Tag Archives: The Rich

New York governor unveils one BILLION dollars of new taxes

Story from CBS News. (H/T ECM)

Excerpt:

Governor David Paterson said Tuesday that the days of profligate spending in Albany are over and that starting immediately lawmakers must participate in an “age of accountability.”

That said, the governor’s new budget has $1 billion in new taxes and nearly $800 million in cuts for New York City.

[…]”Our revenues have crumbled and our budget has crashed and we can no longer afford this spending addiction that we have had for so long,” Paterson said.

[…]”The mistakes of the past have lead us to the breaking point,” Paterson said.

But in addition to the severe belt tightening, the governor said he would need to raise $1 billion in new taxes and fees — some politically controversial.

* A $1 increase in the cigarette tax, raising the state tax to $3.75.

* A new soda tax that will cost consumers 1-cent per ounce — a 16-ounce bottle will cost 16 cents more, a 64-ounce bottle 64 cents more.

* The governor also plans to legalize and sanction cage fighting.

* And allow wine to be sold in grocery stores.

* And introduce 50 speed cameras on highways to catch unsuspecting motorists with fines of up to $100.

How did this happen?

New York legislators voted to tax the wealthy.

Then the wealthy left New York for red states.

And now Albany has no revenues to pay for all of their government spending on social programs, such as paying delinquent teachers to do nothing all day because the teacher unions won’t allow teachers to be fired, no matter how badly they screw up.

Governor Patterson never wanted anything to do with earlier tax increases on the wealthy. At least these new tax increases are on consumption, not on income, and not on corporations. Consumption taxes cost the fewest jobs, in my opinion. Consumption taxes encourage saving, too.

What did Reagan do when he inherited a recession?

Ronald Reagan
Ronald Reagan

Here is a piece from Bloomberg from Amity Shlaes. (H/T The Western Experience)

Excerpt:

Double-digit unemployment looms. The country is in a funk. The federal budget deficit is widening to an extent not seen in decades.

This scenario isn’t new. It also describes the U.S. in 1982. Somehow, the 1980s and the 1990s turned out to be pretty good years. So it’s worthwhile to compare current policy to the one followed then.

…Today, taxes are on their way up. Whether it will be abolishing some of the tax deductibility of health care or increasing taxes on soda, President Barack Obama and Congress are clearly signaling the direction in which they want to move. Most tax increases under discussion would make the rich, or companies, the first to pay. The justification offered for this is that the federal government needs the money and may know how to spend it better than the private sector, anyhow.

…In the early 1980s, the view on taxes was the opposite: get them down. The Economic Recovery Tax Act of 1981, enacted by Ronald Reagan, pushed tax rates down for wealthy and non-wealthy alike. The capital gains tax rate dropped to 20 percent. When Reagan signed the Tax Reform Act of 1986, the top marginal rate on income taxes fell to 28 percent.

Is Obama right? Or was Reagan right?

The coming tax increases

The Wall Street Journal reports on some of the new taxes Obama wants to impose.

The [health care] bill’s main financing comes from another tax increase on top of the increase already scheduled for 2011 under Mr. Obama’s budget. The surtax starts at one percentage point for adjusted gross income above $350,000 in 2011, rising to two points in 2013; a 1.5 point surtax at incomes above $500,000, rising to three in 2013; and a whopping 5.4 percentage points in 2011 and beyond on incomes above $1 million.

And what happens when you tax the rich?

House Democrats… claim that this surtax would raise $544 billion in new revenue over 10 years. America’s millionaires aren’t that stupid; far fewer of them will pay these rates for very long, if at all. They will find ways to shelter income, either by investing differently or simply working less. Small businesses that pay at the individual rate will shift to pay the 35% corporate rate. When the revenue doesn’t materialize, Democrats will move to soak the middle class with a European-style value-added tax.

It should be noted that a value-added sales tax disproportionately hurts the poor.

Barack Obama’s claim to save or create 150000 jobs falsified by FactCheck.org

Obama claim that his socialist policies that attack “greedy corporations” and “the rich” are actually increasing employment rates. Now, that seems to be impossible for rational people to believe, and FactCheck.org confirms that intuition. It is not possible for socialist policies such as card check, higher taxes, increased spending, more regulation, etc. to create more jobs than are lost from the changes.

Obama’s claim was:

At President Obama’s April 29 news conference, he claimed that the American Recovery and Reinvestment Act has “already saved or created over 150,000 jobs.”

That’s what he learned to believe at Harvard in his marxist rap sessions with the radical students and professors.

But how does the world really work?

According to the Bureau of Labor Statistics, the economy lost more than 1.3 million jobs in the two months after he took office, and it has probably lost at least another half-million in April. The day after Obama spoke, the Department of Labor announced that another 631,000 workers (seasonally adjusted) had filed new claims for unemployment insurance the previous week.

So what 150,000 jobs was Obama talking about?

It turns out the president’s claim is really an estimate of what his economic advisers think the stimulus bill is doing, and not based on any evidence of its actual effects.

But how does the White House respond to the falsification of their propaganda by reality?

We asked the White House for substantiation of Obama’s claim, and a spokesman responded that the figure comes from a recent estimate by the Council of Economic Advisers. “Because the baseline for employment is obviously still strongly downward,” the spokesman told us, “the estimate does not mean that employment has risen by 150,000. Rather, it means that employment is 150,000 higher than it otherwise would have been.” He said the figure is an estimate of people hired to work directly on ARRA-funded projects, plus “jobs created by the tax cuts, aid to the states, and other parts of the ARRA.”

So when the president said his stimulus bill “already saved or created” those jobs, he was just giving an estimate produced by his own economic advisers at the White House. Furthermore, the jobs figure is based on projections done at the time ARRA was passed. Recipients of ARRA spending aren’t required to report until later what they’re doing with the money and how well it’s working, so there’s very little hard data on where the money is being spent, let alone how many jobs may have resulted from the legislation. The CEA incorporated some actual spending reports into its estimate, but that information is not complete.

This is the result of voting by people who know more about the lives of celebrities than they know about economics. Imagine how surprised these Democrat voters are to find out that the 1 hour spent voting was not enough time to have thought anything through. Some of them thought that Obama was better on pro-life issues and government spending than McCain for example.

Remember, Democrats caused this recession and Republicans tried to stop it.