn't just about a 'healthier' lunch. A Chicago Public School has banned students from bringing their lunch from home, making them eat the lunch provided by the cafeteria. As the article explains:

But parent Miguel Medina said he thinks the "no home lunch policy" is a good one. "The school food is very healthy," he said, "and when they bring the food from home, there is no control over the food."

He gets it - it's all about control, but apparently parent Miguel Medina doesn't understand that he's just given up control over his child to a public school system. Of course, he fails to understand that he does have control over the food his child takes to school, as he could supervise the packing of the lunch, but that seems to escape him as well.

It's parents like Medina who are the biggest threat, because they willingly give up their parental right and responsibility to raise their children and turn that duty over to a bureaucracy which can do whatever it wants, so long as it can say it's for the child's own good.

Sad...very, very sad.

The 'broken window fallacy' of federal extensions of unemployment

The federal government is debating how to pay for the planned extension of unemployment benefits. While there is much talk in the news about 'whether or not to do it,' the real question is how to pay for it, as it appears many Republicans are very likely to support it if they can make cuts elsewhere to cover the millions of dollars it will cost.

So you're probably wondering where a broken window fits into all of this. Before we get there, it's important to understand how unemployment insurance works in the first place - as that is critical to the discussion.

In Ohio, employers are charged/mandated by the state to pay into a fund a specific amount based upon what they pay their employees. Being 'insurance,' there are actuarial tables and estimates, etc... to determine the rates. The state bases their rates on projections of how many people will be unemployed and for how long. Because they administer the program, the state then processes requests for the insurance payouts based upon an unemployed individual's earnings and length of time employed and pays out for up to 26 weeks.

This expense on behalf of the state is covered by what employers have paid.

The federal government, on the other hand, has no specific income to cover what they have been paying out over and above what the states have given. The federal government has been paying for up to 53 more weeks of unemployment under their Emergency Unemployment Compensation (EUC) program. That's a total of 99 weeks.

But that's not all. Ohio also has an Extended Benefits program which paid out another 20 weeks for people who'd still not found a job after 99 weeks. That program was, according to Ohio.gov, 100% funded by the federal government.

So where did the federal government get the money to pay 73 weeks of unemployment to everyone in the country who didn't have a job? That's a good question, considering that the federal government is, essentially, broke. Obviously, they borrowed to come up with the money - which means that we (and our children and grandchildren) are paying the price of today's giveaways.

Of course, the 'logic' in Washington is that this handout is really 'economic development.' Just last week, House Speaker Nancy Pelosi said (again), that unemployment compensation creates jobs.

"It injects demand into the economy, it creates jobs to help reduce the deficit," Pelosi said.

At least she's being consistent in her error as back in October she claimed that food stamps and unemployment insurance will grow the economy and help end the recession.

And here is where the broken window fallacy becomes so relevant. The broken window concept is part of an essay, "That Which is Seen, and That Which is Not Seen," written by Frederic Bastiat in 1850. Lew Rockwell Jr., chairman of the Ludwig von Mises Institute, summarized Bastiat this way:

A kid throws a rock at a window and breaks it, and everyone standing around regrets the unfortunate state of affairs. But then up walks a man who purports to be wise and all knowing. He points out that this is not a bad thing after all. The man fixing the window will get money for doing so. This will then be spent on a new suit, and the tailor too will get money. The tailor will spend money on other items, and the circle of rising prosperity will expand without end.

What's wrong with this scenario? As Bastiat put it, "It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way which this accident has prevented."

You can see the absurdity of the position of the wise commentator when you take it to absurd extremes. If the broken window really produces wealth, why not break all windows up and down the whole city block? Indeed, why not break doors and walls? Why not tear down all houses so that they can be rebuilt? Why not bomb whole cities so construction firms can get busy rebuilding?

It is not a good thing to destroy wealth. Bastiat puts it this way: "Society loses the value of things which are uselessly destroyed."

So for every dollar the federal government takes from working people to give to non-working people, that is a dollar that is not spent in the economy.

Even if you believe that working people should have their money taken from them and given to those who don't work, you cannot believe that the economy will be better off, since you're not creating any NEW spending - just changing WHO is doing the spending.

And the expense is actually LESS because government has taken a percentage off the top to cover its costs of taking and re-distributing.

Politicians are trying to tie the unemployment extension to ending the expiring tax cuts for the 'rich.' First of all, the claim that those tax cuts 'cost' the federal government is a fallacy in and of itself.

The federal government has nothing that it hasn't first taken from someone. I find it incredulous that federal politicians think it 'hurts' the government to not have these funds but don't care one bit about how it may hurt the person from whom they're taking the funds.

And lest you begin to believe the class warfare distortion, the vast majority of the 'rich' that are impacted by the current proposals are small business owners whose loss of those funds, especially in this economy, will definitely hurt the individual owner and their ability to hire and expand - or even stay open.

Even if you support the idea of the government taking more from some people than others, you cannot escape the logic that it will not improve the economy to move the money from one spender (the current owner of the money - the 'rich') to another (the end recipient - the unemployed).

Is it true that people who are unemployed with spend whatever the government gives to them? Yes. That is true. It is, as Bastiat explained, what is seen.

But it is also true that the people who've had the money taken from them, in order for the government to give out unemployment compensation, will NOT spend. They won't be purchasing items they wanted, so there is no new demand. This is what Bastiat explains is unseen.

The back and forth in Washington over the issue is political posturing. But the basic economics of the idea are irrefutable - and just common sense. You cannot improve the economy by taking from one person, deducting your percentage and then giving to another - nor can you expect that more goods will be produced, more demand will be generated and the economy will grow by taking such action because you've eliminated a corresponding action from the person who had their money taken from them in the first place.

So if the logic is faulty why are they employing it? Because if they tell the truth the American people won't support it.

While it's a declining percentage, a slim majority still pay the bills for everyone else and too many of that majority are hurting themselves. Individuals who've lost jobs and have taken a new one at less pay don't want to foot the bill for those still not working. And they shouldn't have to. Many do choose to help by giving to food banks and other charities, or by helping to support a family member. But that is a choice - not something being forced upon them through penalty of law as taxation is.

So the politicians will twist the words and present fallacies hoping we, the American public, will either be so greedy as to not care who isn't getting money so we can have some - or that we won't be knowledgeable enough to know the truth.

And then they'll come back to us in two or four or six years and tell us how grateful we should be for what *they* did for us. Logic will be trumped by emotion - and the economy, and our own individual situations, won't be any the better for it.

A new tax on stock trades being pushed by unions

The Hill has the story about the AFL-CIO and some Democrats pushing for a new tax on every stock transaction.

It would *only* be about a tenth of a percent, so, they claim, most small and medium-sized investors wouldn't really notice it. (Beware when someone says a tax is *only* ...) It would, however, significantly cut into the profits of large firms like Goldman Sachs, the article points out.

“It would have two benefits, raise a lot of revenue and discourage speculative financial activity,” said Thea Lee, policy director at the AFL-CIO.

“The big disadvantage of most taxes is that they discourage some really productive activity,” she said. “This would discourage numerous financial transactions. People flip their assets several times in an hour or a day. They make money but does it really add to the productive base of the United States?”

I cannot believe this! At a time when the economy is in decline (still), this would discourage people from buying stocks. It they don't buy stocks, they don't become investors. If there are no investors, there are no investments. Without investments, there are no capital expenditures or expansions. If businesses don't grow, they fail.

Do 'they' not understand basic economics? Obviously not.

And now the AFL-CIO gets to determine what actions "add to the productive base" of our nation? Incredible! Unsustainable union demands are what contributed to the decline of the automotive industry and the layoffs of thousands - how's that for contributing to the productive base????

The AFL-CIO and some allied Democrats would like to cut down on the overall level of trading, or at least give the U.S. government a piece of the action, which would likely tamp down trading.

There's the point - they want more money for the government, which obviously means more spending on union priorities. Take money away from the citizens in order to spend it on pork projects or in meeting the demands of the union. Of course!

But that's not the only thing. According to the article, liberals are mad at Goldman Sachs:

Democrats and labor officials would also like to take a bite out of Goldman’s profits. Liberals are angry the company, which immersed itself in the frenzy of speculation leading to last year’s financial collapse, is now making huge profits after accepting (and repaying) $10 billion in government aid. Goldman employees are on track to earn an average of more than $700,000 this year.

Now we're getting to the heart of the matter. The company accepted and repaid government aid. As a result, the government can't tell them what to do anymore, since it no longer has the hammer of the bailout to hold over their heads. And now, the employees are going to - wait for it - earn money!!!!

We can't possible have people making huge amounts of money - they must suffer! But how to make them suffer for the sin of earning a lot of money? Tax them in such a way as to discourage their ability to earn.

And this is what is passing for government policy? Whatever happened to government protecting our rights and our liberties and our private property? Whatever happened to being happy that others can make a good living and earn money? How did we get to the point of such class envy that we use government to steal from those who "have" to give to others with the end goal of buying votes and ensuring re-election so the process can continue?

How did we get to the point that we demonize wealth instead of celebrate the accomplishments of the individuals who attain it - and thus are able to fund so many charitable, artistic and philanthropic acts?

AFL-CIO president John Sweeney said, following the election of Barack Obama as president:

"We have taken the first crucial steps to build a better future for our children and grandchildren. And what we've seen – the stunning voter participation and the common call for change – is an indication of the history we can continue to make together.
...
The election is just step one in delivering the change we need."

The article further states that one of the priorities for the unions is "regulating Wall Street."

So that's what they're trying to do. But in trying to get even with a company they don't like, and raise money to fund their goals of socialized health care, they are supporting a bill that will tax everyone - and will be especially hard on the average investor like many of their union members.

Most individuals have their pensions invested in retirement accounts and mutual funds that make such investments. As individuals age they make changes in their accounts and this bill will tax them every time. But don't worry, it's *only*...

The bigger problem with this idea is that the tax will discourage the overall market. If people are taxed based upon how many times they buy or sell a stock, it will reduce the number transactions, which will have a global impact. If you have the option of purchasing a stock in America or in Japan, but America charges you a tax for each purchase, would you be more likely to invest in the Nikkei, instead? People invest to make money so why would they willingly forgo a portion of their hoped-for profits simply because some union thinks they're more 'entitled' to the earnings than they are?

This needs to be stopped. Not just because it's bad for the nation and bad for Americans (it is!), but because unions (and other special interest groups) should not be able to have the laws written to benefit their own narrow interests (like the bailout of their union health care and mismanaged pensions), especially at the expense of the American tax payer.

Calling it 'capitalism' doesn't make it so

In a recent New York Times column, Richard W. Stevenson wrote:

In a series of comments in recent weeks, Mr. Obama has begun to sketch a vision of where he would like to drive the economy once this crisis is past. His goals include diminishing the consumerism that has long been the main source of growth in the United States, and encouraging more savings and investment. He would redistribute wealth toward the middle class and make the rest of the world less dependent on the American market for its prosperity. And he would seek a consensus recognizing that an activist government is an acceptable and necessary partner for a stable, market-based economy.

The article, 'Redefining Capitalism After the Fall,' reminds me of George Orwell's 1984 wherein the definition and meaning of words are modified by government. Just like the old joke: "How many legs does a dog have if you call its tail a leg? Four - calling it a leg doesn't make it so." If you take socialist-type practices and call them capitalism, it doesn't mean it's capitalism.

But let's look at what Pres. Obama has suggested.

"His goals include diminishing the consumerism that has long been the main source of growth in the United States, and encouraging more savings and investment."

There's a lot to be said for encouraging individuals to save and invest. However, such an approach is completely contrary to what government has done. Congress, under both Presidents Bush and Obama, has taken various steps to encourage spending - everything from direct 'stimulus' checks (which didn't 'stimulate' the economy) to the latest 'stimulus bill' which borrows against future generations in order to spend now.

How do you say people should save and invest when you are encouraging them to do the exact opposite? And if saving and investing is good in the long term, why are we not encouraging such activity now? How can people (or government) borrow now, incur huge debt and then expect to have any money left over to save in the future?

"He would redistribute wealth toward the middle class..."

Well of course he would. He said exactly that to Joe the Plumber. The problem with this scenario is, as Margaret Thatcher said, eventually you run out of other people's money. Under such schemes, the threshold of whose wealth is 'redistributed' continually goes down, meaning that those 'middle class' people who think they're going to be getting someone else's wealth find themselves classified as 'wealthy.'

As it is, Obama has said that 'rich' starts at earnings of $250,000. According to the most recent data from the IRS (2006), the top 10% of filers, those earning more than $108,904, paid more than 70 percent of all taxes. If you have two union members in a household working overtime, it is very likely they earn enough to put them into the top 10%. If the top 10% are paying 70% of all taxes, that means that 90% of the people are paying only 30% of the bill. How much more does wealth need to be redistributed?

Obama also wants to:

"...make the rest of the world less dependent on the American market for its prosperity."

While I certainly want other nations to be economically successful, I still want them to depend upon the American market. We live in a global economy and I want other nations to depend upon the American market. I want the United States to be in the driver's seat when it comes to the economy. I want our citizens to be the client the world's businesses want to satisfy. But the way to do that is through capitalism - not through a mandated version of what government thinks we want or need.

Finally, Obama says he:

"...would seek a consensus recognizing that an activist government is an acceptable and necessary partner for a stable, market-based economy."

Well that's not capitalism, which is precisely the point. The last thing our founders had in mind for this nation was an 'activist' government. They saw the results of 'activist government' and fought a revolution in order to free of us from such oversight.

Just look at the words: 'activist government' and 'market-based economy.' If government is determining the economy, it cannot be 'market-based.' Either the market determines the economy or government does. And you cannot redefine capitalism to remove the market-based aspect and replace it with government-based and still have 'capitalism.' Socialism or fascism, maybe, but not capitalism.

Leftist like to say that the so-called 'failure' of the economy is a result of our capitalism, failing to realize that the U.S. has moved so far from a free-market economy due to government interference, regulations, subsidies, support, etc. It isn't the failure of a free market that brought us to today's economy, it is the idea, practiced in many areas, that government can dictate to that free-market and still have a free market. If government hadn't mandated loans to individuals not determined, under normal circumstances, to be qualified, do you really think the burst of the housing bubble would have been so severe? When you order banks to consider unemployment insurance payments as income, is it any wonder that people who didn't have a job had trouble making their loan payments?

Of course, leftists also believe that the solution to problems government created is...more government.

Additionally, capitalism includes the possibility and consequences of failure - something government has now determined to prevent, via bailouts, loans and the 'too big to fail' concept. That's not capitalism, either, as capitalism requires reward commensurate with risk. If I risk nothing because I have a government willing to bail me out, I'm likely to take on riskier propositions. The situation becomes worse as a result of government guarantees against suffering the consequences of severe risk, i.e. failure.

Of course, the 'government' really isn't doing this. We, the taxpayers are - those same taxpayers who wouldn't invest their own personal funds in such endeavors are doing so, through taxation and distribution by government, after the failure has been achieved.

Again, that's not capitalism and calling such doesn't make it true.

It is these types of goals and ideas that have so many Americans worried and concerned over the future of their nation. While we're not a socialist country, yet, we see signs that we are moving in that direction and when Pres. Obama says those are his goals, is it any wonder every day citizens took to the streets to protest such aims at the Tea Parties?

For more on the free market, I highly suggest this article from the Foundation for Economic Education.

Quote of the Day

"The more one considers the matter, the clearer it becomes that redistribution is in effect far less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State." ~ Bertrand de Jouvenel

The politics of selfishness

“The state cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.” ~ William Graham Sumner

Barack Obama, in defending his 'spread the wealth,' redistributionist tax policies, recently said:

"John McCain and Sarah Palin they call this socialistic. You know I don’t know when, when they decided they wanted to make a virtue out of selfishness."

Isn't just like a socialist to describe your desire to make your own decisions about how to spend the money you've earned as 'selfish'?

What could be more selfish than someone thinking you should give them your money so they can spend it instead of you? Please note - they don't want to redistribute their own funds - no, they want to take your funds and give them away.

It's also a rather popular media ploy - to attack a logical argument with - what did the Clintons call it? - the 'politics of personal destruction.' You are no longer 'good' if you think you can do a better job of spending your funds than the government. Now, you are being 'selfish' if you don't want to give your money to the government so it can give it to someone else, instead.

And this is, indeed, a media ploy, as well as a poor defense against a policy rejected by the majority of Americans. Dictionary.com defines 'selfish' as:

"devoted to or caring only for oneself; concerned primarily with one's own interests, benefits, welfare, etc., regardless of others"

Under this definition, Obama seems to be saying that Republicans, conservatives and even many Democrats care only for themselves, without regard to our fellow man.

But then, that's in keeping with what Democrats believe. Remember the interview with Ohio Democrat Party Chairman Chris Redfern on NewsTalk 1370 WSPD?

As I wrote on August 27, 2008, the date of the interview:

"When morning show host Fred Lefebvre used his board operator, Don Zellars, as an example of someone who wants to know why he has to pay for other people's homes and food while struggling to pay for his own, Redfern's comment was that Don must feel really good inside knowing he's helping so many people.

Redfern explained that America needs to tax people to provide charitable services through the government because, without forcing people through taxation, most Americans wouldn't help take care of the 'least among us.' When Fred pointed out that Don would be happy to help 'the least among us' if government weren't taking so much of his money first, Redfern said:

"I suspect Don would, but unfortunately, most Americans would not - and if we remove that kind of support, stratagem, then you remove the entire reason for having any kind of projects, programs, initiatives..."

This is the driving philosophy behind calling us selfish - the idea that if government doesn't FORCE us, through the power of law, to 'give,' we wouldn't do it.

However, nothing could be further from the truth. Arthur C. Brooks, a professor at Syracuse University and author of "Who Really Cares: The Surprising Truth About Compassionate Conservatism," documents that liberals are markedly less charitable than conservatives. Brooks found:

-- Although liberal families' incomes average 6 percent higher than those of conservative families, conservative-headed households give, on average, 30 percent more to charity than the average liberal-headed household ($1,600 per year vs. $1,227).

-- Conservatives also donate more time and give more blood.

-- Residents of the states that voted for John Kerry in 2004 gave smaller percentages of their incomes to charity than did residents of states that voted for George Bush.

-- Bush carried 24 of the 25 states where charitable giving was above average.

-- In the 10 reddest states, in which Bush got more than 60 percent majorities, the average percentage of personal income donated to charity was 3.5. Residents of the bluest states, which gave Bush less than 40 percent, donated just 1.9 percent.

-- People who reject the idea that "government has a responsibility to reduce income inequality" give an average of four times more than people who accept that proposition.

Brooks demonstrates a correlation between charitable behavior and "the values that lie beneath" liberal and conservative labels. Two influences on charitable behavior are religion and attitudes about the proper role of government.

You see, conservatives believe the duty to help others is their own - and not something they should abdicate to the government. And because we disagree on the METHOD of caring for others, Obama calls us selfish.

What's truly selfish is that the individuals supporting Obama and this 'share the wealth' philosophy believe they should be given what other people have - just because. I don't have X, you do, therefore, I should be given part of your X. Talk about selfishness and greed!

The biggest tragedy of the politics of selfishness is the emphasis on the money and the spending. By calling conservatives 'selfish' it focuses the discussion on a personal attribute, rather than the proper role of government. The question really isn't 'is a person selfish' because they don't believe in redistributionist tax policies, the proper question we should be asking is this: Is it the proper role of government to take something from a citizen of this country in order to give it to another citizen?

This is not about jointly sharing the costs of such public infrastructures as roads, or about interstate commerce, or even mutual defense of the country and persons. This is about whether or not the property you acquire is free from confiscation by the government in order to gift it to another.

As I said in my Toledo Free Press column, our founders would be appalled:

Ben Franklin said, “When the people find that they can vote themselves money, that will herald the end of the republic.”

Thomas Jefferson wrote, “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

And James Madison said, “Charity is no part of the legislative duty of the government.”

But I suppose Obama, Democrat leaders and others would call them 'selfish' too.

If it walks like a duck...

Recently, many on the right side of the political spectrum have criticized Sen. Barak Obama's tax plan as 'welfare' disguised as tax credits. They correctly point out that many of the tax credits in his plan are for people who are not paying any taxes to begin with, which means they'll get even more of a 'refund' when they file.

Under Obama's plan, if the tax credit is for $2,000, but the taxpayer would otherwise only pay $300 in taxes, the government would write a check to the taxpayer for $1,700. If the taxpayer pays nothing in federal income taxes, the government would pay him the whole $2,000. When the amount you give back to a tax filer is in excess of the total they've paid, it's a handout - also known as "welfare."

Of course the campaign of Sen. John McCain jumped all over this, since it resonates with many voters.

In response to the traction the McCain campaign was getting on the issue, the Obama campaign has added a 'work requirement' to one of the components of their tax credit policy.

"They started saying this was welfare," said Obama adviser Austan Goolsbee. "So, just so they would absolutely not be able to say that, we decided that for the last two percent we'll simply add a work requirement."

So there you have it: to make our redistribution of wealth more palatable, we'll require some sort of work in order to be eligible .... never mind that other people are also working but will be expected to pay more so someone else can pay less - or get a handout. But this is not socialism....

Yeah, right.

Foreclosures and your tax dollars

Lucas County Commissioners yesterday approved a contract for $200,000 to help up to 60 families who are facing foreclosure on their homes. That's $3,333.34 each.

According to Comm. Pete Gerken, "This is darn good public policy and don't let anyone tell you otherwise."

Um...right. It's good public policy to take money from everyone in order to give it to a few who've made bad decisions with their finances over a period of time.

Robbing Peter to pay Paul is NEVER good public policy. It's only good for Paul or the person who wants Paul's vote!

NewsTalk 1370 WSPD has a sound clip of Gerken on the subject (link will be added when clip is available) in which he addresses the criticism some would level on such a policy. His reasoning is that he "makes no apology" for spending tax money to help people stay in their homes.

Of course, he's not helping them - you and I are. And in taking our tax dollars for this purpose, he's saying that government needs this money to help people more than you need it for making sure you don't end up in the group they're trying to help!

Missed in all the hoopla over helping people is that the money isn't even going to the families in such need. Nope - the money is going to pay for services and classes being put on by the contracted agencies. Eligible families will participate in counselling, budget classes and training on interest rates ... a bit after the fact, if you ask me.

Perhaps the loss of a home would be a good enough lesson in those subjects. Don't misunderstand me - I'm not being an evil, heartless conservative. I don't want families to lose their homes.

I just believe that, often, the best-learned lessons are the hardest ones. Sometimes the only way people truly learn is when they are allowed to suffer the consequences of a bad decision. It happens as we grow up and it continues into our adulthood. When government steps in to try and save people from the consequences of bad decisions, the cycle - and precedent - becomes never ending. And the result is less freedom for everyone.

As it is, our commissioners are more interested in the few (60 families) than they are the many (the other 400,000 residents in the county). They're perfectly willing to expend $200,000 of your tax dollars to 'save' up to 60 families.

Now, this is only available to families - at least one parent/guardian with a minor child in the house. That's because they're using TANF (Temporary Assistance to Needy Families) dollars.

For at least four years, the commissioners have found new uses for these funds, adding new programs that can be paid for with these dollars. That's because we get more money than we actually need - and because we spend it all each year (by adding new services), we continue to get more. Lucas County has also increased the eligibility levels for many of these programs, most up to 250% of poverty level and some have been as high as 300% of poverty level.

(Remember: 300% of poverty level for a family of four is about $62,000. According to 2005 IRS data, that income puts you into the top 25% of wage earners in the United States. That's hardly 'poverty.')

As a commissioner debating a similar issue, Gerken once accused me of hating social service agencies and of not wanting to 'help' people. I replied - rather forcibly - that it wasn't that I didn't want to help people, I just believed in doing so with my own money rather than by spending other people's money that had been entrusted to me. There was no retort.

If every Ohio county spends $400,000 on foreclosure programs (the total amount that our commissioners have set aside), the cost of such help adds up to $35.2 million. If every state copies this, that's $1.76 billion - and now you're getting into 'real' money. Money that has been taken from each taxpayer who would probably have a better use for it.

“I’m sure everyone feels sorry for the individual who has fallen by the wayside or who can’t keep up in our competitive society, but my own compassion goes beyond that to the millions of unsung men and women who get up every morning, send the kids to school, go to work, try and keep up the payments on their house, pay exorbitant taxes to make possible compassion for the less fortunate, and as a result have to sacrifice many of their own desires and dreams and hopes. Government owes them something better than always finding a new way to make them share the fruit of their toils with others.” ~ Ronald Reagan

*****************
If you have an opinion about the decisions the commissioners made - or their logic in making it - let them know. They'll think they're doing the right thing unless we tell them otherwise:

Tina Skeldon Wozniak: twozniak@co.lucas.oh.us
Pete Gerken: pgerken@co.lucas.oh.us
Ben Konop: bkonop@co.lucas.oh.us
Phone number: 419-213-4500
*****************

For another perspective on foreclosures, try this article which says foreclosures are good for some...

UPDATE:

GOV'T TO BLAME FOR MORTGAGE CRISIS

"There simply was no such thing as a developed Subprime mortgage industry until the US congress created it by ordering banks to issue loans to people who were not credit worthy."

- Columnist Jerry Bowyer

Free!!! Not really...

One of my pet peeves is when government promotes 'free' services. As this is tax time, there are ads and press conferences and elected officials all touting 'free' tax help for low-income earners.

While the participants do not have to pay a cost for receiving the services, they are not free. The problem is that most of these programs are funded with tax dollars. They are paid for by you and me and everyone else who pays taxes.

Of course, if government didn't take so much of our money in the first place, we'd all have more funds to cover the costs of such things. As it is, those of us who pay someone to do our taxes for us - or who do them on our own - are paying twice (or going without) so that others can get their taxes done 'for free.'

Sadly, I don't think the recipients of such largesse understand that it's not really 'free.'

Quote of the day

“I’m sure everyone feels sorry for the individual who has fallen by the wayside or who can’t keep up in our competitive society, but my own compassion goes beyond that to the millions of unsung men and women who get up every morning, send the kids to school, go to work, try and keep up the payments on their house, pay exorbitant taxes to make possible compassion for the less fortunate, and as a result have to sacrifice many of their own desires and dreams and hopes. Government owes them something better than always finding a new way to make them share the fruit of their toils with others.” ~ Ronald Reagan

Is EITC just re-distribution of wealth?

Our local elected officials have a big push on in Lucas County to make sure individuals and families take advantage of the Earned Income Tax Credit (EITC). There's even a letter to the editor in the local paper from Lucas County Commissioner Ben Konop and Lucas County Treasurer Wade Kapszukiewicz, who are spear-heading this effort.

But what exactly does the EITC do and is it a re-distribution of wealth from those who pay taxes to those who don't?

I started with an Internet search and found a website that helps you determine eligibility and estimate an amount of EITC for which you may qualify. But using that site required earnings, and other financial data, so I created a hypothetical and here's what I found.

My hypothetical is a single mother earning $8/hr. in a 35 hour/week part-time position. She has 1 child, no alimony nor other income. Her yearly gross income would be $14,560. According to 2007 withholding tables, if she claimed 2 exemptions (herself and her child), she would have had $510.50 withheld from her pay for federal taxes.

If she used the 1040EZ form, filing single, she'd be able to use the standard deduction of $8,750, making her taxable income $5,810. (I did not calculate her taxes using a standard 1040 form so I do not know if the form used would have made a difference in her taxable income.)

According to the tax tables, she would owe a total of $583 on taxable income of $5,810. As she already had $510.50 withheld, she'd be writing a check to the federal government for the difference of $72.50.

But ... she's eligible for the EITC - an estimated amount of $2,850.

The way the form is set up, that $2,850 dollar value is a credit and gets added to what you've already paid in taxes through your withholding. This gives my hypothetical mother a total of $3,360.50 'paid' ... significantly more than the $583 the tax tables show she owes.

So, in this example, my single mother will be getting a refund of $2,777.50.

Now, she only paid $510.50 and she owed $583...but she'll be getting a check from the government for $2,777.50. That's 48% of her taxable income that she's getting 'back.'

We all know that government has no money of its own - only what it collects from others. This means that people who pay taxes are the ones who are giving this 'refund' to my single mother. And by 'pay taxes' I mean all of us who have taxes withheld and either get back less than what we paid in - or actually owe more (on top of our withholdings) when we prepare our 1040s.

In this example, the EITC is a re-distribution of wealth. And I cannot help but wonder why we, as a nation, think this is okay, acceptable, appropriate, fair, or any other word you'd like to use to describe this action.

And does anyone else have a problem with our elected officials going around and telling people to claim this re-distribution of wealth in the guise of 'bringing money into our local economy'? From the letter to the editor:

"Families and individuals deserve to keep what they've earned and this free tax preparation will make that happen.

Even if you don't qualify for the EITC, the benefits to our local economy are enormous. The EITC is truly the best economic stimulus available. If everyone who qualified for this money took advantage, we'd bring millions of dollars into our local economy, supporting local businesses, jobs, and wages."

Um - I'd like to keep what I earn as well, but this program makes my family pay so others can have our money instead.

Your thoughts?

UPDATED: Economic stimulus - who gets the rebate?

UPDATE 2: The Wall Street Journal had a good column (may require subscription) with answers about the stimulus plan. Some of the Q&A:

Q: Do I have to file a federal income-tax return for 2007 in order to get something this year?

A: Yes. "You have to file a return for the 2007 tax year in order to receive a rebate check" during 2008, says an aide to Senate Finance Committee Chairman Max Baucus.

The IRS "will calculate the rebate from that return, estimating the reduction in tax liability for 2008 that results in the rebate check," the aide says.

Q: Do I have to figure out how much I'm supposed to get this year?

A: No. You don't have to apply. The Internal Revenue Service is supposed to handle it for you. As one congressional staffer put it, "all you have to know how to do is open an envelope" -- or tell the government how to zap your money electronically into your account.

Q: Will Uncle Sam tax these payments?

A: No, say representatives of the U.S. Treasury Department and congressional tax-writing committees.

Q: But what about all these rumors that the payments will cut into what I get as my refund next year?

A: They're wrong, congressional staffers say. "Please be aware that there have been erroneous reports that stimulus rebate checks are an advance on next year's tax refund, so that any refund a taxpayer might normally receive would be reduced by the amount of the 2007 stimulus check," says the Baucus aide. "This is not correct."

Amy McAnarney, executive director for H&R Block's Tax Institute, says, "The actual credit will be calculated on your 2008 return. If you're due a higher credit, you'll get the remainder next year when you file. If you received a higher credit than you should have, you do not have to pay anything back."

"What might happen next year," a House staffer says, "is that somebody who didn't get their full amount this year could get more, based on their return for 2008. For example, if you had a child born in 2008 and you were within the income caps, you'll get another benefit of $300 next year when you file your return for 2008."

UPDATE 1: Here is the breakdown of who gets how much based upon the proposal, which may be changed by the Senate.

If your adjusted gross income (AGI) is less than $3,000, you get nothing.
If you are single and your AGI is $3,000 to $6,000, you will get $300 to $600 plus $300 per child.
If you are single and your AGI is $6,000 to $75,000, you will get $600 plus $300 per child.
If you are married and your AGI is up to $150,000, you will get $1,200 plus $300 per child.
If you are single and your AGI is over $75,000, you will get $600 plus $300 per child, less 5% for every $1,000 over the $75,000.
If you are married and your AGI is over $150,000, you will get $1,200 plus $300 per child, less 5% for every $1,000 over the $150,000.

Total package is estimated at $150 billion with about $28 billion going to individuals who paid no taxes. Timeframe for actually receiving the funds could be as early as May, though most estimates are for July or later.

ORIGINAL POST:

From Dictionary.com Unabridged (v 1.1), the definition of 'rebate':

–noun 1. a return of part of the original payment for some service or merchandise; partial refund.
–verb (used with object) 2. to allow as a discount.
3. to deduct (a certain amount), as from a total.
4. to return (part of an original payment)
5. to provide a rebate for (merchandise) after purchase.
[Origin: 1400–50; late ME rebaten (v.) < OF rabatre to beat, put down, equiv. to re- re- + (a)batre; see abate]

This means that, in order to qualify for any sort of rebate, an individual must have, by definition, first paid something. If the second definition is used, there must first be something owed in order to allow as a discount.

In sticking with the definition, only individuals who've actually paid federal taxes and not gotten all of them back as part of a refund, should be eligible for a rebate.

By definition, individuals who've paid no taxes should not be eligible for anything under this portion of the so-called stimulus plan.

Yeah - right. Who thinks that Congress or the President will insist on following the definition? Anyone?

What's going to happen is that our elected officials will take to the microphones to espouse a redistribution of wealth under the guise of 'fairness' by saying it isn't fair to give money back only to the 'rich.' That the 'less fortunate among us' also deserve some 'help.'

How fair is it to give a rebate to those who've not paid anything in the first place? If a person walks into your store and demands a rebate without purchasing the required products, you'd laugh and tell him to get lost. But somehow, our elected officials seem to think that this same scenario is not only logical but 'necessary' when it comes to the proposed tax rebates.

It's redistribution of wealth under the false assumption that taking from the taxpayers and giving cash to everyone, regardless of prior payments, will somehow stimulate the economy.

They're wrong - and any amount of common sense would demonstrate just how wrong this is. But that's never stopped them before - so expect it to happen anyway, with the hoped-for results never materializing.

How does more money to food banks stimulate the economy?

It doesn't.

But that certainly won't stop Ohio Senator Sherrod Brown from including such funding in the fast-tracked 'stimulus' bill under consideration in Washington.

"He said assisting those who have already suffered, such as with money for food banks, the home heating assistance program, and extended unemployment benefits, are the elements he wants in a "stimulus" package."

First of all, numerous articles in financial publications, and numerous economists, say that tax rebates won't stimulate the economy.

It was tried in 2001 and really didn't work, but the tax cuts passed in 2003 did. And if you don't believe that, just look at what the stock market did in response to the announcement of these rebates. It went down because Wall Street and everyday investors understand that any rebates have to come from somewhere, which means that Congress will have to borrow the money - putting increased debt on the shoulders of future generations.

But, even if you might somehow convince yourself that tax rebates are the way to go to head off what might be a recession, how does money to food banks stimulate the economy?

If you extend unemployment benefits, you encourage recipients to stay in the program longer rather than actually taking a job - even if it's a job paying less than what they were making previously. The same with home heating assistance - all these programs do is make people comfortable in their current economic status, encouraging them to continue in such circumstances.

Any money that the government gives out has to come from somewhere - and that means you and me - and everyone else who's already struggling with their own increasing costs, including taxes which will have to be imposed on future generations to cover the promises being made today.

This is a re-distribution of wealth - and it won't cause the economy to grow. In fact, it may have the opposite impact of causing those most capable of spending to decide to save instead.

Any way you look at it, taking from some to give to others does not stimulate the economy- even if it is for a 'good cause' like a food bank.