Tag: taxes

national politics & policies responsibility

The Accelerators

“We can do $10 trillion,” declared Rep. Alexandria Ocasio-Cortez (D-NY) last week.

“I know that may be an eye-popping figure for some people,” explained the photogenic pop-eyed pol, “but we need to understand that we are in a devastating economic moment, millions of people in the Unites States are unemployed, we have a truly crippled health-care system and a planetary crisis on our hands, and we’re the wealthiest nation in the history of the world.”

In other words, the sky is falling . . . and we still have checks.

The Bronx congresswoman, described as “one of the most influential members” by MSNBC’s Rachel Maddow, trumpeted that tidy sum in response to last week’s “go big” proposal by President Joe Biden to spend a special new $2.2 trillion under the loose label of infrastructure, which AOC argued “is not nearly enough.”

This new two-tril spending bill is “a follow-up to the $1.9 trillion stimulus approved in March.” And just Part 1 of a two-package infrastructure and other stuff Biden plan.

“The White House is reportedly willing to spend $4 trillion across the two packages,” Business Insider reports, “a sum that would bring recovery spending under his term to nearly $6 trillion.”

Biden’s term has been only 76 days.

A couple trillion here, a couple trillion there and pretty soon you’re talking real money . . . except under Modern Monetary Theory, which Ocasio-Cortez embraces. The idea being: government can print as much money as politicians want to spend.

While this road to bankruptcy has been paved with the partisan political intentions of big spending politicians of both major parties, right now it is the Democrats hitting the gas.

This is Common Sense. I’m Paul Jacob.

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Tags bankruptcy, inflation, spending, taxes

tax policy

Just Never Satisfied

The top federal income tax rate is currently 37 percent.

It’s been higher — 94 percent at one point during the Second World War, 91 percent in the 1950s . . . on income above a certain threshold.

Back in the 1890s, the federal government briefly taxed income at 2 percent. It was quickly struck down by the U.S. Supreme Court as unconstitutional.

Those were the days.

In 1913, the 16th Amendment was ratified, giving Congress “power to lay and collect taxes on incomes” overriding the constitutional provisions that the high court had cited in 1895. The first federal rates were 1 percent for the lowest income bracket, 7 percent for the top bracket, on income above $500,000.*

By 1916, the lowest percentage was 2, the highest 25, on income above $2,000,000.

The good news: skyward tax rates aren’t set in stone. The bad news: once a precedent for a new tax has been established, you can expect worse to come.

So what happens if California Assemblyman Rob Bonda gets his way? He seeks a tax of “just” 0.4 percent on the accumulated wealth of “just” “the top 0.15%” wealthiest Californians, “about 30,000 people.” If these wealthiest leave the state, they would still be subject to the tax for ten years(!).

Presumably, this latter, and quite brazen, aspect of an already brazen tax would be subject to constitutional challenges.

If Bonda’s proposal is enacted and upheld, would the scope of its reach stay put at 0.4 percent of holdings and 0.15 percent of Californian taxpayers?

It would not.

This is Common Sense. I’m Paul Jacob.

* That was a lot of money back then — worth $13 million today.

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Tags poverty, taxes, wealth

deficits and debt tax policy too much government

No Shock and Awe

They’ve crunched the numbers and the shocking truth is . . . Democratic Presidential candidate Joe Biden wants to raise taxes and debt.

The word “shocking” needs quotation marks, of course, for sheer lack of any shock whatsoever.

Also not shocking is who pays.

You see, “80 to 90 percent of the total proposed tax increases in Biden’s plan would fall on the top five percent of earners,” according to the Committee for a Responsible Federal Budget. That is the target taxpayer cohort, anyway. Economists know a hidden truth: the incidence of a tax’s burden shifts. All taxes siphon off production, but — because production is engaged in for consumption’s sake — in the end consumers pay.

In politics, of course, the idea is not to acknowledge this, instead focusing on the targets, tempting voters to get on board with spending and taxing and borrowing just so long as some other (preferably non-voting) people pay.

“While tax burdens would rise by 0.2 to 0.6 percent for most households, they would rise by 2.3 to 5.7 percent for the top 20 percent of earners and by 13.0 to 17.8 percent for those in the top 1 percent in 2021.” The Democrats would have the highest earners in America pay an extra “$300,000 per year” and call that a benefit . . . to those who would pay less.

Meanwhile, the “additional revenue that would be raised through Biden’s tax plan would only pay for a portion of his overall spending agenda.” It would take “$6 trillion more . . . to stabilize debt-to-GDP at today’s near-record levels.”

According to the CRFB, because of pandemic panic spending, and before any proposed Biden add-ons, “debt will grow from 79 percent of GDP before the crisis to 101 percent by the end of 2020 and 118 percent of GDP by 2030.”

Have our politicians set out to revise Ben Franklin’s maxim? There is nothing more certain than death and taxes — and debt.

This is Common Sense. I’m Paul Jacob.

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tax policy too much government

California Schemin’

Is California a failed state? It has an electric grid problem. And a vagrancy problem. Both of which stem from the bizarre ideological blind spots of a political class “benefiting” from the state’s high legislator/citizen ratio, which insulates politicians from feedback.

Driving them power mad.

And one form of madness flowers in political greed, hubris and overreach.

“A pack of Democratic lawmakers in California are proposing a wealth tax for the state’s richest citizens, forcing them to pay more essentially just for owning a lot of stuff,” writes Scott Shackford at Reason. “They also, amazingly, want the tax to follow Californians who flee the state in response, attempting to make them continue paying taxes on wealth that’s not even in the state.”

Rob Bonta, Oakland’s Democrat in the Assembly, says the Golden State needs more gold, and he has made a startling observation. Wait for it. “Rich people have money,” Shackford summarizes, and Bonta wants to take it. To expand services.

But surely service expansion is not only not the only option, it is often the worst option.

Take the state’s rolling blackouts. Was that caused by not enough or really bad legislation? President Trump points his finger at the Democratic-controlled Assembly: “In California, Democrats have intentionally implemented rolling blackouts — forcing Americans in the dark. Democrats are unable to keep up with energy demand,” the president tweeted on Tuesday. But the New York Post identifies as a cause not “intentionally implemented” blackouts, but “inadequate transmission and an over-reliance on renewable energy and issues with natural gas plants during high heat.”

Bad policy. Not too few “services.”

And the proposal to tax the richest Californians — or former Californians — to pay for more disastrous programs?

Hubris and greed.

Not Common Sense. I’m Paul Jacob.

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