Tag Archives: social security

Sen. Tom Coburn: Tax Payers Subsidizing Millionaires

A few days ago, I heard a little snippet on the radio about John Bon Jovi receiving farm subsidies from the federal government. I was busy writing another article, so I jotted down a note to remind me to look into this. Frankly, when I heard the report I was both shocked and skeptical at the same time. I thought, “Surely multi-millionaire performers aren’t being paid farm subsidies with my tax money”. I had just heard Barack Obama talk about rich people paying their “fair share of taxes”. Well, today I decided to take a look at this obviously bogus attempt by vicious, hate-filled conservatives to slander our messianic leader.

As it turns out it wasn’t slander at all. I did a search for ”Sen. Tom Coburn + subsidies” and guess what I found, a 36 page report by the Senator from Oklahoma listing billions in tax dollars going to some of the richest people in this nation every year. This link will take you to the entire report.

In the letter to taxpayers Sen. Coburn wrote:

These billions of dollars for millionaires include $74 million of unemployment checks, $316
million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion of
retirement checks, $75.6 million in residential energy tax credits, and $7.5 million to compensate
for damages caused by emergencies to property that should have been insured. All and all, over
$9.5 billion in government benefits have been paid to millionaires since 2003. Millionaires also
borrowed $16 million in government backed education loans to attend college.

On average, each year, this report found that millionaires enjoy benefits from tax giveaways and federal grant programs totaling $30 billion. As a result, almost 1,500 millionaires paid no federal income tax in 2009.

I have also listed a portion of the report that lists some of the different subsidies that these ultra-wealthy people draw from the same government that taxes me, and from the same Barack Obama that castigates the rich as “not paying their fair share”.

Summary of Total Payments and Tax Breaks to Millionaires
Total Amount of Government Payments to Millionaires
Program Years Total Amount Paid to Millionaires
Social Security Retirement Benefits 2004-2009 $9 billion
Unemployment Insurance 2005-2009 $74 million
Farm Program Payments 2003-2009 $316 million
Conservation Program Payments 2009-2010 $89 million
Disaster Housing Payments 2007-2010 $7.5 million
Total Amount of Payments $9.5 billion
The annual average amount of government payments to millionaires is $1.6 billion.
Total Amount of Tax Breaks Claimed by Millionaires
Tax Breaks Years Total Amount Deducted by Millionaires
Mortgage Interest Deduction 2006-2009 $27.7 billion
Rental Expenses Deduction 2006-2009 $64.3 billion
Gambling Losses Deducted 2006-2009 $21 billion
Cancelled Debt Deduction 2008-2009 $128 million
Business Entertainment Expenses
Deduction
2006-2009 $607.7 million
Electric Vehicle Credit 2009 $12.5 million
Childcare Tax Credit 2007-2009 $18.15 million
Renewable Energy Credit 2009 $75.6 million
Total Taxpayer Cost to the Treasury of all
Credits and Deductions
$113.7 billion

The annual average amount of tax breaks claimed by millionaires is $28.5 billion.

John Bon Jovi, Bruce Springsteen, Ted Turner, and Quincy Jones are just some of the names I have turned up in looking into this scam. How is it that these people can take money from hard working Americans and pad their extravagant lifestyles with money taken through threat of prison if we don’t pay up? Aren’t these the same liberal elite who decry lack of government support of the poor? It seems to me they have no conscience when they yell about the plight of the poor yet turn around and take this kind of money away from those same poor people, as well as from the tax paying citizen who works every day to scratch out a living. Where are the Occupy Wall Street people when you need them? Why aren’t they in Hollywood or at the White House with their squawking?

I saw some video of Barack Obama in Kansas a few days ago, using his best Benito Mussolini pose, spouting his latest campaign tactic about rich people not paying their fair share of taxes. I just wrote an article about that very speech, combined with a clip of an MSNBC interview with T. Boone Pickens that I heard on the radio. Obama rails about the rich not paying their fair share, then sticks his nose up in the air just like Il Duce used to do. All the while, he looks around to the applause of a crowd so apparently ignorant of the truth that they applaud and cheer when they should be booing and throwing shoes. If they would only take a minute to see the things I see, and take a real objective look at what is truly happening!

After seeing that display in Kansas, I stumbled onto my note about the subsidies for ultra wealthy entertainers and media moguls, and began to look into this situation. What I found is not only alarming it is disgusting. How can Obama stand up there and lie without any semblance of shame? And when I say lie, I don’t mean he “misunderstands” the situation. And I don’t mean the “lying is a state of mind” line Eric Holder is trying to pull at the Fast and Furious investigations.

Obama recently stated that if he didn’t get the debt ceiling raised, Social Security recipients, military personnel, and those depending on welfare checks would do without because Republicans hate poor people. I don’t remember him mentioning John Bon Jovi not receiving his farm subsidy, or Ted Turner having to do without is unemployment check. I don’t remember Obama mentioning poor Scottie Pippen doing without an evening meal if the debt ceiling didn’t go up $2.4 trillion.

Here we find another example of the class warfare being waged by Democrats to divide and conquer the populace. It doesn’t help that some of the wealthiest in our nation stick their hands out and virtually steal from those truly in need, and those of us paying the bill to help those in need.

The corruption in our government is monumental, and I fear fatal to our Republic. There is no need for anyone in America to go to bed hungry. Some choose to do so because they are lazy, and content looking for a constant handout. Many more are victims of the corruption in Washington D. C. How many people have lost jobs due to the tax burdens on small business owners, or even giant corporations, tax liabilities that caused them to have to lay workers off? How many homes have been lost due to pay cuts people had to take to keep the job they had in this economy?

The sad tale of this is that it isn’t only Obama and it isn’t only Democrats. If you will look at the report put out by Senator Coburn you will find some of this goes back to 2004, a time when Republicans owned the White House, the Senate, and the House of Representatives. This isn’t a partisan problem, it is a systemic problem. Greedy people empowered by greedy politicians to take advantage of those with no influence, no money, and no voice in government.
This link to CBS News mentions Scottie Pippen, Ted Turner, John Bon Jovi, Quincy Jones, and Bruce Springsteen.

This next link adds Maurice Wilder, a real-estate developer and part owner of a professional sports franchise to the list.

Go to this link and get page after page of stories on this.

This is revolting at the very least. Common people work hard and barely exist while the political class and some of the ultra-wealthy literally steal food out of the mouths of starving children. Some may disagree with my terminology but what else can one call this action?

This is not what our founding fathers, with the protection of Divine Providence, created. Our founding fathers created a nation where everyone has an equal chance to prosper but it has been perverted through greed and corruption. The unions pay Democrats for favorable legislation every day and now we find out that they are only the tip of the iceberg.

How will our nation survive if we continue this? Both political parties take from the poor and give to the rich. Isn’t this the story behind Robin Hood and his Merry Men of Sherwood Forest, evil rulers taking from peasants for themselves and their friends? We need a modern day Robin Hood, a man like John Dummett and a band of merry men recruited by Tim Cox of GOOOH. If we elect the same rogues gallery that has been running things in Washington we can expect the same results we have seen in this report by Senator Coburn.

We are in dire need of patriots to run for office and patriots to have the courage to vote out those who have created this situation. The definition of insanity is to continue doing the same thing and expecting different results, or in this case, electing the same corrupt politicians and expecting different results.

I submit this in the name of the Most Holy Trinity, in faith, with the responsibility given to me by Almighty God to honor His work and not let it die from neglect.

Bob Russell
Claremore, Oklahoma
December 9, 2011

Obama: Congress should work through Christmas to extend Social Security revenue cuts

President Obama announced a 17-day long vacation to Hawaii for the holidays while almost simultaneously telling Congress to keep working through the break to pass an extension of the current Social Security revenue cut.

Obama has been pushing for Congress to extend the Social Security revenue cut and increase the length of time Americans can be given unemployment insurance – which is currently at almost 2 years. Republicans have counter-offered to do so if the increased spending and reduced revenue can be offset by spending cuts.

The president said, “Both parties came together to cut payroll taxes for the typical middle-class family by about $1,000, but that tax cut is set to expire at the end of this month.” To keep that from happening Congress will need to pass legislation to extend the cut. “We’re going to keep pushing Congress to make this happen,” Obama said. “They shouldn’t go home for the holidays until they get this done.”

Congressional Republicans are concerned that the cuts, if not offset, will continue to drain Social Security of the revenue needed to keep the program going. House Republicans have rebuffed the 2% revenue hit to Social Security saying that it could cost as much as $120 billion to the programs balance sheets[1].

The payroll tax that has been cut directly affects Social Security. The tax cut that Obama wants extended is a direct 2% cut to the  Social Security portion of payroll taxes.

Friday morning, House Speaker John Boehner and GOP leaders proposed a legislative package to their members. The bill contained an extension of unemployment benefits, a one year extension of the Social Security revenue cut, a 2-3 year pay freeze for all federal employees – including Congress, language to make it easier for the Keystone XL pipeline to get approved and a directive to the EPA to hold off on boiler/incinerator regulations.

The federal pay freeze is expected to save almost $100 billion but those savings would be to the overall deficit. It would not replace the missing revenue that Social Security would receive had Obama not demanded the payroll tax cuts be extended.

The current Social Security revenue cut has had little effect on the economy and jobs. As the cut is only to the employee’s share of the Social Security tax, employers have seen no reduction in tax liability. There is also historical proof that such short-term, temporary cuts don’t stimulate the economy – at all

..economic theory and the experience with tax rebates in 2001 and 2008 tell us that people are strongly inclined to save temporary increases in income. People only increase their spending when they perceive an increase in their permanent income.[2]

While the President has demanded the extension of the Social Security revenue cut, his leadership on the issue is questionable. While telling Congress to work through the holidays if necessary – Obama is planning a lavish, 17-day holiday vacation to Hawaii – after having been there just two weeks ago.

Sources:
[1] Businessweek – http://www.businessweek.com/ap/financialnews/D9RCGFU81.htm
[2] NYT Economix Blog – http://economix.blogs.nytimes.com/2011/08/30/the-case-against-a-payroll-tax-cut/

Payroll Tax Debate: The Truth Comes Out in the U.S. Senate

On Thursday, Dec.1st the battle to extend the payroll tax holiday and unemployment insurance benefits reached new heights in the Senate, as not only did Republicans battle Democrats, but both parties saw raging fights within their own ranks over how to pay for the extensions, along with whether the tax holiday should even be extended at all. In the end, once again, nothing was accomplished

The Senate Republican bill won only 20 votes, less than half the GOP conference. The Democratic bill also went down in flames, 51-49, failing to muster the 60 votes needed for passage. The debates included back and forth rhetoric on whether the tax holiday actually has ever created jobs or improved the economy, the fact that the Democrat’s bill was weakening Seniors Social Security programs by lessening revenues. Here is a common sense question that will never be asked in the elitist halls of Congress during these debates: Why not give the holiday tax break to all of America’s workers by cutting federal payroll taxes, instead of SSI payroll taxes? (fica) That way you give the workers more money in their pocket, while at the same time keep funds coming into an already under-funded SSI program.

The Truth: Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent. In addition, Senate Republican leaders would go after “millionaires and billionaires,” not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. ← These facts are basically being ignored in the media today.

Fact: The Congressional Budget Office said the Republican bill would reduce federal deficits by $111 billion, mainly because of the pay freeze and the reduction in the federal work force.

Senate Democratic leaders want a deeper temporary reduction in Social Security payroll taxes. They would provide payroll tax relief to employers as well as employees. And they would offset the cost with a 3.25 percent surtax on modified adjusted gross income in excess of $1 million.  Once again, instead of working with Republicans to get our out- of – control spending under control, Liberal Democrats in the Senate want to grow government by taxing Americans more. Spend, spend spend is all these tyrants want to do, with no regards to fiscal sanity in any way shape or form. Here are a few quotes from the Senate payroll tax debate yesterday, that may surprise some of our readers:

After House Speaker Boehner alluded to the benefits of the tax holiday as, “I don’t think there’s any question that the payroll tax relief, in fact, helps the economy. You’re allowing more Americans, frankly, every working American, to keep more of their money in their pocket,” the Speaker added. “Frankly, that’s a good thing.”

To which, Senator Orin Hatch then responded, “If they could show me a lot of increases in jobs or something, that’s a different matter,” Sen. Orrin Hatch of Utah, the ranking Republican on the Finance Committee, said Wednesday. “But I don’t think they’ve been able to show that.”

Then we have a strong statement from Senate Democrat Joe Manchin: “Letting Americans believe that we don’t have to pay for Social Security is wrong. It is dead wrong,” Manchin said. “And I will not vote for it. Period. Under any condition.” Finally, common sense rears it’s long-forgotten head up in the Senate!

And finally, Senator Mark Krik (R – Ill) threw in another dose of reality: “I don’t think seniors should be based on a ‘trust us’ policy, that we’ll pay you back,” Kirk added. “And I would actually say even the political vote is to vote against this so that you’re for Social Security.”

Today, the House is supposed to come out with their own version of the tax holiday and unemployment benefits extension bill. The vicious cycle of the irresponsible debt-spending versus a fiscally responsible government-political-battle rages on with exactly no Presidential leadership anywhere to be found. Barack Obama is too busy waging class warfare in campaign fund-raising speeches on the taxpayers dime for the 70th time in 2011,… to actually concern himself with doing his job as President of the United States.

2012 just can’t get here fast enough!

Newt Gingrich's "Growth" Plan: It's About Welfare

I think it’s about time we take a good look at Newt Gingrich’s plan to reform welfare entitlements through “promoting growth and innovation”, detailed in this 48-page white paper.

First and foremost: Gingrich (or his writers) use very idyllic language which sounds very plausible. It’s the same sort of language Gingrich employs in debates with great success. I ask the reader to ignore it, and focus only on the particulars of his plan. In other words, I want you to be Joe Friday for the next several minutes.

Second, the reader will notice something which is almost laughable: The white paper uses the words “growth” and “innovation” dozens of times in 48 pages, but gives no details about how such “growth and innovation” would occur. It’s a meaningless catchphrase, like “Hope and Change”.

Third, Newt Gingrich firmly cements his opposition to cuts in government spending in the introduction:

The first path is the “fantasy” option: Pretend that everything is working just fine, and fundamental change is unnecessary (…) The second path is the “Austerity” option: Conceding that we will not become as prosperous and secure as we once thought we would, so we should be prepared to settle for less (…) The third path is what this paper will address: Securing Americans’ retirement, expanding world-class healthcare for everyone, and lifting millions of Americans out of poverty through growth and innovation.

(Emphasis mine)

To review: According to Gingrich, budget-cutting (otherwise known as “austerity”) is a defeatist attitude; and one of his goals is “expanding healthcare for everyone”. Note again that Newt camouflages his intentions by mixing his ideas with the language of fiscal conservatism.

The white paper is organized into three “Steps”, which I will also use to analyze the proposal.

Step 1: Social Security Personal Accounts. Gingrich is not alone in championing the Chilean model for Social Security reform, already implemented in part of Texas- in fact, every Republican candidate except Mitt Romney is championing exactly this reform. Newt does, however, provide a fascinating history of the Chilean system, and I’m highly impressed by the thoroughness and accuracy of this section of the white paper.

Step 2: Fundamentally Reforming The Welfare Empire. On welfare, we encounter some problems. Gingrich provides excellent and indisputable background material about the nature of the “welfare trap”, and some history about his much-touted welfare reforms of 1996. It’s fortuitous that I had decided this past weekend to write a four-part series about taxation, and had decided to include a discussion of the Negative Income Tax Credit, as it’s directly relevant to this discussion.

There is one fact about Gingrich’s 1996 reforms which goes underreported: The reforms, which has been claimed to have resulted in a 50% reduction in welfare recipients, had no such effect.

Backstory: Prior to 1996, the federal government operated a program called “Aid to Families With Dependent Children” (AFDC), which paid out benefits to low-income persons with minor children. This program existed in addition to food stamps, housing assistance, heating assistance, and a number of other grants.

Gingrich’s reform restructured AFDC into a new program called “Temporary Assistance to Needy Families”
(TANF), which still exists today. The key component of TANF was a two-year limit on benefits for the parent (not the child[ren]). This much is already known by most of us on the right.

What isn’t commonly known is that the TANF Act also eased the procedures for certifying people with disabilities. As the number of “welfare recipients” shrank, the number of “disabled” persons grew exponentially.

Stated another way: The bulk of the people removed from the welfare system in 1996 were merely reabsorbed into the federal disability system, which is part of the Social Security Administration. Gingrich’s claims of success, and the figures he presents to prove this success, don’t reflect this transition from welfare to pretended disability.

Among Gingrich’s assertions:

As a result, total federal and state spending in constant dollars dropped 31% between 1995 (under the AFDC program), and 2006 (under TANF), and down by more than half of what it would have been under prior trends.

This figure doesn’t reflect a painful fact: State and Federal funding for other assistance programs intended for legitimately disabled people, such as funding for group homes for the mentally and physically handicapped, was diverted to pay for the rash of new disability checks being issued.

This highlights a basic problem with the welfare system: Cash benefits are prone to fraud. I discuss this problem in greater detail in my Negative Income Tax Credit article (linked above).

While the build-up of this topic in the white paper is extensive, the solution part of this section is pretty brief:

1) Reduce assistance to working families to include only the minimum wage, the Earned Income Tax Credit, and the Child Tax Credit.

This promotes exactly the problem Newt’s 1996 reform was intended to abolish: It provides incentives to have children one can’t afford. EITC and CTC are both based on the number of children one has. People without children would be shut out of the safety net, while people in the net would recieve more money with each new child.

2) Transform unemployment into a job training program.

As I illustrated in my analysis of Mitt Romney’s 59-point plan:

Government retraining programs put very few people back to work. They are a perfect example of a feel-good program- a waste of money which “feels” productive but really isn’t.

To illustrate why, consider this hypothetical: You are an employer looking to hire a mechanic. You have two candidates, one with 10 years’ experience as a mechanic, and another who just recently graduated from trade school and has never held a job as a mechanic. Which candidate do you hire? Obviously, you would hire the more experienced applicant.

This is a fatal flaw of retraining programs, which cannot be resolved by any amount of “restructuring”.

3) Block-grant federal welfare funds to the states.

This is a relatively sound idea, assuming one particular: States aren’t required to give excess funds back to the federal government, or spend the funds exclusively on welfare. If states are required to give back money not disbursed through welfare programs, then there is no incentive for a state to not spend the money by enlarging its welfare programs.

In other words, if the money must be spent only on welfare or given back, then governors will naturally splurge on their constituents by expanding their welfare programs- and in the process, make more new entitlement promises which can’t be sustained long-term. On the other hand, if states may devote excess welfare funds to other programs, then the states have an incentive to spend federal welfare dollars more wisely.

Newt’s white paper doesn’t address this issue.

4) Provide federal incentives for welfare recipients to establish two-parent households.

I have only one comment to make on this point: This is being proposed by the guy who called Paul Ryan a “right-wing social engineer” for advocating Medicare reform. This constitutes monumental hypocrisy on Gingrich’s part.

Note something conspicuously absent from these points: Newt makes no mention of reforming the fraud-prone disability system he helped to create. In other words, leaving the disability hole open would nullify most of these reforms via the same mechanism which nullified his original welfare reform concept in 1996.

Step 3: Healthcare Reform: Obamacare versus Patient Power.

As I detailed in this article, Newt Gingrich was- until only six months ago- a long time, ardent supporter of government-run medicine. He championed the individual mandate a decade before Mitt Romney did, and he helped to craft Medicare Part D.

In reading the first few pages of this section of the white paper, you’d almost believe Gingrich really has changed his mind in the short span of six months. He gives an excellent argument against Obamacare and socialized medicine, and describes the “Third-Party Payment Problem”, long-recognized by fiscal think tanks as one of the major factors driving up the cost of health care.

He even references Paul Ryan’s reforms- precisely the same reforms Gingrich called “right-wing social engineering” only six months ago (see above).

Gingrich’s solution to the cost of health care is Health Savings Accounts combined with high-deductible insurance policies- a stock-standard, free-market approach to reducing medical costs. As with the Chilean model, this is another reform being championed by every other GOP Presidential candidate except Mitt Romney.

He extends this concept to include HSA/high-deductible account for Medicaid recipients- something already done in Indiana by Governor Mitch Daniels with the “Healthy Indiana Plan”. Gingrich borrows Daniels’ program, but gives him no credit whatsoever! This is just plain despicable.

In sum: Gingrich’s plan employs a worthless catchphrase to inspire a message of “hope and change”; he establishes his intent to avoid spending cuts and his disdain of those of us who champion them; his good ideas are commonly-accepted ideas borrowed from other venues (some are plagiarized with no credit given- for shame, Professor!); his welfare plan merely perpetuates a problem he created; and, as expected, the paper distorts or ignores substantive portions of Newt’s record.

Stated differently: It’s more proof of Newt’s slick salesmanship.

The FairTax Series: America's Road To Prosperity Part 2

In this installment of the FairTax series I want to cover the cost of compliance and enforcement with today’s tax codes. Before I go into the complexities of compliance and enforcement I want to spend a few minutes dispelling the favorite myth of the anti-FairTax crowd. One of the things that put me off the FairTax at first was the pooh-poohing of the plan by those who don’t want to see it implemented. I bought into the lies and distortions because I did not have enough knowledge of the FairTax to dispel these negative stories. This part of the issue is covered a little further into the book but I want to get this cleared up before I go any farther. I want you to understand the plan clearly, without the distortions thrown at me early in my exposure to the FairTax.

There have been some in Congress, along with the “tax the rich more” crowd, who have suggested a Value Added Tax or VAT. This would be a national sales tax added on to the cost of everything we buy today. This tax, proposed to begin at about 2%, would eventually be up in the 16% or higher range as it is now in some European countries. THE FAIRTAX IS NOT THE SAME PLAN. Those who do not want to see the FairTax implemented deliberately confuse the two plans to scare people like me, and you, away from the FairTax. This worked for quite some time as I was not knowledgeable enough to discern the difference. Be assured that when you hear VAT used in the same sentence as the FairTax it is a red herring designed to put you off the most intelligent proposal I have heard in my 61 years, The FairTax.
Now to the costs associated with our current system. In the debate about income and employment taxes we seldom hear of the costs involved. I am a simple man with a high school education so it doesn’t take very long for the tax structure to get the best of me. I haven’t been able to find any concrete numbers but the federal income tax code has somewhere between 67,000 pages, as stated in the 2nd FairTax book published in 2008, and 86,000 that I heard a politician mention a little while back. I can’t remember which politician or exactly when he gave that number but I do remember 86,000 pages being mentioned. I really don’t care which number is right, both are absurd. My wife has a college degree in accounting in which she achieved a 4.0 grade point average. She is a very smart lady and extremely good with accounting but even she can’t keep up with yearly changes and the odd nuances of the ever changing tax codes. As a result we have our taxes done by a local Certified Public Accountant who is very good and keeps up with all of the changes from year to year.Let me describe the differences very simply here before I go on to the main subject of this article. The FairTax is instead of, not in addition to, income taxes, employment (Social Security/Medicare) taxes, inheritance (death) taxes, gift taxes, etc. The Value Added Tax (VAT) is in addition to, not instead of, these other taxes. This is a huge difference when it comes to deciding whether to support the FairTax or not. Once I understood the difference in the two plans I could plainly see that the FairTax is a plan that is in my best financial interest.

This year, 2011, the IRS has a $12.633 billion budget. That is $12,633,000,000 of our money going to an agency to insure that everyone, well almost everyone, complies with the tax codes. Even with that amount of money being spent they won’t get all of the money “due” to the government in taxes. The IRS is not the most efficient tax collection system. They can find me if I don’t pay but they have a hard time finding out if members of Congress, congressional staff members, and even the head man at the Treasury Department, Timothy Geithner paid their taxes as they should. As I mentioned in the first segment, they won’t collect these taxes from the local drug dealer, prostitute, illegal alien, or anyone else who gets paid under the table for work.
Now let’s talk about the cost to We the People directly. The last figures I could find on the cost to prepare income taxes were from 2005. That year the U. S. General Accountability Office reported that taxpayers paid between $240 billion and $600 billion to prepare and file their tax forms. That is for 2005, 6 years ago. My costs have almost doubled since then to the $315 my wife and I paid to have our taxes prepared in 2010.

So, let’s take a quick look at what we have for the cost of compliance. The IRS alone will spend $12.633 billion in 2011, at least, to insure that some of us pay our taxes. Those of us who pay our taxes spend as much as $600 billion, at least as of 2005, to have those forms prepared. The GAO also stated that taxpayers can expect to pay as much as 20% of the cost of their taxes to have the forms prepared by professional tax preparers. That is another 20% in addition to the amount of the taxes owed (ours isn’t that high). The figures in this paragraph come from the IRS site itself, not the FairTax book. I guess these numbers are great if you are a CPA or tax lawyer but not so great for those of us who have to spend that money.

For those who say “so what, I don’t pay much in taxes and the rich can afford to pay more” I have a new perspective for you. Every dollar that is spent to prepare tax forms or taken by government is a dollar that those “rich people” can’t use to provide jobs for working class people like myself, or you. Also look at the downstream effects. Corporations and the “rich” who own businesses factor their tax liability into the prices they charge for their products and the wages they pay their employees. One way or the other we all pay for the taxes that are heaped upon those we consider “rich”, and those “evil corporations”. People who own businesses own them to make money for themselves to support their families primarily. They are going to make money regardless of how much they are taxed, or they are going to go out of business and let their employees fend for themselves in the employment lines. When they pass those expenses on to the customer it comes to the point that customers pay the taxes in the end through the cost of the product. The bottom line is that corporations don’t pay taxes, the customer pays the taxes. The corporation just becomes the tax collector for the federal government because that money goes straight to bureaucrats and politicians.

The economists who have studied the tax structure and developed the Fair Tax plan have determined that there is a 22% tax liability built into everything you purchase, above and beyond state and local sales taxes. This is where things get a bit complicated and are difficult to comprehend. For example, let me use the wagon we bought for one of our grandchildren last fall. We paid $99, not including sales taxes, for a small wagon with wood sides. These wood sides were barely stronger than balsa wood, not the hardiest or strongest of woods. That may or may not sound like a lot of money but let me delve into how the price of that wagon was arrived at.

The wagon is made of metal, with rubber tires and wood siding. Each of these materials has a manufacturing process. The ore for the metal has to be mined, processed into steel, stamped into shape, painted, packaged, and shipped to its final destination, the store where we purchased the product. The wood for the sides and the rubber for the tires go through this same process. At each step of the process taxes are assessed for the materials and labor needed to complete the process and those costs are included in the final price of the product. By the time we purchased that wagon, $22 of the cost were the built-in taxes added to the cost of producing that product. This includes evaluating the tax costs of those who provide the machinery that makes the wagon. So I pay roughly 32% of my income to the government and then pay another 22% in federal taxes, not counting state and local sales taxes, to purchase the wagon for my granddaughter. So we have a wagon I could have bought for $77 now costing $99.

Take out your latest pay stub and look at it. Look at the Gross Pay box, and then look at the Net Pay box. Now go back and look at the various deductions, federal income tax, social security/Medicare tax, miscellaneous federal taxes, and see how much they take from your paycheck each time you get paid. Quite an amount going to Congress to waste on themselves isn’t it? (The FairTax stops the 32% I pay on my income but doesn’t raise the 22% I pay for the wagon.)

If you will stop and think about it for a moment the current system is a can of worms that is so ungainly and complicated even those who write the tax codes can’t comply. Don’t believe me? Do some research on Rep. Charles Rangel (D- NY), the former chairman of the Ways and Means Committee in the House of Representatives. They write the tax laws and he just got pinched, or hand slapped to be more accurate, for evading millions in taxes. He claims he didn’t understand the laws and made a simple error, to the tune of several million dollars. He had the nerve to stand on the floor of the House of Representatives and complain about how complicated the tax codes are. Rangel writes those tax codes. You try to make that excuse fly and see if you find yourself with a finger wagged in your face or you join Wesley Snipes in prison for tax evasion.

The FairTax puts a stop to all of this nonsense. No need for the IRS, no need for complicated forms and CPA’s or tax lawyers, and a full paycheck coming to you every payday. How much would it help if the drug dealers were paying a consumption tax on their fancy cars, boats, airplanes, etc? What about the millions of tourists who visit the United States every year? Under the FairTax plan they would be helping pay the taxes that support Social Security, Medicare, Medicaid, and social welfare systems. Right now almost 50% of American citizens do not pay any income tax at all, not to mention the illegal aliens who use an overly large portion of our “free” services. What if John Kerry had to pay taxes on the $7 million boat I mentioned in the introduction to the series!!!!!!!!

How would you like to get a gross pay check instead of a net pay check? How far would that money go to help you provide for your family? You are paying a 22% tax on everything you buy, food, clothes, a bicycle for your child, a car to get to work in, shoes for your feet, light bulbs, toilet paper, food, everything. Imagine not having to pay the income tax on top of these embedded taxes. And a bonus is that it wouldn’t hurt the “poor” people in our society. Even those paying no income and social security taxes are paying the embedded taxes.
So let me review what we have learned in this installment. We the People are paying millions to have our taxes prepared by professionals because the tax codes are too complicated for us to do it on our own. The IRS will spend billions on auditing and compliance, for those of us who they audit. Those who engage in illegal activity do not pay income and social security taxes while those of us who are honest hard working folks pay through the nose. The “poor” aren’t going to be hurt by this. And best of all, We the People can be rid of the IRS, and take the favoritism and vote buying out of the hands of the politicians. Those who use taxes to increase their power, wealth, and prestige through taxation lose a great deal of that power and give it back to We the People where it belongs in the first place.

In the next installment I will delve into the business and financial aspects of the FairTax, how it would help in bringing business and manufacturing back to our shores from other countries, and why the money being hidden in offshore accounts would be brought back to provide jobs and increased opportunity for American citizens.
I submit this in the name of the Most Holy Trinity, in faith, with the responsibility given to me by Almighty God to honor His work and not let it die from neglect.

Bob Russell
Claremore, Oklahoma
November 25, 2011

The FairTax Series: America's Road To Prosperity, Part 1

This is the first of a 5 part series I am writing based on the book “The FAIRTAX: The Truth”. In the series I take a 300+ page book and condense it down to a virtual “cliff notes” version designed for the novice political reader. I designed the series for those who are not very knowledgeable about politics or the tax structure and how it affects all Americans. I encourage eveyone reading the series to buy the book and get the full effect of the policies in place today and see how the FAIRTAX will change the dynamics of government financing.

A couple of years ago I began hearing about a new concept in taxation. This new concept is called The FairTax. I didn’t pay much attention because I thought “how is any tax fair?”, when some pay and  some don’t. At first I dismissed it as another scam to throw me off the track of an out of control government looking for another way to hoodwink me into paying more of my hard earned money into their grand spending plans.

I have long since grown tired of paying so much of my money into ever growing but useless government programs that pay people to sit on their butts and spend my money. Welfare expenses keep going up as more and more people find ways to game the system by having babies, faking injuries, working for cash under the table, etc. The ultra-rich hide their money in “foundations” or overseas to avoid the taxes I have been paying for 45 years. All of them, rich and poor are getting over on the other working stiffs who are too stupid, too honest, or unwilling, to do these things. These money pits keep growing as the amount of available income to tax drops.

One of my pet peeves with income tax is those who don’t pay any. While I was paying 32% in my working years the local drug dealer was paying nothing. The local prostitutes who hang out on street corners in the bigger cities or work out of high priced hotels were paying nothing. The welfare cheats who sit around finding ways to game the system for their own benefit have no intention of doing anything to benefit society, or themselves for that matter. The illegal aliens who were working for cash were paying nothing. I had noticed the illegal aliens especially. They were everywhere and driving much nicer vehicles than I was, or am now driving (I don’t hang out where the hookers hang out). I was paying a 25% income tax, a 7.5% social security/Medicare tax, plus state taxes, and being told the government couldn’t afford for me to retire while those not paying taxes lived the good life. I struggled, they flourished. That is when The FairTax began to make sense to me.

I heard Neal Boortz one day talking about this new plan on his radio show. I listened with interest and thought it sounded good but never really did any more to learn about The FairTax. In the last election cycle, the 2010 mid-terms, I kept bumping into Carol Chouinard and she kept handing me literature about The Fair Tax. I took the information and looked it over without really spending a lot of time educating myself on this new concept. Interesting but, ehhhh!!!!

One day I was going through a stack of papers that had accumulated over a few months, actually several months, and found the literature Carol had given me. As I read through the brochures and leaflets I began to realize that this was not the run of the mill scam to get more of my money. This was an idea that made sense to me once I really looked at it.

Carol is the local guru on The FairTax. She lives in Rogers County, 2nd Congressional District, State of Oklahoma. She travels throughout Eastern Oklahoma, or anywhere else for that matter, presenting The FairTax to any group or person who will give her a chance to enlighten them. I ran into her again the other night and we got to talking about political issues and The FairTax came up. Well, I was complaining about the current debt ceiling debacle and how to deal with it. Carol began to explain some more about how The FairTax was the answer to much of the problem.

As I listened to her a light bulb came on in my head, and the squirrel began to spin the cylinder. The things I had read came back to me and began to make sense. I began to remember about the way our tax system keeps hard working honest people in bondage while those who don’t mind cheating skate by without paying anything, only taking from those of us who do things the right way. Carol gave me a book about The FairTax. It is the second book called FairTax: The Truth. The first book, The FairTax, came out in 2005. This book was published in 2008 so is 3 years old as I start this article. Much of the information I will include in future articles about The FairTax will come from updates from the FairTax web site as I want to give you the most up-to-date information and statistics available.

One solution I see to our fiscal problems in this plan is the title, The FairTax. From everything I have read and the research I am doing, this plan solves many of the financial problems we face as a nation, the issue of money paid in taxes. I find that this plan is aptly named. I often hear Democrat and sometimes Republican politicians, especially those in Washington, cry about how “the rich” get over by not paying enough taxes. Yeah, like the politicians pay “their fair share”. Remember the hullaballoo a few months ago about Senator John Kerry, the one who parked his multi-million dollar yacht, $7 million yacht to be exact, on the far side of the bay because the state taxes on that yacht were cheaper there than on his side of the inlet? $500,000 per year cheaper to be exact. So much for Washington’s multi-millionaire insiders being concerned about paying their fair share of taxes. Hmm, I wonder where I am going to park my $7 million yacht. Oh, never mind, I don’t have one.

I also hear many “poor” people make the same statements, “the rich need to pay more taxes”. The problem with the “poor” complainers is that most of the ones I know don’t pay any taxes at all either. Most of the “the rich need to pay more taxes” crowd, at least the ones I know personally, are on the dole. They are drawing welfare, food stamps, social security disability, state aid, etc. Many of them either don’t work at all or work part time. They pay nothing and spend much of their time complaining that they don’t “get enough help from the government”. They have cell phones for themselves and their children, several have big flat screen HD televisions, complete with the latest game consoles, cable TV service, cigarettes, and are usually well stocked with beer in the fridge. Actually, I need the “rich” people to continue to be “rich”. They are the ones who will hire me, hopefully, so I can make a little money. Poor people never seem to hire me for anything.

In the spirit of “transparency”, my wife and I both have cell phones, we have cable TV service, and one 37 inch flat screen HD television set. Before you say “AHAH!!!” let me offer a caveat to this. We don’t get any help from the government and are not exactly in the “rich folks” category. I am retired but not old enough to draw social security, my wife works a full time job, and we have a small Mom & Pop business that gives me a little work and usually provides us very little in the way of profit. As a matter of fact, if the business doesn’t make a profit in 2011 we are going to have to shut it down. I work part time for a friend when he needs help on a project but the rest of the time I spend working on and around the house. We have a 1976 Chevy pickup that my father-in-law gave to us when he became unable to drive. We have a 1995 Ford Escort that my mother-in-law gave to us when she became unable to drive. We also have a 2004 Dodge PT Cruiser with over 100,000 miles on it (it was a demonstrator model). We don’t owe any money on our cars, and live in a 101 year old house with a $60,000 mortgage. Not exactly Beverly Hills here, closer to Green Acres, but we don’t get any government assistance either.

To get back to the point of this article, our nation cannot keep going the way it is financially. We cannot continue to borrow and spend, drive businesses out of the country, and raise taxes on the “rich”, those making $250,000 per year or so, the small to medium businessman/family who provide the bulk of the jobs in this nation. We have to do something to bring the jobs back to the United States. We need to make it feasible for those who hide their money to use that money to provide jobs so those who desire to work but can’t find a decent job can get back to work. Giving people unlimited unemployment pay is not the answer to prosperity, it is a handout not a hand up. Many of those drawing that unemployment would work if they could find a job. Some of them are lazy bums that are looking for a handout but most, and I do mean MOST, are honest hard working people who just want to provide for their families.

The FairTax is a method to accomplish this task of financial recovery and prosperity. In the next installment of this series I intend to delve into how our current tax structure is designed to inhibit rather than enhance prosperity. I will cover the costs of enforcing and complying with the current tax code and how it affects every person in America, tax payer and non-taxpayer. The FairTax books are a treasure trove of information about how our financial system works, or doesn’t work, and what We the People can do if we will stand up and demand that the politicians change the way they do things. Other installments will cover more aspects of The FairTax plan and how we go about getting it implemented by politicians that are more concerned about themselves than We the People. Elections are only 11 months away, so let’s get to work changing our future. God Bless America!

I submit this in the name of the Most Holy Trinity, in faith, with the responsibility given to me by Almighty God to honor His work and not let it die from neglect.

Bob Russell
Claremore, Oklahoma
November 25, 2011

A Better Way To Cut The Deficit

The Congressional Supercommittee has failed to come up with a deficit reduction plan. Personally, I’m thankful for that, since the very existence of the “supercommittee” was a Constitutional violation.

I won’t get into a long explanation here of the debated cuts-which-weren’t-actually-cuts, or the sequestration of funds, or the odd process by which the supercommittee would have presented a bill. It would be too much like explaining a Rube Goldberg invention.

Instead, I’ll discuss the other budget proposal, the one which the supercommittee apparently never considered: Just stop spending!

Let me explain: According to the Congressional Budget Office, a “cut” includes any reduction in planned future spending, even if the total amount spent is greater than current spending. To use Neil Cavuto’s analogy, it’s similar to a diet where a person plans to gain 100 pounds in ten years, but instead only gains 50 pounds and calls it a “reduction”. The “cuts” the supercommittee considered were “cuts” of this type.

The Tea Party proposal, which wasn’t even considered by the supercommittee, would have frozen federal spending for ten years. That’s it. Project the federal budget for 2021 at $3.8 trillion- the current amount.

By CBO’s standard, this would have scored as a $9 trillion cut over ten years- and bring federal spending into virtual balance.

This proposal presents one challenge: Certain areas of federal spending will naturally increase over time- namely, Social Security (as new retirees begin collecting benefits), interest payments on the national debt, and “other federal mandatory spending” (the U.S. government’s contractual obligations).

In order to offset these anticipated increases over the long term, actual cuts would be needed in other areas immediately. To give an idea of the shape of these cuts, here is a pie chart (image right) of federal spending from 2010 (the current proportions are very similar).

Something you’ll notice right away: 80% of the federal budget is made up of just six expenses: Social Security, the Department of Defense, other federal mandatory spending, Medicare, Medicaid/SCHIP, and interest on the national debt. The other 20% is “everything else“.

The Tea Party proposal didn’t include specific cuts. Simply an agreement to freeze the budget would have been a huge victory. I’ll take a little license here and make some “proposals” of my own to keep the budget amount at roughly $3.8 trillion for ten years.

1) Freezing the military budget isn’t a bad thing. Admiral Mike Mullen offered a $100 billion reduction is DoD spending in 2010, which he said could be accomplished without making major changes to our military posture, defunding current operations, or defaulting on contractual obligations. I’ll take Adm. Mullen at his word, and assume that these cuts could also be implemented in the form of reducing expenditures over time by freezing the military budget (and assuming that some of our current operations will end within the next ten years).

2) Offset growth in “other federal mandatory spending” by cutting in other areas. The “other federal mandatory spending” category is made up of the federal government’s contractual obligations- military and civil service pensions, federal unemployment extension funds promised to the states, food stamp and HEAP funds, etc.

It goes without saying that there is substantial work to be done in reducing (and in some cases, eliminating) these expenditures- but this is work that can only be done over the long-term. Among these solutions would be transferring responsibility for food and heating assistance to the states, privatizing long-term unemployment insurance, converting future federal pensions into defined contribution programs, and the like. Naturally, some of the solution to these expenses is fixing our broken economy, which is far too long a subject for this post.

In the short term (i.e. over the next ten years), the amount of these expenses would have to be offset.

3) Paul Ryan is right- privatize Medicare (and block-grant Medicaid). Ryan’s plan, which includes an $18,000 annual premium subsidy and, for low-income seniors, a cash account of up to $9,500 to offset out-of-pocket expenses, will reduce the projected cost increases of Medicare- but it will still increase in cost as more baby boomers enter retirement.

Offset these increases by cutting Medicaid funding by 20% or more, and block-granting the remaining funds to the states. Federal regulations add to the states’ cost of supplying Medicaid, so cutting regulations offsets some of the reductions in funds. Let the states decide how to spend the rest of the money- for example, Mitch Daniels’ highly-effective (and cost-reducing) “Healthy Indiana Plan”.

Also: It strikes me as a total failure of the GOP message machine that the generous amounts proposed by Ryan- $18,000 in insurance premiums and $9,500 in a cash account- weren’t being used to sell the idea. Imagine this conversation by pundits on TV:

Democrat Pundit: “Ryan’s plan will kill Medicare, which is a great program!”
Republican Pundit: “Seniors would get up to $27,000 every year to buy insurance and pay out-of-pocket costs, and seniors get to choose their own insurance and keep their own doctor.”

Argument killed.

4) Offset increases in interest payments by cutting departments. Since the budget won’t balance overnight, the national debt would increase in the short-term. This means interest payments on the national debt would increase as well. In the long term, we’ll need strategies for paying down the debt- sale of federal lands, for example- but in the short-term, we can offset the expected increase in interest payments by cutting federal agencies. This is where the “everything else” which makes up 20% of the total budget comes into play.

There are lots of opportunities here- eliminate the Departments of Education, Commerce, and uhh… (yes, I know, it’s an old joke). Cut earmarks and foreign aid. You, the reader, undoubtedly know these talking points by now, so I won’t waste your time repeating them.

5) The big one: Social Security. This is the area which will grow exponentially over the next ten to fifteen years, as the Baby Boom generation enters retirement. It’s also a political minefield: Freezing social security payment amounts would mean political suicide for the GOP.

Again, there’s a long-term fix for Social Security in the form of privatization. But, as with any long-term solution, there’s a short-term problem to address as well.

What’s needed here is a “bold plan” (please forgive the Herman Cain-ism), and Walter Williams has one: Offer an exchange of Social Security payments for a federal land grant. The federal government currently holds 29% of the landmass of the continental United States- nearly 650 million acres. Offering this land to those who will enter Social Security in 10-20 years, in exchange for their Social Security payments, could accomplish two things:

a) offset projected Social Security expenses;

b) create a demand for development in the states where this land is held- Wyoming, Montana, Utah, Nevada, etc.- for new home construction, road development, electrical, natural gas, and water supply systems, service-oriented businesses such as grocery stores and restaurants, and the like.

I think this is a terrific idea, and merits much more attention than it currently recieves.

In sum: It’s easy to overcome the budget hyperbole from both sides of the aisle and see a solution to our budget problems. All you need is a calculator, a pie chart, and Occam’s razor.

The Herman Cain/ Newt Gingrich Sit-Down

Last night two GOP Presidential candidates squared off in what was referred to as a Lincoln-Douglas style debate. CSPAN really came through in a grand scale by airing the complete debate, and they should be commended for that decision. The debate was sponsored by the Texas Tea Party Patriot PAC, and was more of an informal sit-down discussion between Herman Cain and Newt Gingrich ,than it was an actual debate. The sit-down was held in Houston Texas, and the timekeeper was Rep. Steve King of Iowa, a staunch conservative favorite of grassroots Patriotic Americans across the nation, including the Tea Party groups that played a major part in rejecting big-government Liberals in the 2010 mid-term elections. Rep. King was obviously chomping at the bit to jump into these discussions, and stated so a few times. Why not allow him or other members of Congress in on some of these discussions in future sit-downs? This sit-down was more informative than all of the past media-circuses posing as 2012 GOP Presidential debates….. combined!  This event was limited to 3 main topics: How to reform Social Security, Medicaid and Medicare. Very good choice of three very important problems facing America in the very near future.

The timing of the event was somewhat problematic for politically active college-age voters and football fans in general, as it aired at the exact same time as what was billed as the college football game of the century between #1-ranked LSU and #2-ranked Alabama. (LSU beat Bama in a game of field goals 9-6 in overtime, by the way.)  Personally, I flipped over to C-SPAN during a commercial while watching the game and never went back. Yes, the Cain-Gingrich sit-down was that interesting to me, once I caught a glimpse of the totally relaxed atmosphere, and the fact that both candidates were given the full amount of uninterrupted time to explain their solutions to today’s problems if elected as our President in 2012. 

 

Now comes the time for some hard truths that came out of this sit-down. While it should come as no surprise that Herman Cain was in over his head in going up against the super-experienced and very government-savvy Newt Gingrich, what did come off as a surprise was the fact that Mr. Cain was shown to be largely incapable of thoroughly explaining realistic, unique solutions to today’s problems in America during this sit-down. (Other than relying on past soundbites and following Mr. Gingrich’s lead on most occasions last night.) For those who may think I am being too hard on Mr. Cain here, I,ll give you an example:

Mr. Cain constantly says that he will use the “Chilean Model” when asked about how he would deal with our Social Security impending insolvency. He repeats how Chile fixed their SSI problem decades ago, and that he would just use that system here in America. While that makes for a good soundbite, the fact is that Chile didn’t have anywhere near the unfunded liabilities that our SSI program is facing today, their economy is miniscule compared to America’s, and Chile installed their program before their economy grew by leaps and bounds, allowing them to create a sustainable program in a growing economy. The differences can be seen here, from traveldocs.com, in which we see the following related facts:  

Chile has pursued sound economic policies for nearly 3 decades. ( America simply has not, as we are now $15 trillion in debt ) Chile’s approach to foreign direct investment is codified in the country’s foreign investment law, which gives foreign investors the same treatment as Chileans. Registration is simple and transparent, and foreign investors are guaranteed access to the official foreign exchange market to repatriate their profits and capital. Net foreign direct investment in Chile in 2010 was $18.2 billion, up 43% over 2009. Chile is moving forward with true free market principles that are based on a very limited and transparent government. This is the direct opposite of the direction Barack Obama is taking America. During the most recent recession, Chile was basically unscathed and actually grew their economy by a very healthy 5.2% 2010. America? Our credit rating was downgraded for the first time in U.S. History.

Simply stating that what works in Chile will work in America just doesn’t cut it as being a viable answer as to how we can fix our SSI problems. Mr. Gingrich laid out a complete plan to reform our Social Security program last night, in which it starts out with making SSI the separate program it was originally designed to be. Take it out of the general budget. Force politicians to quit using it to prop up our national debt that they have racked up over the past 4 decades. Newt elaborated on how the government is basically robbing the people blind and how they are lying to our youth when forcing them to pay into an SSI system that simply will not be there for them when they retire. While that hard truth will have Liberal heads exploding across America this week, this is the exact kind of truth in messaging we must have in America today. Absent this kind of truth-telling, we will never be able to resolve our entitlement programs looming insolvency,  and will not be able pass on the American freedoms and prosperity opportunities to future generations of Americans that past generations have enjoyed. While telling the truth about the actions of our government seems to be taboo in most political circles today, this sit-down in the great State of Texas is a must-see event for all Americans. “The truth shall set you free.”

In summary, Herman Cain was the student and Newt Gingrich was the professor during this sit-down. While that was pretty much to be expected, we can’t ignore the amount of very important information that came out of this sit-down on how to move America forward and get this country back to running a surplus, ( as opposed to today’s trillion dollar deficits) by reforming our entitlement programs. Mr. Cain wrapped up this event with a hilarious question to Mr. Gingrich that asked what would Newt do first in his position as Vice President, alluding to the situation that when Cain was elected President, he would select Newt as his VP.  Newt was laughing so hard he had trouble answering the question.  Finally newt replied along the lines of that he would take a lesson from former VP Dick Cheney and “Not go hunting.”  This was a marvelous display of the self-sacrificing teamwork/expressed desire to unite to defeat Obama that the GOP needs to show the people more of as we head towards next year’s presidential elections. A team of 8 dedicated Conservatives (as opposed to 8 individuals fighting against each other) will show the nation they mean business in taking America back from the Liberal Party in 2012.

For those who may have missed the debate, you may watch it in it’s entirety here. Special thanks go out to our friends at the Texas Tea Party Patriots PAC that brought us this very informative event. Thank you again, C-SPAN for airing it. The Cain/Gingrich sit-down will also be re-aired several times on C-Span today. Get involved. Get educated. Watch that event.

 

Footnote: Did I forget to mention the fact that NO TV station would sign on to air this debate? Why is that? Because they would not be allowed to ask their “gotcha questions” or attempt  to embarrass the GOP by starting petty fights, or maybe it was because they couldn’t ask them what kind of pizza they prefer? Fox is supposed to be fair and balanced, yet proved themselves to be just as hypocritical and embarrassing to truth-seeking Americans as the rest of the media puppets of today, when it came time to air this event.  Shame on all of you, as that was a huge disservice to all concerned Americans today.

 

 

Seven Points of Economic Leadership for the United States of America

Seven Point of Economic Leadership for the United States of America

By William Way

It is time for economic leadership in Washington that makes sense.  The entire mental infrastructure of Washington DC has endorsed the foolish theories of Keynes.  If they studied just a little bit, only a little, they would recognize that Keynes never believed that his theories would work to sustain a society.  He was all about disrupting civilization.  Sadly, Barack Obama is so socially challenged by never having really worked in his entire life that he believes in the silly Keynesian theories as if they were relevant to real economic problems.

The nation needs serious changes in its whole economic structure if it is to recover from the ignorant Keynesian theories of the past 65 years.  New leadership is needed, not tricks used by former governors to delude the people into believing they had realistic economic plans in their states.

Here are THE seven steps necessary to fix the United States economy.  Serious leaders will embrace them.

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Calibri","sans-serif";}

  1. Stop printing money. Close  the Bureau of Engraving and Printing for two years, effective January 9, 2012. 
  2. Eliminate the Federal Reserve’s ability to manipulate the supply of money, but not necessarily to act as a central banking system.
  3. Establish an op-in privatized retirement system that phases in over fifteen years.  Social Security ends after fifteen years (This plan assures a greater retirement benefit than a lifetime Social Security program, without injuring current retirees.
  4. Reinstate a commodity-based monetary system where the dollar is tied to the overall value of dedicated retirement funds.
  5. Offset the assault on the dollar by foreign nations and Wall Street currency speculators by stipulating that the US will repay all foreign debt only at the prevailing value of the dollar when payments are made.
  6. Institute a four year plan to convert to a consumption tax on all goods and services except medical expenses.  This should be capped at national rate 14%.
  7. Shut down the IRS and transfer tax collection and disbursement duties to the states, which are already doing the work.

Fear mongers and socialistic minded candidates will declare it won’t work.  That is fear tactics intended to deceive voters into maintaining a failed system.

The future of America’s and the world’s economy rest on these actions.  Anything less will inevitably lead to economic collapse worldwide.  When a nation’s economy fails all security within that nation fails also.

The time for leadership is NOW!

 

CNN/Tea Party Express Debate:Gardasil, Social Security & the Rise of the Tea Party

The CNN/Tea Party Express debate in Florida ended with a whimper, but otherwise will surely go down as the most lively and impassioned debate thus far.  With more questions from the regular Americans of the tea party movement, candidates were given the opportunity to directly address the concerns of average Americans, and that fact alone seemed energizing.

As predicted, CNN did its best to present the debate as the “Rick Perry Show w/Mitt Romney and special guests”.  Blitzer directed or redirected nearly every question to Perry and gave Romney ample time to counter.  Perry came out strong right away.  The first question regarding social security required Perry to defend his Ponzi scheme comment.  He did so, was unapologetic, and the audience responded with great appreciation.  The first half of the debate unequivocally belonged to Perry.  Bolstered by an inarguable record in Texas (Romney tried the argument, but failed), the Governor looked confident, easy and the crowd responded very positively.  Unfortunately, during the second half, Perry struggled quite a bit.  When the Gardasil question was raised, he provided a satisfactory answer and admitted he had made a mistake with that decision.  However Perry didn’t seem prepared for the pounding that question would get.  As Blitzer posed and then re-posed the question, several candidates took the opportunity to take the fight straight to Perry, and he did not seem prepared for that.  The final nail in the coffin came on immigration.  He defended his support of the Texas “Dream Act” and the accompanying “states rights” argument to the boos of much of the tea party packed audience.  After going a long long way to endear himself to tea party patriots across the country, Perry gave up a lot of ground with that answer.  The audience’s displeasure obviously threw Perry off his game, as he began to stammer and stumble through his defense.  It hurt him badly, and being at the end of the debate, left the viewer with that subpar image.  Perry comes off as a man of great stature and composure, and he has the ‘80’s Friday night soap opera eyebrows to back that up – he surely hasn’t lost the nomination in this one debate, but he didn’t win it either.

Romney looked tired, and has been looking that way for a couple of weeks now.  He may not have been properly prepared for the fight this process had turned out to be.  He held his own quite well and had several thoughtful and audience-rousing responses, but seemed out of his element in front of the blatantly conservative crowd.  He certainly did not score points by suggesting that Perry just got lucky in Texas with jobs creation.  His refusal to consider repeal of monstrous bills such as healthcare certainly did nothing to endear him to tea party voters, and his criticism of Obamacare rang quite hollow, considering his own healthcare boondoggle in Massachusetts.  That  will not be lost on conservative voters.  Mitt’s hair also failed to impress tonight.  He’ll pay for that.

Rick Santorum was the pleasant surprise of the evening.  Although he still received considerable less time than the other candidates, his responses were impassioned and straight forward.  He did well to highlight his history of sounding the alarm on Social Security and the debate format played very positively to his everyman appeal.  Santorum proved tonight that he is an intelligent, conservative voice in this race, but his lack of aggression threatens to be his downfall. That being said, his performance was good and he cannot be counted out of this race just yet.  Also, Santorum obviously received the message regarding his pink tie from the last debate.  When you’re struggling to assert yourself as a front runner, vague shades of pink are not exactly the colors that scream “I’m your man!”… or A man, for that matter.

Bachmann was under the most pressure to perform tonight.  She is a tea party favorite and has been struggling in the polls since Perry announced his candidacy.  After a fairly wooden performance last week, she was expected to come out a little stronger in front of her tea party compatriots.  All in all she lived up to the expectations.  She seemed infinitely more relaxed and at home in this format.  Even her hair seemed to have more bounce than usual.  Bachmann was in her element as she explained that Obamacare was raiding Medicare for 500 billion dollars and hammered home all the appropriate tea party points of smaller government and full repeal of Obamacare and financial reform.  Her most forced moments came when she chose to take Perry head on, but as he seems to be siphoning off a good bit of her support, she likely had no other choice.  A loss for Bachmann in this debate would spell a certain end to her Presidential hopes.  She avoided that doom for now, but with every comment about her fights in the House, Bachmann seems only to solidify more and more the very reasons she should remain in Congress and fight for conservative values.  She seemed at home tonight, but it may be her true home is in the House.

Huntsman had his eyebrow greased and calibrated and ready to go from the start.  He seemed to have studied his Tea Party primer well, and was able to fire off a few conservative sounding responses, but as usual he was short on detail and long on eyebrow.  He also had some very awkward attempts at humor, most notably a weird reference to Kurt Cobain.  Who was he hoping to tweak with that remark?  Even the audience seemed embarrassed for him as he paused for the laughter that never came.  Obviously his comedy software program had not been installed correctly.  The amount of time CNN devoted to Huntsman tonight did not work to his advantage at all.  When the network that originally devised the “tea bagger” slur  devotes that much time to a questionable Republican such as Huntsman, it is a clear indicator to conservative voters that this is not who they want as their nominee.  The good thing is, Huntsman avoided the “my record in Utah” script; the bad thing is, without his record in Utah, Huntsman is nothing more than an empty suit with a lot of plugs and wires running down the back.  He doesn’t come off as “real” and if there’s anything tea party voters are looking for, its authenticity.

Cain did well.  The audience was clearly in his corner and his no-nonsense businessman approach was a guaranteed tea party favorite.  He wasn’t offered much time, but he used his opportunities wisely to highlight his 9-9-9 plan and his corporate experience.  Cain did not seem to advance much in this debate, nor did he lose any ground.  It was a solid showing, but surely not the breakout his team must have hoped for considering the forum.

Ron Paul turned in the usual Paul performance.  His highlight came when Blitzer posed a question about a 30 year old man who chose not to buy health insurance but then suffered a horrible health crisis: who should pay for that man’s health benefits?  Should we let him die?  Over the shouts of tea partiers (sure to illicit all kinds of hysterical coverage in the MSM tomorrow), Paul talked about the idea of personal responsibility and taking risks.  He reminded Blitzer that in the days before government entitlements, people in crisis turned to churches and community charity for help.  He  reiterated what every tea partier knows by heart: if the government stopped stepping in to provide every need imaginable, that man would find a way to save his own life.  Of course, Ron Paul got all Ron Paul-y on the military and foreign policy and elicited many hearty boos from the audience as he tried to justify extricating the United States from the Middle East.  The kooky meter was spiking a lot tonight for Paul.  What more can be said?  Some call him the Father of the Tea Party, but tonight it looked like the kids were ready to move dad to the old folks home.

Undoubtedly the one candidate who came out on top was Newt Gingrich. This was by far his best performance to date.  Having a tenuous relationship with the tea party, Newt faced the challenge of remaining true to his core political style while not alienating viewers with what can sometimes be his condescending tone.  He was up to the challenge and had the best, most provocative answers of any candidate on stage.  Newt was the only one who stayed focused on Obama and his disastrous policies.  Blizter, obviously still carrying a chip on his shoulder from the Clinton years, did his best to pose the bulk of the “gotcha” questions to Newt, but Gingrich slapped every one down with poise, passion and searing intelligence.  The crowd was with him the whole way.  Newt may not be able to convince a majority of the right that he should be President, but one would be hard pressed to find a single Republican voter who would not jump at the chance to see him in any influential cabinet position, or even as the White House spokesperson.  No one in Washington is smarter than Newt Gingrich. No one.  He proved that beyond a shadow of a doubt in this debate.

The debate format was an interesting marriage of far left media and the newly influential tea party movement.  Perhaps it was the specter of directly addressing the people as opposed to a table of stuffy moderators that allowed the candidates to appear more at ease.  Whatever it was, and despite the glitches, this format was the most notable and rousing of the debates so far.  CNN could have counted this as one of their most interesting programs to date, but for the last 10 minutes.  Perhaps it is just the dynamics of television producing, but the powers that be at CNN could not resist the pointless fluff question.  “If you were to win the White House, what would you bring with you?”  Newt looked the most fittingly annoyed with the question.  No one had anything particularly fetching to say.  Bachmann gave the pre-approved tea party answer of her copy of the Constitution, the Declaration of Independence and the Bill of Rights.  I sincerely hoped Herman Cain would bring his grill and a few slabs of baby-back ribs, but he said he’d bring a sense of humor instead.  Santorum made a cute joke about adding an extra bedroom for his 7 kids (hey, Rick, it’s a mansion!).  Ron Paul provided the dowdiest answer, responding he would bring a “bushel basket of common sense” and a book about Austrian economics.  Sounds exciting.  Romney had a long answer that ended in him returning Churchill’s bust to the Oval Office.  I think.  It was  long answer.  Huntsman joked that his wife would kill him for saying he’d like to bring his motorbikes to the White House.  It shouldn’t be surprising that Huntsman has a fondness for motorcycles – they share the same parts.  Perry earned  the wife points of the night by saying all he needed was his lovely wife.  But it most likely wasn’t enough to erase his dismal ending to promising start.

Those are the highlights and low-lights.  Clear winners were CNN, which probably garnered more views for this one night than their whole year put together; and Newt Gingrich.  Santorum gets an honorable mention for finally being able to express his positions and doing it quite well.  Holding the line were Bachmann and Cain.  Romney and Perry were the clear losers tonight – Romney for being caught out of his element, and Perry for disintegrating in the second half.  However, above all, the tea party were the true winners tonight, proving definitively that the influence of this grass roots, American movement extends far beyond mid-term elections.  Politicians take note.

 

Boehner Releases Framework of Debt Ceiling Deal

John BoehnerOn Sunday night, Obama announced that a deal on the debt ceiling had been reached. While House minority leader Nancy Pelosi was saying that some or none of her Democrats might vote for the proposal, House Speaker Boehner held a conference with the leaders on the right side of the aisle.

Later Sunday night, he released the details of the framework on his website.

The framework is a two-step increase with a trigger:

Phase one is an immediate $900 Billion increase to the debt ceiling that will hold the government over until roughly February. In exchange for that increase, discretionary spending will be cut and capped immediately which will save $917 Billion over ten years. In an effort to prevent the increase from happening without the savings (remember Reagan anyone?), the ceiling increase will not occur until Congress and the President implement the spending cuts. This would signal that a short term measure will need to be passed to allow a small debt limit increase (perhaps a week’s worth) while Congress irons out the spending cuts.

Phase two: The President can ask for a second debt limit increase of $1.5 Trillion if either a balanced budget amendment to the Constitution is sent to the states for ratification or a the recommendation of a 12-member special committee are implemented that would save more than $1.5 Trillion.

The trigger: Specific spending caps would be put in-place to limit spending. If the government fails to remain below these limits, it will trigger across-the-board cuts to government spending. The trigger is specifically hit if the Joint Committee fails to achieve at least a drop of $1.2 Trillion in the deficit. Once the trigger fires-off, the President can request another $1.2 trillion increase in the debt-limit. If the increase is passed, across-the-board cuts in all government spending equal to the difference between $1.2 trillion and the amount of the deficit reduction enacted by Congress. These cuts would be equally applied to mandatory and discretionary spending, both defense and non-defense. While Medicare would be included in the cuts, Social Security, Medicaid, veterans benefits and government pay (civilian and military) would not be affected.

One way to read the summary presentation from Boehner is that the triggers could cause the spending cuts to be split 50-50 between Defense and Medicare spending. Some reports have said that the Medicare spending would only affect providers (hospitals, doctors, suppliers) not beneficiaries.

As a final note, the framework includes no tax hikes, but the committee will be free to recommend them as a method for reducing the deficit.

 

Tax Expert’s Advice: Don’t Count on Social Security

BRENTWOOD, Tenn., July 1, 2011 — According to a poll taken earlier this year, 77 percent of voters think Social Security is in danger. Fewer Americans, however, approve of increasing the retirement age. Voters were split on permitting people to invest their Social Security taxes into personal retirement accounts.

Tax expert Dr. Friday, aka “The Tax Doctor,” falls into the camp of doubters. “I don’t look to the government to be there for me; I don’t think anyone our age (30s-40s) should,” says Dr. Friday.

The good news, she says, is that “it’s never too late to start saving. The key is to find retirement plans with immediate tax benefits.” She recommends a disciplined savings plan, and her site, DrFriday.com, has an online guide to determine how much one should put away each month.

Dr. Friday outlines steps for retirement savings:

  • Get out of debt so you can live on less than you make and actually save.
  • Start saving once you have no high-interest credit cards/loans to pay off.
  • Open a money market account and keep three to six months of living expenses in it for emergencies.
  • Max out one or in some cases two of the following – IRA, Roth IRA, Simplified Employee Pension Plan (SEP), 401(k) or 403(b).

Dr. Friday’s advice is sound, considering proposals to cut Social Security benefits. The American Association of Retired Persons (AARP), the lobby for older Americans, has been considered one of the leading opponents of cuts. However, the group recently indicated it was open to modest reductions in benefits for future recipients.

Darrell Payne, a public affairs specialist with the Social Security Administration, recently was interviewed by Dr. Friday and co-host Hank Parrott on the “Retirement Report” on Nashville’s Channel 5+. When asked about the solvency of Social Security, he said, “We’ll have enough money to last until 2037.”

“Social Security was designed after the Great Depression when people didn’t have any money,” says Dr. Friday. “It wasn’t designed to be your sole support for retirement.”

For more information on Social Security, visit http://www.ssa.gov. For more information on Dr. Friday’s financial services – including tax returns, retirement planning and business accounting – visit http://www.drfriday.com.


« Older Entries Recent Entries »