Monthly Archives: November 2011
In case you missed it, this is the Bret Baier interview with Romney that everyone’s been talking about. Bret asks Mitt about possible similarities between Obama Care and Romney Care, and oh, does Willard squirm. Check it out, check-it-outers:
I’ll tell you two things I learned from this video.
One: Romney was hoping the interview would be a bunch of softballs, and a circuit in his (robot) brain shorted out when he was thrown a curve ball.
Two: Now that Newt is Romney’s greatest threat, Mitt’s gonna start throwing him under the bus like he used to do Perry. (and Huckabee the last go-round)
What do you guys think? Did Willard quirm? Did that robot brain seize up? Or did he handle himself well? And is he going to be able to bully Newt around the same way he used to do Perry?
Let us know your thoughts on Facebook or in the comments below. This primary ain’t over yet, folks. Not by a long shot.
Earlier today the Senate voted to keep a provision in S.1253 National Defense Authorization Act for Fiscal Year 2012 which would give the President authority, using the military, to indefinitely detain suspected terror suspects. This includes not only oversees, but in the United States, to include American citizens. The provision’s sponsors are Arizona Republican Sen. John McCain and Michigan Democratic Sen. Carl Levin.
Colorado Democratic Sen. Mark Udall proposes an amendment to the bill that was intended to remove the detainment provision. It was defeated by a vote of 61-37. In a column written for the Washington Post, Udall made the following argument:
“For example, the provisions would require the military to dedicate a significant number of personnel to capturing and holding terrorism suspects — in some cases indefinitely — even those apprehended on U.S. soil. And they authorize the military to do so regardless of an accused terrorist’s citizenship, even if he or she is an American captured in a U.S. city.”
It was reported that Senator Rand Paul (R. – KY.) and Senator John McCain had an exchange regarding the provision, in which Paul made the following comment: “Should we err today and remove some of the most important checks on state power in the name of fighting terrorism, well then the terrorists have won. [D]etaining American citizens without a court trial is not American.”. To which McCain responded with “Facts are stubborn things. If the senator from Kentucky wants to have a situation prevail where people who are released go back into the fight to kill Americans he is entitled to his opinion.”
The White House has threatened to veto the bill over the provision claiming it will hamper current efforts of “counter-terrorism professionals, including our military commanders, intelligence professionals, seasoned counter-terrorism prosecutors, or other operatives in the field” . In addition, FBI, Pentagon, and the Director of National Intelligence have all criticized the legislation.
SPRINGFIELD, Ill., Nov. 29, 2011 — Today’s Senate vote approving SB 678 promises to leave Illinoisans paying at least $286 million in annual costs for the next 30 years to pay for the Taylorville Energy Center, a power plant that Illinois doesn’t need. If passed by the House and signed by the Governor, this tremendous cost would devastate Illinois’ economy, destroying jobs and sending businesses elsewhere.
Kevin Wright, former Illinois Commerce Commissioner and President of the Illinois Competitive Energy Association, cited the costs that Tenaska, an out-of-state energy company, would pass on to Illinoisconsumers to build the Taylorville Energy Center.
“According to Tenaska’s own report, this project would cost Illinois electricity customers at least $286 million per year, and after today’s vote, Tenaska is one step closer to getting their way,” said Wright. “When this issue comes up next year, I hope the House will do what the Senate wouldn’t and stick up forIllinois consumers by rejecting this bill.”
In addition to the cost alone, this legislation would lock Illinois businesses, families, and government agencies into a 30-year contract, undermining Illinois’ competitive energy market and damaging our economy.
“This bill forces Illinois businesses to subsidize an out-of-state company and leaves them exposed to a huge cost burden in the event of budget overruns, which are almost inevitable,” said David Vite, President of the Illinois Retail Merchants Association. “It will make it harder for our businesses to keep and create jobs and signal ‘Look elsewhere’ to businesses outside our state looking to expand or relocate.”
Three times previously, the General Assembly voted against the Taylorville Energy Center, amending and adding to the legislation to win votes. Greg Baise, President and CEO of the Illinois Manufacturers’ Association, discussed the legislation and called on the House to reject SB 678 next year.
“This is a massive electric rate hike on Illinois residents and businesses during the worst economic time in our generation,” said Baise. Members of the STOP Coalition are urging the House to stand up for Illinoisconsumers and reject this legislation next year.
Rumor has it that Alec Baldwin had a little bit of a Twitter meltdown last night. I missed out on it live, but I caught a little bit of it this morning on this website. (check it out; it’s pretty nutty) The Five, a show with five hosts that comes on at 5pm (get it?), decided to feature some of the meltdown in one of their segments today. It just so happens that I know and follow two of the tweeters they show Alec Baldwin getting into it with. (@keder and @SooperMexican) If you’re into conservative politics and snark (and who isn’t?), then you’ll want to check these two guys out for sure. Watch the video below, and make sure to check out the link above, to catch all the zaniness.
And if you’d like to show support for these brave heroes that went up against one of Hollywood’s biggest stars, be sure to send them love on Facebook or in the comments below.
In the times in which we live, an unfortunate fact of life is that we on the right must battle not only the Democrats, but their biased media as well.
This phenomenon is quite discouraging on many different levels. One of the side effects of the media treatment is that most conservatives don’t speak with any level of righteous indignation in press conferences and interviews, fearing the media criticism that would follow. The result of this is when a Republican speaks with appropriate anger towards Democrats and the media, he or she seems to gain quite a following.
Donald Trump burst on the scene in early 2011 announcing that he was considering running for president as a Republican. The most interesting thing about this prospect was Donald Trump’s past liberalism, his large campaign donations to numerous Democrats, and most recently, his having supported Hillary Clinton in 2008. But despite these should-be debilitating facts, Trump still managed to gain some traction.
The massive news coverage was garnered based on the billionaire’s constant focus on the obscure issue of President Obama’s birth certificate, with few actual rational criticisms. As Senator Rand Paul (R-KY) said in jest regarding Trump’s focus on the “birther” issue and liberal history, “I want to see the original long form certificate, with embossed seal, of Donald Trump’s Republican registration.”
Eventually Trump’s charade was up and he admitted he wasn’t going to run for president after all. Trump was getting absolutely slaughtered in polls versus Obama, but that wasn’t the reason he declined to run; he never had any intention to run at any point. The whole event was a massive publicity stunt. So, why did Trump ever get support from a portion of voters on the right? This is likely because of Trump’s directed anger at Obama, China, and OPEC.
It’s no secret that Republican voters love to talk about how great America is and how they believe in American Exceptionalism. When they see foreign powers rising as America falters, its a natural reaction for them to focus their disdain at them. Trump’s tough talk on China gave his supporters a personal sense of patriotism to see a strong figure “stand up” for his country. This is in spite of the economic and diplomatic damage that would’ve been caused by a trade war with China. Americans have also grown tired of Obama’s assault on domestic oil drilling, which has raised oil prices, killed American jobs, and made us even more dependent on the ever hostile Middle East for our energy supply. This issue is another reason why some Republicans supported Trump. Trump wanted to confront OPEC and cuss them out, as he put on display in a speech. It doesn’t matter that the result of this action would’ve at best been no result and at worst, raised oil prices, the reason it got him support was because Americans don’t like OPEC.
Trump’s next idea that some conservatives supported was making foreign nations pay us for our troop presence in their respective countries as well as Iraq paying us back for the war in oil. The silver lining to this idea is that at least some on the right have inadvertently admitted that we can’t afford to have all our troops in so many different countries. It also admits that the Iraq war wasn’t really worth the blood and treasure so we want our money back in the form of a resource, so we can at least financially break even. Republicans liked these ideas because: they generally like an expansive foreign policy with hundreds of bases abroad and cheaper oil prices; and they don’t like excessively large deficits. Now the unfortunate part of the proposals, that apparently didn’t matter to the Trump supporters, were that: 1) Our troops would effectively be international mercenaries instead of being used to uphold their oath to protect and defend the US Constitution. And 2) In the case of the Iraq War, you can’t really force payment for a service that was never requested. Iraq didn’t ask us to attack them and occupy them for 8+ years, thus we can’t just take $2+ trillion worth of their oil reserves. The analogy I like use to describe this idea is: I’m your neighbor and I decide you need some yard work done, despite us not having discussed this. So I go out and mow the lawn, rake and bag the leaves, edge your driveway and etc. My wife and kids are unhappy that I’ve been busy all day and spent money we had planned for other things buying the supplies to do your yard work. So then I decide to take your microwave, toaster, and other household appliances for my efforts.
As you can see, its a pretty good thing that Trump is gone from the presidential scene. Unfortunately, other charlatans parading as conservatives appear to have taken his place. Newt Gingrich for example has been the latest candidate to take his turn surging in the polls. Newt’s sudden popularity is the latest example of the short attention span of the average American voters. Newt is without a doubt a smart guy, I don’t think anyone questions that. But I have to stop myself from committing unspeakable acts every time I hear the platitude that Newt is, “the smartest man in the room”. As Ann Coulter has said, she thinks that Newt is the person who started the rumor that Newt Gingrich is the “smartest man in the room”.
Newt admitted he didn’t see the housing bubble coming (doesn’t have a firm grasp on economics) and has supported an individual healthcare mandate (in his defense he says the Heritage Foundation did as well, which is correct, and this is a chief reason that I don’t blindly take Heritage’s word on issues). Newt has also supported Cap N Trade and he thinks that FDR is one of the nation’s greatest presidents, the New Deal was a success, and that FDR belongs on Mt. Rushmore.
Newt in the past few years has also urged the US to take military action against North Korea. More recently, in the Heritage Foundation’s Foreign Policy debate, Newt came out in favor of conditional amnesty. So how does one with such a terrible record get increasing support among conservatives? The “lack of other alternatives” answer may have some merit, but I think its because of how Newt takes on the media and Obama.
Newt is to debating as what Ronald Reagan was to addressing the American people. Newt’s skill in the debates is that he can offer many simple policy solutions in the 60 seconds he has to answer. Newt possesses quick wit and has bashed the media in interviews/debates, which has contributed to his recent success. Apparently humor and expressing anger at unpopular entities can take you far. So far that they may actually be able to make people who pride themselves on being unemotional on policy issues, unlike their liberal counterparts, and have them forget all of Newt’s storied and terrible past, which is exactly what Newt would like. Newt is quite adept at warding off criticisms of himself in debates by lashing out at the moderators and refocusing criticisms at President Obama instead of at himself or other Republicans. Newt’s strategy of not attacking other candidates has been successful in that he has largely avoided criticism coming from the others in return. The result of this “good-natured” tactic is that the top two Republican front runners are the two with the most political baggage.
Perhaps Newt has genuinely changed and supports none of those ideas currently. But, given that he’s supported a number of terrible ideas in the past, can we trust his first judgment? If President Bush came back and said, “Wow guys, I’m sorry about Iraq, Medicare Part D, No Child Left Behind, and the $5T in debt I added; I’ve had an epiphany and I’ve seen the error of my ways”. That would be great, but his ability to admit mistakes years out of office isn’t really good for anything. We still have all his policies and their lasting effects as constant reminders to stay vigilant even during Republican administrations. The question we must ask ourselves is, “Can we trust that Newt, even if he no longer supports Cap N Trade + Individual Mandates, won’t have an equally terrible idea that he’ll push and get passed that we’ll be stuck with?” Personally, my answer to the question is no, because I, to quote The Who, “Won’t get fooled again.” Regardless of your own answer to the question, please make sure its not because you fell for the tough talk.
On numerous blogs and in my Twitter timeline, I’ve seen an astounding number of people make the claim that these allegations are the only reason Cain may be dropping out. I wholeheartedly disagree: I don’t think Cain ever had substantive support from any of the “power brokers” in GOP politics.
On gun rights, Cain never really had the support of major gun rights lobbies, because the seriousness of Cain’s support of Second Amendment rights was questionable at best. This put him in stark contrast to candidates like Rick Perry, whose gun rights record is ironclad; Newt Gingrich, Gary Johnson, and Jon Huntsman, whose public statements and actions in office supported a ‘favorable’ impression of gun rights; Rick Santorum, a life member of the National Rifle Association; and Ron Paul, who has donated large sums of money to gun rights legal actions. In fact, only one other candidates’ gun rights record is murkier than Cain’s: Mitt Romney.
Little needs to be said on Cain’s foreign policy flubs, since they are well-known and often-repeated. Cain’s numerous foreign policy gaffes turned away ‘defense hawks’ and foreign policy analyists, who want a better-informed Commander-in-chief.
Cain’s 999 tax plan became something of a gimmick, due to Cain’s laughable overuse of the phrase. It was so laughable, in fact, that a number of Twitter personnas (of which I am one) instituted a “999 drinking game” during debates. The fact that the details of the 999 plan were abysmally ill-conceived helped to cement the failure of Cain’s de facto talking point.
And then there was Cain’s comments on the housing bubble– his failure to predict the consequences of a bad policy of giving away mortgages to unqualified borrowers, and the insults he hurled at those of us who did forsee the housing collapse. (I have also blogged about Newt Gingrich’s record on this same issue.) Of anyone on the right, Tom Woods has compiled the best case against Herman Cain as a free-marketer.
Cain also failed to earn the respect of monetary reformers, due to his background as a former Federal Reserve chairman and his opposition to auditing the Fed.
So if Herman Cain had no unique support from educated fiscal conservatives and tax policy enthusiasts, defense hawks, gun rights advocates, foreign policy wonks, or monetary reformers, where did his support come from?
The answer is damning: It came from people who believed he had greater character than anyone else in the race. Cain himself played up this element with cozy stories about his faith, his battle with cancer, his long marriage, his fortitude in the face of racial discrimination in the South, his hard work and success in business, and so forth. I myself commented that, though I didn’t support him for President, I would probably like him very much if I knew him privately; this personability is what drove his fans- the “Cainiacs”- to support him so ardently (and at times, ridiculously).
And then came the allegations. The first few were laughable in their transparency, and Cain dismissed them and promised us he had “no skeletons in his closet”; Sharon Bialek’s claim was quickly dissected and dismissed; but then came Ginger White, with a claim of a 13-year affair with Cain, and evidence in the form of late-night cell phone calls and text messages.
The crushing blow, then, is not that yet another political personality engaged in sexual misconduct- we all know that this is as common in politics as neckties- but that Cain doesn’t have the great personal integrity he claimed to have.
And that is the worst kind of betrayal any of us can suffer.
Tonight, November 29, 2011 on the Dark Side with Kira Davis (hey, that’s me!) we’ll talk about the Richmond Tea Party’s suit against the city of Richmond Virginia for refund of fees paid for the same park Occupiers are currently camping in for free. We’ll talk to Gilbert Wilkerson, Richmond Tea Party Board member, about the suit and the city’s decision to respond with an audit. We’ll also discuss Herman Cain and the latest revelation of sexual misconduct, and I’ll reveal how uncomfortable I am saying Herman Cain and sex in the same sentence. Plus other stuff! Join me on the Dark Side tonight at 10p.m. ET, 7p.m. Pacific. We have cookies!
This is never-before-seen
video obtained exclusively by The Daily Caller shows Illinois Senator Barack Obama, then campaigning for Democrats before the 2006 midterm elections, praising Reverend Jeremiah Wright and telling an audience that he “stole” the title of his book “The Audacity of Hope” from Wright’s sermon of the same name, which he “loved.” Obama also referred to Wright as “my pastor.”
It certainly brings more solid proof of how deep the relationship was (is?) between Barack Obama and Rev. Jeremiah Wright. One would have to doubt they are still that close, due to the fact that then-Presidential Candidate Obama through his ‘pastor’ under the bus, as seen in this video. However, trust seems to be no big deal at all with people these days.
To read the entire article on the first video, visit The Daily Caller.
The Pocono Record reported today that President Obama is not drawing the crowds he’s used to, or that even Hillary has drawn before in Ohio:
When Hillary Clinton was on the campaign trail in 2008 and spoke at Scranton High School, the line to get tickets a few days before her appearance stretched about 1,000 people long.
Monday’s line to grab the available free tickets to President Barack Obama’s speech Wednesday was noticeably shorter — about 225 people were waiting when the doors opened for the distribution.
“It’s a little disappointing to see that,” said Cathy Kneeland, 64, of Scranton, who showed up more than three hours early to stand in line and found herself second. “You would think more people would want to see the president speak.”
The lack of interest in the President is a nationwide continuing trend. Along with his poll numbers, sales of anti-Obama merchandise are reported to be almost four-to-one over pro-Obama artifacts.
This past week, anti-Obama merchandise outpaced sales of pro-Obama merchandise 79 percent to 21 percent at the online clothing store CafePress, which has been tracking sales of election-relevant items.
CafePress, an online custom merchandise shop, launched its 2012 “Election Meter” at the beginning of November but has been tracking the trends in candidate merchandise sales since April.
The disappointing numbers in Scranton show a dismal trend for the Obama campaign – the white middle class workers of America have lost faith in him. The sentiment has not been lost on Democrat leadership as they are returning the favor. As Thomas Edsall writes in The New York Times the DNC just doesn’t love them anymore.
Democratic operatives for the 2012 election make it clear for the first time that the party will explicitly abandon the white working class.
As Laura Ingraham asked in a Tuesday morning tweet, “Can Obama win reelection by cobbling together a coalition of rich white liberals, blacks, and Hispanics?”
Obama travelled the world shortly after his election – to apologize for America. He had hoped that it would endear him to the peoples of the Mid-East and Europe. There is now much the same treatment of President Obama as there was of President Bush in that part of the world as this man in Pakistan demonstrates (image right).
Tack on his polling results here in the good ‘ole U.S.A. and it’s no wonder he’s spending more time on the golf course.
How much more proof does President Obama need that his “green jihad” is a failure? The greatest problem is that it has failed on two fronts. First, he and his administration have subsidized and/or granted loan guarantees to green energy projects regardless of feasibility. Second, he has all but shut down fossil energy production and exploration.
Through its Department of Energy (DOE) loan guarantee program, it has backed loans for “green energy” projects for $35.9 billion of taxpayer dollars. Obama’s DOE has a less than stellar record so far. And much of the “stimulus” money earmarked for green energy projects went to companies outside the U.S.
So the question is, “Why does Obama continue, through the DOE, to hand out loan guarantees?” Well, as DJ Redman, in his article about the Federal Financing Bank (FFB), says, “…politicians are stuffing their campaign coffers, crony-capitalists, union bed-pals, friends, and relatives wallets, through mafia-style influence peddling.” And from this source (also provided by DJ Redman), we find that the FFB is giving out billions of dollars in loans to White House pet projects often at interest rates below 1%. So green energy projects are nothing more than for recipients to have money to contribute to favorite politicians. From this source, we find that the Obama administration was motivated by politics in its decisions on green energy loans, and that many of the loan recipients were donors or bundlers for Obama and Democrats. Peter Schweizer, author of the book, Throw Them All Out, wrote that at least 10 members of Obama’s finance committee and more than a dozen of his campaign bundlers took money from administration loan programs. Schweizer said that he believes that many of those who were chosen to receive loan guarantees, were picked almost solely for their success in raising money for the Obama campaign. There can be little doubt that DJ Redman is correct.
Two recent incidences characterize Obama’s fossil energy policy: the Keystone XL Pipeline (non)decision and the canceling of a major mineral lease in the Wayne (Ohio) National Forest (WNF).
This source provides information about the Keystone XL Pipeline, and this source provides information about Obama “passing the buck” on the pipeline decision. Ultimately the oil will be sold to China, who is investing heavily in the Canada oil production industry. The green energy environmentalists care nothing for inexpensive American energy, American jobs, or American national security.
President Obama’s Department of Agriculture (DOA) has delayed shale gas drilling in Ohio for up to six months by cancelling a 2006 mineral lease auction for WNF. The cancellation was taken in deference to environmentalists on the pretext of studying the effects of hydraulic fracturing, or fracking. The WNF study, the DOA says, “will focus solely on how it could affect forest land and not how it could affect groundwater.”
Obama made this decision in spite of the fact that it will delay 200,000 jobs, and that WNF already has about 1,300 oil and natural gas wells. One suspects that Obama took this action out of anger at Ohio. This cancellation comes just days after Ohio citizens voted to reject key provisions of Obamacare.
His foreign policy closely follows his energy policy. It can be described in one sentence: punish your friends (Canada, Israel, Poland, Mexico, etc.) and reward your enemies (Russia, Iran, Venezuela, etc.). And he particularly “has it in” for Canada, starting (in 2009) a trade war.
But that’s just my opinion.
The killing of 24 Pakistani soldiers by U.S. airstrikes may have been a defensive action.
The facts have been slow to come out in the killing of 24 Pakistani soldiers on Saturday, but new reports are surfacing that detail a different course of events than has been reported over the weekend.
A senior Pakistani defense official acknowledged that Pakistani troops fired first, sending a flare, followed by mortar and machine-gun fire, toward what he said was “suspicious activity” in the brush-covered area below their high-altitude outpost barely 500 yards from the border.
According to Afghan security officials, their commandos were engaged with U.S. Special Operations troops in a nighttime raid against suspected Taliban insurgents when they came under cross-border fire and called in an airstrike.
While the U.S. has not yet responded to demands for an apology, the administration has expressed condolences for the deaths of the Pakistani soldiers.
Supporting the stance that perhaps U.S. troops were attacked over the border by Pakistani forces, Chairman of the Joint Chiefs of Staff in the United States General Martin Dempsey refused to apologize.
Gen. Dempsey says that while they Pakistanis “have reason to be furious that they have 24 soldiers dead and that what killed them was the ordinance of a partner,” as far as the U.S. having anything to apologize for: “absolutely not”.
Pakistan has now shut it’s borders to U.S. supply traffic which could affect almost half of all supplies flowing into the Afghanistan
In Part One, I’ll cover the dangers of taxing consumption as a major source of government revenue, both to the individual and to the economy.
Part Two will cover the little-known problems in the FairTax proposal- the “fine print” FairTax advocates won’t tell you about (or don’t know themselves); I’ll also refute some of the inconsistencies and rhetoric used by FairTax advocates.
Part Three will introduce the reader to the benefits of flat income taxation- why it’s superior to consumption tax, and the economic benefits of flattening the tax code.
Part Four will introduce the reader to the Negative Income Tax Credit- an ideal solution to the the problems of our massive welfare state, which can only be implemented in conjunction with an income tax system.
Part One: Why Not Tax Consumption?
I think it’s safe to say that nobody is happy with our current tax code. It burdens people who want to succeed in business, it favors the largest businesses who can afford to lobby for carve-outs; the enormity of the tax code creates a substantial compliance burden for smaller businesses; and- as already known to those of us on the small-government side of the aisle- 47% of the public pay no income tax at all, while recieving benefits funded by the other 53% who pay.
In our fervor to change the tax code, however, some people have been seduced by the idea of scrapping the tax code entirely: Eliminate income taxation and convert to a national tax on consumption. Whatever problems we currently have, I contend that this conversion would make our tax situation far worse.
Let’s start with defining “consumption”, because even this term creates problems. “Consumption” means the purchase of any good or service.
In a “pure”, or “flat”, consumption tax system, all transactions are taxed. Stated another way, every bill you recieve- your phone bill, your car insurance bill, your cable bill, your garbage removal bill, etc.- would include a consumption tax. Your grocery, fuel, medication, and clothing purchases would include a consumption tax. When you make a major purchase- such as a home or a car- the purchase price would include a consumption tax. If your washing machine or central air conditioning breaks down, the cost of parts and the bill for labor from the appliance repair service would include a consumption tax. If you hire a home health aide, consult an attorney, or visit a doctor, the bill for their services would include a consumption tax. If you own a business, all of the purchases made for your business- “business expenses”- would be subject to consumption tax. Making a deposit at the bank would include consumption tax, since the banking institution is offering a service by accepting your money.
Financial services- such as credit cards or bank loans to purchase a home or a car- would be taxed twice: Consumption tax on the goods purchased, and consumption tax on the service of financing.
Such a “pure” consumption tax would be wholly offensive to the public. Because of this, the major consumption tax schemes seen around the world today are designed to mitigate the impact of taxation on certain purchases. European-style value added tax, or VAT, is a system designed minimize the impact on businesses by allowing companies to recoup taxes paid on supplies. Most state sales taxes in the United States exempt some (but never all) purchases of food and medications. Variable rates are used in some countries to change the tax burden on various products: For example, levying a lower rate on medical devices than on clothing purchases. Certain transactions are exempted from taxation.
This illustrates the fallacy of a basic assumption about consumption taxes: That a consumption tax code would be simpler than an income tax code. As you can see above, there is just as much incentive to over-complicate a consumption tax code as with an income tax code. Most carve-outs found in the federal income tax code are also intended to mitigate the effects of taxing incomes.
It also illustrates a basic problem with consumption tax systems: They are regressive, in that the lower a person’s income, the greater the share of their income is spent on consumption. A tax code can’t predict whether a loaf of bread will be purchased by a well-to-do person, or a homeless person who has panhandled all day to buy it. Fair Tax proponents propose a “poverty grant”, or “prebate”, to alleviate this problem. I will discuss that in Part Two.
This brings us to the “47%”- the 47% of the public who currently pay no federal income tax. It’s easy to think of this 47% as “freeloaders”- and while some of them are, others are clearly not. Many of this group are people whose incomes are currently tax-privileged for good reason: They are Social Security recipients, combat veterans, disabled people, and others whom society has determined should not be burdened with taxation. Also in this group are people who live on already-accumulated (and already-taxed) wealth: Persons living on accumulated retirement savings, for example. They have already paid their “fair share”, and imposing consumption tax on would amount to double-taxing them.
As for the “freeloaders”- this group are problematic because they are net recipients of tax money. They pay less in taxes than they recieve in taxpayer-funded public assistance.
Imposing consumption tax on the “47%” would target precisely the wrong people: It would impose taxation on people we don’t want to burden- such as retirees, veterans, and the disabled- while welfare recipients would continue to be net recipients of tax money. In other words, a consumption tax wouldn’t fix the problem, it would simply add another problem. I will address the problems with our welfare system, and the overlooked solution to most of them, in Part Four.
High consumption taxes also have an effect on behavior: They provide incentive to develop a black market for untaxed goods. Consider a similar black market which already exists here in the United States: the market on tax-free cigarettes sold through Native American reservations, and one can readily see how a tax-free market on other goods could emerge and prosper quickly. And by the way: If the thought of “black market food” doesn’t immediately make you think of a communist country, then I hereby revoke your “Small Government Conservative” card.
Consumptions taxes disproportionately burden businesses, too.
As stated above, in a “flat” consumption tax model, all purchases of goods and services are taxed, including purchases made by businesses; and as already known, any tax on business purchases constitutes the mother-of-all-barriers to growing a business.
With an income tax, it’s relatively easy (though time-consuming) to deduct revenues spent on business expenses from taxation. With a consumption tax, this is decidedly more difficult, since tax is paid at the point-of-sale.
In countries with a VAT, for instance, businesses may recoup, from the government, the amount of taxes paid on expenses at the end of each year; however, the records-keeping burden of doing so is enormous, even more so than the records-keeping burden of our income tax system, because the purchasing business’ records must match perfectly with the selling business’ records.
This system also creates additional work- and additional expense- for government tax agencies: Every business in the country submits a request for reimbursement of taxes paid, every year, which means governments must compare the tax forms submitted by ‘Business A’ against the tax forms of every other business ‘Business A’ has purchased from that year.
It’s no surprise, then, that some countries- Costa Rica, for example- choose to only allow certain expenses to be deducted, in order to minimize this burden of examination. In choosing to limit the types of expenses eligible for deduction, the government makes a conscious decision to tax certain business expenses- which brings us full-circle to the mother-of-all-barriers to business growth mentioned above.
The net effect of this: large businesses are favored, while small businesses remain small. The larger a business, the more easily said business may cope with the intense regulatory burden of records-keeping, or absorb the cost of taxes paid on business purchases. In fact, consumption taxes disproportionately favor vertically-integrated businesses- those companies large enough to own their suppliers- since greater integration means all records-keeping (or all business purchasing) is internal.
Stated another way: Consumption tax schemes are the cronyists’ best friend, since consumption taxes favor already-large businesses and stifle potential competitors by preventing them from growing. (Note: I refuse to dignify the term “crony capitalism”, since it isn’t capitalism at all.)
This being the case, wealth remains generational, and the American dream of working hard, taking risks, and succeeding- and accumulating wealth in the process- becomes impossible. Consider this point: The class warfare rhetoric of socialists- “rich people stay rich, poor people stay poor”- becomes fact when a widespread consumption tax is instituted. This goes part-way to explaining how European nations (early adopters of consumption tax) accepted and embraced socialism at a faster pace than it was accepted here in the United States.
In sum: Consumption taxes as a major source of government revenue keep poor people poor, inhibit growth of small businesses, favor large businesses and ensure that wealth remains generational. Consumption tax schemes cause economies to become stagnant by stifling competition, and promote conditions which breed socialist sympathy and criminality.
If you, the reader, would like to refute these assertions, all you need to do is show me an example of a country which has had a major (i.e., a rate substantially greater than state sales taxes here) consumption tax for more than ten years, where none of these events have taken place. I can confidently issue this challenge, because I know there isn’t such a place.
The following is from BBC News:
Militant students are said to have removed the British flag, burnt it and replaced it with the Iranian flag.
They were also shown live on Iranian state TV throwing stones at embassy windows and breaking them.
The move comes after Iran resolved to reduce ties following the UK’s decision to impose further sanctions on it.
The students clashed with anti-riot police and chanted “the embassy of Britain should be taken over” and “death to England”, AP reports.
One protester was reported to be waving a framed picture of Queen Elizabeth II.
On Sunday, Iran’s parliament voted by a large majority to downgrade diplomatic relations with the UK after the UK Treasury imposed sanctions on Iranian banks the previous week, accusing them of facilitating the country’s nuclear programme.
Iran says its nuclear programme is for peaceful purposes only… [read more]