A vital part of the solution to our economic and employment crisis is right under our feet

A frequent refrain during budget and debt ceiling debates is that we need revenue enhancement: higher tax rates, reduced deductions, eliminated credits. But doing this, especially amid today’s massively expanding regulations, will kill more jobs and further reduce government revenues.

There is a better way. Huge revenue sources are literally under our noses, or more precisely our feet.

America is blessed with vast oil, gas, coal, uranium, rare earth and other natural resource riches – to compliment our ultimate resource: the creative, competitive, innovative spirit of our people.

Finding and developing these resources would generate millions of jobs and billions, even trillions, in new government revenue and societal wealth. It would prevent default and downgraded credit ratings, reduce the need to cut government programs, shrink unemployment and welfare payments, avoid having to send hundreds of billions of dollars overseas each year for foreign energy and minerals, and reduce the need to borrow $120 billion out of every $300 billion the United States is now spending every month.

Many of these untapped resources are on federal public lands in our western states, Alaska and Outer Continental Shelf (OCS). Many more are on private land and onshore and offshore state-owned lands.

Leasing, exploration, extraction, transportation and processing unleash economic activities and revenues on extraordinary scales: business activity, investment and profits, along with lease bonus and rental payments, permit fees, royalties and severance taxes for each unit produced, direct and secondary jobs, taxes on corporate profits and workers’ income, property taxes on equipment and facilities.

These activities also generate billions of dollars in purchases of equipment, food, supplies, raw materials, hotel lodging, special services and myriad other items. All this means still more employment, newly enabled consumer spending, more local, county, state and federal revenue, and other economic benefits.

Newly developed horizontal drilling and hydraulic fracturing (“fracking”) techniques have enabled companies to unlock previously unavailable natural gas riches in conventional and shale gas deposits. That increased production, in turn, has reduced industry’s cost for energy and raw material feed stocks.

The American Chemical Council says this is reopening idled plants and creating jobs. In 2010 it helped increase chemical and plastics exports by 17% and 10% respectively, turning a $100 million industry balance of trade deficit into a $3.7 billion surplus. Other industries could soon see similar benefits.

America’s OCS generates over $19 billion annually in bonus, rent, royalty and tax revenue, IHS Global Insight has calculated. Alaska’s Prudhoe Bay oil field alone has generated hundreds of billions in government revenues since 1978, and the state of Alaska has collected a whopping $157 billion (in 2010) dollars from statewide oil and gas development since 1959. Millions of jobs were created and sustained.

In the Lower 48 States, Marcellus Shale deposits stretch across 95,000 square miles of New York, Pennsylvania, West Virginia, western Maryland and eastern Ohio. In Pennsylvania, say the state Labor and Revenue Departments, Marcellus fracking activities created 72,000 jobs (with an average $73,000 salary) between October 2009 and March 2011. Workers and royalty recipients paid $214 million in personal income taxes attributable to Marcellus development, while Marcellus drillers paid $1 billion in state taxes 2006-2010 (and another $238 million just during first quarter 2011).

The shale gas success story is being repeated in West Virginia, Louisiana, Texas and other states: thousands of jobs created, billions in royalties and taxes collected. New York should take note.

Taken together, America’s oil industry sustains 9.2 million direct and secondary jobs (5.3% of all US employment), generates $533 billion in total annual payrolls, contributes $1.1 trillion to US gross domestic product (7.5%), invested $2 trillion in capital improvements since 2000, and accounted for $190 billion in 2010 oil production. The largest integrated oil companies alone paid $1.95 trillion in corporate income, severance, property, excise and sales taxes, between 1981 and 2008, says the Tax Foundation.

We have it in our power to put many of our 20 million unemployed and involuntary part-timers back to work, generate trillions in revenue, and slash our chronic indebtedness. We just need to take action.

* End the leasing moratorium and “green flu” backlog on drilling permits in formerly accessible areas of the Gulf of Mexico. By the end of 2012 America could create 230,000 jobs in Gulf Coast and dozens of manufacturing states, produce 150,000,000 barrels of oil (worth $15 billion), reduce oil imports by a like amount, and generate $12 billion in tax and royalty payments, says IHS Global Insight.

(Right now, we are losing over $1 billion annually in Gulf royalty payments, because Gulf oil and gas production is down 220,000 barrels a day, thanks to DOI, EPA and White House foot dragging.)

* End leasing and drilling bans in the East Coast, West Coast, Western Gulf and Alaskan OCS, Rocky Mountains and Arctic National Wildlife Refuge. America could produce up to 40 billion barrels of oil (worth $4 trillion at $100 a barrel) … create 114,000 to 160,000 jobs … and generate $547 billion to $1.7 trillion in new government revenues over the next few decades, according to ICF International.

* Open up some of the nearly 500 million acres of public lands that are now closed to mineral exploration (nearly 70% of all public lands). We could repeat these petroleum-related gains, and end our near-total dependence on China for rare earth metals that are essential for smart phones, smart bombs, night vision goggles, hybrid and electric vehicles, wind turbines, solar panels and a host of other modern technologies.

Unfortunately, Congress and the EPA, Interior Department and White House are doing just the opposite.

EPA denied Shell Oil permits to drill in Alaska’s Chukchi Sea, after Shell had spent $5 billion acquiring and exploring leases. EPA also blocked construction of the Keystone XL oil pipeline from Alberta, Canada to Port Arthur, Texas. During construction, the project would generate 130,000 US jobs, plus $600 million in state and local tax revenues – plus $5 billion in property tax and other government revenues during the pipeline’s life. EPA’s excuse? The projects would contribute to global warming.

EPA is also imposing thousands of pages of new rules on coal-fired power plants that provide 48-98% of the electricity in 26 states, including our most important manufacturing centers. Experts say the actions will raise electricity rates 20-60 percent, shutter up to 60,000 megawatts of electricity generation, kill 3.5 million jobs in six Midwestern states, and cost those six states $42-82 billion in lost annual GDP.

Interior Secretary Ken Salazar continues to stall OCS leasing and drilling, and keep Western States oil, natural gas, oil shale, shale gas, coal, uranium and metals deposits off limits.

Meanwhile, our state and federal governments are spending over $10 billion annually, subsidizing wind and solar energy, and bankrolling radical environmental activism on energy, climate and public land issues.

Americans deserve a complete and honest accounting of how much revenue and how many jobs have been lost to environmental excesses. We have a right, and a duty, to develop our resources, rather than depleting other countries’ energy and minerals – and saddling our children with more joblessness and debt. It’s a perfect time for bipartisanship, at least among Republicans and moderate Democrats.

Committee hearings and briefings could discuss and evaluate industry, government and independent analyses of our vast energy, mineral, job and revenue opportunities. They would go a long way toward revealing the enormity of our self-inflicted wounds – and charting a responsible path forward.

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green power – Black death.

 

WesternFront America

As much as it grieves me to say it, I am STILL convinced that President Obama will win a second term as President of the United States in November of 2012. His win will be followed by the collapse of the United States, as we have known it since it’s founding. Yeah, I know the Gallup pollsters say their poll shows that any GENERIC republican candidate can beat Obama. The key word there is G E N E R I C – not one of the republican candidates running today.

Call it pessimism on my part if you choose. Instead, I would describe my “prognostication” as a realistic look at our future as a representative republic.

In fact, Americans can forget about continuing as a constitutional representative republic. Obama, it seems, is the chosen one to lead America into all out socialism. In fact, if you like where America is today, you’re going love the hellhole Obama is leading us into!

I have mentioned before that when I want to get a feel for the thinking in my small community I head for my barbershop. I went today. The general feeling is that any one who supports, or votes, for Obama is in desperate need of an immediate evaluation of their mental health. In my part of the south, it is generally accepted that you must be crazy to support Obama. But, we all grudgingly agreed that he would probably be reelected in November of 2012 because Americans are, obviously, crazy!

Taking an objective viewpoint, however, one must admit that republicans simply do not have a candidate in the race that conservative voters have any confidence can actually WIN the race, and even if he did, would be very different from Obama in his, or her, political philosophy. THAT is a sad commentary on just how far America has fallen from the pinnacle of greatness as a freedom-loving nation.

Two things: A Pope once said: “When you rob Peter to pay Paul, you can count on support from Paul.” The democrats are counting on “Paul” – and they will get his support.

The other thing is – as soon as a people learn they can vote themselves money from their nation’s treasury, that nation is done for. I didn’t say that. Someone, far wiser than I, did. And it is spot on.

We, the American people, have drained our treasury dry. Oh, we can blame our politicians, but, hey, this is America! We put them in office, and WE kept them in office term after term after term… until there is nothing left for them to wring from the nation’s cash box.

As we watch the three-ring circus that is our national leadership haggling with each other over tax hikes versus spending cuts in order to raise the nation’s debt ceiling… it would be laughable… if it were not so TERRIBLE!

The fact is this: The debt ceiling WILL BE RAISED! I know it, they know it, and, surely, you MUST know it, too. It is unavoidable. It WILL happen.

Raising taxes on a people as strapped for cash as Americans are today is nothing short of crazy! Oh, the dems declare they are only going to tax big business and millionaires. I have news for you. Neither big business nor millionaires pay taxes. They simply pass the increase in taxes along to their consumers in the price of the goods and services they supply and WE, you and I, the peons, have the great honor of actually paying those taxes! That is the way it works.

Americans who work for a living carry the tax burden for practically everyone else in America. So don’t be suckered into believing the garbage, the raw bovine scatology, spewing from the democrats in Washington.

Look. I was reared in a company town. The entire economy was built around the largest industry in that town. When the employees of that plant received a raise in their wages – the prices in the town went up by the exact same salary percentage! The merchants were charging what the market could bear. It is the way of things – the way of business. Do not think, for one instance, business will not pass Obama’s proposed tax hikes along to you and I. There is simply no way the government can raise the taxes of big business without it affecting every American … period!

See – THIS is reality. It is not the fantasy the American people are being sold day after day by the democrats in Washington and their propaganda machine, the American mainstream media.

I mention reality because Americans absolutely must get a grip! We must accept reality and make the hard choices that MUST be made to save our nation.

Let me be as clear as I know how: The choices WILL be made, either by us, or by someone else — someone who has way less interest in our welfare that we do!

We are at the cliff’s edge. To continue our current coarse will bring certain disaster. We have a very small window, indeed, to make humongous decisions about the continued existence of America as a free nation.

Reelecting Obama will only drive America off the cliff to its doom.

J. D. Longstreet blogs daily at “INSIGHT on Freedom” at: http://www.csadispatch.blogspot.com/

 

WesternFront America

By Paul Driessen

President Obama frequently says Americans “need to end our $4 billion in annual taxpayer subsidies to oil companies.” The latest Democrat bill would have repealed some $2 billion of what Senator Charles Schumer (D-NY) and others call “subsidies” and “special tax breaks” for Big Oil.

That’s baloney – shameless demagoguery that will inflict further damage on our struggling economy.

Subsidies are cash payments from government to the private sector. Money is taken from the 51% of Americans who still pay income taxes – and transferred by legislators and bureaucrats to companies and activities that “deserve” or “require” these wealth transfers, because the recipients perform an important service and/or could not remain in business unless subsidized with other people’s money (OPM).

The petroleum industry does not receive “subsidies” to produce oil and natural gas. It doesn’t even get “special tax breaks” or outright tax credits. What are falsely described in these terms are actually tax deductions for costs incurred by companies in the process of exploring, drilling, producing and refining the oil and natural gas that energize this nation’s economy and living standards.

These tax deductions are equivalent or similar to deductions claimed by every US business, large and small, for things like facilities depreciation, equipment, utilities, payroll, and research and development. They are intended to ensure that businesses, like individuals, recover their costs and get taxed only on their net incomes. For oil companies those deductions include:

* Geological and geophysical costs, for exploration to assess prospects prior to drilling;

* Intangible drilling costs – equipment, labor, fuel and supplies associated with drilling expensive wells;

* Expensing “tertiary injectants,” water and chemicals injected into older wells to keep them producing;

* Domestic manufacturer’s deductions of up to 6% of income earned from extracting oil and gas (farmers, manufacturers and other producers can deduct up to 9% of earned income);

* Percentage depletion allowance, allowing for gradual recovery of up-front investments in a petroleum (or iron, gold, limestone, et cetera) deposit that is gradually extracted and depleted. The allowance is not available to “integrated” companies that produce, refine and market oil.

White House, congressional and eco-activist claims that repealing these deductions will generate “billions in new revenues” reflect an abysmal grasp of basic business, economic and behavioral principles.

Thankfully, more Americans are beginning to understand that repealing any or all of these deductions will increase oil companies’ individual project and overall operating costs. That means future bonus bids will decline, wells won’t be drilled, fewer deposits will be profitable enough to develop, and wells and fields will be abandoned prematurely. Oil and gas will be left in the ground, crews will lose jobs, tax and royalty payments will dwindle, and the USA will send billions more overseas for imported oil.

Informed Americans also recognize that, in 2008, oil and natural gas provided 61% of the energy that powers America. Natural gas generates almost a quarter of our electricity. These fuels provided affordable energy 24/7/365, supported 9.2 million jobs, kept millions off welfare and food stamp rolls, and generated billions in revenue for federal, state and local governments.

Wind and solar combined accounted for barely 0.6% of total US energy, and 1.9% of electricity generation, in 2008 – providing expensive, intermittent, heavily subsidized energy 8/6/312 or less.

In subsidies per unit of energy actually produced, gas-fired electricity generation got 25 cents per megawatt-hour in 2007 subsidies; coal received 44 cents (mostly for clean technology research). By comparison, wind turbines got 23.4 dollars and photovoltaic solar received 24.3 dollars per MWh.

One project alone – the $2-billion Shepherds Flat wind farm in north-central Oregon will transfer $500 million in hard cash subsidies, plus a subsidized loan guarantee of $1.1 billion to White House friend Jeffrey Immelt, General Electric and their partners. These OPM subsidies equal 80% of the $2-billion in tax breaks that Senators Reid and Schumer are so exercised about. The contract was GE’s largest in FY 2009. (Ethanol subsidies totaled nearly $5 billion in 2010, more than double the senators’ target.)

Shepherds Flat will be the world’s largest wind farm: 338 gigantic 2.5 MW turbines, 97 miles of new roads and 167 miles of high voltage transmission lines sprawling across 32,000 to 83,000 acres (up to twice the size of Washington, DC) of the scenic Columbia River Gorge area. At best, the turbines may average one-third of the 2.5 MW stamped on their nameplates. At the whim of the winds, the farm will generate electricity at wild swings between zero and the turbines’ combined rated capacity of 845 MW.

That’s about one-quarter to one-half of what a single modern coal, gas or nuclear power plant generates 90-95% of the time, day after day, all year long … from a tiny fraction of the wind farm’s land area.

As is the case with Pacific Northwest hydroelectric, Four Corners coal and Arizona nuclear power, Shepherds Flat will supply electricity for Southern California, so that state can maintain its lifestyle, meet its lofty renewable energy goals and be “green,” by using energy generated in someone else’s backyard.

Building and installing the turbines will require some 1.5 million pounds of rare earth metals (from Mongolian areas devastated by mining and smelting the metals), plus at least 700,000,000 pounds of concrete, steel, copper and fiberglass … accompanied by the fossil fuel energy, pollution and CO2 associated with mining, smelting and manufacturing these materials. The turbines will impact scenery and wildlife habitats, and kill numerous bats, falcons, hawks, eagles, owls, egrets, herons, ducks and curlews.

However, environmentalists, legislators and regulators treat those impacts – as well as noise, human health, airspace, Defense Department and other concerns – very differently from the way they handle hydrocarbon projects. In their quest for “green” energy at any cost, they simply brush these issues aside.

Our taxpayer subsidies are financing all of this, and generating impressive profits for their recipients. GE, for instance, generated over $5 billion in US profits in 2010 – but paid no US income taxes.

Compare this to Big Oil companies, which likewise made big profits last year… but also paid big taxes. ExxonMobil, for example, earned $30.5 billion in profits in 2010, on revenues of $383 billion, and paid $1.6 billion in US income taxes. Its combined lease bonuses, rents, royalties, taxes and other payments to the US Treasury totaled almost $10 billion last year. The company also paid state and local levies.

Overall, a Tax Foundation analysis of Energy Information Agency data shows, the largest integrated oil companies paid $1.95 trillion in corporate income, severance, property, excise and sales taxes, between 1981 and 2008. During that time, those companies’ total combined profits (net of taxes and expenses, and after adjusting for inflation) were $1.4 trillion – or 40% less than they paid in total taxes.

The “green” agenda – to use mandates, subsidies, regulations and taxes to coerce a shift to “renewable” energy and “fundamentally transform” our energy, economic and social structure – is rationalized largely by fears of “dangerous manmade global warming.” It is deceptive, costly, environmentally harmful, and devoid of genuine scientific evidence to support its alarmist claims.

Europe’s catchy “20-20-20” climate action plan (20% renewable energy, 20% reduction in overall energy consumption, 20% cut in greenhouse gas emissions, by 2020) carries a minimum price tag of OPM $300 billion. It may reduce average global temperatures by 0.1 degree F (0.05 Celsius) by 2100 … assuming climate change is actually driven by carbon dioxide, rather than by multiple, complex natural forces.

Only mad dogs, environmentalists, liberal Democrats and RINOs would buy into such nonsense.

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green power – Black death.

 

WesternFront America

by Doug Edelman

Democrats in congress love to beat up on the oil companies: those “evil mega-corporations that make obscene profits and gouge us poor consumers.” But while that populist meme might gain them a few polling points with the assistance of a complicit press, any objective analyst of the facts will have to call BS on the entire premise.

Just where would we be, if the government succeeded in seriously putting the hurt on the world’s few companies capable of taking crude oil and delivering useful products to market?

Forget, for a moment, the energy resources coming from petroleum like gasoline, jet fuel, kerosene, home heating oil and the like. We are dependent upon petroleum for plastics, for medicines, for pesticides, for synthetic fibers necessary to clothe us. For asphalt necessary for roads and roofing. Look at what these demonized companies provide to us, on a slim margin of profit, as we’ll see.

The pain at the pump felt by Americans as gas prices hover around $4.00 a gallon is palpable. And as Rahm Emmanuel famously quipped, the left will “never let a good crisis go to waste”!

Politically, the left sees a golden opportunity: They can attack an “enemy of the common man”. They can (they think) raise tax revenues. They can further cripple the petroleum industry – providing impetus toward their “green economy”. They can attack corporate capitalism. So, of course, they go after the oil companies with great zeal.

But even Democrat Senator Mary Landrieu (a hard core leftist) recognizes that the attacks on the oil companies are both unfounded, and ill advised. Acknowledging that punitively terminating tax provisions (which are available to multiple industries and for good reason!) for the oil companies will not reduce (and might increase) gas prices at the pump, and will NOT increase revenues to the government, she spoke out on May 11, 2011 against the attempts to score political points by setting up the straw-man boogie-man of the “Evil Oil Companies” as an enemy to be taken down.

What REALLY is the cause of these high gas prices? Who’s REALLY to blame?

Well, let’s take a look at the factors influencing our pump price today.

First and foremost is the cost these companies must pay for crude! Raw Material Costs. Presently above $100 a barrel, these costs are bolstered by the weakness of the US Dollar – a function of the poor fiscal policy coming out of Obama’s Washington. A weak dollar means a dollar doesn’t go as far in purchasing commodities on the world market. We can only expect to see commodity prices (of EVERYTHING, not just oil!!!) to continue to climb unless drastic action is taken to stabilize the value of our money!

In addition, we are dependent on foreign (and not always friendly) sources of our oil. Leftist policies have hamstrung our domestic production. When the Department of Energy was created (ostensibly to REDUCE our dependence on foreign oil) our imports represented around 30% of our total petroleum consumption. Presently about 2/3 of all our oil is foreign sourced! (Good job, federal bureaucracy!)

All that oil we’re obtaining from foreign sources must be transported halfway around the globe (on very environmentally friendly tanker ships!). Those Shipping and Delivery Costs contribute to our gas price. Don’t forget, those ships run on DIESEL!! How many gallons do you think a tanker burns to bring a million barrels of oil across the ocean? (And what happens to the shipping costs as the price of Diesel rises?) Then, once offloaded in port, the oil must be transported via pipelines (which charge fees) to the refineries.

Our Refinery Costs are also factored into our gasoline pump prices. We haven’t built a new refinery since the Carter Administration… but we’ve lost a few in that time. Our refining capacity is not increasing to meet demand. Meantime our “helpful” federal government has mandated boutique fuel blends – different formulations engineered for different geographical regions. The refineries must make one blend for Missouri, and another for Illinois! These blends cannot be sold across the regional boundaries, so if there’s a shortage in Illinois for their blend, they can’t sell Missouri’s blend, even if there’s a surplus of that variety! So what happens? The price in IL must go up relative to the price in MO, as a function of its scarcity. And when IL residents note the difference, they cry GOUGING against IL gas retailers, who are innocent of any wrongdoing!

Speaking of the gasoline retailer, their average Retailer Profits are about 10 cents per gallon… unless you pay by credit card! Then the credit card company, which takes a fee based on the SALE PRICE will eat about 6 or 7 cents per gallon, leaving the station operator a mere 3 cents per gallon. This is why gas stations are now mini-markets. They need to sell higher margin items to stay alive! The gas is often a “loss leader” used simply to get motorists to stop and shop their convenience store!

Oil Company Profits must necessarily be figured into the cost equation… but let’s do so with perspective. Oil companies earn approximately 2 cents for every gallon sold! States place Taxes on Gasoline ranging from 30-something to 60-something cents per gallon, with the national average being 48 cents. So for every penny the oil companies earn, the states make almost a quarter. WHO’S reaping the windfall profits? The states invest nothing in exploration, extraction, transportation, formulation, refining, or delivery of gasoline, yet they make nearly a quarter for every penny the oil companies earn in profit!

But we’re not yet done with taxes! Once the states get their share, the feds also get a chunk. About 18 cents per gallon goes to the Federal Government. So about $.66 of every gallon you pump is simply paid to the state and federal government in taxes. Lay that against the lowly 2 cents profit per gallon that the oil companies get! If the profits of the oil companies are obscene, what about the Federal and State Governments appropriating 33 cents (and delivering NOTHING) for every cent the oil companies make in profit while delivering vital products to market?

But they sell billions of gallons! They earn BILLIONS in profit!

Ok… and so? That profit goes to their shareholders. When they make money, 9.2 million stockholders benefit!! Do you have a 401K or IRA or a pension? I’ll just bet you’re one of those evil oil profiteers!

And what of those billions? Oil companies operate on margins that would shut down most other industries. What business could survive with an effective tax rate of 48% and a profit margin under 7%?

According to ABC News (hardly a friend of the oil companies, and certainly not a conservative news outlet) the big oil companies had the following revenues/profits:

Source: http://abcn.ws/jgMnP4

Company Revenues Profit Percent Profit

Exxon Mobil 284.7B 19.3B 6.8%

Chevron 163.5B 10.5B 6.4%

Connoco 139.5B 4.9B 2.8%

Valero Energy 70.0B 2.0B 2.8%

Marathon Oil 49.4B 1.5B 3.0%

The total profit for these 5 big oil companies was 38.2 Billion in 2010. (How fast does Government spend 38.2 billion?) Sounds like a lot, doesn’t it?

With approximately 250 million people in the USA, it takes $4 per person to make a billion dollars. So all 5 companies in total earned about $152.80 from each of us in 2010! Now think about what you SPENT on gasoline in 2010! Now realize that over $5000 was collected from each of us in gas TAXES by the states and the feds in that same time period. WHO are you mad at now?

Oh, and the Feds want to raise taxes on the oil companies. Where do you think that money will come from?

So WHO should be demonized when you feel that pain at the pump?

Copyright © 2011 by Doug Edelman

Doug Edelman is a conservative political analyst and commentator, and was a contributing editor for The Conservative Voice. His work has appeared on ChronWatch, Western Front American, Small Government Times, Western Journalism, News By Us, The American Daily, The Post Chronicle, New Media Journal, Capitol Hill Coffee House and more. Mr. Edelman is also an IT Consultant/Contractor and owner of a Computer Services Business.  He has taught PC Maintenance & Repair and Networking at his local Community College, and maintains a blog at http://starboard.blogtownhall.com/.

 

WesternFront America

Ignorance and stupidity, while often misapplied as though they were synonymous, are not the same!  Ignorance is a changeable state of the lack of knowledge.  Being uninformed does not make one stupid.  Stupidity, on the other hand, is an immutable state characterized by a lack of capability to understand or learn.  Galactic Stupidity is the willful refusal to try to learn or understand, despite possessing the capability to do so – and this, too, is often an immutable state!  These people are known in the book of Proverbs as “fools”.

There is no point in addressing my commentary to the stupid.  However there are many people who are ignorant on the topic of economics and taxes… as there are very few sources of true and accurate information with which to educate them!  For this reason, I have taken it upon myself to write several recent pieces addressing these issues

The purpose of this particular article is to serve as a letter directly to those who are ignorant of, but willing to learn, the facts and the truth about taxes, deficits, debt and spending.  If you can assimilate the following five facts, you will have a greater understanding than the vast majority of people who are spoon-fed the Marxist Pablum of the Progressive Media Machine.  You will then understand why conservatives are passionate on the subject, and you may even become motivated to share this information with others!

1) We did not just pass tax cuts. We retained tax rates that have been in place most of the last decade. We prevented an automatic tax hike.

2) The left complains that tax cuts have to be paid for. As mentioned, we haven’t cut taxes, we kept them the same… but that fact notwithstanding, this premise is faulty. Tax cuts don’t have to be “paid for.” Tax rates are not directly related to tax revenues!! Tax cuts have INCREASED revenues every time they’ve been tried. Kennedy, Reagan, & Bush all proved this. Reagan’s tax cuts DOUBLED revenues. (This is because reducing taxes unshackles the engine of the economy – spurring growth, investment and risk taking – and this leads to job creation and revenue producing enterprise!)

3) Deficits are not a factor of revenues. They are a factor of SPENDING. When Reagan DOUBLED tax revenues, Congress spent $1.84 for every new $1 in revenues… and the deficits climbed DESPITE a doubling of revenue. We’re not under taxed. Congress over-spends.

4) Our current Deficit is over a TRILLION a year and has been since Obama took office. Bush’s WORST Deficit was in 2003, after 9/11 and the commitment to 2 wars. It was under $420 Billion. After the 2003 tax cuts, the deficit was cut in half in 2004, and was 1/3 of the 2003 deficit in 2005. We were headed back to a balanced budget. Then we elected the 111th Pelosi/Reid Congress. In 2007 they tripled the 2005 deficit to around $480 Billion. This was their BEST deficit, and it was 60 Billion more than Bush’s WORST. Then Obama was elected in 2008. The Deficit blossomed to over a TRILLION dollars… which tripled the previous worst deficit in history, which occurred under Pelosi/Reid… the year before!

5) Our current debt (as opposed to the annual deficit) is $14+ Trillion. When Obama took office, it was “only” $9 Trillion. In 2 years he managed to increase the national debt by more than 50%! When Pelosi/Reid took the majority in Congress the Debt was only $6 Trillion. In their 4 years, they managed to increase by 2.5 TIMES, the debt that it took the previous 230 years and 44 Presidents to amass. (BUSH was vilified for taking our debt from 4 Trillion to 6 Trillion in 6 years. The Dems took it from 6 Trillion to 14 Trillion in 4 years.)

Our problem is not and never has been a matter of under taxing ANYONE. It has always been a matter of irrational spending of money they DON’T HAVE.

Copyright © 2010 by Doug Edelman

Doug Edelman is a conservative political analyst and commentator, and has been a contributing editor for The Conservative Voice. His work is also seen on Western Front American, Small Government Times, Western Journalism, News By Us, The American Daily, The Post Chronicle, New Media Journal, Capitol Hill Coffee House and more. Mr. Edelman is also an IT Consultant/Contractor and owner of a Computer Services Business.  He has taught PC Maintenance & Repair and Networking at his local Community College, and maintains a blog at http://starboard.blogtownhall.com/

 

WesternFront America

“I am convinced that the battle for humankind’s future must be waged and won in the public classroom by teachers that correctly perceive their role as proselytizers of a new faith which will replace the rotting corpse of Christianity.” -John J. Dunphy, Humanist Magazine, January-February 1983

And you wonder why so many public officials hate the Ten Commandments and want any reference to Christ eliminated from Christmas? I don’t. They are the product of government brainwashing in public schools and further reinforcement of communitarianism in colleges and universities.

Back in 2004, I wrote a column, Department of Education must be abolished.[1] It was one of Ronnie Reagan’s campaign promises; one of many he never kept. Tragically for America’s children, that vile operation still exists while Americans continue to shove massive amounts of money into a failed, unconstitutional government program.

No where in Art. 1, Section 8 of the U.S. Constitution does it give the Outlaw Congress the authority to take over education in this country. If the framers of the Constitution meant for the GENERAL government to legislate education, it would have been specifically enumerated in the clauses under Art. 1, Sec. 8. It is not because education is the domain of the states of the Union – an internal operation:

“Another not unimportant consideration is that the powers of the general government will be, and indeed must be, principally employed upon external objects, such as war, peace, negotiations with foreign powers and foreign commerce. In its internal operations it can touch but few objects, except to introduce regulations beneficial to the commerce, intercourse and other relations, between the states, and to lay taxes for the common good. The powers of the states, on the other hand, extend to all objects, which, in the ordinary course of affairs, concern the lives, and liberties, and property of the people, and the internal order, improvement and prosperity of the state.” –Joseph Story, associate justice, U.S. Supreme Court, Commentaries on the Constitution, 1833

The bloated, corrupt “Federal” Department of Education became a cabinet under one of the biggest buffoons this country ever elected, Jimmy Caaa-ter. That sealed and doomed the finest educational system on this planet.

It’s also a massive hole in the universe the American people are fleeced to fund — including the illegal grants and loans made by the Dept of Education. None of it is constitutional. It’s not my responsibility to pay for your child’s college education anymore than it’s your responsibility to for your neighbor’s child to attend college. No, it’s not for the “collective good.” In a free, constitutional republic, it’s called personal responsibility. If you want a ‘higher’ education, you pay for it, not your neighbor with a gun to his/her head. Collectivism is a poison consuming this republic.

The Federal Department of Education is a monstrous, corrupt entity sucking down more than $66 BILLION BORROWED “dollars” just this past year alone for nothing. Students are coming out of college under educated and drowning in student loans. Doesn’t anyone ever wonder why college tuition shot through the roof after that cabinet came into being? Why, it’s simple: colleges and universities suddenly discovered they had YOUR blank checkbook at their disposal courtesy of the prostitutes in Congress. More money for education! Every child deserves a college education paid for by YOU!

If there were no longer all those loans, America’s young folks would not graduate buried in so much debt. They would attend a college they could afford. All those graduates have to look forward to is despair trying to pay off huge school loans while working at McDonald’s. Make it go away. Without your checkbook, colleges and universities would have to compete in the market place to attract qualified students. Let the free market work and you will see a huge adjustment in tuition.

Let’s not forget the millions of illegal aliens who attend the government’s indoctrination centers, stealing the resources of school districts short changing your child(ren). Illegal minors need to be deported right along with their parents and if they don’t like it, blame their parents, not we the people or naturalized citizens who entered our country according to our laws. The drop out rates for illegals is so far into the atmosphere, it’s pathetic. If you think it’s bad with all the illegals stealing from school districts nationwide, if the abomination called the DREAM ACT passes, it will be another major bomb destroying this country.[2]

Dedicated Americans like Charlotte Iserbyt have spent decades trying to bring the truth to the American people about the real agenda behind “public” schools.[3] Yet, parents across this country seem blind to the truth about who controls education in this country and what the ultimate goal is: creating the new Soviet man and global citizen:

“Teach those attitudes which will result ultimately in the creation of a world citizenship and world government. We can and should teach those skills and attitudes which will help to create a society in which world citizenship is possible.” William Carr, NEA (National Education Association) leader, secretary of of the Educational Policies Commission

Know what? I’ve read a thousand columns on education. Dozens of books by excellent writers. But, hear me: No matter how many zillions of borrowed dollars are poured into the Federal Department of Education, it will not educate America’s children. They will continue to be short changed because of massive corruption from the teacher’s unions protecting bad, unqualified teachers and subjected to social and political indoctrination. Time has shown this to be true.

Speaking of money, here in Texas, we the taxpayers fund state education to the tune of $47 BILLION dollars a year. Now, Americans pay state taxes to fund education in their state whether by a direct personal income tax or as here in Texas, through state sales taxes, gasoline taxes and local property taxes [as in most states]. On top of those taxes, we the people are then forced with a gun to our heads to pay twice for education: federal income taxes to fund the Federal Department of Education. Of course, we know not a penny in the taxes extorted by the IRS funds a single penny of public education.[4]

The Outlaw Congress goes into its new session next month. While the House is now controlled by Republicans, it’s also controlled by the “old guard” who had 14 years to get rid of unconstitutional cabinets and agencies. Fourteen years of a Republican controlled Congress and education only got worse. Eight of those years were under a Republican president, Bush, Jr. Nothing was done except more BS fed to we the people while astronomical budgets (more money for education!!!) continued to be signed off by the controlling GOP. The illegal senate is still controlled by progressive Demorats (socialists and communists) and RINOS who support federally run education. And, of course, we still have an illegal president camped in the White House who would veto any bill to get rid of that unconstitutional agency.

Yes, I am aware there are 111 individuals (candidates and incumbents) who declared during the campaign cycle they want the Federal Department of Education eliminated (list below). However, it isn’t going to happen because you still have 80% of the same political animals who got reelected. “Vote out all incumbents” died because of too many Americans with their hands out to mommy government.

Too many reelected incumbents are socialists and too many are Republicans who owe their financial backers who have a vested interest in making sure that cabinet continues to exist. No, abolishing the Federal Department of Education will not come from Congress, it has to come from the states of the Union. Think not? Here in Texas, the seed has been planted:

November 18, 2010. Dunbar seeks to nullify federal education laws

“Outgoing State Board of Education member Cynthia Dunbar offered a “parting gift” to her fellow board members in the form of a resolution declaring the U.S. Department of Education an unconstitutional bureaucracy with no authority to impose restrictions upon Texas or its school districts.

“No action was taken Thursday on Dunbar’s resolution, which states that education policy is outside the purview of the federal government granted by the U.S. Constitution so federal legislation addressing education is for naught.

“Therefore, the Education Department “shall be put on notice that any such unconstitutional directives given by it to the Texas State Board of Education will be met with the principle of nullification and the clear admonition of ‘Don’t Mess with Texas!’”

“Nullification is the legal theory that a state may deem invalid any federal law that the state finds unacceptable or unconstitutional. Most legal scholars maintain that nullification is unconstitutional.

“But Dunbar, who decided not to seek re-election to a second term, is an assistant professor of law at Liberty University School of Law and has more than once used her own knowledge of the U.S. Constitution to make a point through board policy.

“The resolution could be considered in January, when the 15-member board, including its five new members, next meets.

“Read a copy of the SBOE resolution (PDF).”

The problem — a big one — states reliance over the decades on federal money for education. But, wait — we already pay at the state level. Why should the fruits of your labor be stolen in Bison, Kansas, to pay for education in Louisville, Kentucky? You have no control over how those taxes are spent for one thing. Second, your state legislature makes the laws for public education overall which are adhered to and added on at the local level. There is no need for a federal cabinet except to advance the agenda of the global elite.

We know that state pension obligations are literally killing the states causing them to beg for more money from Washington, DC. Always the money, honey. Because of gross mismanagement of state budgets, state legislatures want that federal money. They’re lined up at the feeding trough stealing us blind – penalizing you and me for their failures – even when we don’t live in a state taking federal bail out money (also illegal). Money, not to educate your children, but to feed pension funds and support school districts drained by heavy bureaucracy and classrooms crowed with illegal aliens – an estimated some 5 MILLION of them.

The question is this: Are you ready to restore state sovereignty?

“It is a question all those supporting states’ rights initiatives need to ask themselves. Once answered affirmatively the struggle for educating others truly begins. It is easy to claim we support our sovereignty, to lend our voice to state resolutions, perhaps even support legislation with some teeth, yet how will we withstand the opponents who simply point to the dollars we are willingly cutting off?

“Glen Warchol ran what is perhaps the shortest piece seen in the Salt Lake Tribune in recent history. In 10th Amendment cold turkey he quickly leaves us with the truth about what we are asking for and how we must accomplish it. He describes a very brief conversation between U.S. Rep. Jason Chaffetz (R-UT) and Supreme Court Justice Antonin Scalia. Rep. Chaffetz asked what it would take for the federal government to recognize the 10th Amendment rights of the states, a fair question asked to someone who could truly articulate the answer. “Stop taking their money,” is the answer Warchol reports and it is an answer known to be the true, root challenge. We must stop taking the money and mimicking the income tax system as a start to reclaiming sovereignty.”

I have a new state rep, Jim Landtroop. As soon as he’s sworn in next month, I’ll be politely hammering on him about many issues and education is in the top ten. If the states withdraw their support for that rancid cabinet, it will be a fiscal challenge, but one that must be undertaken. Either the states reject federal money or they will become nothing more than occupied territories under regional, world government. America’s children will continue to suffer while the corrupt teacher’s unions run rough shod over good, well meaning, qualified teachers kissed and blessed by buzzards in the state houses.

The states MUST do this no matter how painful because it is the right thing to do. If enough states refuse federal education dollars, the Outlaw Congress will have no choice but to continue to defund it until that beast withers and dies. Ask yourself some questions like: before the Federal Department of Education became a cabinet (1979), how come schools around the country were able to turn out highly educated students on very few dollars? How did America become so finely educated prior to the Federal Department of Education, but has sadly and tragically turned out two generations of young Americans who are so under educated, they graduate high school at third or fourth grade reading levels?

Return education to the state and local levels. Stop the social indoctrination programs and nonsense like “safe pink rooms” for sexual deviants brainwashed by activists passing themselves off as teachers. Get your groups and organizations together and hammer on your state legislature come January. I will be doing the same even though my daughter is long out of school and in fact is a teacher. I care about America’s children and want to see them get educated, not deliberately dumbed down, their minds washed clean and then propagandized by environmental greenies and other special interests. I am sick of being taxed to death at the federal level when I already pay a healthy amount here in my state for education.

As for illegal minors in state schools: The hell the state shouldn’t be able to determine citizenship status and deny access to our schools! Illegal minors are no different than their illegal parents. They have no right to even be on U.S. soil. They have absolutely no “right” to a free education paid for by the sweat of your labor. If the feds don’t like it, the states need to call their bluff. The time is over for tea and crumpets. The time is now for the state houses to either stand up or shut up. It’s up to all of us to make it happen within our states and forget the political animals in the Outlaw Congress.

Footnotes:

1- Abolish Federal Department of Education
2- Illegals are breaking the bank
3- The Deliberate Dumbing Down of America Free on line
4- Your federal “income” taxes do not fund education – it’s funded by BORROWED fiat currency

Creating the new Soviet man here in America

I know time is in short supply for Americans who work or are trying desperately to find work, but it is important to get the facts. I do recommend these books (there are so many, really):

1 - The Teacher’s Union: How They Sabotage Educational Reform and Why by Myron Lieberman
2 - Kill Your Teacher – Corruption & Racism in Los Angeles City Schools by Rabbi Nachum Shifren

111 Republicans who favor eliminating the unconstitutional Federal Department of Education:

Senate (12)

John McCain (AZ); Saxby Chambliss (GA); Mike Crapo (ID);
Sam Brownback (KS); Pat Roberts (KS); Jim Bunning (KY);
Roger Wicker (MS); Richard Burr (NC); John Ensign (NV);
George Voinovich (OH); Tom Coburn (OK); Lindsey Graham (SC)

House of Representatives (63)

Spencer Bachus (AL-06); Don Young (AK-AL); John Shaddegg (AZ-03); Jeff Flake (AZ-06); Wally Herger (CA-02); George Radanovich (CA-19); Elton Gallegly (CA-24); Buck McKeon (CA-25); David Dreier (CA-26); Ed Royce (CA-40); Jerry Lewis (CA-41); Ken Calvert (CA-44); Dana Rohrabacher (CA-46); Brian Bilbray (CA-50); Doug Lamborn (CO-05); Cliff Stearns (FL-06); John Mica (FL-07); Bill Young (FL-10); Ileana Ros-Lehtinen (FL-18); Lincoln Diaz-Balart (FL-21); Jack Kingston (GA-01); John Linder (GA-07); Paul Broun (GA-10); Tom Latham (IA-04); Donald Manzullo (IL-16); Steve Buyer (IN-04); Dan Burton* (IN-05); Todd Tiahrt (KS-04); Ed Whitfield (KY-01); Hal Rogers (KY-05); Roscoe Bartlett (MD-06); Michele Bachmann (MN-06); Pete Hoekstra (MI-02); Vern Ehlers (MI-03); David Lee Camp (MI-04); Fred Upton (MI-06); Frank LoBiondo (NJ-02); Chris Smith (NJ-04); Scott Garrett (NJ-05); Rodney Frelinghuysen (NJ-11); Walter Jones (NC-03); Howard Coble (NC-06); Sue Myrick (NC-09); Peter King (NY-03); John Boehner (OH-08); Pat Tiberi (OH-12); Steven LaTourette (OH-14); Frank Lucas (OK-03); Bob Inglis (SC-04); Sam Johnson (TX-03); Ralph Hall (TX-04); Joe Barton (TX-06); John Culberson (TX-07); Mac Thornberry (TX-13); Ron Paul (TX-14); Lamar Smith (TX-21); John Duncan (TN-02); Zach Wamp (TN-03); Bob Goodlatte (VA-06); Frank Wolf (VA-10); Doc Hastings (WA-04); Jim Sensenbrenner (WI-05); Tom Petri (WI-06)

Senate candidates (9)

Joe Miller (AK); Ken Buck (CO); Linda McMahon (CT); Rand Paul (KY); Eric Wargotz (MD); Sharron Angle (NV); Rob Portman (OH); John Raese (WV); Mike Lee (UT)

House of Representatives candidates (27)

Jesse Kelly (AZ-08); John Dennis (CA-08); Gary Clift (CA-10);
David Harmer (CA-11); Mark Reed (CA-27); Robert Vaughn (CA-38); Mike Yost (FL-03); Allen West (FL-22); Rob Woodall (GA-07); Austin Scott (GA-08); Ray McKinney (GA-12); Brad Zaun (IA-03); Andy Harris (MD-01); Robert Broadus (MD-04); Tim Walberg (MI-07); Joe Heck (NV-03); Frank Guinta (NH-01); Charlie Bass (NH-02); Anna Little (NJ-06); Chris Gibson (NY-20); Ashley Woolard (NC-01); Bill Randall (NC-13); Steve Chabot (OH-01); Bill Johnson (OH-06); James Lankford (OK-05); Bob Hurt (VA-05); Keith Fimian (VA-11)

Devvy Kidd authored the booklets, Why A Bankrupt America and Blind Loyalty; 2 million copies sold. Devvy appears on radio shows all over the country. She left the Republican Party in 1996 and has been an independent voter ever since. Devvy isn’t left, right or in the middle; she is a constitutionalist who believes in the supreme law of the land, not some political party.

Devvy’s regularly posted new columns are on her site at: www.devvy.com. You can also sign up for her free email alerts.

E-mail is: devvyk@earthlink.net

 

WesternFront America

The House Democrat Caucus is so furious with Obama, over his compromise with Senate Republicans that extended the Bush era tax cuts, they voted to demand to see his birth certificate.

Previously, when hypocritical Democrats voiced regret that bipartisanship was a thing of the past because Republicans were being Republican, right–thinking progressives assumed bipartisanship meant GOP members would come crawling, begging for forgiveness, confessing myriad sins and making a generous contribution to the fund that will replace the stranger’s medals John Kerry threw over the White House fence.

If House Dems had even an inkling that bipartisanship meant the GOP would get something it wanted, expressing even insincere support would have been out of the question. As the McClatchy News Service described it, “The Senate was expected to pass the deal overwhelmingly late Tuesday or early Wednesday, drawing a breadth of bipartisan support previously unseen during Barack Obama’s presidency.”

And Nancy Pelosi’s House wanted nothing to do with it.

For readers not up on their class warfare, the reason for the revolt is ‘progressives’ are enraged because Obama agreed not to raise taxes on those cruel overseers making over $250,000 a year and he is willing to compromise on how much grave robbing Uncle Sam does to your estate after you die.

For ‘progressives’ tax rates are another of those areas where the ratchet effect is evident. When tax rates are set those who make more, pay more. So much more, that the top 5 percent of earners pay 60 percent of all income taxes. That’s a ‘progressive’ income tax regime. But when it comes time to cut taxes, leftists complain if refunds for wealthy taxpayers are proportionate to the amount of tax paid.

The estate or death tax is another example of ‘progressive’ thought at work. This tax is not levied on wealth some miscreant Scrooge has managed to squirrel away from the IRS and was only revealed during his lingering and painful death. It’s money the deceased paid taxes on when he was alive, so most of it has already been taxed once.

Uncle Sam’s idea of respect for the dead is to go through his pockets before the corpse is interred.

So who really is greedy? The individual or family who wants to keep his own money? Or the ‘progressive’ Democrat who wants to take money that does not belong to him and spend it to make himself look morally superior?

“We think you make too much money” is not adequate justification for confiscating legally earned income. God Almighty is content with a flat 10 percent — with no deductions — from everyone.

Liberty means we are not creatures subject to the government. The government exists to serve us and not vice versa. “Fairness” applied to earnings is simply another word for socialism on the installment plan.

Fortunately, as Obama has told us before, elections have consequences and one of the consequences of last November is the administration has to pay attention to Republicans for at least two years.

As a sidelight to the tax cut issue, the most remarkable story appeared Sunday in the WashPost. It literally attempted to generate sympathy by explaining to us lesser folk how much trouble families have making ends meet on 250K a year. After reading it my advice is take your tax cut and shut up.

The representative couple had two kids, two incomes, lived in the DC metro area and had too many bills. They were saving $8,000 a year for a college fund, living in a $750,000 house, paying $5,000 for maid service and running in the red.

My other advice: buy a smaller house, buy a vacuum cleaner and consider two years at community college.

Finally, before we finish discussing Obama’s troubles: What does one say when Don Quixote beats the windmill?

Virginia Attorney General Ken Cuccinelli won the first round of his case against Obamacare when Federal District Judge Henry Hudson ruled the requirement that every citizen buy health insurance from a government–approved company was unconstitutional.

When Cuccinelli filed the suit chin–strokers were calling him a reckless grandstander driven by the publicity gene. (Sounds like Chuck Schumer D–Narcissism to me.) Soon to be former Speaker Nancy Pelosi, when asked if Obamacare’s individual mandate was constitutional, screeched, “Are you serious? Are you serious?”

Now we know Cuccinelli is serious and his strategy is sound.

As Cuccinelli has said all along, this case is not about healthcare, it’s about liberty. Otherwise if Obama can force you to buy insurance because it helps everyone afford health care — Virginia Gov. Bob McDonnell can make you buy booze at the ABC store because it helps build roads for everyone.

Michael R. Shannon is a public relations and advertising consultant with corporate, government and political experience around the globe. He’s a dynamic and entertaining speaker and can be reached at michael–shannon@comcast.net.

 

WesternFront America

As the expiration of the Bush Era Tax Cuts looms and Congress debates what to do next, it is perhaps useful to revisit the facts, and some basic understanding of what they mean.

Let’s first establish the fact that the current issue is not one of tax CUTS. We’re talking about EXISTING tax rates that have been in force for a decade. No one is talking about cutting taxes for the rich. The issue is whether to allow automatic tax INCREASES to take place… and whether to shield ANYONE or EVERYONE from these automatic increases. If these Obama Tax Increases take place, they will represent the largest tax hike in American History!

Conservatives take the position that it is unwise and unproductive (not to mention unfair) to raise taxes on anyone at all during a period of economic turmoil such as we are currently experiencing. Further, it would do damage to the employment prospects of the working classes if more of the income of those in a position to create jobs were to be confiscated in taxes!

Liberals take the position that only the so-called “middle class” deserves to have their tax rates preserved, and that the “rich” (defined as those earning over $250K annually) aren’t paying their fair share and should have their taxes raised.

Before going into the dry economic realities that are embodied in these diametrically opposed positions represent, let me first share a parable which has made the circuit of viral email. It very clearly and accurately portrays our “progressive” tax system in a way even a Liberal steeped in Academia and Leftist Propaganda can understand it!

Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men — the poorest — would pay nothing; the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth man — the richest — would pay $59.

That’s what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement — until one day, the owner threw them a curve (in tax language a tax cut).

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” So now dinner for the ten only cost $80.00.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six — the paying customers? How could they divvy up the $20 windfall so that everyone would get his “fair share?”

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, Then the fifth man and the sixth man would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same proportion, and he proceeded to work out the amounts each should pay.

And so the fifth man now paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man who pointed to the tenth. “But he got $7!”
“Yeah, that’s right,” exclaimed the fifth man, “I only saved a dollar, too . . . It’s unfair that he got seven times more than me!”.

“That’s true!” shouted the seventh man, “why should he get $7 back when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up. The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!

And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Monaco and the Caribbean.

Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!

Given the fact that 40% of American Wage Earners pay NO income tax, and in fact, some receive back money in credits that exceed any withholding contribution, we can see that the progressive tax structure already soaks the rich and executes a form of wealth redistribution!

Given the fact that the top 1% of wage earners pays almost 30% of the tax bill, and the top 10% pays nearly 60%… how can one argue they don’t pay their “fair share”?

Class warfare is simply jealousy combined with the Democrat fostered myth that the economy is a Zero Sum Game. For someone to have more, someone else must get less. This is patently untrue, but the myth feeds the narrative.

The other myth Democrats propagate is that tax rates are directly proportional to revenues. This has been disproven every time tax cuts have been tried! Tax RATES affect economic activity. LOWERING tax rates spurs economic growth, and results in an INCREASE in tax revenues. Kennedy proved this. Reagan proved this. Bush proved this. It happens EVERY time it’s tried. Deficits are never a function of revenues. They are a function of spending. Under Reagan, tax cuts DOUBLED revenues, yet the deficit went up because the Democrat controlled Congress spent $1.84 in new spending for every $1 of new revenues!

I wrote more extensively on this in my article at: http://starboard.blogtownhall.com/2010/07/26/basic_economic_reality_101.thtml

It is essential to remember that it is the very populace the Democrats seek to slap with punishing tax increases who are the engine behind hiring and job creation. Whether the $250K+ person is a business owner, who will hold off expansion and hiring, or whether (s)he simply won’t hire a maid or buy a luxury item that wage-earners work to produce… jobs are dependent on the wealthy!

Let me give you a real-world example of how taxing the “rich” hurts the middle class:

During the 80s there was a “soak the rich” sentiment that resulted in a luxury tax being levied upon “yachts” – pleasure boats of a certain size that lawmakers deemed out of the reach of the middle class, and a conspicuous luxury “toy” of the hated rich.

The class warriors were pleased when this tax was passed. The “rich” would be punished for their extravagance.

But what happened?

The “rich” found other toys for their distractions. Instead of paying the higher taxes for their yachts, they stopped buying yachts.

Boat makers laid workers off. Marinas let workers go. Boat Sellers closed up shop. Boat repair shops lost business. Restaurants near marinas lost business. Once thriving communities, whose economic well being depended on the commerce generated by the yachting populace were all negatively impacted.

Oh, and there was also little in the way of additional tax REVENUE generated by the tax, as so few yachts actually sold!

Who WASN’T hurt? The rich! They simply found other ways to spend their money!

But those who WERE hurt complained, LOUDLY, to congress. The result? That failure of a Luxury Yacht Tax was repealed!

Congress must begin to understand that the power to tax is not given them to control people or to redistribute wealth. The constitutional power to tax is only to raise revenue for the legitimate expenditures on the legitimate activities of the Federal Government. And if it isn’t in Article II of the Constitution – it isn’t a legitimate activity!

Raising taxes ANY time is a bad idea. It does not enhance revenue. It puts an ankle weight on those who are the runners in our economy. But raising taxes on the engine of job creation during what could be argued as the worst economy since the Great Depression is SUICIDAL.

Copyright © 2010 by Doug Edelman

Doug Edelman is a conservative political analyst and commentator, and has been a contributing editor for The Conservative Voice. His work is also seen on Western Front American, Small Government Times, Western Journalism, News By Us, The American Daily, The Post Chronicle, New Media Journal, Capitol Hill Coffee House and more. Mr. Edelman is also an IT Consultant/Contractor and owner of a Computer Services Business.  He has taught PC Maintenance & Repair and Networking at his local Community College, and maintains a blog at http://starboard.blogtownhall.com/.

 

WesternFront America

Missouri Democratic Senator, Claire McCaskill, has been cited as one of the more vulnerable Democrat senators facing re-election in 2012. Unsurprisingly, ever since the Mid-Term elections of November 2010, she had been making a concerted effort to appear more moderate. But that ended recently as she spoke about the effort to extend the current tax rates for ALL Americans, including the top earners. As she spoke, she lurched violently to the left!

Here are her comments, verbatim:

“I’m trying to figure out how anyone in America can take the Republican Party seriously about deficit reduction. I’m trying to figure out how anyone can keep a straight face and say they’re for deficit reduction while they insist on a permanent tax cut for the wealthiest Americans… completely unpaid for.

Now, they want to say this is class warfare. Well… y’know, in a way it is. Because we’re fighting for the middle class. We are fighting for the middle class. Frankly, the middle class hasn’t had enough champions in America.

Seventy percent of American don’t itemize deductions. That big-old complex tax code… It’s been written for wealthy Americans. The ones that itemize deductions. And then you get to the very very top… where a lot of these peoples income is all about dividends and capital gains, and not even ordinary income; and they have all kinds of ways that they can use the tax code to avoid paying taxes.

This is about leveling the playing field, for what has always made our country different than everyone else. That is a strong, vibrant middle class. And I will tell you this: If they think it’s ok to raise taxes for the embattled middle class because they’re going to pout if we don’t give more money to millionaires… it really is time for the people of America to take up pitchforks.

And all those people that are out there in the Tea Party that are angry about the economics of Washington; they really need to look at this. They need to pull back the curtain and realize that you’ve got a republican party that’s not worried about the people in the Tea Party; they’re worried about people that can’t decide which home to go to over the Christmas Holidays. They’re worried about the people who think they may take a jaunt to Europe for the new year. They’re not worried about those people who are packing those town halls. Cause those folks are the middle class.

So yes, we’re going to continue to fight for the middle class. We’ve net cut taxes $400 Billion in the last 8 months. Targeted like a laser on the middle class and small business. And we’re going to continue to fight for that middle class and for those small businesses. Throughout the end of this year, and all through next year, and beyond.

But please quit taking these guys seriously about the deficit. What a joke!”

How anyone can listen to the entire statement without choking is beyond me – I had to take it in small chunks. But let’s dissect the statement, a phrase or a sentence at a time… because there are very few instances where 2 or more sentences are strung together without a massive error, lie or misdirection!

“I’m trying to figure out how anyone in America can take the Republican Party seriously about deficit reduction. I’m trying to figure out how anyone can keep a straight face and say they’re for deficit reduction while they insist on a permanent tax cut for the wealthiest Americans… completely unpaid for.

Ok, so she can’t see how Republicans are serious about Deficit Reduction. Let’s not even spend much ink on the fact that the deficit was TRIPLED in Obama’s first year… or the fact that this TRILLION Dollar Deficit is only the first of MANY Trillion Dollar deficits, projected out as far as the eye can see!

Claire thinks that one cannot support lower taxes and be consistent with calls for reduced deficits. I could write an entire piece on this myth alone, but lets examine this presumption she adheres to.

First, she is relying upon an economic myth foisted upon the American population. The myth that tax RATES are directly proportional to tax REVENUES. They are emphatically NOT! Raising tax rates has historically put a damper on economic growth, and rarely results in significant gains in revenue. But more importantly, tax rate REDUCTIONS have universally stimulated the economy and resulted in INCREASED revenues. This is provable every time it’s been tried. It happened under Kennedy. It happened under Reagan (whose tax cuts DOUBLED federal revenues!!) It happened under Bush. Therefore, reducing taxes doesn’t COST… it PAYS!! The concept of “paying for” rate reductions is a lie.

Deficits are NEVER a factor of insufficient taxation. They are not a function of revenues. Deficits are a function of SPENDING! As mentioned, Reagan DOUBLED revenues after his tax cuts. But all you’ll hear about the Reagan economic policy is the so-called “Reagan Deficits”. The fact is that these were the Tip O’Neal deficits!!! The Democrat Congress at the time, under the leadership of former Speaker Tip O’Neal, spent $1.84 in new spending for every $1 in new revenue generated by the tax rate reductions!

Reagan submitted balanced budgets to Congress. They were famously declared “dead on arrival” by the Tip O’Neal House.

Now, they want to say this is class warfare. Well… y’know, in a way it is. Because we’re fighting for the middle class.

Well, I’m glad she actually admitted it! It IS INDEED class warfare. This feeds another Democrat propagated myth: The myth of the “Zero Sum Game”. This fallacy posits that the economy is a closed system. That in order for someone to have more, someone else must have less. Thus anyone who succeeds above a certain point is depriving someone else of a decent living… and fairness demands a redistribution to “level the playing field”.

But the economy is NOT a zero sum game! You don’t make the poor richer by making the rich poorer. You make EVERYONE more prosperous by growing the economy! You may get a smaller slice of the pie than someone else, but by growing the pie, you still get more pie! Or, as Reagan said… a rising tide lifts all boats.

Seventy percent of American don’t itemize deductions.

That’s true! But not because they’re not ELIGIBLE to do so! Many people pay more in taxes than they have to, because they DON’T go through the trouble to itemize. EVERY HOMEOWNER should consider itemizing… but so many people just want to just get thru the oppressive tax process – especially if they’re going to get a refund by just taking the standard deduction… that they’ll file a quick and easy form! But this is a function of ignorance, and laziness and not some conspiracy to aid the rich!

And then you get to the very very top… where a lot of these peoples income is all about dividends and capital gains, and not even ordinary income; and they have all kinds of ways that they can use the tax code to avoid paying taxes.

I’m guessing she forgot that most Senior Citizens (those who aren’t COMPLETELY dependent on the Government Social Security dole) are relying on “dividends and capital gains” to pay their bills and keep food on the table! Not everyone receiving dividends and capital gains is a top-hat and monocle wearing moneybag.

This is about leveling the playing field, for what has always made our country different than everyone else. That is a strong, vibrant middle class.

Yeah. That “leveling the playing field” I mentioned with the Zero Sum myth. This is a primary tenet of the Socialist and the Communist. Redistribution of Wealth. “From each according to his ability – to each according to his need”. She wants to expand the middle class by pulling the wealthy down into it!

If they think it’s ok to raise taxes for the embattled middle class…

THEY DON’T! The GOP wasn’t trying to raise taxes on ANYONE! They were trying to PREVENT AUTOMATIC INCREASES! If NOTHING were done, EVERYONE would suffer a massive Obama Tax Hike. Even Obama didn’t want that! But the GOP was adamant that the current rates… the rates that had been in force since 2003… should be allowed to continue for everyone! There is no reason to impose a massive Obama Tax Hike on ANYONE, including the upper incomes! This was the basis for the debate.

…because they’re going to pout if we don’t give more money to millionaires…

…it really is time for the people of America to take up pitchforks.

REALLY, Claire? I thought it was those evil Tea Partiers calling for violence in the streets!! (Sarcasm) Can you imagine the uproar if Glenn Beck or Sarah Palin made such a statement!!

And all those people that are out there in the Tea Party that are angry about the economics of Washington; they really need to look at this. They need to pull back the curtain and realize that you’ve got a republican party that’s not worried about the people in the Tea Party; they’re worried about people that can’t decide which home to go to over the Christmas Holidays. They’re worried about the people who think they may take a jaunt to Europe for the new year. They’re not worried about those people who are packing those town halls. Cause those folks are the middle class.

One must remember that the upper income earners are the driving force behind job creation in this country. They are business owners who hire people. When they are successful, they expand their businesses and hire more people. They are consumers who buy things that middle class people have jobs to produce. They patronize services performed by middle class workers. I wrote recently about the unintended consequences upon the middle class that were inflicted by the class warriors of the 80s who passed a punitive tax on luxury yachts. When the wealthy stopped buying yachts and found other places to spend their money, it was the industries, businesses and services that were depending upon the yachting community that suffered. Boatbuilders lost jobs. Marinas closed. Restaurants near marinas suffered. You get the idea. In the end these middle class workers who were directly hurt by the tax lobbied Congress LOUDLY and ultimately this punitive luxury tax was repealed as a miserable failure and boondoggle. Enough time has passed that most people have forgotten this chapter in our economic history. It is therefore appropriate to remind you.

So yes, we’re going to continue to fight for the middle class. We’ve net cut taxes $400 Billion in the last 8 months. Targeted like a laser on the middle class and small business. And we’re going to continue to fight for that middle class and for those small businesses. Throughout the end of this year, and all through next year, and beyond.

But please quit taking these guys seriously about the deficit. What a joke!”

You can’t demonstrate tax benefits like that, Claire! We may have realized a reduction in revenues – because leftist policies have dragged the economy to a crawl… but there have been no NET TAX BENEFITS.

And if ANYONE wants to get serious about the deficit, the issue is SPENDING, not revenues. As demonstrated every time… Tax REDUCTIONS increase revenues. Tax INCREASES rarely succeed in raising revenues. And Democrat majorities spend nearly $2 for every $1 in increased revenues.

Conversely, spending and deficits have gone DOWN whenever we’ve had GOP majorities!

Deficit timeline with landmarks

Early in Clinton’s administration, he refinanced the debt with short term low interest paper. This began a reduction in deficits as interest payments were reduced. Unfortunately this was a political move to make him look good, as he knew he’d have to refinance that debt at a higher rate a couple years later. But in 1996 the Gingrich Revolution brought about a power shift in Washington. For the first time in nearly 50 years, the GOP was the majority in Congress. This began a series of annual reductions in the deficit that ultimately crossed that magic line and we had a couple years of surplus. This was under a GOP Congress, though CLINTON gets the credit! (Of course it’s CONGRESS that has the power of the purse, but that fact is only applied when it benefits the left!)

The surpluses continued until 9/11 and the dot com bust. This was followed by the run up and implementation of the Afghanistan and Iraq wars. There were significant deficits in 2001 thru 2003. Sadly, these are what is touted by the left against the Bush Presidency. But what followed is conveniently ignored.

In 2003, Bush passed the Tax Cuts. In 2004, the deficit of 2003 was cut in HALF. In 2005, the deficit was 1/3 of the 2003 deficit. We were on our way back to a balanced budget.

Then came 2006 and the power shift in Congress. The 111th Pelosi-Reid congress was elected in November 2006 and seated in January 2007.

The 2005 deficit was tripled.

Then Barack Obama took office. And the 2008 deficit was tripled, and deficits crossed into territory never CONCEIVED of before. TRILLION dollar deficits.

WHO are the ones uninterested in deficit reduction? The ones who spent $787 Billion in Stimulus? The ones who gave us ObamaCare? The ones who are trying to give us Cap and Trade?

We will not forget in 2012.

© 2010 by Doug Edelman

Doug Edelman is a conservative political analyst and commentator, and has been a contributing editor for The Conservative Voice. His work is also seen on Western Front American, Small Government Times, Western Journalism, News By Us, The American Daily, The Post Chronicle, New Media Journal, Capitol Hill Coffee House and more. Mr. Edelman is also an IT Consultant/Contractor and owner of a Computer Services Business.  He has taught PC Maintenance & Repair and Networking at his local Community College, and maintains a blog at http://starboard.blogtownhall.com.

 

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… Cuts Need to Made on Larger Level Including Military.

PolitiMO posted an interesting article on the divide over earmarks in Missouri. The final sentence of the article was the most revealing. “Misssouri is 9th in taking most earmarks, bringing in $346,784,080 (or $59.99 per capita) between 2008 and 2010.”

Average it out. In the three years, Missouri has received just over $100 million per year in federal money for earmarks. Let’s put this in perspective.

According to the Missouri Department of Natural Resources:

The typical Missouri vehicle uses approximately 600 gallons of fuel and is driven more than 16,000 miles each year. With more than 4.2 million registered vehicles in Missouri, that adds up to a lot of miles driven, gasoline consumed and money spent at the gas pump.

Let me tell you what else it means. It means a lot of federal revenue. Missourians pay the federal government 18.4 cents of taxes for every gallon of fuel sold. This tax is supposed to fund road projects and repairs, and earmarks are often used to return this money back to the state and your district. Do the math.

If you own one vehicle that meets the average according to the state of Missouri, you are paying $102 a year in federal fuel tax. According to PoliticMO, the average earmark equals $59.99 per person that gets returned back to the district. The population of Missouri is 5.9 million people.

According to the Missouri Department of Natural Resources, there are 4.2 million cars in the state of Missouri. Based on these numbers, knowing that average car in Missouri sends the federal government $102 per year in taxes and their are 4.2 million cars registered in Missouri, that amounts to $428.4 million a year sent to the federal government for road repairs.

If anything, we should be mad more of our fuel taxes aren’t getting returned to our state and districts and they aren’t earmarking the funds from the fuel tax enough to improve our roads and to make them safer.

We are paying $428.4 million into the federal government in a year in fuel taxes. In return, we have only gotten $346.7 million in return in the form of earmarks over the past three years from 2008 through 2010.

The truth is politicians are using this earmark issue to make you believe they are cutting wasteful government spending, but the truth is these politicians like Billy Long who are pushing no earmarks, aren’t willing to make necessary cuts in the federal budget from cutting out unconstitutional bureaucracies to a military budget that totals 46% of a military spending in the world.
Earmarks simply aren’t the problem. They are a deception to make you believe the federal government suddenly has some kind of moral responsibility to its people.

Originally posted at Bungalow Bill’s Conservative Wisdom © Clay Bowler

 

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