Kowabunga

I have been giving some thoughts to the "Fair Tax" plan being pushed by various Libertarians and others. As it is a consumption tax, I am, in general, favorable to it, especially as a replacement to the current tax on income and property. Based on what I know, and feel free to correct me in the comments section, the plan calls to incorporate the tax in the final price of goods and services at 23%, and then provide some sort of monthly rebate to cover spending up to the poverty level based on household size.

First, I would be very leery of the Fair Tax plan being passed as anything other than a Constitutional Amendment that simultaneously repeals the 16th Amendment, which is what gave the Federal Government the power to tax income. Anything short of this positions the Federal government to go "double-down" and hit Americans with continued income taxation AND consumption tax via the "Fair Tax." The understanding I have is that the current plans call for implementing the "Fair Tax" as legislative law, and then put a sunset clause on it so as to provide a timeframe to repeal the 16th Amendment. One problem with this plan is that sunset clauses have a tendency to be extended until they are, for all intents and purposes, become permanent, and then we would have both income taxes and consumption taxes.

Second, the plan calls for the tax to be built into the final price such that 23% of the price is tax revenue: $100 of product includes a $23 tax. The problems here are that it is lacks transparency as you don't "see" the tax on the product as you do with conventional sales taxes, and you are actually paying closer to a 30% sales tax (100-23=77, 23/77=29.87, tax is rounded to 29.9%). It would be more transparent to apply the same rate, 29.9%, to the total purchase price. The end result is the same as far as tax revenue based on purchases, however, by having it added on so that you see how much the tax is, it becomes transparent and less likely to mucked with by Congress without the knowledge of the electorate. I think that this is important as if it is included in the final purchase price, and not separated, most people would not notice any increase in taxation should Congress decide to be greedy and push it up to 35%. Nor would we notice should Congress develop the wisdom to reduce such a tax to 25%. Transparency in taxation is critical!

The tax would only apply to the purchase of new goods and excluded from the resale of used goods, such as the '66 Mustang convertible, or that beat-up copy of a good book. This makes since, and will stimulate the purchase of many types of used goods, and will be a boon to eBay sellers. This part of the plan makes a lot of since as demand for some types of used goods will go up some, with the price going up accordingly, to help counter-balance the taxes on the purchase of new, similar products. Basically, will you be better off buying a 2006 Mustang convertible with 20,000 miles on it where the tax has already been paid, or buying that brand new 2009 Mustang convertible and paying the tax? Depends on product availability and the desires of each individual consumer.

The rebate to counter spending up to the poverty level, although good on paper, will meet with substantial resistance in that it can be argued that it is setting up a new welfare system and includes payments to all Americans, regardless of household income. It also requires a certain amount of government bureaucracy to maintain it, and government to determine at what rate the rebate will be in subsequent years, based on changes in inflation and poverty level.

A better approach may be what is used in many states that currently have a sales tax, rather than having a rebate plan based on spending up to the poverty line. I'll use the Minnesota model as it will make more since for the implementation of a national sales tax. Food purchased at the grocery store (or similar) should be exempt, except when purchased at a restaurant. Going to McDonald's and buying a hamburger is taxed, just as a nice steak dinner from Timberlodge. Going to the store and purchasing buns, meat, lettuce, tomatoes, etc., would not be taxed. Same would be true for "take and bake" purchases (Papa Murphy's!). Most clothing should not be taxed, with the exception of formal wear. You don't need a tuxedo for every day living, but we all need basic work-a-day clothing, whether we're talking jeans and a shirt or a suit and tie.

The plan also calls on taxing all services. I would probably want to put an exception in place for lawyers, not because I like them, but because having access to legal advice has become such a necessity in our daily lives that placing a hefty tax on their services would be a big burden on people who need them the most: people struggling to make a living. This would be especially true for family law attorneys. Besides, all of those tax attorneys will need to respecialize in a new field with the elimination of income and corporate taxes, or they'll end up flipping burgers at McDonalds. Hmm…on the other hand, that may not be such a bad idea.

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Fair Tax

Posted by Sqotty at 8:00 AM | Permalink | Comments (0)
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Michael Wigley of the Taxpayers League of Minnesota writing for the Red Star Tribune this week makes some interesting points in respect to a column by Lori Sturdevant recently published by the Strib.

Sturdevant unwittingly defines a fundamental liberal problem in her first paragraph:

"Reform of big, Byzantine public systems is cyclical work. It generally takes years of hand-wringing, analyzing and politicking to build a head of steam for noticeable change."

That should be a comforting thought to parents, especially in Minneapolis and St. Paul, sending their first-grader off to the big, Byzantine public school system. While legislators and bureaucrats are hand-wringing, analyzing and politicking, children are not learning to read or write or do arithmetic, but perhaps by the time the children are in the sixth grade ...

I'm not sure if anyone can be comforted by sending their kids off to a Byzantine public school system. I don't know how complex/intricate the public school systems are, but Wigley is right in that many kids are not being taught the basics (reading/writing/arithmetic). There are numerous failures in a system that is allowed to produce people that are not able to make change at a cash register without having a "deer in headlights" look on there face when you hand them when you hand them $5.52 for a for a $4.42 charge. (I have encountered this type of scenario numerous times when dealing with cashiers.)

It worries me that schools are resorting to computer technology for kids to use and perform their homework on rather than teaching them to use inherent cognitive processes. How are kids supposed to learn to spell correctly and use proper grammar when all they have to do is click spell check on a software program?

Wigley continues:

DFLer Mindy Greiling of Roseville wants to simply tweak the funding formula and add a billion dollars a year to the budget. In other words, the problem is not that children are not being educated; the problem is that the system is being challenged and needs to be supported better.

Or more accurately, the system doesn't have enough money, which is the constant cry, despite school districts providing lavish compensation deals to administrators. Remember the Apple Valley superintendent that was paid off to the tune of a half million dollars a few years back? Is there any sane person who would consider that a good use of taxpayer money? Or how about the Minneapolis case where the contract was broken by a administrator who wanted to go to Atlanta because the money was better? She broke her contract over taxpayer money! These are the poster child examples of the liberal cry of "It's for the children!" every time they call for new and bigger taxes to fund the schools.

Wigley then has this quote from Sturdevant:

"We'd love it from the feds ... . But when public work needs money, Minnesotans are acculturated to look first to state government."

Wigley correctly points out that regardless of the level of government, the money always comes from the taxpayers: that would be you and me and everyone else. Wigley also points out that the more layers of government involved, the greater the amount of bureaucracy and the less the money will actually buy. This is true whether we are talking education (public schools), welfare, social security, or nationalizing health care. The more layers of that is government involved, the less you get and the lower your return on your dollar, and the greater the amount of government waste there will be.

This is way the State and Federal governments should get out of the practice of providing certain social services, most especially the public schools, which should be controlled and funded specifically by the communities that they serve, as well as welfare programs (which would be best served if handled at the county level rather than involving higher levels of government). There are those who will cry out that some schools, especially those in poorer districts, will be shortchanged. Maybe, but there should be ways to handle that at the local level without involving higher levels of government that will introduce a lot of bureaucratic red tape and wasting taxpayer dollars by paying for more bureaucrats. One needs to remember that school districts normally cover more than a couple of schools, especially when we're talking mid to large sized cities.

Wigley then asks a question:

The second implication of Sturdevant's comment, and perhaps the more frightening, is that she sees Minnesotans as a people who when faced with a problem "look first to state government" for a solution. Have Minnesotans become so domesticated by years of liberal hand-feeding that we are neither outraged nor embarrassed by the characterization of us as waiting placidly in the corner by our dish for a helping from the government gravy train?

The answer, unfortunately, but not surprisingly, is yes; most people, and not just Minnesotans, have grown accustomed to looking to government, and the bigger the better, to solve their problems. Didn't Reagan say that "Government isn't the solution to your problems, but is the problem" or something to that effect? The fact that many Americans have been domesticated into believing that the only way to improve our education system is through big government and bigger taxes tells us exactly how big of a problem conservatives will be facing in coming years. It's scary to realize that so many people believe that the way to solving America's problems is through top-down big (expensive) government, rather than relying on local government where most social services are concerned (like schools and welfare). One way leads to a welfare nanny state, the other leads to responsible local government.

One thing that people need to remember is that its far more difficult to justify tax increases to the people that will have to pay them if the elected officials have to look them in the eye every meeting. This is something I have been learning while serving on my town board; we don't have the power to levy a tax, only recommend and justify the money needed to run the township. That's local control and responsible government. That's what the founding Fathers envisioned for America: That the powers granted to government should be granted to the level of government that is most closely aligned with the people (local, state, and Federal), and no higher than is absolutely necessary.

Liberalism (or Progressivism as they now want to call it) can only lead us down one path and that is to the welfare state, wasting our money and bilking working Americans out of their hard earned money, while continuing to fail to educate our children the basic tools they need to succeed in life.

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Star Tribune Wigley Sturdevant Liberal Education

Posted by Sqotty at 6:48 PM | Permalink | Comments (0)
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The Dems are going crazy over Global Warming. with Rep. Dingell (D-MI) leading the charge by proposing a 50 cent excise tax increase on gasoline, phasing out mortgage interest deductions for homes over 3,000 square feet in size (supposedly to fight suburban sprawl), carbon tax of $50 per ton (watch your energy bill go up), all in the name of combating green house gases that some people wrongly theorize is causing the current warming trend.

Earth to Dingell, ever read a science book?

He calls these tax increases "fair" as it will mainly fall on 10% of Americans, mainly those people in the upper-end of the middle class.

This type of extremely taxation over a scientific fraud not only goes against the grain of what is best for America, it will also cripple the economy. A lot of people who have busted their behinds to afford a nice home to raise their families will be forced to sell their homes, most likely at substantial losses as they will no longer be able to afford the increased tax burden brought on by removing the deduction for mortgage interest. (For disclosure, yes, there is a high probability I will be impacted by this, because, although my home is 2100 sq. ft. in size, it also has a full walkout basement. And I am by no means wealthy.) If you think the house market is bad now, just wait until you have a few hundred thousand nice houses tossed on the market because the owners are being taxed out of their homes.

This whole global warming thing has gone too far. It has been clear to me that it is nothing more than a excuse to raise our taxes. Now the Dems are coming out of the closet and have declared war on the American Middle Class.

Because, let's face it, if you think Al Gore, John Kerry, John Edwards or any of these other filthy rich owners of multi-million dollar homes will be impacted by the phase-out of mortgage interest, forget it. Do you really think these people carry mortgages on those homes? Or will there be built in loopholes that will allow them to become exempt?

From Washington Post:

A carbon tax would impact everything from the cost of electricity to winter heating and add to the cost of gasoline and other motor fuels. But economists say a cap on carbon also would raise these costs as burning fossil fuels becomes more expensive.

If the Dems are serious about reducing carbon emissions, then they should first look into eliminating their multi-million dollar homes then remove the barriers to building new modern nuclear power plants and allow for the reprocessing of fuel rods.

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Dingell Loons Gone Wild Carbon Tax Economy Congress Energy

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Obama wants to put in play one huge tax increase. Although it may not directly impact the average American as what Obama is proposing is eliminating the cap on Social Security taxes, not, in this case, a regular income tax increase. The current cap is $97,000 and is adjusted fairly regularly (it wasn't all that long ago that the cap was $60,000).

The claim is that it would generate $1 Trillion dollars over ten years, the theory being that it would be sufficient to cover the projected shortfalls.

There are some pitfalls, some obvious and ignored.

The ABC News report sights that removing the cap will erode support for Social Security amongst the 5% (or so) of Americans that would be directly impacted. It states that this would be a 12.4% tax increase.

Part of the problem with removing the cap is that companies that pay high-end executives, especially CEOs exorbitant salaries will pass that cost on to consumers in the form of higher prices for products and services. This will impact just about every aspect of American life, from the price of a loaf of bred to a gallon of gas and the cost of a lawyer.

Many companies will seek a way to keep the high paid executives and other professionals happy by switching them over to more incentive based compensation: stocks.

It will also impact professional sports (which may not be a bad thing) as those players with the huge multi-million dollar salaries (I trend I disagree with) will be impacted, as will the franchisees that operate the teams. If you think the price of going to a ball game is high now, wait until Obama has his way on mucking up social security.

Further, although they predict it will generate sufficient money to shore up the system, it is doubtful that it will as a more likely scenario is to throw this country into a recession while companies figure out how to readjust their prices so that they can pass the tax onto the consumer.

Edwards is floating a proposal that isn't much better as it leaves those workers earning between $97K and $200K exempt and then kicks the tax back in for those earning more than $200K. Members of Congress would still be able to opt out of the Social Security program under either plan.

"With their proposals to raise Social Security taxes, it appears that John Edwards and Barack Obama are engaged in competition to see who can wreak more havoc on the economy," said Club for Growth spokeswoman Nachama Soloveichik. "Obama comes out the winner with his proposal to raise Social Security taxes on more Americans than Edwards proposed in his plan. But make no mistake: While Obama's plan is worse, both plans would significantly increase America's tax burden; devastate the economy, and turn Social Security into a full-fledged welfare program."

Although the piece does not elaborate on what Soloveichik means by wreaking havoc, when you take into account that half of that 12.4% is employer paid payroll taxes, that means it gets passed on to the end consumer.

"Middle class and working families are paying a much higher percentage of their income [than wealthier Americans] -- that was Warren Buffet's position," said Clinton at a June 29 PBS debate, "When you cut off the contribution at $90,000, $95,000, that's a lot of money between $95,000 and the $46 million that Warren Buffet made last year. And he's honest enough to say, 'Look, tax me because I'm a patriotic American and I want to make sure our country stays strong and is fair.'"

There is only one problem with Hillary's statement: Warren Buffett's salary as the CEO of Berkshire Hathaway is $100,000. The vast majority of his income is from capitol gains, dividends, interest and so on, none of which is subject to the Social Security tax.

As for Warren "Tax Me More" Buffett, there is nothing in any law that says you can't pay more in taxes than is required by the law. Since Buffett thinks California's Prop. 13 provided a tax disparity where property taxes are concerned, what's stopping him from paying more into the public coffers. If Buffett were being honest, he would be pushing for a stiff tax on accumulated wealth, not on base income.

The same is true of the leftist-Democrats, whether we are talking Hillary Clinton or Barack Obama. If they truly believe that people of wealth, including themselves, are not paying their "fair share," then they should be pushing for a tax on accumulated wealth. And kick back while the revolution takes place.

Removing the cap on the Social Security tax will not fix the problems inherent in a system that is a pipeline. The only way to fix it is to give the American worker control over that money taken from them by allowing them to invest part (or all) of it in any fashion they wish, including stocks, bonds, real estate, savings accounts or, for that matter, letting government bureaucrats continue to mismanage billions of dollars every year. In a free society, being able to choose how you participate in Social Security should be the norm, not the exception.

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Obama Hillary Social Security Taxes

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It comes as no surprise to me that once again the Red Star Tribune is publishing an opinion piece pushing for a tax increase. This time it is blaming Republicans and conservatives for not wanting to increase taxes to pay for roads and infrastructure. That's what we already pay taxes for. Let's keep in mind that this year Minnesota had a $2 Billion surplus that the Democrats used for a spree of new spending rather than returning it to the tax payers. More on that later as we get into the opinion piece.

Conservatives are exceptionally good at politicizing emotion. From the headlong rush toward a half-trillion-dollar misadventure in Iraq to attacks on immigrants, gays and abortion rights, emotional appeals have brought to power conservatives whose bedrock ideology is no new taxes, no matter what, and shrinking government.

Actually, it is the Liberal/Progressive/Whatever Democrats who are the real experts at manipulating the emotions of voters by using lines like "it's for the kids" when it comes to huge increases in education spending while refusing taxpayers the option of "school choice" via a voucher system. They play on emotions where health care is concerned by claiming millions of Americans cannot afford insurance and thus getting health care, yet there isn't a hospital emergency room in the country that would refuse to treat an uninsured person for illness or injuries. They call the liberation of Iraq a "misadventure" yet millions Iraqis have been able to vote in a democracy for the first time, and live in a free society, albeit one that has to deal with terrorists and sectarian death squads. The right to kill your children is another hot button issue for Liberal/Progressive Democrats as they claim it is "reproductive rights," rather than pushing for personal responsibility and ensuring that all Americans, even those in the womb, will be able to enjoy our unalienable rights of Life, Liberty and the Pursuit of Happiness. Conservatives have never "attacked" immigrants, but rather have pushed for enforcing our immigration laws, including the deportation of illegal aliens and securing our nations borders. Nor have conservatives "attacked" gays; there is a call to pass the Marriage Amendment that defines marriage as being between one woman and one man, which is what has been the norm throughout human history (with the exception of some cultures that have practiced polygamy, but that was still between man and woman, not man and man or woman and woman).

On the flip side of the coin Progressive/Liberal Democrats keep trying to change society through judicial fiat as with gay "marriage" in Massachusetts, or "royal" decree as was done in San Francisco. The claim that illegal aliens are just immigrant trying to make a living, yet these people have and do break our laws by violating immigration law, using forged documents and stealing the identities (and social security numbers) of working Americans. I could go on (and on), but you get the point.

But now that Minnesotans' tears are being shed and their fears heightened over the deadly collapse of the Interstate 35W river bridge, state Rep. Mark Buesgens tells us in his Aug. 10 commentary that this is no time to let emotions rule our collective response. It's a hypocritical ploy from a conservative legislator who has long prospered in the political marketplace of emotions.

Not even 24 hours had passed since the bridge collapse before the Lefties began calling for tax increases and blaming tax cuts for the disaster, yet it isn't transportation taxes that had been cut, but other taxes, and Minnesota ended up with a $2 Billion surplus, not a shortfall due to tax cuts. Who's playing with people's emotions? The Progressive/Liberal left.

Along with strong emotions, however, an unexpected bridge collapse legitimately and reasonably raises concrete questions about safety, maintenance, design, construction and political funding. Elected officials, after all, propose, authorize and administer transportation funds. And the public has a right to know about those decisions and to judge the results. That's democracy's ultimate check and balance.

Yep, here he is right, and with a $2 Billion surplus that COULD have been used for infrastructure, the Democrats went "whoohoo" and went on a spending spree like a bunch of drunken Liberals.

If the government has a surplus, we must cut taxes. If there is an ensuing deficit, we can't raise taxes back up, because that would hurt an already weakened economy. If pressing needs arise and public safety is at stake, we must reprioritize government spending, robbing health care or education to fill the gap.

Yep, and as has been shown, the tax cuts helped the economy and revenues grew, and Minnesota had a $2 Billion surplus, because people have more money to spend thus stimulating economic growth and job creation . Raising taxes has an inverse result, depressing tax revenues as people do not have as much to spend which causes economic stagnation and increased unemployment.

As for reprioritizing government spending, Liberals have been very good at robbing tax payers to support Liberal ideas rather than taking care of existing infrastructure. Instead of encouraging those in need to seek a helping hand up, they give them hand outs, thus keeping them on the public dole and encouraging bad behavior.

This is nonsense when pump prices often fluctuate daily by far more than the nickel or dime by which bipartisan legislators proposed hiking the gas tax. There's another difference: When drivers dig deeper for those market increases in the price of fuel, not a penny goes to easing traffic congestion that costs Twin Cities commuters hundreds of dollars a year or to maintaining bridges whose structural integrity is a matter of life and death.

Yep, and the price of a gasoline includes sales tax, so as the price of gas increases, people are paying more in taxes. That does not go towards infrastructure but into the general fund.

Facts, although they are stubborn things, haven't persuaded us to fix Minnesota's neglected transportation infrastructure, even as the funding shortfall approaches $2 billion a year. Maybe it's time to inject some good old-fashioned emotion into the debate.

Yep, facts are stubborn things, like a $2 Billion surplus squandered on new spending rather than used to cover the transportation infrastructure shortfall that deFiebre points out. Minnesota has spent a heckuva lot of money on light rail rather than on roads and bridges where we need to use it. And that $2 Billion surplus, as part of the State's general fund, could, and should, have been shifted to transportation uses.

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Star Tribune Minneapolis Bridge

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There is discussion going on in Congress to repeal, or at least provide relief, from the Alternative Minimum Tax (AMT). The problem is, they can't agree on who is wealthy and what the line is to dfine who is in the middle-class and deserving of a cut, versus those who are not.

Here's a concept: every American deserves a tax cut. Just abolish the AMT in total. Problem solved. Better still, revamp the tax code to a simple one page code that says every American will pay X% of their income regardless of income. Again, problem solved, and it makes filing our taxes easy. One tax rate can fit all. And the lower it is, the better.

From the Washington Post:

The debate has focused attention on a different surtax proposed by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution. That plan would eliminate the AMT and replace it with a 4 percent surcharge on income over $200,000 for families and $100,000 for singles, cutting taxes for 22 million households and raising them for more than 3 million.

"Our plan is as simple as can be. And only 2 percent of the whole population would have to pay it," said Leonard E. Burman, director of the Tax Policy Center. The plan has the added benefit of abolishing the complicated AMT at all income levels, Burman said, an approach some lawmakers find attractive.

Except for the 4% surcharge on people making $100K, or families with $200K incomes, the plan sounds pretty good.

But wait, there's more:

On the other hand, fewer families' taxes would be cut, diminishing the ability of Democrats to capitalize on the plan politically. Since they took control of Congress in January, Democrats have made repealing or scaling back the AMT a top priority in hope of establishing tax-cutting credentials and seizing the issue from Republicans for the 2008 campaign.

Of course no issue is not without politicization. It's all about the Demos trying to look good to the voters, especially the middle class who makes up the majority of voters while sticking it too the so-called wealthy, or roughly 2% of the voter base, that carries the bulk of the tax burden.

Why am I not surprised.

The bottom line is that our current tax code is a voluminous mess that is greatly in need of being replaced with something that anyone can understand, rather than everyone making more than minimum wage being forced to hire a tax professional to deal with all of the convoluted laws.

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AMT Tax Reform

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The DFL controlled Legislature here in Minnesota voted to increase the gas and other taxes, costing Minnesotans upwards of $500 per year (guesstimated, which means it will be more). Pawlenty has promised a veto, so it looks like it is time to contact your representatives and let them know they need to sustain it.

Although some of the taxes would be leveraged for roads and bridges solely, there is also a lot of the hoped for revenue would be used to support transit, a.k.a. the light rail boondoggle.

The estimates for revenue raised would be over $6 BILLION, which means the people of Minnesota will have that much less money to spend (or invest) as they choose, stifling economic growth in the state.

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Gas Tax Minnesota

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It was a real struggle to get these uploaded as they kept stalling out, however, I finally got the darn things up. I had to split them into two videos due to length.

Part 1:

Lot's of jabs being poked at the sierra Club and the Global Warming rally taking place a few hundred feet away.

Part 2 (may still be getting processed by youtube...should be availble sometime today):

Part 2 features most of the anti-tax parody of "Green Eggs and Ham." My camera ran out of memory close to the end of it. I definitely need to buy a real video camera and not rely on my digital camera for video as I missed out on a lot of other good stuff.

Tax Cut Coalition Tax Cut Rally Minnesota Jason Lewis Sierra Club Global Warming

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Today was the Tax Cut Coalition Rally at the Minnesota State Capitol, and I am very glad I headed up early as there was a competing event on the Capital Mall sponsored by the Sierra Club. When I arrived, there were already about a hundred people at the State Capitol for the rally. That was the tip of the iceberg.

By the time the rally actually started, the gathering crowd hit some 5,000 people in size, greatly dwarfing the "Global Warming" rally that was held a few hundred feet away.

Two cohorts from the Townhall Meetup made an appearance. After a bit of chit-chat with Mark and Linda, I drifted off to pursue some additional photo ops.

There was quite a bit of signage, many of which were quite novel in their statements; some poked fun at Al gore, while others were blunt and to the point on taxation.

The list of speakers was extensive, and included several Minnesota State Reps including Mark Buesgens, Mary Liz Holberg, Marty Seifert and a couple of others, followed by Congresswoman Michelle Bachmann and Congressman John Kline, then, last but not least, Jason Lewis of KLTK and the main driving force for the Tax Cut coalition and this rally. And yes, there were several speakers from various allied organizations.

With the Sierra Club pushing its "Global Warming" alarmist agenda within hearing range of the sound system, much fun was poked at them, all of it was good natured.

The running theme of the event was the need for cutting taxes in Minnesota, and reducing state spending, which is destined to bloom by over $3 BILLION in new spending during the next biennium budget. This includes spending the $2 BILLION surplus plus over $800 MILLION in new confiscation, er, taxes.

Although Pawlenty has pledged to veto new taxes, it is clear that he will need the help of all Minnesotans in contacting their State Reps and Senators in order to assure that his vetoes will be sustained.

All in all, it was a great deal of fun and I am very glad I went. Next time, I'll have a real digital video camera instead of relying on my digital camera, which I managed to fill up the memory card in the middle of the rally. I didn't have enough memory to shoot even one picture of the "Global Warming" rally.

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Tax Cut Coalition Tax Cut Rally Minnesota Jason Lewis Sierra Club Global Warming

Posted by Sqotty at 7:10 PM | Permalink | Comments (5)
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Just received a reminder via email that next Saturday, April 14th, is the Tax Cut Coalition's rally at the Minnesota State Capitol. I'll be there, will you?

The gathering is being led by Jason Lewis, and will take place on the Captitol steps at 11 AM.

Be sure to sign up for the Tax Cut Coalition.

Posted by Sqotty at 7:54 AM | Permalink | Comments (0)
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Once upon a time, the United States amended its Constitution so as to allow Congress to implement an income tax. This bill of goods was sold with the understanding that such income taxes would only be applied to the rich. It only took a few years for Congress to use the 16th Amendment to go from taxing the rich to taxing every working American. The same is true when the state of Minnesota changed its own state Constitution to allow for its own income tax plan.

Now, in the state of Minnesota, which has realized some $2 BILLION in tax surpluses, that's where the amount of revenues received exceeds the budget, the Leftists now in control of both legislative houses are planning to not only spend the extra $2 Billion, but also increase taxes so as to justify spending an additional $800 Million.

Their plan to pay for it all includes another "soak the rich" scheme, claiming that the new upper bracket income tax would only impact people above a certain income threshold.

Welcome to Minnesota! Warning: Liberal Leadership at Work!

According the Red Star Tribune's editorial on the matter, this really isn't soaking the rich, merely demanding, I mean asking, that the rich pay their fair share of taxes. Sales taxes, are, in their opinion, not "progressive" enough.

Among the state's major taxes, Stinson says, the personal income tax isn't the underperformer. The sales tax, corporate income tax and business property tax are the slow-growers, relative to growth in the economy. They're regressive to boot. They fall harder on low- and middle-earners than on the wealthy.

First, sales taxes are not regressive, nor do they unfairly hit low- and middle-income earners more than the wealthy. Sales taxes (and their sibling, excise taxes) hits all consumers at the same rate. In Minnesota, food and clothing are not subject to sales taxes, which is where most low- and middle-income earners spend their money. It is, as it should be, neutral in how it is applied to whom. Wealthy people may spend more on consumer goods, even buying more expensive cars (like Mercedes-Benz) than the rest of us, and pay more sales taxes. There is a serious problem with sales taxes, and that is using it, as is being done in Hennepin county, to provide welfare to billionaires who own professional sports teams, and provide these super-rich athletes a place to earn their living at taxpayer expense. Sales taxes are not regressive as the Red Star Tribune would have you believe, but are flat tax rates, and based on how much is spent on taxable consumer goods.

As for property taxes, those are also not regressive. Relaitviley flat in nature, everyone in a given community is taxed on their property at the same tax rate, whether it is 1% of valuation or some other fraction. Nothing regressive about that.

Now, if we were to say that everyone pays the same amount in actual dollars, say $10,000 per person, regardless of their personal income, then that would be a regressive tax. A flat tax rate, say 5% of income (or a 6% sales tax rate on what you consume), would mean that the more you earn (or spend) compared to other people means the more in taxes you will pay. In other words, using the income tax example, if everyone paid a 5% income tax rate, regardless of income, a person making $100,000 per year would pay $5,000 in income taxes whereas a person earning $20,000 per year would pay $1,000 in income taxes. Same principle holds true with sales taxes and property taxes; the more you spend (or higher your property valuation), the more you will pay.

Increasing income taxes will not solve Minnesota's budget woes (as if, with a $2 Billion dollar surplus, there could be any woes). All it succeeds in doing is taking money from hard working Minnesotans, reducing their standard of living and enjoy the fruits of their labor. It will also reduce the amount of money available for investment that will spur economic growth with all of its additional benefits, including greater tax revenues.

Although taxation is necessary to provide for the common good (law enforcement, judicial systems and a few other state/local functions), it should never be so excessive so as to violate our rights to Life, Liberty and the Pursuit of Happiness, and a $3 Billion increase in spending, with its accompanying increases in taxes, will do just that. If anything, the Minnesota State Senate and House should be devising plans to return the $2 Billion dollar surplus to the working Minnesotans that made that abundance possible, and work towards being responsible custodians of the public trust, reducing, not increasing, taxes.

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Star Tribune Taxes Minnesota

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As if ramming a stadium tax down the throats of Hennepin County voters wasn't bad enough, the Vikings want to tax all metro counties. From the Star Tribune:

Gov. Tim Pawlenty clipped the wings off the latest concept for building a new Minnesota Vikings stadium, saying Monday there is no political support for a seven-county metrowide sales tax to finance a $900 million stadium with a retractable roof.

Such a tax "isn't going to fly," Pawlenty told reporters in response to questions after an event in St. Paul. "The counties aren't going to support it. The people in the metro region aren't going to support it. I'm not going to support it."

Pawlenty also said the Vikings are "in a real pickle" because they don't have a host community where public officials are united in accepting the financing burden.

Pawlenty has been veering a bit to the left lately, so reading that he plans to say no to any 7-county tax for a Vikings stadium is a breath of fresh air.

I admit that I am not a big spectator sports fan, except for women's beach volleyball, and the Olympics, so I really don't care where they build the stadium, as long as I am not forced to pay for it.

The biggest problem with these stadiums is that the franchise owners have grown accustomed to using various extortionistic tactics (build us a stadium or we'll move to another state) to get their way. Instead, I would really like to see these owners do something creative: pay for the stadiums themselves. It is, after all, a business investment.

Unfortunately, since the 1950s, they have grown accustomed to being able to pressure communities to tax their citizens in order to build their playgrounds for their million players. In a way, it's disgusting, as even the lowest played professional athlete makes many more times in salary than the average citizen they expect to foot the bill for these stadiums. Add to that the fact that these buildings are not much more than white elephants; anchors around the necks of the communities that build them.

I wish Pawlenty had had the cojones to say no to the Twins last year. Unfortunately, he lent them to Carl Pohlad instead.

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Tim Pawlenty Taxes Vikings Stadium

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I'm in California right now, and the big issue of the day, and the current election cycle, is Proposition 87, which would levy a tax on oil producers in the state, varying from 1.5% to 6% of revenues and prohibit the oil companines from passing this tax onto the consumers. the drive for this is a desire to reduce oil consumption in the state by 25% over the next some-odd years. In the most populous state in the Union, with its level of population growth, reducing oil consumption by 25% of current levels is a pipe dream.

Worse yet, by prohibiting oil companies from passing this proposed tax onto consumers will mean a reduction of oil production in-state as those wells that are determined to be marginally profitable will be shut down, resulting in an increased dependnce on foreign oil.

The goal is also to develop alternative fuels, notably wind and solar power (but NOT nuclear energy...we are talking California here). Although increasing electrical production through these technologies is admirable, it will do nothing to impact oil consumption.

There may also be a provision to stimulate purchasing hybrid and flex fuel vehicles, however, in a state that has some 35-40 million people (and growing), this will do nothing more than stabilize oil consumption in this state.

As I am no longer a California resident, I have no say in the outcome. However, it would be a serious mistake for Californians to pass this proposition. It is bad policy and lousy economics.

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Prop. 87
California Oil Tax

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Every year for some time now, the various sports franchises in Minnesota has turned to the state legislature to get new stadiums, instead of building it themselves. The Twins and Carl Pohlad are leading the current charge, supported by the Hennepin County Commissioners. And it looks like they are winning. Which means the taxpayers of Hennepin County, and possibly all of the metro-area counties, will lose.

The current plan calls for an increase in the sales tax, WITHOUT a voter referendum, which is in violation of state laws requiring such. Since the law was passed in 1999, there have been no exceptions to the requirement of a referendum on sales taxes. Now, there is a serious push to bypass this requirement by the Hennepin County Commissioners and the Twins ownership. To make matters worse, the DFL Senate leadership, specifically State Senator Kelley, wants a larger sales tax increase spread throughout the entire Metro-area.

This is from MPR

The latest vote may force the members of the committee to pick one of two completely different approaches to stadium funding. The choices include a .15 percent sales tax in Hennepin County to build a Twins ballpark, or a half-percent seven-county, metro-wide sales tax that would fund not only a new Twins ballpark, but also a Vikings stadium in Blaine and transportation projects.

The Republican-controlled House already has passed the Hennepin County sales tax, but Senate DFLers are lining up behind the metro-wide tax.

"I think there's a sense that there's a majority of folks who would like us to look at a broader solution that includes both the Twins and Vikings and to do it in a way that saves the public money by reducing the financing costs and also gets us to move forward on transit," said DFL Sen. Steve Kelley of Hopkins.

Kelley says his metro-wide sales tax proposal does all that and doesn't require voter approval.

This means, watch out Minnesota, you are about to get *blanked*.

A recent article in the Star Tribune had this to say on the issue:

The law requiring a referendum is relatively new. The Legislature passed it in 1999. Stadium proponents argue, correctly, that other large projects, such as Target Center in Minneapolis, were not subject to a referendum. But what they do not often disclose is that the law requiring a referendum was added after such projects were built.

Since 1999, only three, mostly minor, exemptions to the law have been made. Mankato, Rochester and Albert Lea were allowed last year to hold referendums on sales tax issues at a special time as opposed to the general-election day.

A year ago, nine local governments were given permission by the Legislature to levy sales taxes -- Winona, for example, was allowed to impose a 0.5 percent sales tax to fund transportation projects -- but all were required to hold referendums.

Public opinion polls have shown overwhelming opposition in Hennepin County to a referendum exemption. But team and county officials have bluntly said the project will not go forward if a referendum is required. In the past week alone, attempts by stadium critics to require a referendum failed by narrow margins in the House Taxes Committee and the House Ways and Means Committee.

However, the owners of these private businesses, known as professional sports teams, will continue to line up for getting taxpayers to pay for their playgrounds, despite the will of the people. And they will continue to use extortionist tactics to get their way, strong-arming legislators and voters into capitulation instead of building it themselves.

I remember reading a while back something about how prior to 1950, only one stadium was built using public money. Since then, only one has been built without public money.

Legislators have been entrusted with OUR money to use it wisely, to govern, not to fund the playgrounds of wealthy athletes and the billionaire team owners. They are also supposed to safeguard the interests of the people they represent, not deny them their right to vote on referendums as required by law.

It is time to tell all of these sports teams NO when they come panhandling for taxpayer money to finance their albatrosses. If the Twins can spend $64+ million for salaries, they can afford $500 million for a new stadium.

For some additional reading, check out MNGOP SD42

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The Stribe is running a piece on a report that has been developed by President Bush's Tax Advisory Commission.

President Bush's tax advisory commission recommended two alternative plans Tuesday, both of which would limit or eliminate almost all existing tax deductions.

There are some ups and downs to the plans as revealed in the Stribe article, most notably the elimination of the Alternative Tax Method (a significant plus) and the reduced cap on which mortgages will qualify for an interest deduction or credit (big downer).

Okay, most people would say that anyone who can afford a million dollar mortgage doesn’t need a credit, however, in Silicon Valley, many middle income families are struggling to afford a home in a market where the median home price is over $750K, and mortgages to match, figure somewhere in the 4-500K range, if not higher. By reducing the cap, this will mean many people may end up being taxed out of their homes. Maybe they’ll leave California and cause the housing market to crash, leaving a lot of mortgage lenders on the hook with homes they can’t resell for enough to recap their losses. Unless, of course, the overall tax rates are reduced significantly to reduce the overall tax burden, then this would be a moot point.

The elimination of the ATM, on the other hand, is a darn good thing as many people get caught into this trap on stock swaps, and I have known several people who ended up owing the IRS more than the stocks were worth at the time the tax bill came do (the tax was set on the valuation at the time of the swap, then the price collapsed as the new company went bankrupt).

Some of the other changes may also be good. Hard to say until we have access to the report and a chance to read it.

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Due to the Lake Minnetonka cruise it seems that the Vikings will be in the proverbial doghouse for sometime to come, and they are taking stadium dreams for all Minnesota teams with them. And this is a good thing.

The Twins, Vikings and the UofM Gophers have all been pushing hard for new stadiums for several years, and most recently, pushing to have the Minnesota legislators called back for a special session in order to get what they want. Tax dollars from you and me to support the business of sports.

The UofM Gophers are currently playing at the Metrodome. This facility has been around for a bit over 20 years, so it is fairly new, and in excellent shape. I was there recently for an event, so I have seen it from the inside. The Twins and the Vikings also use the Metrodome.

Add in the fact that the Hiawatha Light Rail line was laid in so as to service the Metrodome, a feature that will be lost if three new stadiums are built. So, when you take that into account, there is no doubt that as soon as they get the go signal for building new stadiums, there will be a call to lay in light rail to service the new stadiums as well, thus creating a much larger tax burden than just several hundred million for each of the proposed stadiums.

Light rail is heavily used to get people to sporting events at the Metrodome. this is evident to anybody riding the rail on event days, as I saw recently during the Gophers/Badgers game recently, with the cars jammed-packed with fans and students headed for the game.

Frankly, if these new stadiums are truly necessary, why dont the Twins and Vikings build their own stadiums instead of relying on taxpayers to build them? They could then lease out the space when not in use by the teams for other events. Answer: They know that stadiums are a losing proposition. Thats why the demand that they be built using tax dollars.

If the Twins and the Vikings truly need new facilities, they should go to the bank and take out a business loan and build them, instead of stooping to extortionist-style tactics to pressure legislators to tax people into oblivion to build them. Strong words, extortionist-style, however, accurate. What else can one call it when a business owner takes the position of build me a stadium, or well move to a city that will build me one. I say go ahead, find a new home. Just dont expect me to pick up the tab. Especially when they pay their players such exorbitant salaries, which they then spend on sex cruises out on the lake.

Certainly the Vikingcapades on Lake Minnetonka hasnt helped, and it has had a bleed over effect onto the other stadium requests. If this is the way to end these continued assault on the pocket books of the Minnesota taxpayer, then all I can say is go, Vikings! Maybe theyll invite a few Twins and Gophers along on their next cruise.

As for the UofM stadium, they receive enough tax dollars every year. If it is such a critical need, they should get willing donors from their alumni to fund the project, or maybe ask Bill Gates for the money in exchange for naming rights. They could also raise tuition, earmarking some amount to the building of the desired new stadium. Maybe even sell tickets for an additional $10 per. Basically, there are many ways for the UofM to get a new stadium without asking the taxpayers to foot the bill.

The only way to stop these continued demands for new stadiums for professional sports teams is for every legislative body in the country to say: Read my lips: No new stadiums! and then stand firm against this outrageous form of corporate welfare.

Posted by Sqotty at 9:06 PM | Permalink | Comments (0)
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The Star-Tribune is running an opinion piece advocating bankrupting the Social Security System.

But along with the promise, Roosevelt offered this warning: "Let us not allow ourselves to be misled by those who advocate short cuts to Utopia or fantastic financial schemes."

Today, the promise of Social Security has come under attack by backers of a scheme that clearly is a "short cut to Utopia": private accounts funded by money drained from Social Security.

The plan for private accounts would not be funded by money drained from Social Security, but funded by payroll deductions from each participant’s paycheck. Personally, I don’t like the deceitful misrepresentation of the privatization plan that this opinion piece has put out.

It also fails to point out that Social Security is a Federally controlled benefit, to which nearly every worker in America is force to pay, and receive no guarantees of receiving a payout. It can be terminated or modified at the whim of Congress, leaving working Americans no choice but to continue to pay into this insolvent system.

Kimball also fails to point out that some FIVE MILLION Americans have been able to opt out of the Social Security program by working for certain state, county or local municipalities, or that anyone elected to public office have the ability to have their pay as an elected official shifted from Social Security to a fully private and matched retirement system similar to 401K retirement accounts. And at a lower rate (5%) as well.

Privatizing Social Security, even offering it as an option, would return control of some of our money back to the people it belongs, and that is the right course to take.

Yet this representative from the AARP uses leftist talking points to cloud the issue, that privatizing will make the situation worse and pile on a mountain of debt, without showing any substantive facts to back it up.

Social Security is far from secure, and the only way to fix it is to privatize, not bury one’s head in the sand and hope that the problem goes away, as Michelle Kimball advocates in her opinion piece.

It should also be pointed out that the plan for creating private accounts that workers could choose to pay into (they could also choose to stay fully in the soon to be bankrupt plan) does NOT take anything away from those retired workers receiving benefits, nor impact those nearing retirement age.

This is a fairly typical tactic of the Socialist left…they shoot down the plan without supporting their arguments, instead focusing on the Social Security program as being a “great legacy” of FDR, and should not be touched, except to tax American workers even more.

Further, the creation of private accounts would provide many poor workers with the means to pass some level of wealth on to their offspring, especially true of black men whose life expectancy is somewhere around 67, right around retirement age. And the money you pay into Social Security cannot be passed on to your children if you die without receiving an amount equivalent to what you paid into the system.

Let’s not forget that the current process, the pipeline of money forcibly (remember, this is not a voluntary participation plan) taken from young workers goes to pay those retired workers receiving benefits. This is not to say that retirees don’t deserve compensation: They do! However, it is unfair to the workers of today to be continually taxed without recourse to support a system that will provide them less than 85 cents for every dollar they pay into it, and then factor in inflation, and you have a losing proposition.

The system, as it stands today, does far more harm to poor Americans by preventing them a means of accumulating wealth that can be passed on from generation to generation. By denying the ability to pass wealth on, they condemn impoverished Americans to continue in a cycle of poverty for generations.

The implementation of private retirement accounts, even if it is only a portion of the employee tax, will go a long way in helping break the cycle of poverty, and create a whole new class of investors, who may learn the power of wealth accumulation. Perhaps that is what the AARP truly fears, impoverished people learning the truth that it is the Liberal/Leftist agenda that is keeping the shackles of poverty in place.

Kimball’s piece ends with the following statement:

Congress should follow FDR's wise counsel and put aside "short cuts to Utopia" that won't work and get serious about strengthening Social Security so it's fair for everybody.

Congress is trying to eliminate the “short cuts to Utopia” that Americans were shackled with by FDR, and the creation of private accounts will go along end to breaking those chains and putting Social Security on a course that is in keeping with our country’s founding principles of independence and self-reliance.

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The Cybercast News Service, which I am really begining to like a lot, as a brilliant piece on Nancy Pelosi discussing Social Security.

San Fran Nan has this to say:

At a press conference broadcast on C-SPAN Thursday, House Minority Leader Pelosi (D-Calif.) commented, "The President has said this is 'pay-as-you-go'-well, it's not 'pay-as-you-go,' it's a trust fund."

Where did she learn that one? Oh, wait, she must be confusing Social Security taxes, which her Congressional Salary is not subject to, with her retirement savings account the government provides all elected officers with in lieu of Social InSecurity. That's the only reason I can see her coming out with such a gross misrepresentation of the facts on how the social Security system works (in it's crippled sort of way).

More from the article:

"What?" the NRCC asked in a press release: "Has someone notified the Social Security Commissioner? The President? The Congress? All this time we've been wrong about this?" exclaimed NRCC Communications Director Carl Forti.

"Most everyone familiar with Social Security in any capacity understands that the current generation of workers finances the benefits of the current generation of retirees-making Social Security a pay-as-you-go-system," Forti said.

Is San Fran Nan merely confused, as I suggest, or is she being genuinely ignorant of the facts, or, as Forti suggests: "But now we're seeing her blatantly misrepresent the basic facts on the way the system is run..."

Maybe if we forced Congress onto the same system that we've been condemned with, they might change their tune. But then pigs might fly as well.

Posted by Sqotty at 9:06 PM | Permalink | Comments (0)
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Based on reports I have been seeing, it sounds as though President Bush will be making a serious push for Social Security Reform. There is a lot to be said about this, especially since I have learned that some FIVE MILLION Americans have been able to opt-out of the Social Security program. Isn't it about time that the rest of us were allowed to join their ranks?

I'll be writing a couple of articles on this topic, including info on how the County of Galveston opted out in the 1980s, just before Congress eliminated this option. There are other communities that were able to privatize their local, and even a couple of states, workers retirement programs, getting them out of Social Security.

And let's not forget that ALL elected officials have the option of participating in a government run retirement program instead of Social Security, including local officials who receive small stipends, such as myself (it's so small, it isn't worth the trouble to switch off of Social Security). One has to wonder if that is part of why Congressional Democrats refuse to consider privatization. They believe they know how to manage their retirement, but the vast majority of Americans, according to their thinking, do not!

Social Security Reform is a hot button issue, and it is time we have a dialog on it. More on this coming soon.

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