How much is too much? When the “carrot” of earning lots of money becomes the “stick” that beats you to death with taxes, what’s a young entrepreneur to do? Does she work hard, innovate and pioneer? Or does she reconsider? How is America better if she reconsiders? Why are we incentivizing that reconsideration?

Consider:

Newly released data from the IRS clearly debunks the conventional Beltway rhetoric that the “rich” are not paying their fair share of taxes.

Indeed, the IRS data shows that in 2007—the most recent data available—the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act.

Remarkably, the share of the tax burden borne by the top 1 percent now exceeds the share paid by the bottom 95 percent of taxpayers combined. In 2007, the bottom 95 percent paid 39.4 percent of the income tax burden. This is down from the 58 percent of the total income tax burden they paid twenty years ago.

To put this in perspective, the top 1 percent is comprised of just 1.4 million taxpayers and they pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined.

Some in Washington say the tax system is still not progressive enough.

via The Tax Foundation – Tax Burden of Top 1% Now Exceeds That of Bottom 95%.

Are we really to tell our children—”Work hard, but not TOO hard! You don’t want to end up paying 90% of that last dollar you earn to Uncle Sam, do you?”

Of course this is mostly theoretical, since none but a small percentage of our population are in that top 1% bracket. Still, it’s all about incentives, isn’t it? It’s about what such a twisted formula says about success in our country. We clearly don’t like it.

And that’s wrong.

There’s a trick play in baseball where the first baseman pretends to throw the ball back to the pitcher after a pickoff attempt, but instead, he actually holds on to it. He hides it in his glove. The idea is to get the runner on first to bite on the ruse and wander off the bag again…thinking the ball is back with the pitcher. When he does that (sucker!) the first baseman reveals the ball, puts the tag on the duped runner, and everyone has a good laugh. Except the runner. And his manager, maybe.

So how to get a gullible and benighted public to wander off the bag on health care? No serious person would want a socialized system when presented with the facts, so you’ve got to trick it somehow and pretend you’re doing one thing while actually doing another.

Bobby Jindal breaks it down:

The left in Washington has concluded that honesty will not yield its desired policy result. So it resorts to a fundamentally dishonest approach to reform. I say this because the marketing of the Democrats’ plans as presented in the House of Representatives and endorsed heartily by President Obama rests on three falsehoods.

First, Mr. Obama doggedly promises that if you like your (private) health-care coverage now, you can keep it. That promise is hollow, because the Democrats’ reforms are designed to push an ever-increasing number of Americans into a government-run health-care plan.

If a so-called public option is part of health-care reform, the Lewin Group study estimates over 100 million Americans may leave private plans for government-run health care. Any government plan will benefit from taxpayer subsidies and be able to operate at a financial loss—competing unfairly in the marketplace until private plans are driven out of business. The government plan will become so large that it will set, rather than negotiate, prices. This will inevitably lead to monopoly, with a resulting threat to the quality of our health care.

Second, the Democrats disingenuously argue their reforms will not diminish the quality of our health care even as government involvement in the delivery of that health care increases massively. For all of us who have seen the Federal Emergency Management Agency’s response to hurricanes, this contention is laughable on its face. When government bureaucracies drive the delivery of services—in this case inserting themselves between health-care providers and their patients—quality degradation will surely come. House Democrats seem willing to accept that problem to achieve their philosophical aim—the long-term removal of for-profit entities from the health-care landscape.

Third, Mr. Obama’s rhetoric paints a picture of a massive new benefit that will actually cost average Americans less than what they pay today. The Democrats want middle-class taxpayers to believe they won’t feel the pinch of this initiative, even as their employers are assessed massive new taxes. They might as well try to argue that up is down. The analysis of the Democrats’ proposal by the Congressional Budget Office shows that it will not reduce government spending on health care, and that it will substantially increase the federal deficit—and this despite all the tax increases.

via Bobby Jindal’s Bipartisan Health-Care Reform – WSJ.com.

Of course read the whole thing.

Vote no on Socialism.

Had to read this headline twice.

Obama seeks fiscal responsibility mantle

He’s seeking it now? I mean, it’s nice, if it’s true, but I can’ t believe that this is about anything except Obama trying to cover his ass after his MASSIVE outlay of irresponsible spending contained in the “stimulus” package. Let’s see what you think.

WASHINGTON (Reuters) – President Barack Obama sought on Tuesday to show he was serious about improving the U.S. budget picture as he called on Congress to pass new limits on tax cuts and spending programs to avoid adding to deficits.

Obama urged passage of “pay-as-you-go” legislation that would require any new tax cut or automatic spending program to be paid for within the budget.

“The ‘pay as you go’ principle is very simple. Congress can only spend a dollar if it saves a dollar elsewhere,” Obama said in a speech at the White House attended by several Democratic members of Congress.

I guess that first sentence gives it away, doesn’t it? Reuters couldn’t help itself. Instead of saying that Obama’s plan is meant to actually IMPROVE an overtaxed economy that he himself created, they say that the move was designed to “show he was serious” about improving the economy. Is that the same thing as what I said? Not even close. I can either do something, or so something that “shows I’m serious” about doing something. If you actually had a vested interest in that thing I was supposed to be doing, would you rather I actually DID that thing or instead show merely that I was serious about doing it?

Second, he’s going to cut the deficit by removing tax cuts? Doesn’t he read the papers? Tax cuts increase revenue. By raising taxes he’s going to DECREASE the amount of money in the treasury and INCREASE deficits.

Finally, the kicker. He says that this “pay as you go” program will work by requiring that a dollar be “saved” before any new dollar can be spent. He did NOT say that a dollar of spending had to be CUT before another can be spent. He said that a dollar had to be SAVED….which is Obama-speak for….what, exactly?

Imagine the following scenario. Democrat pork-wranglers get together to propose a bill to increase spending by $100billion. According to Obama, he won’t sign it until the porkies can show that $100billion will be “saved” by the passage of that bill. What sort of proof does he need? Doesn’t say. I’d bet it’s a pretty low threshhold, what about you? The porkies would likely say that spending $100billion now will save $100billion in future costs.

And that will be that.

There’s one more piece to this ridiculous Reuters article that deserves mentioning:

Republicans have warned that programs such as the proposed health care plan would add to the budget deficit for years to come and have also criticized Obama’s $787 billion stimulus plan, which was passed by Congress in February.

Obama contends that much of the budget deficit was inherited from the Bush administration, which presided over a shift from record surpluses to huge increases in the deficit fueled by the financial crisis and spending for the Iraq war.

“The reckless fiscal policies of the past have left us in a very deep hole,” Obama said. “Digging our way out will take time and patience and tough choices.”

First, Republicans have warned that a complete government takeover of our health care system would “add to the deficit for years to come”??? Are the Republicans the only ones? How about a quote from a Democrat that says it won’t add to the deficit? Does any reasonable person believe this massive spending won’t add to the deficit? Unbelievable. Obama’s position is indefensible…except by the MSM.

Second, Bush left office with the deficit at a tick over $400billion. Obama’s projected deficit for 2009 is $1.85trillion….thanks to the massive pork burger he and his Liberal buddies in Congress just stuffed down our throats. It was sort of like being waterboarded, only half as polite. Here’s a handy chart to post on your night table so that you never forget how deeply and thoroughly we’re all being f***ed by the Lord High Obama:

Obama projected deficit compared to prior administrations

NEW YORK Reuters – Vice President Joe Biden acknowledged on Tuesday that some waste is inevitable in the spending of a $787 billion economic stimulus package, in a characteristically blunt assessment.

“We know some of this money is going to be wasted,” Biden said during a roundtable discussion in New York with business leaders aimed at promoting the two-year stimulus plan.

[clip]

Biden said transparency and accountability are key to the programs success.

“There are going to be mistakes made,” said Biden. “Some people are being scammed already.”

Huh.

I wonder what his point is.

Because if it is to show how wasteful and inefficient anything run by the government tends to be, he’s doing a fantastic job.

What incentive does a gargantuan, leviathan government have to suck up the capital of its citizens in an economical fashion? Without wasting? To take only that which it needs? None. A body without regard for waste, who simply sucks more when it runs low has no incentive whatsoever to spend wisely, to track inventory or to conserve.

A private citizen with limited resources, however, is forced—FORCED—by the laws of simple economics to allocate his resources where they are most efficiently used. If a private citizen loses $500, $5,000 or $5,000,000….he feels it. Because his resources are not unlimited, and because he spilled his own sweat to create that money, he has an incentive to avoid that loss by limiting risk, enacting measured responses to events and conserving.

Not the government. If through waste, “scamming” or mistakes, it loses millions or billions of dollars, they can either print more money or simply suck up some more from taxpayers. They don’t create that money from their own effort and thus there’s no incentive for them to conserve.

No incentive to conservation.

Keep that in mind as you listen to Biden and the rest of the Obama Administration explain their takeover of American private enterprise.

They’re doing things with your money that you wouldn’t do with it yourself.

We’ve all seen the infomercials. The hucksters claiming that their extra special product “won’t last” or that their “supplies are limited” They tell us that their offer is only available “for a limited time” and as an extra incentive to get us to open our wallets, tell us that the “first 100 callers” get a free tote bag. They’re appealing to that base instinct within us not to be left behind and to avoid future teeth gnashing at having missed the greatest thing ever to have happened to mankind.

The thing is, if you stop to think about it, if the product were really that valuable, these salesmen would make it available FOREVER wouldn’t they? What thing of value is there in the world that is not available to you RIGHT NOW? Are there any? Bread, water, milk, an apartment, a lawnmower, hand towels, toilet tissue, nasal spray. Whatever. Nobody needs to create false demand for these things by hyping the uncertainty of supply.

It’s the truly worthless things that you have to worry about. These are the things that nobody wants, but which salesmen convince you are invaluable due to the supposed fleetingness of their availability. We buy these things not out of need but out of fear of “missing out” and regretting it later. It’s a scam.

It is in the spirit of these hucksters and the worthless products they connive us into purchasing that I bring you (who else?) the President of our great nation. Barack “Shifty” Obama.

Seems he convinced our legislature a bit ago that unless we “acted now!” that our entire economy would be up in smoke. Remember now, any real solution of value will stand the test of time and be as valuable after everyone’s digested its contents as before. Acting now won’t make a dog turd into a gold nugget, even though Shifty may want you to believe it to be so.

This from today’s Washington Post:

YOU MAY RECALL President Obama urging Congress to pass the stimulus bill immediately because the economy so desperately needed money. The massive recovery bill was passed, and, recently, a few “green shoots” have been popping up — indicating that, perhaps, the worst may be over. Is it a result of the stimulus? Tough to say, but, given the amount of money that has actually gone out the door, probably not.

Government agencies have thus far spent $29 billion of the $787 billion stimulus package, and less than that has gone out in tax cuts. What has been spent has mostly gone to Medicaid and unemployment insurance — real “shovel-ready” programs in that they are already in place. It is true that just knowing that money has been authorized ($88 billion so far) can allow projects to get started and jobs to be created. Nonetheless, of the $20 billion approved for spending so far for the Education Department, for instance, 97.2 percent remains unspent. Of the $10 billion approved for the Transportation Department, a full 99.7 percent is still left to be spent.

The challenge of getting government money out the door fast is one reason that some economists challenge the value of Keynesian stimulus policies. By the time checks are being written, they argue, an economic recovery is often underway. The result can be an inflationary waste of money.

So let’s walk through this one together.

When left alone, thriving economies like ours have a tendency to correct themselves. I know this. You know this. Obama certainly knows this. Only Obama’s got a problem. He was elected on the crest of a populist “gimme mine” and “soak the rich” platform. He’s got buckets full of special interest groups like unions, environmentalists, the poor, and generally any of a long list of groups that produce nothing in our economy except grievances. They take what you and I make. So what does he do? Instead of getting out of the way and permitting the economy to recover from the (government induced) trauma of the housing/credit crisis, he uses the crisis as an excuse to pay off his constituency.

$787 billion is authorized by Congress to be spent even though nobody outside of kindergarten seriously believes it will actually be in anyone’s hands before the economy rights itself of its own accord, or that it will help the economy in any meaningful sense. Obama doesn’t care. The stimulus package is a payoff. It’s retribution. It’s redistribution. It’s purpose isn’t to help the economy at all. It’s only purpose is to help Obama.

And we can see from the results that Obama knew exactly what he was doing. Of the total amount authorized to be spent, only 2.5% of that actually has been spent 3 months later.

Yet we had to “act now”. We couldn’t delay one minute. Supplies were limited after all.

Had we taken the time to think about this, we’d have seen that it was nothing more than a play by Obama to use the recession as an excuse to drench his pet projects and those of the liberal democrat legislature with our hard earned money. The economy would always fix itself. But to fix his political base, Obama demanded the stimulus.

Sure, lots of people got rich off the stimulus. Too bad you and I aren’t among them.

One of Maryland’s budget-balancing tactics – asking millionaires to pay more money to the state - appears to be backfiring as the number of the highest-earning taxpayers dwindles with the flagging economy.

A year ago, Maryland became one of the first states in the nation to create a higher tax bracket for millionaires as part of a broader package of maneuvers intended to help balance the state’s finances and make the tax code more progressive.

But as the state comptroller’s office sifts through this year’s returns, it is finding that the number of Marylanders with more than $1 million in taxable income who filed by the end of April has fallen by one-third, to about 2,000. Taxes collected from those returns as of last month have declined by roughly $100 million.

via Maryland plan to tax millionaires backfires — baltimoresun.com.

Unless of course Maryland intended to lose 2,000 millionaires from their tax rolls.

This really isn’t all that difficult to understand. Taxes are penalties. When you penalize a certain behavior, you’ll get less of that behavior. Likewise, you’ll get more of the behavior you reward. When Maryland told filers with AGI of $1million+ that they’d be penalized in the form of higher taxes on that income, the so-called millionaires did the most reasonable thing anyone with half a brain would expect. They left the state or reduced their taxable income. Either way, the result was that Maryland got roughly $100million less in taxes from these filers this year as compared to last year. Was that what Maryland wanted to see happen? No. What they wanted to see happen was for their state to receive MORE tax revenue as a result of the higher tax.

But that was plain stupid.

If they wanted to see more tax revenue, all they had to do was REDUCE the rates at which everybody (especially their highest earners) was taxed.

Look what happened after President Bush cut tax rates in 2003:

This same result has been borne out throughout history.

Why then do we continue to go down this road and attempt to raise revenue by raising tax rates?

Politics.

So long as your constituency has no idea what the results of your failed policies are, they’ll continue to believe that making it “harder” on the “rich” will make them better off themselves…somehow. It’s class warfare and it’s the tactic of scoundrels.

Penalizing the “rich” makes us all poorer….but nobody more so than the poorest among us who depend on the services that are paid for by (you guessed it) TAXES…which mysteriously GO AWAY when those providing that revenue are PENALIZED for earning as much as they can.

Its’ a vapid cesspool we live in where this sort of system is tolerated let alone promoted as some sort of “social justice”.

In early January, 2 members of President Elect Obama’s economic team, Christina Romer and Jared Bernstein, published what Team Obama was billing as their plan for economic recovery. You can find the full text of the document here. In it, we were shown how unprecedented massive government spending was to be our ticket out of the recession. The graph below was included in the study as Figure 1. We’d spend our way to more jobs, went the logic, and here’s how much better we’ll be than if we did nothing at all.

Now, 3 months in, isn’t it time to ask (to paraphrase former NYC Mayor Ed Koch) “How are we doing?”

Funny you should ask.

Of course the left will howl that it could have been “even worse” without the $1trillion, and of course they “could” be right…except that by accepting that premise, they’d be forced to concede the fact that their expert forecast of merely 3 short months ago (you know, the one which they relied on to steal nearly $1trillion in taxpayer money) was GROSSLY inaccurate. And if we accept that premise, doesn’t it follow that we’re now at square 1 and have absolutely no way of knowing (from the data provided from the administration) HOW or IF the stimulus did anything except flush $1trillion down the toilet? Sure it COULD have been worse, but we don’t know that based on the info in that chart (which has been proven to be amateurishly inept). Only if we accept as a matter of faith that ANYTHING Obama does makes the world a happier place can we also accept that the economy COULD HAVE BEEN WORSE without that spending. But since the chart itself is a turkey, doesn’t that mean that Obama is fallible? And if he’s fallible, then how can we accept on faith that this could all have been a lot worse?

What I’d like to see now are some CONSERVATIVE principles being engaged by the federal government to help reverse this recession. I’d like to see taxes lowered and incentives to growth encouraged, and end to bailouts, more bankruptcies with a resulting reapportionment of capital which will place it where it is most needed and most productive. If anything is clear from the table above it is that Obama certainly doesn’t have a clue. And since his gaffe cost us $1trillion dollars, perhaps the conservatives might be afforded the opportunity to fix things at absolutely no cost to the taxpayer.

Look at that chart again, if you can bear it. Obama said that if we spent $1trillion, that our unemployment rate would be around 8% today. We spent that $1trillion. Our unemployment rate is 9%. Which happens to be exactly what he said the rate would be if we spent nothing.

Governments don’t fix economies, people do. By getting out of the way and encouraging businesses to hire people and make things, governments foster an environment conducive to economic recovery. By confiscating the profits of our top producers and burdening our future generations with mountains of unprecedented debt, Obama is doing the opposite of that.

And surprise of surprises, our economy limps on bleeding.

Megan McCardle from The Atlantic, on why Obama’s unprecedented spending plans will simply run out of gas.

So far, Obama’s only proposal for dealing with the funding shortage is a tax increase on high earners, leaving “95% of working families” untouched. But the math doesn’t work. In 2006, the latest year for which data are available, the top 5% of families took home a whopping 36% of national taxable income, and paid 20% of that, or around $600 billion, in Federal income tax. But even before the president’s ambitious health care plan emerges from the Congressional policy grinder, the CBO estimates that his budget plans to spend an additional $400 billion each year. He’s not going to get there with a small, or even a large, tax increase on high earners. For one thing, the share of national income collected by the top 5% has undoubtedly dropped sharply since 2006, because their incomes tend to depend more on capital and business income, and on bonuses, all of which have fallen off. (That’s why tax revenues fell off so steeply in 2001.) And work by economists Thomas Piketty and Emmanuel Saez suggests that the deeper the crisis, the longer and deeper the hit to top incomes: the lessening of the gap between rich and poor during the fifties and sixties may in fact have been largely attributable to the deleterious effects of the Great Depression and World War II.

Even if this weren’t the case, it’s not really feasible to pay for everything simply by doubling taxes on the wealthy — because federal income taxes aren’t the only taxes they pay. Higher incomes are disproportionately concentrated in places with high state and local taxes, like New York City. There’s a practical limit to how high a percentage of income you can take from even the wealthiest financier, not least because they have more discretion about how, and whether, they make money, which means that raising taxes above a certain level rapidly starts depressing the amount of income available to tax. Even most European countries don’t try to pay for their welfare states just by soaking the rich.

via The Trillion Dollar Fix – The Atlantic Politics Channel.

Unless he plans to sink the entire American ship in his pursuit for the Socialist Nirvana of social justice.

But he wouldn’t do that, would he?

Matt Kibbe, in yesterday’s reasononline, on how the Left is trying to  make sense of the Tea Party Movement:

Some tried to diminish the tea parties as misguided tax protests. In reality, the protestors demonstrated a sophisticated understanding of economics that went well beyond objections to higher tax rates. You can’t spend money you don’t have, the tea party attendees understood, and government spending above current revenues must be paid for with higher taxes, more borrowing (to be paid for with higher taxes in the future), or artificial government expansion of money and credit, which can only debase the currency and make everyone poorer through inflation.

So how did the media miss the real story? Perhaps the question itself is silly because it assumes that left-of-center reporters were actually trying to “report.” Some were, though most simply regurgitated the talking points supplied by partisans in the blogosphere.

But facts can be stubborn things, and no matter how many times those talking points were repeated by reporters, it quickly became clear that a substantial slice of the electorate would not buy into the promise of really big government. Imagine how that must have felt for many leftists: Having dutifully sat through a four hour and 17 minute subtitled movie about Che Guevara that every sane American ignored, many in the Hope and Change Brigade misinterpreted the voting public’s rejection of Republican over-spending and gross mismanagement last November as an endorsement of La Revolución!

Read the whole thing.

Tom Blumer at PJTV presents some interesting research of the economic collapse which began last summer and has resulted in record low federal tax receipts as entrepreneurs, business owners and individuals scrambled for shelter from the coming Obama storm:

April 2008 saw an all-time record for federal tax collections of over $400 billion, largely buoyed by final 2007 tax payments and first-quarter 2008 estimated tax remittances from business owners, investors, and entrepreneurs who pay taxes as individuals. It was a performance I characterized at the time as a “supply-side stunner,” because it showed, five years on, that George Bush’s investment-related tax cuts of 2003 still had growth-generating legs.

The collections record occurred as the economy was in the midst of recovery after a difficult fourth quarter of 2007. First-quarter growth was a tepid 0.9%, but the second quarter’s 2.8% was just short of the 1958-2007 median of 3.1%. The real (i.e., not seasonally adjusted) economy added jobs, though not as many as in previous years, from February through June.

Thus, we were not in a recession as normal people define it — not numerically and not mentally. As I wrote at the time of the high producers who were generating so much cash for Uncle Sam: “many … are thinking, in the face of relentless media harping to the contrary, that 2008 will be at least as profitable [as 2007].”

But a short time later, receipts began tailing off and went comparatively negative:

What triggered the sudden shift? It was the beginning of the POR (Pelosi-Obama-Reid) economy in mid to late June.

Read the whole thing.

Responsible producers in our economy (you know, the ones we all depend on for jobs, goods, services, and general economic well-being) scrambled to protect themselves when it became clear that the Pelosi/Reid/Obama nightmare had morphed into a frighteningly real political landsdcape. Raise my taxes? Make it difficult for me to use energy necessary to grow my business? Fine. I’ll stop producing. Then see how much taxes you get.

Look at the chart above and see how much taxes we got.

This is the way the world works, everyone. Actions have consequences and smart people simply will not stand by and permit their pockets to be picked by a pack of demagogues. They’ll withdraw while they still can.

How can we have economic recovery while our greatest producers are on the sidelines?