TO THE RICH.

This article, Bush’s Tax Cuts Are Unfair … To The Rich, is from October 2004, but I feel is still relevant today. (Especially with the Democrats thinking about repealing the tax cuts.) I found this while looking for data regarding the federal tax rates and revenue and the effect it had on the poor, middle class, and wealthy. And for those of you that feel that the middle class pays a disproportionate amount of taxes, consider this data: The top 10% of income earners paid 70% of the federal income tax. And, as Steven E. Landsburg in the Slate article writes, “it seems patently unfair to ask anyone to pay over 30 times as much as his neighbors (unless he receives 30 times as much in government services, which strikes me as implausible).”

Select quotes from the article below. Please visit the site to see the rest of the article and the charts/graphs.

The Bush tax cuts (which Congress just voted to extend) are an affront to the most fundamental principles of fairness. They are skewed in favor of those who already pay less than their rightful share of taxes and shift the burden even farther onto the shoulders of the most overtaxed. In other words, the Bush tax cuts are unfair to the rich.

I know there’s a lot of hype to the contrary, but look at the numbers. If you and your spouse have a taxable income of $60,000 a year, you’ve had almost a 24 percent income tax cut since President Bush took office. (And ditto if your income was just $20,000.) Meanwhile, the folks who make $350,000 a year got a cut of only about 12.5 percent; those who make $1 million a year got an even smaller cut.

…

My own opinion is that the rich already pay too much—it seems patently unfair to ask anyone to pay over 30 times as much as his neighbors (unless he receives 30 times as much in government services, which strikes me as implausible). If you share my sense of fairness, you’ll join me in condemning the president’s tax policy.

(the bolding is mine)

There are 2 Versions - Read Both

TRADITIONAL VERSION:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The grasshopper has no food or shelter, so he dies out in the cold

MORAL OF THE STORY:
Be responsible for yourself!

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Above the Law figures just how much an Obama presidency will cost you (that is, if you are making over $164,000):

The effect is enormous. Betsy’s marginal tax rate goes up from an already ridiculous 42.5% to 51.4%—not including the new 6.2% marginal tax on your employer. Subject to how she structures her withholding, Betsy’s take home pay drops an average of $515 a paycheck—less in the early months of the year, but much more in the later months of the year. Add in the effects on her bonus, and Betsy loses nearly $20,000/year in take-home pay.

I added a third column: how big a pay cut would you have to take to receive the same take-home income? The answer is that Obama’s tax increases have a bigger effect on your income than a law firm cutting New York salaries by $34,000.

Now, I’m not anywhere close to making that kind of money right now. I still have another 2 years of medical school to pay for and then another at least 5 years of around $40,000 a year during residency. So the earliest that I’d start earning this income would be around 2015. However, I still feel that the best stimulus for the country is to reduce taxes and limit spending of the non-essential federal programs. Here’s a good article called Ten Myths About the Bush Tax Cuts that explains how the tax cuts stimulated the economy and promoted growth. The key balancing point for the correct tax rate is theorized by the Laffer curve: “This curve illustrates ‘taxable income elasticity’, which is the idea that government can maximize tax revenue by setting tax rates at an optimum point and that neither a 0% tax rate nor a 100% tax rate will generate government revenue. At one extreme, a 0% tax rate means the government’s revenue is, of course, zero. At the other extreme, where there is a 100% tax rate, the government collects zero revenue because (in a ‘rational’ economic model) taxpayers presumably change their behavior in response to the tax rate: either they have no incentive to work or they avoid paying taxes, so the government collects 100% of nothing. Somewhere between 0% and 100%, therefore, lies a tax rate percentage that will maximize revenue.”

Here’s something interesting. National defense spending (including the wars in Iraq and Afghanistan) as a percentage of the GDP is actually 1.5 percentage points below the 45-year historical average.

The fourth annual Future Wisconsin conference will be held on Saturday, April 5th, 2008 at Bluemound Gardens Conference Center in Wauwatosa, WI. WISN Radio talk show host, Jay Weber will be the master of ceremonies for the conference. Click the link above to sign up as well as to preview the list of great speakers they have scheduled. Student registration is free!

Unfortunately, I won’t be able to attend because of upcoming exams (pharm and pathology). However, this is a great opportunity to get involved in improving the economic health of Wisconsin for those that are free on Saturday.

This Spring Break I had the amazing opportunity to visit Prague and various other areas in the Czech Republic and Germany. Most of the photos now have captions.

Great information if you are going to be visiting Prague: Ten Essentials to Experiencing Prague

Here’s an interesting article regarding recently updated GDP calculations:

China, it turns out, isn’t a $10-trillion economy on the brink of catching up with the United States. It is a $6-trillion economy, less than half our size. For the foreseeable future, China will have far less money to spend on its military and will face much deeper social and economic problems at home than experts previously believed.

What happened to $4 trillion in Chinese gross domestic product?

Statistics. When economists calculate a country’s gross domestic product, they add up the prices of the goods and services its economy produces and get a total — in dollars for the United States, euros for such countries as Germany and France and yuan for China. To compare countries’ GDP, they typically convert each country’s product into dollars.

The simplest way to do this is to use exchange rates. In 2006, the World Bank calculated that China produced 21 trillion yuan worth of goods and services. Using the market exchange rate of 7.8 yuan to the dollar, the bank pegged China’s GDP at $2.7 trillion.

That number is too low. For one thing, like many countries, China artificially manipulates the value of its currency. For another, many goods in less developed economies such as China and Mexico are much cheaper than they are in countries such as the United States.

To take these factors into account, economists compare prices from one economy to another and compute an adjusted GDP figure based on “purchasing-power parity.” The idea is that a country’s GDP adjusted for purchasing-power parity provides a more realistic measure of relative economic strength and of living standards than the unadjusted GDP numbers.

Unfortunately, comparing hundreds and even thousands of prices in almost 150 economies all over the world is a difficult thing to do. Concerned that its purchasing-power-parity numbers were out of whack, the World Bank went back to the drawing board and, with help from such countries as India and China, reviewed the data behind its GDP adjustments.

It learned that there is less difference between China’s domestic prices and those in such countries as the United States than previously thought. So the new purchasing-power-parity adjustment is smaller than the old one — and $4 trillion in Chinese GDP melts into air.

Continue reading: “The great fall of China”

So I used to like Keith Olbermann. I thought he was funny but also fair in his analysis of news. Lately, though, he has neither been funny nor fair. Here is an example:
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IBDeditorials.com has a great article entitled, Government’s New Minimalist Mission: ‘Just Keep Us Safe And Leave Us Alone’, that discusses the need for small government. The funny thing is that the Left preaches the need for government help/intervention in everything. Yet, when showcasing a successful individual, rarely is government help mentioned as the reason for the success. It is always how the individual succeeded in a world stacked against him or her.

The quote below is only a snippet of the entire article. The bolding is mine.

The following set of minimalist guidelines may be useful.
1. The need for government in a society varies inversely to the sophistication and affluence of its people. Despite government’s recent depredations, America is for the most part still an educated, highly civilized and affluent society. At present, therefore, it needs little governance. If these qualities decline among the population (because of immigration or otherwise), more governance will be needed.
2. Government is a high-cost way of doing anything. The reason is it finances itself with taxes, which do more harm to the private economy than they yield in revenues for the government to spend. This damage occurs because taxes function like a pay cut, reducing the reward to work and investment and curtailing the supply of both.
3. The less government does, the better off we are. Because the tax revenues the government has available are always less than the cost of acquiring them, government should spend its resources solely on high-value projects that only it can perform. National defense is the best example.
4. Government cannot spend its way out of the economic hole dug by taxes. When government expands beyond its limited areas of competence and efficiency, the public benefit per dollar of additional spending drops and the marginal cost of more taxes to pay for bigger government rises.
5. Since we need so little and the cost is so high, why do we have so much government? Washington tells voters that a dollar of taxes costs only a dollar (even though experts agree that the cost is at least $2. It then insists that each dollar of spending produces much more than a dollar of public benefit (though the government’s own data show that the benefit is often less than a dollar). Washington also tells voters that the burden of taxes is borne mostly by the rich (though the damage done by taxes harms everyone, especially wage earners).
6. How to make and keep government small? There are three key steps: (a) tell the voters the truth about the high cost of taxes weighed against the often low benefit of spending; (b) force Congress to adhere to a cost-benefit budget procedure, conducted in the open with full public notice and voter participation; and (c) give everyone a “tax cut dividend” when spending reduction targets are met — and send them a bill for additional taxes when spending goes up. Government will shrink, the economy will grow and, with a large base of prosperity, America will always have plenty of money with which to meet any crisis.

The big question is whether McCain’s radical agenda is simply designed to rally the Republican base, or would prove a blueprint for a McCain presidency. Given the Arizona Senator’s maverick record, voters have every reason to distrust the new McCain. He twice opposed the Bush tax cuts and keeps dropping disturbing lines like, “I don’t know as much about the economy as I should.”

But economic conservatives should take heart. McCain’s chief economic adviser - and perhaps his closest political friend - is the ultimate pure play in free market faith, former Texas Senator Phil Gramm. If McCain follows Gramm’s counsel, and most of his current positions are vintage Gramm indeed, his policies as president would represent not just a sharp departure from the Bush years, but an assault on government growth that Republicans have boasted about, but failed to achieve, for decades.

…

Today, McCain is advocating a plan that’s radically different from those of Clinton and Barack Obama, and - if he goes all the way by following Gramm - could revolutionize America’s healthcare system. For McCain and Gramm, the problem with our healthcare system - and the reason why over 47 million Americans are uninsured - is that it’s excessively, scandalously expensive. The solution, they say, is to let Americans shop for healthcare with their own money. McCain advocates giving tax rebates of $2500 per individual or $5000 per family. With that money, families could purchase policies on their own. What’s truly radical about the plan is that it eliminates the tax exclusion for healthcare benefits offered by companies to their employees, and replaces it with the $2500 to $5000 rebates.

Consumers could then use that cash to buy their own insurance in what Gramm foresees as a vibrant, consumer-driven marketplace for healthcare packages.

By contrast, Clinton and Obama want to leave the employer-based system in place; Clinton would make big companies either fund gold-plated packages for workers, or pay a stiff tax to support a new Medicare-like system. The Democrats wouldn’t allow insurers to charge lower rates for young workers who cost far less than older Americans. McCain favors allowing insurers to charge rates based on actual cost. Gramm adamantly supports that policy allowing insurers to tailor their premiums, and their packages, to their customers. Says Gramm: “Most people without coverage are young and healthy. We shouldn’t penalize them by forcing them to pay for someone else’s coverage.”

Read the long version @: McCain’s econ brain

McCain sounds like just the man for the job. His ideas are much, much better than Clinton or Obama’s populist proposals. Taxing businesses is not the way to improve America. If anything, corporate taxes (which are among the highest in the world) should be lowered.

SEAN HANNITY, CO-HOST: And welcome to “Hannity & Colmes.” Thank you for being with us. I’m Sean Hannity.

And we get right to our top story tonight. Earlier today, former New York City Mayor Rudy Giuliani filed “statement of candidacy” papers with the Federal Elections Commission. Mayor Giuliani joins us now for a “Hannity & Colmes” exclusive interview!

Should I say congratulations or condolences?

RUDY GIULIANI, FORMER MAYOR OF NEW YORK CITY: A little of both, but mostly congratulations. It’s wonderful thing to be, you know, organizing and putting together. And it’s a little — very humbling to think that running for president of the United States is — for a kid from Brooklyn, it’s quite a step.

HANNITY: You are then officially running to be the next president of the United States?

GIULIANI: Well, we still have to formally announce it and do a few more things. But this is about as close as you’re going to get. We did everything you have to do, I guess legally to do it — then you still have to make a formal announcement and do things like that

HANNITY: Are you in it to win it?

GIULIANI: Gosh, yes. I mean, that’s the only reason to do it. I mean, first thing you have to do is say to yourself, you know, what can I bring to it, what can I do that’s, you know, different or — and how can I make the country better? How can I improve it?

And I think that the experiences that I’ve had as mayor of New York City, United States attorney, all of them very, very, strongly, kind of in the executive area, where you have to have leadership, and organization, and focus, and having dealt with a city that was in really bad shape when I took over and that I had to kind of turn around, I think it gives you the background to approach it and to feel pretty comfortable that you can make a difference.

Continue reading…