American Republic Online

Just a friendly reality check for those believing the lie that Bush’s tax cuts helped the rich and hurt the poor.  Sorry, the numbers don’t lie. We know, sometimes the truth hurts… the liberal world view.

Washington is teeing up “the rich” for a big tax hike next year, as a way to make them “pay their fair share.” Well, the latest IRS data have arrived on who paid what share of income taxes in 2006, and it’s going to be hard for the rich to pay any more than they already do. The data show that the 2003 Bush tax cuts caused what may be the biggest increase in tax payments by the rich in American history.

The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. Barack Obama says he’s going to cut taxes for those at the bottom, but that’s also going to be a challenge because Americans with an income below the median paid a record low 2.9% of all income taxes, while the top 50% paid 97.1%. Perhaps he thinks half the country should pay all the taxes to support the other half.

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The Wall Street Journal has a piece that shows that even though food prices are at all time highs, farms are still a great way to spread around some political love:

We can’t wait to hear how Members of Congress explain their vote this week for the new $300 billion farm bill. At a time when Americans are squeezed at the grocery store, they will now see more of their taxes flow to the very farmers profiting from these high food prices.

This year farm income is expected to reach an all-time high of $92.3 billion, an increase of 56% in two years, making growers perhaps the most undeserving welfare recipients in American history. But that won’t stop this bill from passing the House and Senate by wide margins. Speaker Nancy Pelosi was once a farm subsidy skeptic, but she now has some 30 freshman Democrats from battleground rural districts to protect. So more than $10 billion a year in giveaways to agribusiness is a necessary taxpayer sacrifice to keep her majority.

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That’s right since leaving the White House the Clintons have sure found a lot of GREEN. They couple’s recently released tax returns show that they have made $109,200,000.00 since 2007. That’s an average of $15.6 Million per year. Which makes you wonder if Hillary has her fingers crossed when gives campaign speeches about how she’s going to stop the evil rich or when she explains how she can empathize with the poor and downtrodden in this country.

Something I’ve always wondered: if the Big Wig Democrats actually believed the things told to the adoring masses, why don’t they donate their own money to the government? I mean it’s a widely held democratic belief that the rich are “bad” and can “afford” to give more of their wealth to the government… so where is the leading by example? I think this question could be asked of any multi-millionaire Democrat, (I’m looking at you Hollywood) but particularly a leader of said political movement. If the government is the best method to more justly/correctly/fairly distribute the money that the rich don’t need to help those that do need…. doesn’t it follow that wealthy politicians (that claim such beliefs) should just give the portion of wealth that they don’t need to the government? I mean sure raise taxes as soon as you can, but you don’t have to wait to help the masses with your money - right? Right?
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This looks promising:

A U.S. Treasury report on ways to cut corporate taxes will include discussion of a national sales tax, a senior Treasury official told CNBC.

The U.S. currently has no national sales tax, also known as a value added tax, or VAT, though many states do. The tax would be one option to help offset revenue lost from lowering corporate taxes. The report is due in the coming weeks.

Of course, a sales tax is not the same thing as a VAT tax, but it’s encouraging that the government is recognizing that we can’t keep taxing business as much as we do and expect them to stick around (or even incorporate here). Note this, it’s important (emphasis added): Read the rest of this entry »

Warren Buffett has issued a challenge to his fellow billionaires:

“I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists.”  

I don’t think I’d take that bet.  As Phillip Ruffin points out, “He is forgetting about the 55% estate tax at death that goes along with making the money…”  and with that it is probably more than the receptionists’ combined lifetime earnings.  However, Buffett makes a very good point: the very rich don’t really pay taxes.  It comes down to a pesky little thing that politicians don’t really bring up.  The whole “raise taxes on the rich” really means “raise taxes on the high income earners.” You see, our system of taxation is based on income, not wealth.  Once you reach a certain amount of wealth, you tend to not bring in as much income, and as a result tend not to pay much income taxes.  It is a fine line, but a big difference.  So when politicians promise to raise taxes on the rich, they are really raising taxes on those in higher income brackets.  It really has little to do with the really really rich.  When they point to people like Paris Hilton and Bill Gates and say we need to raise taxes on the rich, they do so with a wink.

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Via the Instapundit:

A Google Earth map of where pork barrel spending goes:

If the Democrats have their way,

“We would actually have for more people higher tax rates than what we had under Jimmy Carter” is the way Lawrence Lindsey, former director of President Bush’s National Economic Council, described to me what might happen if the tax reform bill from House Ways and Means Committee Chairman Charlie Rangel ever became law.

So says James Pethokoukis. It would seem that they think the White House will inevitably be blue come January, 2009. I have little doubt that they will try their hardest to bring taxes back up. However, the allusion to Carter raises an interesting thought: what happened after Carter? Reagan Revolution anyone? This follows a similar thought I commented on a couple weeks ago:

If [Thompson] loses the election (or nomination for that matter) it would be on principle: he stuck to his guns. Or, as Henry Clay once said, “I’d rather be right than president.” And then if a Democrat wins and promotes a “progressive” agenda [or raises taxes like crazy], he can point out his unflinching conservative principles, and float to a win in 2012.

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Disguised as a “fix” for the Alternative Minimum Tax, the Dems have proposed a 4% surcharge on anyone making over $150k ($200k for couples). This coupled with the decision to let the tax cuts that spurred our economy to new records expire (an easy way to raise taxes) means the top bracket for individuals will become 44% in the US. For comparison, the average for developed countries is 35.7%.

Now some of you may say that such wealthy people can afford to give us all their money. Unfortunately, small businesses owners and farmers, often pay taxes as individuals not as businesses (like corporations do). So if you’re out to screw the rich - remember that when the family loses their farm, or the small business down the street has slow customer service because they had to lay off some help to pay the new 9% of taxes.

And it’s actually even worse: the 4% increase is a surcharge not a rate hike. The difference? Surcharges are applied before tax deductions. Got a kid in college? Paying all that mortgage interest? Gave a large donation to Katrina relief? Doesn’t matter… 4% on it ALL.

So on top of punishing the successful, we’re now going to take away their incentive to give money to charity? Though, I guess if we just take even more of their money away it won’t matter if they give to charity ’cause the government can fill that void as well. Well at least until they rich take their money & income to another country to avoid the taxes. 50%, 70%, even 100% of nothing is less that 35% of something. Read the rest of this entry »

So the tax implications of Barry Bonds’ 756th home run ball has been discussed by several “experts” and all have failed to see the obvious: this is utterly ridiculous. I can’t think of something more American than eating a hot dog, drinking a beer and catching a home run ball while enjoying America’s past time: baseball.

And I can’t think of a better example of how deranged our tax code has become that we have made it economically infeasible to keep said memento. Seriously, you go to a game, you catch a ball, you suddenly owe the government $250,000+!!! Why is no one else objecting to the seer lunacy of this? “I feel like I’m taking crazy pills!” (Mugatu)

If poor Matt Murphy had decided not to sell his souvenir he would still owe 35% of whatever the IRS guess-ti mated it’s worth. The fair market value of a one of a kind ball (until the record is again broken) mixed with the taint of an asterisk? We’re talking a range of hundreds of thousands of dollars here. So who picks the worth?

Now I’ve heard several people argue that the ball’s value IS that so high because a few people would be willing to pay an exorbitant amount for it. But lets take that logic and apply it else where - like Real Estate. The South, lately, has been getting an influx of people retiring from the North East. These people are paying 2 to 3 times the normal rate per sq ft for homes marketed to them because they’re idiots their cost of living comparison is such that those homes still seem cheap to them. Does the fact that some people are paying 3 as much for a house down the street from mine triple the value of my house? Did clever distance marketing just triple my property taxes?

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