Ammunition

Haven't been posted much at all lately. New job is keeping me pretty busy plus I don't have ready access to a computer most days.

Ran across an article over at Legal Insurrection that I just had to link to. I will provide a few details here:

-Bush Tax Cuts for the Rich: 13%, for the middle class: 33%

-The top "1%" paid $84 billion more in taxes between 2001 and 2008. This despite an overall decrease in the tax rates. Funny how it works; when you let the people that spend money to make money keep more of that money (less tax), they tend to spend even more money to make even more money. Liberals pundits derisively call this trickle down. But let's face facts: When rich people spend money to create more money, it tends to create jobs for the rest of us. (More below)

-The bottom half of taxpayers paid $6 billion less from 2001 to 2008. This decrease occurred even though middle class wages were on the upswing. The decrease in middle class wages is only a recent development. Oddly enough, this wage decrease has occurred over the past four years. Lines very precisely with Obama's firsts reign of terror.

-Tax revenues went from $793.7 billion in 2003 to $1.16 trillion by 2007. Again, this was an increase in tax revenue despite a tax rate decrease.

Comment Response

While clicking through my local newspapers this morning, I came across this linked article. In it the writer makes his case for how the federal budget crisis we are currently under had its roots in the spending practices of the previous administration, while barely casting any blame on the current administration. As I read through his column, I began to formulate a response that I was going to post in the comments section. However, the more I wrote, the longer the response. So I decided rather than post it where my readers might not be able to find it, I will put my response here.

Enjoy

OK, decent article that has obviously been researched. But Talton, as a journalist you should that numbers and figures are journalism 102 (101 being who, what, when, where, and why (or how)). The statistics did make the point that spending is out of control, and the wars didn’t help matters.

They have been fought on credit (Iraq and Afghanistan). Instead, President George W. Bush pushed through tax cuts, heavily weighted toward the rich, that added another $1.8 trillion in red ink – and this was before their extension under President Obama last year.

You kind of forget to mention that the tax cuts that favored the rich also coincided with a nice long run of economic prosperity after the recession brought on by the 9/11 attacks. Gross domestic product had an average rate of just under 4% (this includes 2009 which really screwed up the curve). Our unemployment rate hovered near 5%. In terms of strict numbers, it is quite possible the tax cuts did cost the US Treasury $1.7 trillion dollars.

But why don’t we look at this from another direction. Each state in the Union collects taxes for the state coffers. Some states collects taxes through sales taxes, other through income taxes, while others still collect taxes using a combination of both. While this might be comparing Red Delicious Apples to Granny Smith Apples, I think it is worth exploring. During the recent economic downturn the state of Washington has come up close to $7 billion dollars short in tax revenue because of unemployment and people pinching their pennies. ($5.5B actual, $1.5B projected). At 6.7 million people, The Evergreen State has just over 2% of the US population. If we were to project out this $7 billion and 2%, we can come up with a possible state level revenue shortfall of somewhere near $330 billion. Keep in mind this is only state level revenue generation, which is typically lower than the federal government (except for maybe California and we’ve seen how well they’ve done with all that tax revenue).

Weekend Links

LOCAL:

1. King County (Seattle) has seen a slight uptick in the unemployment rate from Feb to Mar. As goes King County, so goes the rest of the state.  Since our region was probably hit last in the “Great Recession” we’ll also probably be last to feel the slow economic recovery. Overall, the unemployment rate has improved slightly over the past year.

2. The Washington State Legislature has tried in vain for several years to raise taxes on us but have failed miserably every time as residents have defeated legislation efforts with initiative. But I think Olympia has finally found a way to raise some tax revenue that won’t upset the residents too much. They are going after the Canadians.

3. While this news is terribly surprising to me, the man arrested for attempting to bomb the MLK Day parade in Spokane earlier this year has ad links to a white supremacist group. Kevin William Harpham, a former Fort Lewis soldier, has been arrested by authorities in Spokane and has been linked to the Neo-Nazi group, the National Alliance.

Some Local News

Here is a story from Seattle’s TV station, KOMO-4. The actual story is touching, about a woman whose baby needed her to be a stay at home mom due to a condition known as Pierre Robin Sequence. As a result of her only working part time she had to become a part time employee and lost her health care insurance. Without health care she had to rely on a public health nurse through Maternity Support Services.

Recently, WA Governor Christine Gregoire announced that she would not sign a budget that was not balanced. Currently, the state is facing a $4.6 billion shortfall. Because shortfall and the Governor’s pledge, budget cuts are going to happen across state agencies. How does this and previous paragraph relate? One of the cuts was in King County when 123 health care workers in received layoff notices. The baby mentioned above received care through these health care nurses.

These are the kind of things that happen when a government spends too much and isn’t prepared for a time when the revenue stream is cut back due to a poor economy. Earlier this year, the WA Legislature raised taxes on bottled water, candy, and sodas as a means of raising money. In Nov, the people of WA soundly rejected this tax increase through the initiative process. Suddenly, a stream of money disappeared. This story and others like will be repeated across the state and the nation as we face the harsh reality that we have spent too much money, people are tired of being taxed to death, and cuts have to be made.

As I point out in my “about me” page, living in the Pacific Northwest can be interesting due to the liberal culture. But one thing Washingtonians don’t like is taxes, especially those imposed without our consent. Strange, I know.

BTW: the little girl made a full recovery.

Tax Bill

Not quite sure haow I feel about the House passing the bill to continue the Bush tax cuts. On the one hand, it does mean our taxes won't go up on 1 Jan 2011. On the other hand, we'll have to have this fight all over again in two years. At least it will give the folks a reasonable gauge on what their income will be for the next two years.

I am also not liking the "death tax", but at least it was held at 35%. What right does the gov't have to money and property that was already earned and taxed? One congress-critter tried to make the argument that since the person was dead, the money was no longer theirs. True enough. But it has already been taxed once already from a variety of different money-grubbers. The death tax can be a burden on the family who receives the property. If the it is a business or land (say a farm) that is involved, the heirs are required to pay the death tax, which will stand at 35%. If the property owner and the heirs are land rich but cash poor, they will be forced to sell the property to pay off the tax burden. And will they also be required to pay income taxes on the proceeds after the death tax is paid? I don't know the answer to that question but it sure sounds like something the gov't would do.

I wish the republicans had held out for a longer deal on the tax cuts. Maybe they could have put a bill together after the New Year. But the risk would be that President Obama would veto the bill. He is not a fan of the "wealthy", having already stated that at some point you have already earned enough money. So taxing the rich is something he really wants to make happen. But at least it has been held off for a couple of years and can be re-engaged at a later date. Hopefully we'll not wait until the last minute next time around.

I am also not a fan of the unemployment benefits extensions. I know there are lots of people hurting out there and there has to be something to protect them. But we now have people on the unemployment dole for more than two years. There are jobs out there to be had, you just have apply/submit your resume.

Bush Tax Cuts

Well, it looks like Obama has finally caved to the demands of the American people. It’s about dang time. For a little while, it looked like he was going to go against the will of Americans once again, like he did with Health Care, Stimulus, and Wall Street bailouts. And now that the compromise has been reached, the progressives are up in arms. Facts just don’t seem to get through to these people, or at least they don’t care about the facts. Economic prosperity has almost always followed big tax breaks. We had growing economies after the Kennedy, Reagan, and Bush tax cuts. And hard times follows tax increases. If you look at the trend of the Great Depression you should note the country was coming out of the troubles and then FDR passed what was then the largest tax increase and our economic trend plummeted. Taking money away from the people who spend it is not the path to economic growth. The government cannot spend money as efficiently as individuals. When you and I spend money, we have the ability to stretch the dollar further and across a wider scope. The government is utterly inefficient at spending money so it doesn’t go as far and doesn’t have the same impact as an individual spending the money.

On the downside (sort of) is the extension of the unemployment benefits.  As someone who is currently unemployed, but not receving benefits, I sort of understand why these are being extended. But I can't overcome this feeling that we are forcing people to look for work. I have too many anecdotal stories about people getting benefits and either not looking for work or working under the table. This bothers me a great deal.  BTW: I don't receive any benefits because my military retirement check is too big. My expenses have barely changed, but my income has been reduced by almost two-thirds.  I am about ready to go work at McDonalds just to have some additional income.