Sanity Injection

Injecting a dose of sanity into your day’s news and current events.

Posts Tagged ‘taxes’

Why do conservatives oppose higher taxes and expansion of government programs?

Posted by sanityinjection on March 25, 2010

Most people who are generally familiar with American politics understand that people who call themselves “conservatives” generally oppose higher taxes and expansion of government services (“big government”). However, I’m willing to bet that many people do not really understand *why* conservatives oppose these things. The average person may understand at some level that conservatives are not simply greedy, selfish people who are trying to weasel out of paying their fair share. But with this smear constantly being repeated to them by the Left and their media lackeys, and without an alternative explanation readily available, the stereotype becomes pervasive.

In fact, the conservative positions stand on a solid foundation of economics, common sense and even fairness. I commend to your attention this essay by Hal Gershowitz and Stephen Porter. Although lengthy, it explains in a clear and logical way many key conservative ideas on economics and government, including:

  • Why raising taxes creates a socialist system in which the rich pay far *more* than their fair share to subsidize everyone else
  • Why expanding entitlement programs such as subsidized health care is financially irresponsible
  • How the role of the federal government has inflated to take over things that local governments used to provide and that individuals and charities used to be responsible for
  • Americans are increasingly encouraged to view their life goals as “rights” to be provided by someone else (the government) rather than things we ourselves should work to achieve

The authors conclude by rhetorically asking: “Are you a morally bad person if you do not want to shoulder an ever-increasing government appetite to provide more and more benefits to a segment of the population who view these benefits as if they are birthrights?”

You can only get so many eggs out of the golden goose. If America continues to demand more and more from the top 10 percent – the people who really drive our econ0my – at what point will they get fed up and, like Ayn Rand’s John Galt, simply quit or move overseas?


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Health care reform punishes handicapped, tanning, personal responsibility

Posted by sanityinjection on March 22, 2010

Like most pieces of major legislation, the health care reform bill is long and complicated. In their attempts to fund a dramatic expansion of health insurance coverage and costs, Democrats pulled out all the stops and reached for every possible revenue source short of across-the-board tax increases.

Some of the revenue provisions in the bill may surprise you. According to Bloomberg, the reform bill imposes some bizarre punishments. For starters, the bill places a $2500 cap on pre-tax contributions to health care flexible spending accounts or FSAs. In other words, don’t be too responsible in trying to set aside funds for your own health care needs when you should be burdening the insurance system with those costs like a good socialist.

Here’s another: If you visit a tanning salon under the New Obama Order, you’ll pay a 10% excise tax on top of the price. Presumably this is justified by findings that tanning beds increase the risks of cancer, thereby burdening the health care system unnecessarily. But I think it would be hard to prove that the impact is so great as to justify such a tax.

Perhaps most incomprehensively, if you purchase a medical assistive device such as a wheelchair, you’ll be slapped with a new 2.9% excise tax. That may not be enough to bankrupt anybody, but what pray tell is the rationale for soaking disabled people? What crime against the Welfare State have they committed? It’s not as if they can simply choose to forego their wheelchairs rather than pay the excise tax.

Maybe the Democrats counted on a belief that tanning salon patrons, disabled people and responsible working stiffs don’t vote in great numbers. Let’s hope that, in the words of President Ronald Reagan, “They counted wrong.”

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“I’ll stop.”

Posted by sanityinjection on October 30, 2009

In my last post about the Frankenstein House health care bill, I posed the question: Why do the Democrats in Congress think they can spend unlimited amounts of money that we don’t have with no consequences?

Peggy Noonan tries to answer that question in her latest column, which I commend to your attention. I was particularly struck by this tidbit:

I talked with an executive this week with what we still call “the insurance companies”….He talked about all the new proposed regulations on the industry. Rep. Barney Frank had just said on some cable show that the Democrats of the White House and Congress “are trying on every front to increase the role of government in the regulatory area.” The executive said of Washington: “They don’t understand that people can just stop, get out. I have friends and colleagues who’ve said to me ‘I’m done.’ ” He spoke of his own increasing tax burden and said, “They don’t understand that if they start to tax me so that I’m paying 60%, 55%, I’ll stop.”

If that bears an eerie similarity to Ayn Rand’s Atlas Shrugged, it should. I recall reading that work and thinking that while I agreed with the points being made, the story of America’s most productive people laying down their ploughshares and refusing to work to subsidize everyone else seemed overwrought and implausible. But isn’t that just what is being implied above?

If the slogan of 2008 was “Change We Can Believe In” and the slogan of 2009 has been “Where’s *My* Bailout”, I sincerely hope the slogan of 2010 is not, “Who is John Galt?” But the Nancy Pelosis and Barney Franks seem to be doing their best to force us down that path.

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Another bad idea: Tax junk food and soda

Posted by sanityinjection on July 28, 2009

“If you drive a car, I’ll tax the street, / If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat, / If you take a walk, I’ll tax your feet. ” – George Harrison, “Taxman”, The Beatles’  Revolver, 1966

“I’d like to teach the world to sing / In perfect harmony

I’d like to buy the world a Coke / But the tax is too high for me.”

-adapted from “I’d Like to Teach the World to Sing”, from the Coca-Cola “Hilltop” TV ad, 1971

In the context of the current debate over health care and how to pay for it, something sneaky is going on. First, a number of media outlets reported that obesity-related conditions account for a significant percentage of health care expenditures, with figures such as $147 billion and 9% of overall health spending thrown about. Then today, two major media outlets – CBS News and the LA Times – both “coincidentally” published blog entries on paying for health care by taxing items that cause obesity – sugary sodas and fattening foods, respectively. If you think it’s a coincidence that this drum is only being beaten after the attempt to soak the rich to pay for ObamaCare backfired, think again. The focus is now being turned from one group it’s OK to hate – the rich – to the only other one – the fat. (Disclosure: Sanity Injection is personally about 17 pounds overweight.)

To be sure, the media isn’t the prime mover behind this conspiracy, just a happy helper. The “data” is coming from think tanks and government agencies that are part of the ObamaCare advocacy team. The logic works like this: Evil junk food makes people fat, and fat people cost everybody money. So we should tax junk food, which will raise money to pay for fat people’s health care while also encouraging people to eat healthier and thus lose weight.

Anybody see a flaw here? How about this: Fat people aren’t fat just because they eat sugary or fatty foods. They’re fat because of their overall lifestyle, which includes diet and (lack of) exercise. Some have other medical conditions that contribute to obesity. So let’s say the tax works and everybody stops eating  junk food. No major revenue stream is generated, but fat people are still fat and we still have to pay for them. Alternatively, the tax doesn’t work and people still eat unhealthy foods, so a bunch of money is raised. How much do you want to bet that money gets raided by the government to pay for other things besides health care? Meanwhile the fat people have less of their income they can save to help pay for their own care.

Those are economic arguments, but how about the philosophical arguments? Is everyone who drinks a Coke contributing to obesity? Arguably not, if you’re eating healthy and getting exercise. Yet you’ll still have to pay the punitive tax. More fundamentally, what right does the government have to tax you in order to get you to live your life the way *they* want you to? If we believe that the obese should bear the responsbility for their extra health care expenses, then charge them higher premiums, or offer them lesser coverage due to their pre-existing condition. That’s the free market solution. Instead, the Democrats’ health care bill would force insurers to not only cover pre-existing conditions but at the same premium paid by healthy people!  And so the serpent of Leftism continues to gnaw on its own tail, planning an economy that is in inherent contradiction with itself and telling us all that it will work.

If this all sounds familiar, it should: we’ve been through the same nonsense with cigarette taxes. In fact, you could replace the words “fat people” and “obesity” with “smokers” and “smoking” above without any further alterations necessary. The result is a regressive tax that hits the poor hardest – precisely what the Left always says they don’t want.

Frankly, I am sick and tired of the search for scapegoats to blame America’s health care problems on and punish them with targeted taxes. With apologies to Martin Niemoller:

When they came for the smokers, I did not speak out, because I was not a smoker.

When they came for the rich, I did not speak out, because I was not rich.

When they came for the fatties, I did not speak out, because I was not a fatty.

When they came for me, there was no one left to speak for me.”

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F*** the rich

Posted by sanityinjection on July 15, 2009

Apaprently, that’s the new motto of the Democrats in the House of Representatives. Their newly unveiled health care expansion bill proposes to pay for its $1.2 trillion cost primarily by way of a new surtax (surtax means, “on top of all the other taxes they already pay”) of between 1 and 5.4% on those who earn more than $350,000 annually.

For the record, let me state that I don’t make anything close to that figure and probably never will. So I have no immediate self-interest at stake if such a tax is imposed. But I’m appalled that the party controlling our federal government has apparently committed itself to wide-scale redistribution of wealth – punishing those who have been successful in order to help those who have not.

You have probably heard the economic arguments a million times, how taxing the rich simply shrinks the overall economic pie by diminishing investment capital. (In fact, something like 60% of tax revenue already comes from just the top 5% of earners.) I’m not going to belabor this point, as true as it is.

Instead, let me make a philosophical argument. Most of us accept the principle of paying taxes to the government to support the essential services that government provides (though we often disagree about what those services should be.) We like to imagine that every American makes a contribution – though in fact huge swathes of people pay no federal taxes at all because of their low incomes. (I am not convinced that someone who makes $20,000 a year can’t afford $1 in federal taxes as opposed to $0.) We also like to imagine that every American pays a fair percentage of their income in taxes. (In fact, wealthy Americans not only pay more in absolute dollars – which they should – but are taxed at higher rates determined arbitrarily.)

However, it should make us uneasy when the government starts singling out groups of taxpayers and making them pay more in taxes while others are spared. Imagine, for example, if the federal government decided that Asian-Americans should be taxed at a higher rate because they are, on average, better educated and more successful than other Americans, and can “better afford to pay.” I think we would all agree that would be an outrage.

So why isn’t it an outrage when the group in question is defined by income level? People who make $350,000 or more are not crooks who take advantage of the poor; they are ordinary Americans who have worked hard to become successful in their fields, and generally added great value to our economy by creating jobs, developing new products and services, or expanding consumer access. They are already paying *more* than their fair share under our current tax system. To impose an additional surtax is just punitive.

With each passing day of this Administration, our government’s policies seem more and more to reflect the maxim, “From each according to ability; to each according to need.” If that sounds familiar, it should – it is one of the founding principles of socialism – and an official slogan of the Soviet Union. Is that what we want to model our country after? Was that model so stunningly successful that it should be resurrected here in America?

Keep this in mind when you hear the Democrats talking about the “ability to pay” of the wealthy and those who “need” subsidized health care. They are not trying very hard to conceal their goal here. I just wish there were more voices outside the Republican Party (Nobody takes Republicans seriously when they cry socialism anymore) willing to stand up and denounce this for what it is. Middle America needs to remember that, to paraphrase Martin Niemoller, if they do not speak out on behalf of the rich now, there will be no one left to speak out for them, when our government eventually comes for them.

Our society will self-destruct when we reach the point where all those who are productive are sucked dry of their lifeblood in order to nurture those who are not. Don’t look now, Ayn Rand, but Atlas is shrugging.

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Creating a permanent majority for higher taxes?

Posted by sanityinjection on March 9, 2009

So much to write about today, but let me begin with this. I was listening to a radio talk show on Friday and heard something that really struck me. The host said that currently, 38% of Americans do not pay federal income tax, because their income falls below the No Tax Status level, or their deductions and credits reduce their tax liability to zero. However, he said that the tax changes being put forward by the Obama Administration will raise that percentage to 50%. This means that when any new federal spending program or tax increase is suggested, there will be at least 50% of Americans who can support it because they will not have to pay a dime in taxes to fund it. Combined with those who believe in big government philosophically, this will create a more or less permanent majority in favor of increased government spending and higher taxes.

I have not double-checked these figures for accuracy, so if anyone wants to do that feel free. But assuming they are correct, am I the only one who sees this as a big problem? Shrinking the tax base places a greater burden on that base, and while upper-income earners may be able to afford the tax increases, eventually they will have an incentive to cut back their economic production in order to avoid the taxation. For further reading on what happens when the economy’s most productive citizens get sick of supporting its least productive, check out Atlas Shrugged by Ayn Rand.

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Obama’s 95% tax cut is 95% flim-flam.

Posted by sanityinjection on October 14, 2008

Watching Barack Obama during the debates, I am always impressed by his easy demeanor, confidence, and ready command of the issues. The one thing that always sticks in my craw, though, is his repeated mantra that his economic plans will cut taxes for 95% of working families. This is a fraudulent claim, and it’s surprising that the McCain campaign hasn’t done more to debunk it. The Wall Street Journal does so:

The marginal tax rate graphic is a particularly striking indication of what Obama’s plan is really about.

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Wherefore dost thou tax me?

Posted by sanityinjection on August 14, 2008

Interesting little story from Reuters regarding an Italian athlete, Francesco D’Aniello, who just won a silver medal in a shooting event at the Beijing Olympics. Apparently, Italy, like a number of countries, offers cash prizes to Italian athletes who win medals. However, those cash prizes are subject to taxation, like other forms of income. So D’Aniello, at a press conference, suggested the Italian government carve out a special tax exemption for Olympic medallists:

We athletes go through major sacrifices to get to this level. It would be the right thing to do to remove the taxes from what we get here. It would be a very good thing.

Normally I am inclined to sympathize with anyone who feels their taxes are too high. And I have no doubt that the Italian tax rates are probably higher than ours here in the US. But D’Aniello’s request is fundamentally flawed. Without gainsaying the amount of work and sacrifice that went into his achievement, does D’Aniello really think that athletes are the only ones who devote tremendous hard work and make sacrifices for their professions? How about police, firefighters, soldiers – should they all be tax exempt too? Or maybe D’Aniello thinks he’s more important than they are. The bottom line is, the government bonus for his medal is income, and should be taxed as such. The amount of the bonus was not given, but based on what similar countries pay, it’s probably a six-figure amount.

Of course, the Italian legislature might be wise to at least make a pretense of seriously considering D’Aniello’s suggestion. He is, after all, armed and a crack shot.

How do you say “ungrateful ass” in Italian?

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