Tax The Rich

I was watching the news program ‘Fareed Zakaira GPS’ on CNN this morning. There was a story about Gerard Depardieu’s decision to claim Russian citizenship to avoid France’s new 75% tax rate on millionaires. Russia, by the way has a 13% flat tax. Now, I would not cherish the thought of living in Russia the required 6 months out of the year to maintain my citizenship eligibility, but the thought of paying a government who taxes me to death is even less attractive. While the CNN report stated Depardieu’s story was getting much attention, the numbers don’t support the notion that when a government taxes the rich, the rich pack of their stuff and move to more tax friendly locations. To some degree, that may be true, as corporations are bound by brick and mortar investments, and other physical restrictions that would be more costly to move than paying the higher tax. However, those not bound by costly restrictions will move. So the CNN story tended to support the idea that if the Obama administration continues to tax the rich, they will just pay more in tax. But that’s not true. CNN failed to look forward into the future. Consider upstart companies looking for somewhere to begin their business? Why would they build in New Jersey with a 9% corporate tax rate when Texas has 0%? Or why would they build in the United States when many countries offer friendlier tax environments? Bottom line, the rich will do what’s best for their pocketbooks. And while it may be ‘patriotic’ to pay taxes, according to the Obama faithful, that does not mean you should bend over so they can take advantage of you.

Are we Broke?

When countries are in serious financial trouble, they will agree to about anything to get out debt. Enter the island country of Cyprus. They hammered out a deal to have the European Union bail them out – but in order for the deal to go through, the Government of Cyprus considered raiding the bank accounts of its citizens, taking 10% of everything they have in the bank. The reaction of the people of Cyprus was to empty their bank accounts – basically an old fashioned run on banks. This past Saturday, people stood in line to withdrawal their money from what they thought was a safe place to store their savings. The backlash was so bad, that the government closed the banks and is re-considering their plan to rob the hard earned savings of their citizens. Even though Cyprus is a small country, the thought of a country taking such a desperate action sent shock waves around the globe. The Dow dropped 62 point today – and depending on what Cyprus does, the decline could continue. The lesson here is what a government, when it becomes too big and bloated, borrows too much, and finally can’t pay its bills, will do to access money. Could this happen in America under Barack Obama? No, you say? What if someone asked you 10 years ago that the American government would be forcing you to buy health insurance or they would punish you with fines? What our President should have done today was demonstrate some leadership and guarantee the American public nothing like what is happening in Cyprus will ever happen here. But then again, would anyone believe him?

Finally - a little reality sets in....

Jay Carney needs to tell his boss that 1977 is calling and it wants its failed economic policies back. The reason I say this is several major news outlets are reporting the President’s approval ratings are down. Bloomberg reports his approval rating has fallen to 48%, down from a high of 54%. That means over half of America either doesn’t think he is doing a good job or has just given up caring. The headline in the Washington Post says “Obama’s approval drops as Americans take a dimmer view of his economic policies”. The Post reports the President’s one time 18 point advantage over Congressional Republicans on the question of who the public trusted most to deal with the economy has tilted towards the Republicans, with the President only having a 4 percentage point lead today. Just perhaps, America is finally waking up to the fact that there isn’t a free ride -- that we can’t increase taxes and borrow more money to achieve prosperity. Perhaps Americans are beginning to understand that some really hard choices are ahead for all of us, rich, middle class, and poor – and they are looking for someone who has the courage and leadership skills to guide our country out of our economic gloom (or should I say ‘malaise’). And now some, not all, are beginning to see that Barack Obama isn’t the guy for the job. This is the reason the President has recently laid down his golf clubs and picked up an olive branch – trying to appear like he’s willing to work with Republicans on a budget. What hogwash. Let’s only hope reality continues to set in – and more and more people see our President for what he is – a tax and spend liberal. November 2014 will be here next year and America has the opportunity to correct its mistake of 2012 by giving the country a Republican House and Senate.

Make Like the U.S.S.R.

Hamid Karzai says America and the Taliban have a common goal of destabilizing Afghanistan so we can keep American troops in his country. Really? After billions of dollars and the blood of American troops, this ungrateful bastard thinks our intentions are somehow less than honorable. Chuck Hagel needs to inform President Karzai we can take our ball, our bat and our bombs and go home – along with any financial aid that keeps him in power. So why does this third would power feel he can thumb his nose at the US? Well, it is because the world sees American as weak, with a weak leader, Barack Obama. We are repeating the leadership failures of Jimmy Carter, when the rest of the world saw us as weak – it emboldens our enemies. I say if President Karzai doesn’t trust us or want us in his country, we make like the U.S.S.R. and leave.

Obamageddon

Is our "fiscal" sky about to fall? Many Americans are about to feel the bite of President Obama’s sequester. For those of you who have been living in a cave the last three months, the sequester is a law passed last year with across the board budget cuts meant to be so painful that no one in Congress would allow them to take effect. The original cuts were to take effect 1 January. But, as we have learned, time and time again, Washington just kicks the can down the road, as they are too scared of the political ramifications come election time. So, the new deadline became March first. Well, this time, at least the Republicans in the House had the spine to say enough is enough. The sequester went into effect the first of March. So what has the leader of the free world been doing other than playing golf with Tiger Woods (at our expense)? Well, he has been on the campaign trail telling everyone about the evil Republicans in the house, their refusal to cave in to all of his demands to raise taxes on the rich, and due to their evil intent, they sky will fall effective the first of March. The first of March has come and gone and the sky is still up there. The President’s dire predictions of massive layoffs, stock market crashes, long lines at airports, and government shutdown didn’t happen. In short, he looks a good bit like Chicken Little. So, to save face, he and his comrades have been out telling their liberal allies in the press they had to shut down tours at the White House. And as one American who has never taken the White House tour, I can’t say this has been a critical blow to my lifestyle or pocket book. Closing the White House to the average American is both a stupid and pathetic attempt by the President to save face. However, I don’t live in a vacuum either – I know these sequester cuts are coming. Like everything else in Washington, it takes a long time to implement law. Starting sometime in April or May, government employees can expect furloughs (that’s a nice word for layoffs). Probably their work week will be cut to four days a week saving about 20% in government payroll – which equates to 20% less in everyone’s paycheck. Government contractors will feel the pinch too as those companies that build things for Uncle Sam will see their contracts dry up. And when this happens, the ripple effect will hit all Americans. A big chunk of the employed population, and group whose numbers get smaller every day due to Obama economic policies, will tighten their collective economic belts. Think about the effect of one less workday a week: one less Starbucks coffee, one less lunch at Wendy’s, less stops at the gas station, delays or not buying any new clothes, not taking that summer vacation. The folks hit hardest by the Presidents sequester will be group of people who he claims to protect the most – the middle class. And in the end, the President’s sequester will have an effect on the thing he values above all other things – tax revenue. In case he doesn't realize it, less working hours means less income, and therefore less income tax – forcing the Obama administration to borrow more and print more money. Neither of these actions will concern liberals, as Nancy Pelosi said, the Government doesn't have a spending problem. Really Nancy? In the end, it will come out in the lame stream media that those evil Republicans in the house offered the President the authority to transfer where the cuts would be made to minimize the hardships it will inflict on all of us. But, the President refused. Why? Because our President wants to maximize the pain on the American public to help advance his liberal agenda by trying to blame the Republicans – all in an effort to take back the House of Representatives in 2014. Yes, the President is more concerned with playing politics than being a leader to all Americans – and that’s just sad.