All posts by Wintery Knight

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Commentary

Walter Williams on CEO salaries and celebrity salaries

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Walter Williams
Walter Williams

From CNS News.

Excerpt:

It turns out that the top 10 CEOs have an average salary of $43 million, which pales in comparison with America’s top 10 celebrities, who earn an average salary of $100 million.

When you recognize that celebrities earn salaries that are some multiples of CEO salaries, you have to ask: Why is it that rich CEOs are demonized and not celebrities? A clue might be found if you asked: Who’s doing the demonizing?

It turns out that the demonizing is led by politicians and leftists with the help of the news media, and like sheep, the public often goes along. Why demonize CEOs? My colleague Dr. Thomas Sowell explained it in his brand-new book, “The Thomas Sowell Reader.” One of his readings, titled “Ivan and Boris – and Us,” starts off with a fable of two poor Russian peasants.

Ivan finds a magic lamp and rubs it, and the jinni grants him one wish. As it turns out, Boris has a goat, but Ivan doesn’t. Ivan’s wish is for Boris’ goat to die. That vision reflects the feelings of too many Americans. If all CEOs worked for nothing, it would mean absolutely little or nothing to the average American’s bottom line.

For politicians, it’s another story: Demonize people whose power you want to usurp. That’s the typical way totalitarians gain power. They give the masses someone to hate. In 18th-century France, it was Maximilien Robespierre’s promoting hatred of the aristocracy that was the key to his acquiring more dictatorial power than the aristocracy had ever had.

In the 20th century, the communists gained power by promoting public hatred of the czars and capitalists. In Germany, Adolf Hitler gained power by promoting hatred of Jews and Bolsheviks. In each case, the power gained led to greater misery and bloodshed than anything the old regime could have done.

Let me be clear: I’m not equating America’s liberals with Robespierre, Josef Stalin and Hitler. I am saying that promoting jealousy, fear and hate is an effective strategy for politicians and their liberal followers to control and micromanage businesses.

Tom sent me this article that shows that raising taxes on the wealthy doesn’t even produce more revenue.

Excerpt:

All this nostalgia about the good old days of 70% tax rates makes it sound as though only the highest incomes would face higher tax rates. In reality, there were a dozen tax rates between 48% and 70% during the 1970s… the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.

[…]President John F. Kennedy’s across-the-board tax cuts reduced the lowest and highest tax rates to 14% and 70% respectively after 1964, yet revenues (after excluding the 5%-10% surtaxes of 1969-70) rose to 8% of GDP. President Reagan’s across-the-board tax cuts further reduced the lowest and highest tax rates to 11% and 50%, yet revenues rose again to 8.3% of GDP. The 1986 tax reform slashed the top tax rate to 28%, yet revenues dipped trivially to 8.1% of GDP.

Why would a Christian care how much money other people have at all? If you see someone who is poor, help them. If you see someone who needs a gift, give them a gift. The Bible teaches individual charity – you choose who to give your money to and how much to give, after you’ve paid your taxes to Caesar. I think it’s time that we took the Bible seriously on money… there are an awful lot of people sinning by breaking people into groups based on how much money they have – or what the color of their skin is. You do the best you can with what you can earn, and stop being concerned about taking money from people who have more than you do. The purpose of life is not to make everyone happy by making the secular government allocate everyone an equal amount of stuff – how unBiblical.

News

Canadian Supreme Court refuses to hear appeal on infanticide case

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From Life Site News.

Excerpt:

The Supreme Court of Canada declined last Thursday to hear an appeal in the case of a mother who smothered two of her children. The decision means that a Canadian mother can continue to plead to the lesser charge of “infanticide” rather than “murder” when she ends the life of her newborn child.

The mother in the case, referred to as “L.B,” was 15 years old when in 1998 she smothered her 6-week-old son Alexander. She smothered another one of her children, 10-week-old son Cameron, in 2002.

[…]In a statement to the police, L.B. testified that 6-week-old Alexander’s crying made her “angry.” When he would not stop crying, she placed him in his crib, covered him entirely with blankets and a plastic cover, left the room, and began listening to music. She admitted that she was “very confused” but insisted that she “wanted to help Alexander feel better.”

L.B. also testified to police that on the day she killed her 10-week-old son Cameron, she was “very upset” and feared that she would do her child harm. Police heard how L.B. “wanted Cameron to die,” since she believed it was “the right thing to do.” As Cameron slowly suffocated, she told her son that he was “going to a better place.”

Here’s the prosecutor:

Jennifer Woollcombe, acting for the Crown, appealed Justice Herold’s 2008 decision, arguing that L.B’s “infanticide defence” was based on antiquated laws that were created to give juries an alternative to the death penalty for mentally unstable mothers who killed their children. The Crown argued that the “infanticide defence” constitutes an “unacceptable devaluation of the worth of a newborn child.”

“The trial judge found that these murders were planned and deliberate. There is no principled reason for acquitting her of murder. She made a choice to kill while her husband was at home, called an ex-boyfriend rather than 911 after killing him, maintained a facade that the babies died of SIDS, and accepted and sought out sympathy and attention.”

“The respondent intentionally killed two babies,” said the Crown brief during the mother’s trial, as reported in the Globe and Mail.

Recall the horrifying story about the recent slap-on-the-wrist handed down to the Edmonton woman who strangled her own baby. What is wrong with Canada on the life issue?

News

Is Herman Cain’s 9-9-9 plan revenue neutral? Does it tax the poor more?

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Presidential candidate Herman Cain
Presidential candidate Herman Cain

Consider this article by rock-star economist Arthur Laffer.

Excerpt:

In the recent past, federal tax revenues from the personal and business income taxes, all payroll taxes, and the capital gains, gift and estate taxes have averaged $2.3 trillion, while gross domestic product has averaged about $14.5 trillion. The total revenue from these taxes as a share of gross domestic product averages around 16%. Sometimes it’s a good deal higher, as in the boom of the late 1990s, and sometimes its lower, as in today’s “Great Recession.” But a number in the 16%-19% range is as good as you’ll get under our current tax code.

By contrast, the three tax bases for Mr. Cain’s 9-9-9 plan add up to about $33 trillion. But the plan exempts from any tax people below the poverty line. Using poverty tables, this exemption reduces each tax base by roughly $2.5 trillion. Thus, Mr. Cain’s 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.

The whole purpose of a flat tax, à la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously—not because tax rates have increased, but because marginal tax rates have decreased.

By making the tax codes a lot simpler, we’d allow individuals and businesses to spend a lot less on maintaining tax records; filing taxes; hiring lawyers, accountants and tax-deferral experts; and lobbying Congress. As I wrote on this page earlier this year (“The 30-Cent Tax Premium,” April 18), for every dollar of business and personal income taxes paid, some 30 cents in out-of-pocket expenses also were paid to comply with the tax code. Under 9-9-9, these expenses would plummet without a penny being lost to the U.S. Treasury. It’s a win-win.

I have heard precious few conservative commentators reporting the facts on Herman Cain’s plan, so it’s nice to see Art Laffer looking at the details.

Here are three facts about Cain’s plan:

  • Fact #1: People below the poverty line are exempt from ALL the taxes.
  • Fact #2: It is a stupid objection to say that the tax rate can be raised. ALL taxes can be raised, and Cain has already said that his plan would require a 2/3rds majority to raise the tax rates.
  • Fact #3: This plan has nothing to do with state income taxes or state sales taxes or state corporate taxes – his plan only reforms federal taxes. State tax laws are outside of the jurisdiction of the President.

I was really disappointed to hear some of the people in Tuesday night’s debate disparaging Herman Cain’s plan, especially Michele Bachmann, who ought to know better because this is her strength. When people say that a tax is regressive, that means that it is not progressive. And a progressive tax is communist. It punishes success. What we want to have is a flat tax rate that doesn’t punish success and broadens the tax base so that everyone pays something. What Cain’s plan does is lower the punishment on job creators and workers, and raises the tax on consumers who spend money. And isn’t that a good thing? Aren’t we in this whole mess because we spend too much money? Maybe we should incentivize job creation and work instead of spending. Cain’s plan would be the greatest boon to job creation that this company has ever seen – it’s brilliant precisely because it eliminates the cost of having to comply with an onerous, complicated tax code. We are getting this wealth for free, and the only losers will be the IRS and the Washington lobbyists.