Tag Archives: Class Warfare

At what point does taxing more actually reduces govt revenue?

In less than 6 minutes, economist Tim Groseclose explains why raising more taxes does NOT mean government will get more revenue.

In fact, there is a point when the opposite happens — when raising more taxes brings in less and less revenue to government.

Astoundingly, it was none other than Christina Romer, former Chair of the Council of Economic Advisers in the Obama regime, who did a study that found that a marginal (or top) tax rate of 33% is the point when increasing taxes becomes counter-productive. That should make us wonder why Obama and the Left keep insisting on raising taxes on “the rich”….

The obvious answer is:

They’re not doing that for the practical reason of increasing government revenue. They’re doing that for ideological class-warfare reasons.

The United Kingdom just discovered this truth, again.

In the 2009-2010 tax year in Britain, more than 16,000 people reported annual income of more than 1 million pounds (equal to about $1.6 million today). Then in 2010, Prime Minister Gordon Brown, a member of the Labour Party, introduced a new 50 percent top income tax rate for high-income earners. After that, the number of people reporting income of at least 1 million pounds fell to 6,000.

“It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes,” The Telegraph reported.

Instead of raising revenue, the tax hike cost the U.K. 7 billion pounds ($11.2 billion) in lost revenue — and that in an economy one-quarter the size of America’s.

H/t FOTM’s Joan

~Eowyn

Econ 101: Ann Romney’s Horse

In the just-finished London Olympics, a horse partly owned by Mitt Romney’s wife, Ann, had competed (and lost) in dressage. Dressage refers to the guiding of a horse through a series of complex maneuvers by slight movements of the rider’s hands, legs, and weight.

Ann Romney’s part-ownership of the horse has been lampooned by liberal critics as being symbolic of the family being out of touch with “ordinary” Americans.

Here’s a rebuttal to the class-warfare critics:

So the Romneys are selfish for keeping a horse? For:

  • Employing a groom with a family to support.
  • Paying for feed that’s sold by someone with a family to support.
  • Feed that’s transported in trucks by drivers with families to support.
  • The trucks are manufactured in a factory by people with families to support who are fed with stuff that’s grown by farmers with families to support.
  • The barn to house Ann Romney’s horse was built by construction workers with families to support, with materials trucked by drivers with families to support, from factories with workers with families to support.

Ann Romney’s horse has done more to put Americans to work than that horse’s ass in the White House!

But then Econ 101 was never Obama’s strong suit, having spent his political formative years as a Saul “I-dedicated-my-book-to-Satan” Alinsky community organizer class-warfarer….

H/t FOTM’s beloved Joan

~Eowyn

Entitlements make up over half of federal govt spending

On Friday, July 13 (!), at a campaign rally in Roanoke, Virginia — the one where more than 20 people fainted — the POS in the White House gave a “class warfare” speech, decrying the selfishness of “the top 2%” in America and called for increasing their taxes because “they didn’t get there on their own.” The POS said:

“Now, understand, the top 2 percent…most benefited over the last decade from not only tax breaks, but also a lot of the money from increased profits and productivity went up to that top 2 percent.  So the bottom line is, the top 2 percent doesn’t need help.  They’re doing just fine.

…if we spend a trillion dollars on tax cuts for them, we’re going to have to find that trillion dollars someplace else. That means we’re going to have to maybe make student loans more expensive for students. Or we might have to cut back on the services we’re providing our brave veterans when they come home…. Or we might have to stop investing in basic science and research that keeps us as a leading-edge economy….

Now, this is just a small example of the difference between myself and Mr. Romney, between myself and some of the Republicans who are running Congress… I went to Washington to fight for the middle class. (Applause.)  I went to Washington to fight for working people….

if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own… If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges.  If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. “

In other words, the POS was implying that “the rich,” privately-owned businesses, and “successful” Americans refuse to pay “their fair share” of taxes even though they “didn’t get there on their own” but got “there” due to government and all the public works that government has provided — education, infrastructure of roads and bridges, R&D, the Internet.

Zombie of PJ Media wrote a rebuttal in which he presented the pie-chart below of actual federal government spending in FY 2010.

~Click image to enlarge~

Below is a list of all federal government expenditures, with Obama’s “you-didn’t-do-it-alone public benefit” programs highlighted in pink, which altogether account for 24.19% of total expenditures:

Social Security 19.63%
Department of Defense 18.74%
Unemployment/welfare/other mandatory spending 16.13%
Medicare 12.79%
Medicaid and SCHIP 8.19%
Interest on the national debt 4.63%
Health and Human Services 2.22%
Department of Transportation 2.05%
Department of Veteran’s Affairs 1.48%
Department of State 1.46%
Department of Housing and Urban Development 1.34%
Department of Education 1.32%
Other on-budget discretionary spending (1.8%): $149.67
Other off-budget discretionary spending (1.3%): $108.10
Department of Homeland Security 1.21%
Department of Energy 0.74%
Department of Agriculture 0.73%
Department of Justice 0.67%
NASA 0.53%
Department of Commerce 0.39%
Department of Labor 0.38%
Department of Treasury 0.38%
Department of the Interior 0.34%
EPA 0.30%
Social Security Administration 0.27%
National Science Foundation 0.20%
Corps of Engineers 0.14%
National Infrastructure Bank 0.14%
Corporation for National and Community Service 0.03%
Small Business Administration 0.02%
General Services Administration 0.02%
Other agencies 0.56%
Other off-budget discretionary spending 2.97%

What struck me about the pie-chart is how much federal government spending goes to entitlements — Social Security, unemployment, welfare, Medicare, Medicaid, SCHIP (State Children’s Health Insurance Program). I’ve colored entitlement spending in dark red in the list above. Altogether, entitlements account for 56.74% of total federal government spending.

We’re screwed.

See also:

H/t FOTM’s beloved Hardnox

~Eowyn

Breitbart at CPAC 2012 – This Year Obama Will Be Vetted

What Do Americans Mean by “Rich”?

A week ago on Dec. 6, 2011, in Osawatomie, Kansas, Obama fired the first shot in what Financial Times is calling a “class warfare election.”

In a speech that set out the guts of his 2012 campaign, Obama says the belief in capitalism, individualism, and small government, although is “in America’s very DNA,” not only “doesn’t work. It has never worked.”

Instead, Obama calls for a society where “everyone gets a fair shot, when everyone does their fair share, when everyone plays by the same rules” — whatever that means. Blaming the Great Recession on the “breathtaking greed” of the financial elites — the very same financial elites whom he has bailed out ($7.77 trillion to Wall Street!) and who are his cronies (e.g., Jon Corzine, ex-CEO of the now-bankrupt MF Global) — Obama calls on the rich to pay a higher share in taxes.

Words have different meaning to different people.

During the 2008 election season, in his now-famous encounter with Joe the Plumber, Obama had called Americans who make more than $250,000 a year “rich”. The Occupy Wall Street (OWS) movement say they represent the 99% and call those who are in the top 1% of income distribution to be the super “rich.”

Oddly, some who are in that top 1% insist they are not “rich”. Actress Roseanne Barr, who has a net worth of $80 million and supports the OWS movement, says Americans who make more than $100 million should have their heads chopped off.

Now we have polling data from Gallup about what ordinary Americans consider as “rich.”

Catherine Rampell reports for the New York Times, Dec. 9, 2011, that Gallup has surveyed Americans to ask what they believe the cutoff for being “rich” should be. The median response was that a person would need to make at least $150,000 to be considered rich. “Median response” refers to the income figure — in this case, $150,000 — that cuts the poll sample into two halves.

Here’s a breakdown of the responses:

Answers to Gallup’s survey question on the threshold for being “rich” vary by demographics. Men, those younger than 50, college grads, those with kids, city-dwellers, and those with more than $50,000 in annual household income cited a higher figure for what they consider to be “rich”:

According to the Tax Policy Center’s calculations on income distribution, a household earning cash income of $150,000 would fall somewhere between the 89th and 90th percentiles, that is in the top 10-11%. In other words, the typical American believes anyone in about the top tenth of the income distribution counts as “rich.”

Obama and others, on the other hand, have set the cutoff around $250,000 when discussing “raising taxes on the rich.” Households earning cash income of $250,000 are somewhere between the 96th and 97th percentiles, that is in the top 3-4%.

So if you make $150,000 or more a year, watch out for that hand reaching into your pocket!

~Eowyn

Do Rich Americans Really Pay Less Taxes Than the Middle Class?

Eat the rich!

Like all Leftists, Obama’s irrepressible impulse is to demagogue by fomenting class envy and exploiting our resentment of those who have more, especially in today’s hard economic times.

That’s the basis of Skippy’s proposal yesterday to combat the federal government’s gargantuan $15 trillion deficit — the equivalent of 101% of America’s gross domestic product — by taxing “the rich.”

He called on Congress to increase taxes by $1.5 trillion as part of a 10-year deficit reduction package totaling more than $3 trillion. He proposed that Congress overhaul the tax code and impose what he called the “Buffett rule,” named for billionaire investor Warren Buffett — that “People making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.”

Buffett wrote in a recent piece for The New York Times that “super-rich” people like him should gladly pay more taxes, and that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office, including his secretary. But Buffet left out a vital bit of information from his pious op-ed:

Super-rich Buffet’s super-rich company, Berkshire Hathaway, owes the government tens of millions in taxes and has been wrangling with the IRS over this for years.

Trafficking on Americans’ sense of violated justice, Skippy declared that “the rich” should at least pay as much in taxes — be in the same tax bracket — as middle class Americans like Buffet’s secretary. “There is no justification for it,” Obama said. “It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.”

But are the rich really taxed less than secretaries? Here’s a fact check by the Associated Press.

Stephen Ohlemacher reports for the AP, Sept. 20, 2011:

The data tell a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.

[...] This year, households making more than $1 million will pay an average of 29.1% of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay 15% of their income in federal taxes. Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7%.

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS. Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.

Obama’s claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15%. The top marginal tax rate for wages is 35%, though that is reserved for taxable income above $379,150.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress’ official scorekeeper on revenue issues.

The Tax Policy Center estimates that 46% of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.

Note that investment income is earnings that have already been taxed. It is money accrued from wages. In other words, investment income is actually income that is twice taxed!

Meanwhile, ever the hypocrite, mere hours after delivering his speech demonizing wealthy Americans, Skippy dined with some of these very Americans in New York. His haul last night is expected to exceed $2 million for his reelection campaign.

~Eowyn

Your Liberal La-La Land Chart of the Day

This little piece of liberalism on parade is all the rage for my lefty friends. It’s everywhere on Facebook. So since I’m all about listening to every opinion out there, I gave it a glance. Meet class warfare defined in 100 words or less:

After witnessing this I found myself scratching my head in confusion, wondering why friends of mine who seem so intelligent keep getting attracted to such stupidity.

They really do think that if money exists then it’s a shame it hasn’t been confiscated yet.

But aside from that, the figures in this chart are absurd. Look at the second item. $8.9 billion is the cost of a housing program for one year. If we eliminate the vacation home deduction…. for ten years straight… that will reap enough to pay for one year of the program.

Those are your intellectual betters hard at work, folks.

In the spirit of bipartisanship, I’ve decided to help them out by adding my own item. This is such simple brilliance I don’t know why they haven’t thought of it yet:

source: usdebtclock.org

Hunger crisis solved.

Incidentally, the origin of this chart can be traced back directly to – wait for it! – the Center for American Progress. You know, that place funded with Soros money so it can pay Van Jones every dime he is worth. So with that in mind, I’d like to add one more suggestion to the chart:

source: soros.org/grants

Gee, when you say it like that it doesn’t sound so good.

Stuff such as this is exactly why the far left lost me 10 years ago.

-Candance