by | ARTICLES, BUSINESS, ECONOMY, OBAMA, QUICKLY NOTED
The CBO considered two different possibilities to raise the minimum wage, as a Democrat bill is set to be introduced in the Senate in a few weeks.
From the CBO report:
“Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly”
What Options for Increasing the Minimum Wage Did CBO Examine?
For this report, CBO examined the effects on employment and family income of two options for increasing the federal minimum wage:
1) A “$10.10 option”
A “$10.10 option would increase the federal minimum wage from its current rate of $7.25 per hour to $10.10 per hour in three steps—in 2014, 2015, and 2016. After reaching $10.10 in 2016, the minimum wage would be adjusted annually for inflation as measured by the consumer price index.
2) A “$9.00 option”
A “$9.00 option” would raise the federal minimum wage from $7.25 per hour to $9.00 per hour in two steps—in 2015 and 2016. After reaching $9.00 in 2016, the minimum wage would not be subsequently adjusted for inflation.
Read the full report here
by | ARTICLES, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, OBAMACARE, POLITICS
It was certainly no surprise to most of us the the CBO report showed Obamacare was costing the economy countless jobs. White House and congressional Democrats could have put a rational spin on it – that this was a necessary price to pay in order to get his signature health care proposal implemented, – but they didn’t do that.
Instead, they chose a response which showed them to be the disingenuous hypocrites that they truly are. It also showed that the true intention is simply political — in other words, they wantonly come up with whatever excuse will lose them the least number of votes.
The White House and congressional Democrats have explained the CBO’s job loss outlook to actually be a good thing. The job losses merely reflect the fact that individuals will, going forward, have choices. Such examples include the option to retire before one might have otherwise done so, or perhaps stay at home as a single parent because the government is providing for them (health care) what otherwise only a job could.
But this “logic” is ridiculous. Electing the option to not work when one could do so will certainly prevent many people from getting ahead along the economic chain. And in combination with an extension of food stamp benefits, an extension of unemployment benefits, an extension of other welfare programs, and raising the minimum wage, all are acting in tandem to prevent the upward mobility that the President has said he so sorely wants and unequivocally demands.
He can’t have it both ways. The President cannot be both against economic inequality and simultaneously for policies that maintain prolonged dependence. The preposterous idea that work is now a “lifestyle” choice reveals the shallowness of his commitment to economic success.
by | ARTICLES, ECONOMY, QUICKLY NOTED
This was a great article from Forbes countering the misconception that generic drugs are better for price-cutting in the pharmaceutical world. I encourage you to read the piece in it’s entirety.
by | ARTICLES, ECONOMY, GOVERNMENT, OBAMA
The folks over at CNSNews reported that, according to the US Treasury, Public Debt has increased $6.666 Trillion during Obama’s Presidency.
The amount of debt listed on January 20, 2009 was compared to the amount of debt held January 31, 2014 — the most current day available. Those figures are $10,626,877,048,913.08 and $17,293,019,654,983.61, respectively.
That means the total amount of debt has gone up $6,666,142,606,070.53 under President Obama.
To put it into perspective, public debt first reached $6.666 trillion in July, 2003. CNSNews notes that in slightly more than 5 years, “the U.S. has accumulated as much new debt as it did in it’s first 227 years”.
Now, to make an entirely different comparision:
The public debt held by George W. Bush on the first day of his inauguration (Jan 20, 2001) was $5,727,776,738,304.64. On his last day full day in office, Jan 19, 2009, the debt was $10,628,881,485,510.23.
Therefore, debt during his 8 years increased $4.901 Trillion. One could also argue that debt went up some 85% during his term.
On the other hand, so far, Obama’s debt so far has increased 63% over 5 years.
If one were to take 85% and divide it by 8 years , one would find the average rate of debt increase to be 10.625% a year under Bush. For Obama’s debt to only increase by the rate of Bush’s, Obama’s debt percentage increase would be 53.125%. But Obama’s is more, currently at 63% debt increase — more than a year ahead of the average pace of Bush.
Taking Obama’s current rate of debt increase, 63%, and dividing it by 5 years, the average rate of debt incrase by Obama is 12.5% per year. At that pace, by the time Obama’s Administration is complete after 8 years, the debt increase will be 100.8%.
That means we can expect our Public Debt to increase by at least $10.711 Trillion, or that our public debt will be roughly some $21.337 Trillion at the end of his term. (This is only at the current rate of spending and debt, without taking into account future programs, etc)
In other words, it will have only taken 233 years to spend the first $10 trillion and roughly 8 years to spend the second $10 trillion.
by | ARTICLES, BUSINESS, ECONOMY, FREEDOM, GOVERNMENT
The story of “I, Pencil” is rightfully regarded as one of the most important economic essays of the 20th century. Known for both its brevity and simplicity, “I, Pencil” conveys the truth about the correlation between free people and economic freedom.
The brilliance of “I, Pencil” is that the lesson is told from the most unexpected perspective — that of the lowly pencil. Yet the very humbleness of the pencil is perfectly juxtaposed by the complexity through which the pencil itself comes into being.
Told through the eyes of the pencil, the pencil delightfully describes human ingenuity, cooperation, and connectedness — all necessary parts to bring the pencil to fruition. The pencil explains that it is a people free and unfettered, who have each learned and exchanged a skill, that ultimately will create a good — be it a pencil like him, or otherwise.
Ultimately, using the perspective of the pencil is a metaphor for Read’s salient point: for us all to look introspectively and understand ourselves, our potential, and the world in which we live and can contribute. That it is ultimately people, not some government, who can organize, work, and create a thing of beauty and of necessity.
In that regard, the recent movie adaptation of “I, Pencil”, produced by Competitive Enterprise Institute, fell short of its potential. To be sure, the film most certainly has beautiful and simple graphics to convey the story and show the complexity of markets. However, the message itself is narrated from an outside perspective explaining the process of creative industry using a pencil as an example, which is not how “I, Pencil” is written.
By choosing to retell “I, Pencil”, with a replacement narrator looking in instead of the pencil looking out, the film loses the charm of the story and the central message about individuals, their potential, and freedom to create. The story needs that foundation in order to powerfully and properly explain that people, not government, are the true source of economic freedom.
Though the film is good, it is not great, and misses a wonderful opportunity to really bring to life the message of “I Pencil”, and convey its truths about individual freedom and free markets. Start with the essay and then watch the movie — and be uplifted about the ingenuity of free people.
by | ARTICLES, BLOG, ECONOMY, FREEDOM, TAXES
It seems like the White House and media these days are spending a lot of their energy discussing disparity between the haves- and have-nots. The phrase “income inequality” is especially being used more frequently as a means to continue the class warfare rhetoric and is absolutely certain to be a major theme of Obama’s State of the Union Address this month.
Many explanations are bandied about in an attempt to show that “devious policies” are causing the wide gulf between higher and lower income earners. They include the vague and general terms such as “special tax benefits for the wealthy”, “corporate welfare”, and a “tax system that favors those with higher incomes”. Though these targets are great for talking points, they fail solidly on substance.
There are no virtually no special benefits for the wealthy — only higher tax rates, phased out tax deductions, and added surtaxes that lower income earners do not have to contend with. As for corporate welfare, though it does exist, it only affects a few crony capitalist-type industries and companies out of the millions of small businesses which form the backbone of our economy (think: GE, green energy, electric cars). What’s more, the tax system clearly favors those with lower incomes, not higher, with lesser rates and more deductions and tax credits available. It has been shown clearly and indisputably that the US has – by a large margin – the most progressive taxes in the world (yes, far more progressive than even Europe and the Scandinavian countries). Though there is income inequality in America, why it exists is not what you think.
The simple reason is this: unlike people in the fastest growing countries, and unlike our own citizens in prior generations, the current middle and lower income classes in America have lost their inclination to personally invest in their future. I would argue that much of this is because the growing government welfare system is stripping individuals of their need to prepare and plan ahead, and a wide safety net also exists. For the most part, it is only the upper middle and higher income individuals — those who are not the beneficiaries of government welfare and those with more entrepreneurial orientation — that are forcing themselves to save and put this money at risk into investments for their future.
Much of China’s current economic success can be directly attributed to the financial attitude of their citizens with regard to investing. Almost all earners, including and especially the middle and lower income ones, keep a certain amount of income each month and invest it in both entrepreneurial endeavors and the existing equity markets. It is common for even the minimum wage earners to save at least 10% of their income! Large or small sum, they regard investment as a priority and a path to prosperity.
I have a close relative who is an owner and executive of a substantial manufacturing operation that he started in Shenzhen, China because of its business friendly environment. I’ve heard from him many times that he went into business, not to comply with government regulations, but to make things. And part of that business friendly environment is the people. He has been pleasantly surprised by the careful frugality of the owners and their passion to invest and grow– a sentiment extends to, and is practiced by, even their lowest paid workers.
Contrast this to the present state of affairs in our country. We have not been saving– we have been borrowing for more than a generation now. Citizens have mortgaged their future by consuming continuously — while investing nothing — and passing on that example to the next generation. We are turning into a country where people will begin to wonder why they should invest, if it’s just going to be taken away from them in the long run by those who do not, or go into a market that is wholly unstable.
People are encouraged to spend as if consumption is a good thing , but truly, it is investing that is far better for individuals and for the economy as a whole. When our government pushes measures such as extending unemployment benefits, food stamps and other welfare programs, it reinforces prolonged financial dependency. It is government policy aimed in the wrong direction as recipients have harder, not easier, obstacles to overcome.
The biggest problem that this country has to deal with regard to moving people away from a culture of dependency is that it continues to be demagogued by the Left for the precise reason that it easily mischaracterizes those who might being against such policies as “insensitive” and as being against the “less well off”. But many who are opposed to such policies merely recognize that success of investment, independence, and upward mobility are making other countries greater while we persist our slide into wider dependencies and economic decline.
In order to get the middle class back on track, we must focus our efforts and rhetoric on reminding ourselves that this country was built upon those who were willing to invest their time and money to become great. It is the true source of upward mobility – and those that do not do their fair share will be left behind by those who do. This is what truly drives at the heart of income inequality in our country.
Investment is what made our country thrive and it is the only thing that will properly sustain our country’s financial future.
_________________________
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by | ARTICLES, ECONOMY, FREEDOM, QUICKLY NOTED, TAXES
“We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessities and our comforts, in our labors and our amusements,… our people … must come to labor sixteen hours in the twenty-four, give our earnings of fifteen of these to the government,… have no time to think, no means of calling our mis-managers to account; but be glad to obtain sustenance by hiring ourselves out to rivet their chains on the necks of our fellow-sufferers…. And this is the tendency of all human governments … till the bulk of society is reduced to be mere automatons of misery…. And the forehorse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression”.
Thomas Jefferson, 1816
_______________________________
Now What?
Did you like what you read?
If you did, I hope you’ll join my Secret Tax Club.
It’s free, it’s via email, and it’s for you.
I periodically send out information such as tax tips, reading suggestions, articles and more, and the information is not always available anywhere else, even on my own website.
If you want to join, visit my Secret Tax Club page.
Thanks for visiting Tax Politix
by | ARTICLES, ECONOMY, OBAMA, OBAMACARE
Last week’s Meet the Press roundtable featured, among others, E.J. Dionne — a columnist with the Washington Post. Mr. Dionne’s discussion on Obama and Obamacare was so incredibly inaccurate, it is quite obvious that he is a person who just likes to make up facts as he goes along. And with moderators like David Gregory, who do little to nothing to question the commentary coming from his guests, viewers are left with severely wrong or misinterpreted information.
Some highlights from the show:
>>“Look, I think there is something crazy when people say where government can’t deliver health care. Ever heard of Medicare? Ever heard of Medicaid?”
The fact is that Medicare is actuarially and actually bankrupt, and Medicaid is virtually bankrupting large numbers of states as we speak. Why do people have a positive view of Medicare – simply because they are getting $3 of medical care for each $1 they spend (and hiding from them the fact that the $2 difference will be paid by their children and grandchildren). An SEC investigation would have everyone associated with such a program behind bars. I suppose technically the government does “deliver healthcare” via Medicare and Medicaid but they are so egregiously flawed and mismanaged that it can hardly be considered successful.
> >”President Obama chose to go for a model that is a market-oriented model that Republicans favor, of helping people buy private health insurance”.
A blatant lie. Republicans do favor a market oriented model, but ObamaCare is certainly not anything like one. Can anyone list all the names of the House Republicans who supported and voted for Obamacare in Congress? None? That’s right. In addition, Obamacare is no more a market-oriented model when it renders obsolete millions of plans already freely chosen by Americans and replaces them with fewer and more expensive options — while bullying insurance companies to alter dates and plans according to the whim of any number of government agencies.
>>But what you’re seeing already is there is an enormous appetite among all the Americans who don’t have health insurance to buy it. And that’s what’s going to save Obamacare. This is filling a real need in the society”.
The actual enrollment figures for Obamacare are way off and lower-than-expected. It is so dismal that the White House is counting among the totals for the media the number of people who have “put a plan in their shopping cart” but haven’t paid for it yet in order to bolster totals. Likewise, a lack of “appetite” for Obamacare has resulted in the Obama Administration panicking and paying hundreds of millions of taxpayer money to run commercials and partner with organizations, groups, and non-profits in order to push citizens to sign up before the deadlines (that keep shifting).
>>Every rich democracy in the world uses government to deliver healthcare. You had Christine Lagarde on. France spends less per capita in government spending to cover everybody than we spend for just Medicare and Medicaid. So this thing can work. It needs fixes. And I think the next move by the president is to tell Republicans, do you want to fix this or do you just want to get rid of it?
First of all, the United States is a Republic, not a democracy. Second, the emphasis on the word “rich” is telling because it reeks of the same class warfare-equality policies that have been quintessential to Obama’s presidency. Obamacare is exactly that. It is a wealth transfer that forces the healthy and/or wealthy to subsidize the plans of the uninsured, sicker, or poorer through government fiat — an “individual mandate”. And while Mr. Dionne wishes to hold up France as the pinnacle of Western governing, the French just passed a 75% tax on the wealthy in order to pay for the Socialist policies of Francois Hollande.
E.J.Dionne is representative of the typical progressive pundit who has no framework of reality, and frankly, doesn’t seem to care. He repeats whatever talking points are suitable for the day and the Obama Administration, and its a damn shame that the actual moderators of Meet the Press lack the knowledge or fortitude to call into question their information.
_______________________________
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Did you like what you read?
If you did, I hope you’ll join my Secret Tax Club.
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by | ARTICLES, ECONOMY, QUICKLY NOTED
“To advocate any clear-cut principles of social order is today an almost certain way to incur the stigma of being an unpractical doctrinaire. It has come to be regarded as the sign of the judicious mind that in social matters one does not adhere to fixed principles but decides each question “on its merits”; that one is generally guided by expediency and is ready to compromise between opposed views. Principles, however, have a way of asserting themselves even if they are not explicitly recognized but are only implied in particular decisions, or if they are present only as vague ideas of what is or is not being done. Thus has it come about that under the sign of “neither individualism nor socialism” we are in fact rapidly moving from a society of free individuals toward one of a completely collectivist character.”
This is the beginning of F.A. Hayek’s lecture “Individualism: True and False,” given in 1945. The lecture comprises the first chapter of Hayek’s 1948 work, “Individualism and Economic Order”. Thanks to Mises.org, you can read it online; however, it is a fine book to own for your collection.
_______________________________
Now What?
Did you like what you read?
If you did, I hope you’ll join my Secret Tax Club.
It’s free, it’s via email, and it’s for you.
I periodically send out information such as tax tips, reading suggestions, articles and more, and the information is not always available anywhere else, even on my own website.
If you want to join, visit my Secret Tax Club page.
Thanks for visiting Tax Politix
by | ARTICLES, ECONOMY, NEW YORK, TAXES
The NYTimes ran an article yesterday talking about the curious population shift from NY to FL. The biggest thing missing from the article’s conclusions, however, is the affect of taxes on New York’s population (re)location.
A CNSnews report last year discussed a study by the Tax Foundation found a net loss of 1.3 million New Yorkers who left the state over the 10 year period from 2000-2010.
3.4 million total moved out of state, but another 2.1 moved in, so the change was -1.3 million — which totaled a loss of $45.6 billion in income.
Although many factors determine one’s decision to move to or from a locality, taxes are typically part of the process. As such, the Tax Foundation noted many high tax facts that are unique to New York:
According to the group, New York ranked second among the states for the highest state and local tax burden in 2009. The Empire State was ranked highest for tax burden every year from 1977 until 2006, except in 1984 when it was ranked second.
New York State has a progressive personal income tax rate ranging from 6.45 percent to 8.82 percent for those earning over $2 million. Sales varies by county, and is between seven and eight percent. In Manhattan, the sales tax is 8.875 percent.
According to the Retirement Living Center, which examines tax burdens by state for those nearing retirement, New York also levies a gasoline tax at 49.0 cents per gallon and a cigarette tax of $4.35 per pack, along with an additional $1.50 per pack in New York City.
New York is also one of 17 states plus the District of Columbia that collects an estate tax, with a $1 million exemption and a progressive rate from 0.8 percent to 16 percent.
In 2007, New York State collected $1.1 billion from its estate and gift taxes, the highest of any of the states, according to the Tax Foundation.
I have mentioned these points before. Back in 2009, Rush Limbaugh fled the state due to the crushing taxes. And an Op-Ed in the NY Post last year discussed the implications of a shrinking population — loss of revenue, House of Representative seats, and policy power.
High taxes have devastating consequences. Thomas Sowell once quipped, “Elections should be held on April 16th- the day after we pay our income taxes. That is one of the few things that might discourage politicians from being big spenders”.
With the recent election of De Blasio as Mayor of NYC, you can expect even more flight. De Blasio has vowed to raise taxes both as a means of pushing his economic equality agenda and rewarding the unions for the patience with contract negotiations over the last 4+ years.
The state of NY is on the brink of fiscal insolvency and more and more people are waking up to that reality — and leaving the state in droves.
_______________________________
Now What?
Did you like what you read?
If you did, I hope you’ll join my Secret Tax Club.
It’s free, it’s via email, and it’s for you.
I periodically send out information such as tax tips, reading suggestions, articles and more, and the information is not always available anywhere else, even on my own website.
If you want to join, visit my Secret Tax Club page.
Thanks for visiting Tax Politix
