Taxes: Here's the truth

Obama isn't the agent of change he pretended to be during the primaries. He's an old-school "tax and spend" liberal who will pursue an economic plan that involves increases in all the major income and investment tax rates, while spending billions on new social programs and regulatory schemes. Now that the general election is well under way, he and Joe Biden have taken on the populist mantra that is popular in front of liberal audiences -- couching these new taxes in typical "soak the rich" class warfare politics, promising to raise the taxes of "those who can afford it most" to help those "who need it most". If this sounds a lot like Marx -- "from each according to his ability, to each according to his needs" you'd be right. That's why Obama's ecomomic platform is a classic, socialist income redistribution scheme. Not long ago, Stephen Moore of the Wall Street Journal took a look at income, taxes and wealth in this country. The objective was to better understand whether there is merit to the left-wing contention that the rich don't pay "enough", and whether their largesse really comes at the expense of the middle class.

Here are some of his findings:

** Who pays the most taxes? The latest data show that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans.=2 0The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.

** Did the Bush tax cuts favor the wealthy? In static terms, yes. But in reality -- when taking in investments and income generated by those savings, the answer is absolutely not. The latest IRS data show an increase of more than $100 billion in tax payments from the wealthy by 2005 alone. The number of tax filers who claimed taxable income of more than $1 million increased from approximately 180,000 in 2003 to over 300,000 in 2005. The total taxes paid by these millionaire households rose by about 80 percent in two years, from $132 billion to $236 billion.

** Did the Bush tax cuts put a greater burden on the middle class and poor? No. Moore examined the Treasury Department analysis of how much the rich would have paid without the Bush tax cuts and how much they actually did pay. The rich are now paying more than they would have paid, not less, after the Bush investment tax cuts. For example, the Treasury’s estimate was that the top 1 percent of earners would pay 31 percent of taxes if the Bush cuts did not go into effect; with the cuts, they actually paid 37 per­cent. Similarly, the share of the top 10 percent of earners was estimated at 63 percent without the cuts; they actually paid 68 percent.

** What has happened to tax rates over time? They've fallen -- and this has made the tax system more fair, not less so. As tax rates have fallen by half over the past quarter-century, taxes paid by the wealthy have increased. In 1980, for example, the top 5 percent of income earners paid only 37 percent of all income taxes. Today, the top 1 percent pay that proportion, and the top 5 percent pay a whopping 57 percent.

** Do the rich pay more in taxes because they earn more income? Yes. There’s no doubt that the share of total income earned by the wealthy has increased steadily over the past 25 years. Since 1980, the share of income earned by the richest 1 percent has more than doubled, from 9 percent to 19 percent. The share of the income going to the poorest income quintile has declined. Income disparities, in absolute dollars, have grown substantially.

What is significant is that for the top 5 percent and 10 percent of earners, the ratio of taxes paid compared with income earned has risen. For example, in 1980, the top 10 percent earned 32 percent of the income and paid 44 percent of the taxes—a ratio of 1.4. In 2004, this group earned more of the income (44 percent) but paid a lot more of the taxes (68 percent)—a ratio of 1.6. In other words, progressivity—in terms of share of total taxes paid—has risen.

Contrary to the Democrats' class-warfare rhetoric, gains by the rich have not come at the expense of the middle class:

Median family income in America between 1980 and 2004 grew by 17 percent. The middle class (defined as those between the 40th and the 60th percentiles of income) isn’t falling behind or “disappearing.” It is getting richer. The lower income bound for the middle class has risen by about $12,000 (after inflation) since 1967. The upper income bound for the middle class is now roughly $68,000—some $23,000 higher than in 1967. Thus, a family in the 60th percentile has 50 percent more buying power than 30 years ago.

Another canard of the left is that the low taxes on dividend income and capital gains -- a central component of the Bush tax cuts -- favors "only the wealthy".

The latest polls show that 52 percent of Americans own stock and thus benefit directly from lower capital gains and dividend taxes. Reduced tax rates on dividends also triggered a huge jump in the number of companies paying out dividends. As the National Bureau of Economic Research put it, “The surge in regular dividend payments after the 2003 reform is unprecedented in recent years.” Dividend income is up nearly 50 percent since the 2003 tax cut.

The 1997 tax reform, passed under President Clinton, reduced the capital gains tax rate from 28 percent to 20 percent, and taxable capital gains nearly doubled over the next three years. The 2003 reform brought the rate down to 15 percent, and between 2002 and 2005 there was a 154 percent increase in capital gains reported as income.

It is appealing populist rhetoric to cry "soak the rich" while talking to crowds of middle-class workers who think that somehow they will get the benefit from making the wealthy pay more. It even works in front of elite crowds who may feel guilty over their success and feel compelled to pay more in. Joe Biden this week famously called paying higher taxes "patriotic" -- as if somehow giving your hard earned money to the federal government for them to waste on pork is good for the nation.

But this analysis by Moore shows clearly that the fundamental logic of this is flawed. The wealthy already pay a disproportionate percentage of their income in taxes. Higher taxes don't result in more income to the treasury (just ask the state of Michigan) -- but rather create a quieting effect on the kinds of investment that is necessary to create jobs and fuel market growth. The "dreaded" Bush tax cuts did not fall on the backs of the middle class -- but rather have disproportionately hit the wealthy instead. And the cuts in dividend and capital gains taxes have been shown to be a tremendous engine for economic growth -- leading to more treasury dollars, not less.

It may not make good political theater, but the cry should be "tax cuts for the rich" -- because the old adage that "a rising tide lifts all boats" is true.

Obie's excuse machine is cranking

Since late February, this year's presidential campaign has been Barack Obama’s to lose. With vast Main Street appeal and the ability to bilk average citizens out of millions of dollars, the idea that Obama might actually lose seems even more far fetched than the nightly, Pravda-like claims of Keith Olberman. Nonetheless, recent polls have shown that at the least this election will be a horse race until the end. Faced with a tough fight and Zeus forbid an Obama defeat, a strange series of excuses have begun to bubble to the surface as explanation. Fantastically, few assign any blame to Obama or his politics, opting instead, to imagine causes both overly broad and factually inaccurate. In short, the quest for excuses has thusly begun with MSM golden saints writing editorials and even ‘articles’ that try to excuse and justify a potential Obama defeat as a result of... latent racism, Main Street ignorance, or a McCain campaign which is supposedly now both immoral and dirty.

Foremost of these arguments is a completely brazen, totally improper use of racism and the race card. No better example of this can be seen than a recent Washington Post article in which Obama supporter Randall Kennedy said in regard to an Obama defeat: "I'll think that an important ingredient of their error is racial prejudice -- not the hateful, snarling, open bigotry that terrorized my parents in their youth, but rather a vague, sophisticated, low-key prejudice that is chameleonlike in its ability to adapt to new surroundings and to hide even from those firmly in its grip.”

Such fear-mongering and overly generalized claims are now appearing all over the American left. While divergent in style, the excuse that Obama could only lose due to racism is now a very real, prepositioned part of the 2008 dialogue. To his shame, Obama has from time to time played into this idea with statements to the effect that, racists would only vote for his opponents and his own primary loss might disenfranchise millions of Democrats.

Meanwhile closer polls have spawned a series of rather urgently styled contentions in regard to John McCain, 2008, and the public in general. In a strange mixture of causes, an Obama defeat is now being defined as the result of some kind of foul play by McCain or some kind of group denial on the part of the American public. In this, the American voter is being portrayed as some kind of mindless robot who can only choose according to a visceral response. To me nothing is more insulting to the American voter than to say he or she is motivated solely by wedge issues that he could not "actually" agree with or believe in.

As for the McCain campaign, Obama has been attempting to paint any potential defeat as one at the hands of a James Bond bad guy and not a legitimate political campaign. Obama and his staff are now calling the McCain Campaign the “sleaziest in modern history” and the reincarnation of Nixon-Agnew. Oddly, Obama is trying to take the high ground on an issue when he has no credit as for months his campaign has employed negative attacks, lies, and false quotations. Obama is now playing into that orthodox leftist victimhood that paints the GOP as minions of darkness and Liberals as the perfect and unblemished champions of truth. Oh and yes, the threat of mass liberal exodus to Canada in the event of a GOP victory is back on the table. We should be so lucky.

While the result of such actions is quite the same, the rationale for this pre-defeat debunking differs according to source. For the Obama sympathizers that stack the media, explaining in advance an Obama defeat is a clever escape from realities of a 21st-century America that they never understood and cannot readily command. Keen on personal glory and factual sophistry, many media commentators are now drunk on high-minded Obama rhetoric which has no room for voter choice. In collusion, and in the high coldhearted circles of the Daily Kos or Rosie, lording brains cannot comprehend a world in which voters have examined the candidates in an even-keeled manner and decided to disagree with Sen. Obama and his politics. Like Magtheridon himself, the Hard-Left seems incapable of understanding that America is neither a giant College or a European Principality.

As for the Obama camp itself, laying a groundwork for defeat is, in my opinion, a clever way of hedging bets and raising money. For his part Obama, who for months, has built up himself as a modern day Pharaoh cannot take on the slightest accountability of mistake, lest his superficiality become less bright and his role as a newly discovered Greek god become less pronounced.

Meanwhile, after a rockstar convention and the great discovery of Gov. Sarah Palin the outlook for the GOP ticket has dramatically changed. The party seems rejuvenated and a refreshed Sen. McCain is tearing up the stump with a patriotic, sensible and aggressive agenda of reform. In the moldy conclaves of Republicans and conservatives, months of anguish and reminiscently professorial recrimination has given way to excitement, hope, and whispers of a great leader finally finding his wings. Oh and yes, there are also those wonderful rumblings in many quarters, Democrat, Republican and independent alike that we can actually defeat the farce of Obama and elect the leadership of John McCain.

Memo to Dems: We're not subjects

We Americans generally understand and appreciate the value of our citizenship. We know that we are fortunate to be living in the freest, most prosperous and most powerful country on earth. We thank our lucky stars that we were born in the United States rather than in Russia, China or Zimbabwe, and welcome new citizens from abroad to our shores. However, not enough of us understand that our citizenship is a boon not only, or even primarily, because it is American citizenship, but because of what our citizenship actually entails. The United States Constitution secures the “privileges” and “immunities” of American citizenship. These ultimately derive from the natural rights affirmed in the Declaration of Independence, and are referred to as the “blessings of liberty” in the Preamble to the Constitution.

Our natural right to liberty is secured, not granted, by the government. So our rights can, under that protection, be called “privileges and immunities” because they belong solely to American citizens.

When the Constitution refers to “privileges and immunities,” it is securing rights which are  enjoyed equally by all citizens. In other words, no citizen legitimately enjoys a right at someone else’s expense, either monetarily or in some other way. This confusion between rights and what has been called entitlements is at the heart of the difference between citizens and subjects.

Of course, our citizens are subject to the authority of the Constitution and the laws, but they are certainly not subjects of the president, Congress or the Supreme Court, nor of state and local governments. The people are, in fact, the ultimate sovereign, having agreed to establish a government in the first place by their uncoerced consent, giving it their continued support through periodic free elections.

Subjects, on the other hand, enjoy only those rights which have been conferred on them by whatever government happens to exist, and by whatever means it was established and has been maintained — including force or fraud.

Unfortunately, one of the most powerful temptations of free citizens is to seek privileges for themselves at the expense of others. There are, truth to tell, enabling politicians who are more than happy to appeal to, if not to stir up, this sentiment, by means of which they can assemble majorities that elevate them to office, and provide support for the passage of confiscatory legislation that redistributes the wealth of one class of citizens to another.

This is also a fundamental difference between our two major political parties. Democrats emphatically favor treating their fellow citizens as mere subjects to be manipulated and looted in order to secure their own political power, although they will do all that they can to mislead people who stand to be looted or others who do not approve of the forced redistribution of wealth.

Republicans have always been opposed to redistributionist schemes in principle, but some of them have felt compelled not to oppose those programs when they are popular with the citizens. Frequently, their strategy is to advocate less expensive or oppressive programs than the Democrats.

It is a testament to the lasting legacy of Ronald Reagan that he managed to place Democrats on the defensive. They stopped calling themselves liberals because Reagan had convinced millions that liberals stand for precisely the wealth redistribution programs that responsible and self-supporting Americans oppose. They now prefer the label "progressive," which is no better but less odious to the public.

More specifically, Democrats misrepresent the various government programs that they favor by trying to pass them off as “investments,” rather than forced transfers or drains on the public treasury. Somehow, by Democrat logic, investments made by Americans who are enterprising enough to persuade others to stake their money in corporations and businesses are not legitimate investors, even though no one was, or could be, forced to fork over their money to them.

Today, Democrats want to seize the profits of American oil companies to finance so-called “soft energy” alternatives to fossil fuels, as if the former were bleeding the country and the latter were forcibly held back by the power of the oil companies. In fact, it is much cheaper and more efficient to pump oil and natural gas than to rely on ethanol or windmills, notwithstanding anyone’s contrary wishes.

We are bombarded with never-ending streams of government programs to solve every purported problem. It is up to our citizens to remember that they are not obliged to accept politicians’ claims at face value and to take all necessary steps to ensure that they are not converted into mere subjects of powerful politicians or interest groups that see their fellow citizens as fair game for their schemes.

Flat no on Ref O

Without question Colorado's constitution has suffered from various inconsistent amendments. The primary argument in favor of the so-called SAFE Amendment is that we need some solution to thetraffic jam of Amendment 23, TABOR, and the Gallagher Amendment. That's Exhibit A, although it's hard to actually find an Exhibit B.

Now, the Democrats, with considerable Republican support in the state Senate (8 of 15 Republicans supported the bill), are trying to use this vague dissatisfaction to pass Referendum O, a constitutional amendment making it harder to, well, pass constitutional amendments.

Referendum O would:

1) Increase the signature requirement by 7,000. Currently, constitutional amendments require 5% of the last vote for Secretary of State. Referendum O would require 6% of the last vote for Governor.

2) Push the deadline back to April from August. Petitions campaigns would have to start before the legislature met, and wrap up before adjournment. For all practical purposes, anything passed by the legislature wouldn't be subject to an Amendment over-turn for over a year. Any effort to pass anything could be derailed by a plea to wait and led the legislature deal with it. And if you believe that...

3) Require that at least 8% of signatures come from each Congressional district. Initially, it would have required 8%.

Here's where we need to do some math. With roughly 93,500 signatures needed, that means that about 7,500 valid signatures would be required from each Congressional district. Realistically, we'd need 15,000 since up to half may get invalidated by the Secretary of State. This won't affect signature gathering in Denver, Colorado Springs, or Boulder (CD-1, CD-5, or CD-2), and probably wouldn't affect CD-6 very much, as it's becoming urbanized, or at least, suburbanized. But take a look at the population distribution in CD-3 and CD-4.

CD-3 has liberal Pueblo, and more-liberal-than-conservative Grand Junction. The population - especially the more Republican population - is much lower density, much more spread out. And it's not even like Grand Junction is that large. According to the Mesa County Clerk and Recorder, at the last municipal elections, there were roughly 21,000 registered voters in Grand Junction.

So this, just like Amendment 27 -- the notorious campaign finance measure voted into the state constitution in 2002, more draconian than McCain-Feingold -- places a premium on organization and money to pay for signature-gatherers, especially for more conservative amendments. Especially as proponents will no longer be able to rely on popular anger over legislative action.

While the Democrats were in a perpetual minority, they made spectacularly effective use of the initiative amendment process, passing Amendment 23, which has helped hamstring the budget, and Amendment 27, which has placed a premium on big money and union organization in campaigns. Now that they are in the majority, the modern-day "progressives" find no end of fault with the only meaningful check the citizens have on a runaway legislature backed by a governor and a compliant State Supreme Court.

This is what the Democratic party is exceptionally good at: using power to perpetuate power.

When Coloradoans passed Amendment 27, they probably didn't realize that in their desperation for "reform," they were actually voting for a Trojan Horse.

This time, there are no excuses.

Say it ain't so, Sarah

I cringed when I heard Sarah Palin suggest that human activity might be to blame for so-called global warming in her ABC News interview with Charlie Gibson last week. The Republican VP nominee's claim instantly conjured up images of French President Nicolas Sarkozy breaking many of the pledges he boldly made during the presidential election campaign here in France in early 2007. As I watched Sarah Palin’s cut-and-thrust with the MSM (via the Internet here in France), I seriously wondered for one moment whether her remark was not yet another example of a politician saying one thing and doing another, once in office or on his or her way there.

Forgive my sensitivity. After all, we, American-inspired French conservatives, who have been gullible enough to believe that France might ever become anything other than a stronghold of socialism, have had our fair share of rude awakenings since the days of Turgot, Tocqueville, Jean-Baptiste Say, and Frederic Bastiat.

Consider the latest wakeup call. As candidate, Nicolas Sarkozy straight-facedly promised to reform France along clear-cut free-market principles. Granted, since then, he has cut some taxes in an effort to boost investment and stimulate growth and made moves to dispel the notion that the work ethic is a dirty word.

However, where are the cuts in welfare spending that should have gone hand in hand with the tax changes? Instead, the entitlement mentality is still the cultural norm, and President Sarkozy has been busy implementing his very own brand of Robin Hood economics, robbing hard-working, hard-saving, law-abiding citizens not only to pay for his Al Gore-certified green revolution but also to bribe loafers and welfare queens to get back to work:

** He has approved green taxes on anything from cars, home appliances, and flat-screen TVs to computers, number crunchers for school children and even plastic cutlery used in barbecues and other outdoor meals;

** He has “asked” Total, France’s biggest oil company, to make a $312-million contribution to the French Treasury to help those who can’t afford it pay for nest winter’s heating bills following last summer’s rise in oil prices;

** Worst of all, he has just slapped a new 1.1% new tax on capital gains and other investment to fund a back-to-work program, all in the name of solidarity, a code word for socialistic wealth transfers here in France.

The list goes on. Bottom line? While Sarkozy's approval ratings have been edging up, France’s GDP growth in this year’s second quarter plummeted to –0.3%. Another batch of taxes and France will technically be in a recession by next quarter.

So please, Mrs. Palin, however morale-boosting your selection as John McCain’s running mate might justifiably be, forget about man-made global what-do-you-call-it and let us hear you talk consistently about free enterprise, traditional values and strong national defense.

Let us see you walk the wholeheartedly conservative walk all the way to victory on Nov. 4 -- and from there to the Oval Office in 2012.