Republicans are for the Rich
If you’re a conservative you’ve probably heard this phrase uttered umpteen times, if you’re a liberal you’ve probably said it a million times yourself. This is a gross (and purposeful) generalization designed to categorize all conservatives as money-grubbing trust fund babies who will turn a blind eye on the downtrodden if it maximizes their gain. These evil capitalists (for liberals believe a priori that all capitalists are evil) will make the poor poorer if it pads their wallets, thus the old liberal adage, "Democrats are for the poor, Republicans are for the rich."
Now the logical question is to ask, "Is this true?" As is usually the case with liberals, they don’t let the facts get in the way of their political axioms, they believe if they saturate culture with their petty fact-free diatribes someone will fall prey to it. We’ve heard it over and over how Dick Cheney is using the vice presidency to pad the pockets of his cronies at Halliburton and George W. Bush is a pawn for big oil. All those innocent Senate Democrats and their deep-pocketed Hollywood pals, who are barely scraping by and are in a futile struggle against those evil Republicans in a crusade for "economic equality." Liberals are privy to strike up their canned "class-envy" rants around election time and this is only the tip of the iceberg.
If you followed the ‘04 campaign at all this was an intricate facet of the Democratic platform, with John Edwards and his "Two Americas" rants and John Kerry with his incessant "Halliburton" and "big oil" sound bites. Another item you’ll be aware of is the fact that John Kerry (to borrow a line from prominent pot-smoker John Fogerty) is just as much of a "fortunate son" as George Bush. Kerry was formerly married to a gin heiress and is currently married to Theresa Heinz, who profited from her marriage with former Senator J.H. Heinz. Kerry would fit the liberal definition of "rich white elitist" to a tee if he weren’t a liberal Democrat from Massachusetts.
Democrats are always whining how "the rich" aren’t paying their fair share without looking in the mirror and asking themselves the same question. Kerry (as I have documented here) and Edwards are wild about raising taxes but not so crazy about paying them. Edwards has avoided (via the Subchapter S Corporation Tax Loophole) paying over a half-a-million (!) in Medicare taxes and Kerry’s wife paid a whopping 15 % tax rate on 5.1 million dollars of earnings in 2003. For those who have listened to this "class warfare" harangue the hypocrisy is blatant.
Kerry and Edwards aren’t the only Senators with deep pockets, 1 all the members of the U.S. Senate have plenty of money, the odd thing is the richest of the rich are primarily Democrats. As of June 2003 the 5 richest Senators were Democrats and 8 of the top 10. Doesn’t say much for those sophists who are always proclaiming the rich in this country continue to stomp on the poor and keep them in the gutter. If we’re going to achieve this communist utopia Ted "The Swimmer" Kennedy can start by giving 7 million of his monies to big government’s futile "war on poverty." Even if Johnny Edwards paid those nasty Medicare taxes he could still easily avoid clipping coupons in Sunday’s liberal newspaper.
There are a lot of hypocritical politicians out there (everyone is sometimes, but a select few make it their life’s work) and there are plenty of the liberal side of the aisle. The fact of the matter is, the Democrats’ economic philosophy would kill this country’s economy. Whether it’s railing on Wal-Mart (an entity which has strengthened our economy greatly), stumping for a more progressive (and economically oppressive) 2 tax code, and general mis-education on economic issues, liberal economics are a bad idea from the word go.
Harkin (as well just about every liberal Senator) uses and abuses the "Tax Cuts for the Rich" line on a regular basis whenever conservatives call for an overhaul of the tax code. As I noted in the previous footnote, if you’re paying the lion’s share of income taxes when there’s a cut you’ll get the biggest break. Don’t expect the liberals to change their tune, this old dog can’t learn any new tricks and they’ve been doing this for decades (I often wonder how Reagan was able to get a Democrat Congress to fall in line with his tax-cut agenda).
Liberals rarely get into any detailed discussions about the effects of tax cuts and for good reason. For example, the job growth of the top 10 tax-cutting states was 10.3% above the national average and the top 10 tax-hikers were a whopping 21.1 below. Personal income growth showed basically the same results: The top 10 cutters were 6.1% above the national average and the top 10 hikers were 9.1 below (1990-2002). Liberals won’t let the facts get in the way of their agenda or their mission to institute a socialist utopia. Senator Harkin told me (e-mail correspondence 4/1/05):
"Our economy has weakened, and our nation has significantly increased spending on defense and homeland security. This, combined with the cost of the President's 2001 and 2003 tax cuts, has resulted in a $413-billion budget deficit for last year and continued large deficits for years to come... I believe it would be fiscally irresponsible to repeal the estate tax completely, especially without an offset." (Emphasis added)
For those who don’t speak "liberal gibberish" allow me to translate. "If you’re going to cut taxes you have to pay for them." This makes absolutely no sense, logically if I get paid 17$/hr. on my job and I receive a pay cut to 16$/hr., I don’t wonder to myself, "How am I going to pay for this pay cut." Logically, you would cut spending. Tax cuts don’t create deficits, runaway spending does, and right now our federal government is spending in a way that would make even L.B.J. blush. As far as Harkin’s blathering about our economy being "weak," that is also smoke and mirrors–the tax cuts have done nothing but strengthen the economy.
Moreover, states that require super majorities to raise taxes have a 37.52:1 ratio of budget cuts to tax increases and all states have a 1.18:1 ratio. In Fiscal Year 2003 super majority states saw 65 million in tax increases while all states had 12.82 billion in tax hikes. In Fiscal Year 2002 super majority states saw 2.44 billion in budget cuts compared to 15.19 billion for all states. There is a growing movement to require state legislatures to enact super majority requirements. Too many liberal politicians on both sides of the aisle have a knee-jerk cure for any budget shortfall–let’s just raise taxes. Enacting a super majority requirement will cause them to look elsewhere when dealing with budget difficulties. States that cut taxes typically do better economically then ones who increase taxes and spending. The Bush tax cuts demonstrate this ably.
As of May 2005 the economy has expanded for 14 consecutive quarters and has exceeded 3% growth for 8 consecutive. Overall, the U.S. economy has expanded at a 3.4% rate since the 2001 tax cuts and 4.3% since the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) passed 6/03. The economy has created (as of 5/05) 844,000 new jobs and since the passage of JGTRRA it has created 3.5 million new jobs. According to the Bureau of Labor Statistics unemployment (seasonally adjusted) was 6.3% in June 2003 and was 5% in October 2005. In fact unemployment dropped 0.5% in just the last calendar year. It would be much lower but 9/11, being the economic back-breaker it was, coupled with the Clinton-Gore recession gave the economy a punch in the mouth that it is now only fully recovering from.
Liberals are also privy to playing the "race card" and accusing conservatives of stomping on minorities in an effort to keep rich, white elitists on top of the social/economic ladder. This is pure rubbish, under President Bush black unemployment is currently 9.4%, lower than the 10% it averaged during the Clinton Administration. The gap between black and white unemployment is currently 4.9%, lower than the 5.5% average during the Clinton years.
Another talking point often belched out by the leftists is that nasty outsourcing of jobs. If I didn’t know any better listening to Ted "The Swimmer" Kennedy would lead me to believe unemployment is at 50% and all our jobs have gone to India. All those evil, wealthy capitalists want to put all Americans out of work and utilize cheap labor overseas. This is a complete falsehood, in fact there are over 8 million jobs in this country because of U.S. based foreign subsidiaries. Would you like to practice the isolationism that George "I won one state" McGovern ran on in 1972 and send all those jobs back?
Contrary to the nauseating spin-cycle of liberals conservative economic policies are far more productive than liberal economic policies, those policies will only succeed in sending the economy right into the honey wagon. Liberals think every conservative politician is backed by some deep-pocketed lobbyist who will go extravagant lengths to keep their coffers full. However, those filthy rich Hollywood elitists are more than willing to fill the coffers of liberal activists running for public office.
Our last liberal sound-bite will focus on the minium wage. Liberals are accustomed to parading out economics experts like Leonardo Dicaprio and Ben Affleck every election year to stump for a marked increase in the minimum wage. Attempting to tug at your heart strings a plea is made: "You can’t feed 4 children on minimum wage, those people are struggling to make ends meet and their employer is only worried about his/her bottom line. Please help these poor people." Easy for a multi-millionaire Hollywood elitist to say, these maniacal economic policies will do little to affect them, they have enough money to go around. 3
Raising the minimum wage at this time is a really bad idea, but don’t tell that to Teddy Kennedy, you’ll get a feisty rebuke. Kennedy’s urge to raise the minimum wage to 7.25/hr. would have many adverse affects. For example, many employers would have to lay off many of their younger, less experienced workers in an effort to stay in business if they can stay in business at all. Some would have to close up shop which would result in a bloated unemployment rate. If they don’t close up shop they’ll jack up their prices to make up for it which will inevitably trickle down to all of us. Sen. Kennedy also neglects to inform us that a meager 8% of the beneficiaries of his wage increase are single mothers, only 4% are in poverty; only 4% of the benefits would go to blacks in poverty; and only 15% of the beneficiaries are single parents with children. Most of those are 25 or younger and don’t work full-time anyway. The data doesn’t support Kennedy’s fact-free rambling.
Teenagers in entry-level jobs trying to get a foothold in the job market would feel the brunt of this, in fact a 33% increase in the minimum wage in 1956 resulted in a near doubling of unemployment among young black males by 1960. In 1981 the unemployment rate for young black males had ballooned to over 40% due to numerous increases in the minimum wage.
The fact is, the majority of people who have minimum wage jobs are young people at entry-level jobs, most of them don’t say there for an extended period of time and 2/3 of them get a raise in 1 to 12 months. They don’t "need" a pay raise they get one on their own. Minimum wage workers comprise only 1.6% of all wage and salary workers and a paltry 2.7% of hourly-paid workers. Raising the minimum wage might help a select few in the short-run and will inevitably hurt many in the long run. Kennedy’s whining that there are inordinate numbers of single-income households supporting children on minimum wage is pure fantasy.
In conclusion here’s an amendment to that liberal adage: "Conservatives are for economic development which favors those who are willing to work hard, liberals prefer an oppressive socialistic economic philosophy that favors those who work hard as much as those who are willing to sit on their duffs and suck up taxpayer-funded handouts." As an aside, please don’t mail me stating that I believe everyone who has ever gotten any kind of government assistance is a louse. The economic policies of those like Tom Harkin and The Swimmer will only stifle any and all economic development. Have a nice day.
The Death (Estate, Inheritance) Tax is another pet project of the socialist ilk, who, when talking about this seek to drum up the dusty, old, class-warfare arguments: These people are "rich," they can afford to pay these taxes. Beyond that, they really have nothing to offer, other than lines about how this won’t affect the middle class–that argument in and of itself is a load of horse manure. Besides that, what logical argument can come from the left that validates making death a taxable event? Something other than, "he’s rich, I’m jealous, tax him, it won’t affect me."
So let’s do what the left rarely does, let’s take a detailed look at some of the information on the Death Tax and see if it has a leg to stand on. Senator Harkin and numerous socialists have told me that this tax brings in "much needed federal revenue" every year–making it sound as if going without this revenue will plunge us into a depression. This is bunk, the death tax only brings in about 24-25 billion a year, approximately 1% of federal revenues, a paltry amount.
Here’s some facts and figures of interest (Sen. Charles Grassley (R-IA) mail correspondence 4/27/05). Concerning the amount excluded from death taxes: 2002-03, 1 million; 2004-05, 1.5 million; 2006-08, 2 million; 2009, 3.5 million. The tax rates for income subject to death taxes are as follows: 2002 was 50% and it decreases 1% each year until 2007. Edward McCaffery made a short but salient point when he said:
"The death tax comes to the industrious, the thrifty, and the altruistic. It spares the unproductive, the spendthrift, and the selfish... Our current tax system taxes people when they work, when they save, when they marry, when they give, and when they die. These are wrong choices, all. We should tax people when and only when they spend. And then we can repeal the death tax, once and for all, for the simple reason that dead men don’t spend. (And nor, of course, do dead women.)"
Echoing the same sentiments, Nobel Prize Winner Edward Prescott stated in the Wall Street Journal (sub. req’d):
"What is fair, for example, about telling someone that he will be unable to distribute his hard-earned money, which has already been taxed once, to his heirs as he sees fit? Such a person has zero incentive to accept an estate tax for which he sees no justification. He will do his best to try to avoid this tax through every legal means necessary, after which he may be inclined to consume more than he otherwise would, or just quit working sooner than otherwise. And while there's nothing wrong with consuming one's assets, if such consumption comes at the expense of capital that would otherwise be put to better use, such consumption is suboptimal (sic). Recent empirical work on the disincentive effects of estate taxes has proven these phenomena true. And that gets to our first point about the supposed budgetary benefits of such a tax. Since an estate tax is really just another name for a tax on capital income, then there is certainly no justification for such a tax. I, and others, have written before in these pages about the inefficiency of capital income taxes, and there's no need to revive those arguments here, except to say that we can only grip the neck of our vibrant economic goose so tightly before it eventually dies and quits laying those golden eggs."
In the end, all the left can really do is attempt to dupe those who are politically illiterate, that the Death Tax is only for "those rich guys" who have more than enough to go around. The Death Tax can, and does effect the middle class, as may heirs are forced to sell off all or part of the inherited business and/or assets to pay these death taxes. Most people who fail to think logically don’t worry about things until it affects them. So goes the fallacious arguments against repealing the Death Tax.
The Death Tax debate is good however, as many states are looking at repeal/significant reduction of death taxes to attract more jobs and a broader tax base. A case in point, recently Norway’s richest man, John Fredriksen, has become a citizen of Cyprus, because of Norway’s stifling tax regulations, and inheritance taxes in particular. Fredriksen was looking to the future, to the day his daughters would inherit his successful business and decided Cyprus was a better place for that future. I don’t know how many people will (if any) lose their jobs in his business because of this, but the Norwegian government may have just shot themselves in the foot by pushing away successful businessmen. In comparison, U.S. states that have high inheritance taxes will see businesses flock to states with lower or repealed inheritance taxes.
For example, State A sees their largest business of 8K employees leave to State E because the owner of the business doesn’t want his heirs to be subjected to massive inheritance taxes. In the process those 8K employees lose their jobs because the business is moving 800 miles away. The Death Tax can and does effect those who aren’t "rich," whether you want to believe it or not. The Death Tax effects a lot of small businesses, and it can effect a person with a modest income who saves a lot in the way of a pension, and what most people don’t know is a good majority of those who know they’ll be affected by the Death Tax sell off some of their assets prior to death, just to avoid these inheritance taxes. Under a capital gains structure, a tax is only imposed if the business or assets are sold–death of any individual(s) would play no part.
When one begins to dig into the specifics (for liberals, the devil is indeed in the details for their illogical rants in favor of death taxes) they’ll find the socialists have once again erected a crippled class-warfare argument and a poor attempt to pull the wool over everyone’s eyes. Some of us know better.
I briefly touched on free trade issues but I believe it’s high time to delve into this divisive issue and expose the liberal fallacies attached to it. Typically, liberals are staunchly opposed to free trade agreements such as CAFTA-DR, NAFTA and any other free trade agreement.
Ross Perot probably has the most famous anti-free trade sound bite of all time, uttered during the 1992 Presidential election, describing "that giant sucking sound" of jobs going south to Mexico because of NAFTA. At the time (basically because I wasn’t informed and didn’t care to be) I would’ve supported Perot on this, but after a much longer and deeper look at the facts and fallacies of free trade–Mr. Perot was dead wrong.
Americans fear these free trade agreements will 1) Lead to a net loss of jobs overseas and 2) lead to major trade imbalances that will kill our economy.
One thing free trade restrictions have been successful in imposing is higher prices on consumers. Let’s take the case of Anita Dungey. This woman lobbied successfully against repeal of a tariff that would’ve made her market (in this case a company that makes leather dog collars and leashes) more competitive. Because of this, Dungey can continue to sell her leashes (some as expensive as $100 at her normal price, if you want one you’ll pay her price or go without. Competition has been squelched and the antique media played this off as a victory over Goliath. John Stossel was scratching his head too:
"What? How can the removal of a tariff from a foreign company be a tax break for an American company? A tariff taxes foreign goods and helps domestic manufactures charge higher prices than they could in a free market. By any definition, that's a special-interest privilege. Government interferes with free trade to help favored businesses. But if a tariff is a privilege, how can suspension of a tariff also be a privilege? I guess in the topsy-turvy world of Washington, everything government does -- or doesn't do -- is a privilege for someone."
"Thanks to the tariff Dungey's company enjoys, you and I are forbidden to buy cheaper dog collars from foreigners eager to sell them to us through Wal-Mart. Those foreign collars are probably made by workers with very low incomes. Selling their products in the big American market gives them a chance to climb out of poverty. The tariff is a blow against them in favor of the tony items sold by Leathercrafters. How is that fair?"
Only a liberal could come up with such wrong-headed reasoning, I guess those oppressed foreigners they’re usually so worried about will have to eat it on that one.
Let’s move on to the hysteria surrounding "that giant sucking sound" Perot referred to. Actually if you look at the raw data (this doesn’t even count the number of jobs generated via exports, a convenient fact left out of many liberal critiques):
"[T]he increase in U.S. jobs sent abroad has averaged about 30,000 per month since 2001—a deceleration from the monthly average increase of 45,000 jobs during the period from 1997 to 2001."
That raw data shouldn’t sit well with liberals, during the 2002-August ‘05 period the Bush Administration saw less jobs go overseas than the second term (and including Bush’s first year) of the Clinton Administration. As of December 2006 the unemployment rate sits at 4.5% and has been under 5% for some time, "that giant sucking sound" has been awful silent.
We’re also on track for 40 consecutive months of job growth when the labor statistics roll out in mid-January. Moreover, as I pointed out earlier in this essay, because of our relatively friendly business climate, low taxes (for the most part), and a stable political arena; we have over 8 million jobs in our country because of foreign-owned companies, 4 I don’t see liberals complaining when Toyota or some other foreign company builds a plant here and hires thousands of American workers.
No foreign investor or foreign company is going to invest the time, money, and energy building a branch in a country with an unstable government. Who would? We haven’t seen the U.S. economy collapse because of NAFTA, CAFTA-DR or any other free trade agreement, nor will we see it happen. Contrary to what some of the talking heads in Washington and in the antique media would tell you, when we run a trade deficit (keep in mind this is offset with foreign investment, which will be demonstrated shortly), typically our economy does better. When the playing field is "leveled" so to speak, our economy takes a downturn. As demonstrated in the Wall Street Journal:
"Since the mid-1980s the trade deficit has risen when the economy has grown and receded when the economy has faltered. The lowest annual U.S. trade deficit in recent times was recorded in 1991, a recession year... the mirror image of a merchandise trade deficit is a capital-import surplus. When the U.S. investment climate improves -- through such policies as reducing the tax rate on capital gains -- global investment dollars flow into the U.S. Foreigners in turn earn the dollars to pay for those investments by selling Americans more goods and services than they buy from us. This global exchange process has been a formula for U.S. success: American workers get the auto, technology and financial services jobs that come with foreign investment here; American consumers get the benefit of low-priced products from China and elsewhere, which raises workers' standard of living." (Emphasis added)
It’s simple, John Q. Consumer’s dollar goes further when he can buy a cheaper shirt or pair of shoes, he’s indirectly received a increase in his wages and it’s much more effective than any minimum wage hike. All tariffs and free trade restrictions do is punish the domestic population, limiting their ability. Further demonstrating:
"If the goods and services available to the American people are greater as a result of international trade, then Americans are wealthier, not poorer, regardless of whether there is a "deficit" or a "surplus" in the international balance of trade. As for gold, India had the world’s largest supply of gold in 2003, but no one considered it the world’s richest nation. Indeed, it is one of the poorest.
"Incidentally, during the Great Depression of the 1930s, the United States had an export surplus–a "favorable" balance of trade–in every year of that disastrous decade... [B]oth imports and exports were sharply lower than they had been during the prosperous decade of the 1920s. This reduction in international trade was a result of rising tariff barriers in countries around the world, as nations attempted to save jobs in their own domestic economies, during a period of widespread unemployment, by keeping out international trade." (Emphasis added)
"[T]he much-lamented international trade deficit of the United States narrowed by a record-breaking amount in the spring of 2001, as Business Week magazine reported under the headline: "A Shrinking Trade Gap Looks Good Stateside." However, this happened while the stock market was falling, unemployment was rising, corporate profits were down, and the total output of the American economy was down." (Thomas Sowell, Basic Economics (rev.), p. 309; Basic Books, 2004)
You can see the same results in other countries since we pulled ourselves out of the recession inherited from Clinton.
"Since the 2001 recession, the United States economy has created 9.3 million new jobs, compared with 360,000 in Japan and 1.1 million in the euro zone (excluding Spain), despite our trade deficit and their trade surpluses. Like the United States, Spain (3.6 million new jobs) and the United Kingdom (1.3 million new jobs) ran trade deficits and created jobs rapidly in this five-year period." (Emphasis added)
Due to protectionism and a penchant for pushing tax harmonization schemes, the EU lags far behind the U.S. in job creation, but if you listen to the liberal catcalls here, this "trade deficit" boogeyman should be destroying us–on the contrary, it’s not.
Another point often left out of liberal critiques of free trade is that many of the job-losses in the U.S. are not necessarily because of "that giant sucking sound," but because of better technology, and thus higher domestic productivity. William Overholt explains:
"Scholarly studies show that most job losses in the United States are attributable to domestic causes such as increased domestic productivity. A few years ago it took 40 hours of labor to produce a car. Now it takes 15. That translates into a need for fewer workers. Protectionists who blame China for such job losses are being intellectually dishonest. In fact, both China and the U.S. have lost manufacturing jobs due to rising productivity, but China has lost ten times more -- a decline of about 25 million Chinese jobs from over 54 million in 1994 to under 30 million ten years later.
And echoing my point about John Q. Consumer’s buying power because of free trade:
"A second caveat is that there are two ways to increase people's standard of living. One is to increase their wages. The other is to decrease prices so that they can buy more things with the same amount of money. The ability to buy inexpensive, quality Chinese-made shoes and Japanese-made cars at lower prices disproportionately benefits lower income Americans. The Wall Street banker who pays $350 for Church's shoes benefits relatively little, but the janitor who buys shoes for $25 rather than $50 at Payless or Target or Wal-Mart benefits greatly. (Emphasis added)
The notion that free trade imbalances are costing the middle class their jobs is totally false, actually, when one stifles free trade and enacts protectionist policies, in effect, they hurt the middle class and the poor.
George Reisman, in my opinion, gives a notable explanation and response to Nobel-winning economist Joseph Stiglitz concerning these "trade imbalances."
"It never occurs to Stiglitz that America’s trade deficit is actually benign and doesn’t need to "fixed"–by him or anyone else. In part it is the result of the fact that the US dollar is a global currency. As the supply of dollars is increased in the US, a substantial proportion of them flows abroad, where they are held by individuals and businesses who do not want to hold the more rapidly inflated currencies of their own countries. These individuals use these dollars to a considerable extent in making purchases in their own countries, from other individuals who are eager to acquire them. To the extent that these dollars leave the US in the purchase of goods and services from abroad, they represent imports. The fact that they are then held abroad and do not return, means that there are no corresponding exports. Hence, the balances of trade and payments are "unfavorable."
Of course, there is nothing really "unfavorable" to the United States about such a situation. It exports paper dollars that cost it virtually nothing to produce in exchange for actual goods and services. It is in the position of a gold mining country under an international gold standard, with a principal difference being that it does not incur the substantial costs of gold mining.
To be sure, there is a major danger in this situation. And that is, that the United States government will increase the supply of dollars rapidly enough to deprive them of their desirability for being held abroad. In that case, the dollars that have gone out will come rushing back in. We will then have to exchange a mass of goods and services for these little pieces of paper. Our economy will be impoverished, but the goods and services leaving in exchange for the little pieces of paper flooding back in will count as "exports," and so our balance of trade will turn from "unfavorable" to "favorable." Then, in the midst of impoverishment and major inflation, we shall allegedly know the meaning of prosperity—Keynesian style. (Emphasis added)
"It should be obvious that the present "unfavorable" balance of trade is much preferable to such a "favorable" balance of trade."
"For the rest, our "unfavorable" balance of trade is the result of nothing more than the relative desirability of the United States as a country in which to invest. Despite our substantial and continuing loss of economic freedom and respect for property rights, the United States still compares very favorably in these vital respects with practically all other countries. The laws here still cannot be changed at the whim of a government official. Contracts are almost always still enforced. As a result, the United States continues to be the best country in which to invest for enough people, enough of the time so that each year substantially more capital enters the country from abroad than leaves it. This net investment of foreign capital is what mainly finances our continuing excess of imports over exports." (Emphasis added)
In conclusion, the U.S. has experienced job losses in the manufacturing industry, although not nearly as many as China. In addition, some of these losses can be attributed to technological advances, allowing a lesser amount of people to be more productive. If China is sucking up all of our manufacturing sector (in an indirect manner of course) than they shouldn’t have experienced massive job losses in the manufacturing sector.
Free trade "imbalances" are more than offset by the gargantuan amount of foreign investment in the U.S. and afford lower-income individuals more buying power as they’re able to access cheaper goods. Socialist protectionism will only drive out foreign investment, foreign companies (and jobs), and pinch those who are financially strapped. Tariffs only allow domestic companies to charge a higher price than if they were in a free market. In their quest to declare war on the rich (whether domestic or abroad), liberals who vote and lobby for free trade restrictions will only hurt the poor. Much in the same way their rants for a minimum wage will do. By trying to help the poor they will only hinder them.
Continuing with our dissection of Democrat policies that hurt the poor much more than they help them, let’s take a gander at another Democrat axiom, the income gap. It goes something like this: "The rich are getting richer, while the poor are getting poorer." That may be true from time to time, and I’ll add, "so what?" Now rather than look at the facts, liberals will use the last statement to make an emotional appeal and brand me a "capitalist pig." Again, "so what little man?" Do you think semantic blathering proves anything?
In a nutshell, if the poor are indeed getting poorer, could it not be because of their own financial missteps? If so, is it the government’s job to "fix" this problem? If so, then all I can do is hand you a copy of Das Kapital and direct you to the nearest Clinton for President headquarters because that was spoken like a true Marxist. It’s not the government’s job to "fix" income equality, even if it were true.
Let’s look at the facts and see if indeed the poor are getting poorer and the rich are getting richer. Almost everyone would believe the former (especially liberal purveyors of silly class-warfare rants) probably as adamantly as the latter. But is it true? Has the evil George W. Bush allowed the wealthy to get filthy stinking rich(er) while the poor have slid further into the gutter? Not even close. The reason a good portion of people fall for arguments like these is cultural brainwashing–these United States have the richest poor people on the entire planet. If you want to see what "poor" really is go to the rural areas of Peru or India; that would be a good primer if you want to learn the proper definition of "poor."
Before we get into some details undermining this liberal ignorance, let’s look at some key philosophical points that may explain why the economically illiterate hold such a view:
"The argument that income inequality is bad is based on an underlying assumption: that if one person has more, another automatically has less. This ‘zero-sum’ approach bases its logic on a pie chart that adds up to 100 percent. If one person has 30 percent of the pie, that leaves 70 percent for all the others to divide among themselves. The problem is, that isn’t how a free-market economy works. And the media have left out economists who could explain it on the nightly news... The problem with the zero-sum outlook is that it ignores the fact that wealth is created and that the overall amount of wealth grows... The emphasis on earnings inequality also ignores the source of most income on the bottom fifth [of earners] 5 – namely, more than $1.5 trillion of government transfer payments such as Social Security, unemployment benefits, the Earned Income Tax Credit, Medicaid and food stamps." (Emphasis added)
In a free-market economy (which is the best way, unless you’re a devout follower of Marx or Lenin) you’re never going to achieve income equality because (time for some hard truth) most of us aren’t tireless entrepreneurs, taking risks to achieve an end. Most people don’t have the patience or the wherewithal to start a business and build it into a giant like Microsoft. Some people get themselves into financial trouble because of their own poor economic and/or personal decisions–but I digress.
Now let’s get into some details and find out if the "poor" are getting "poorer" or not. Here’s some economic data from three different sources showing that this is not true.
"The Congressional Budget Office (CBO) estimates that between 1979 and 2000 the real income of the bottom 80 percent of households rose by 12 percent before taxes and 15 percent after taxes. The Census Bureau shows a 24 percent increase in the bottom 80 percent of households between 1978 and 2000 -- most of it since 1982 and growing at an accelerating pace. The Federal Reserve Board finds that from 1989 to 2004 the increase in real median income for the top 40 percent was initially identical to the increase for the bottom 40 percent." (Emphasis added)
As one can see, this is a long-term trend, over the last 20+ years, the quality of life and income for those in the lowest quintile have been increasing, not decreasing. You see, the worn-out, overused liberal one-liners have been said often enough that people believe them, despite it being a steaming hot load of horse manure. Continuing with some more information from the CBO:
"On average, CBO found that low-wage households with children had incomes after inflation that were more than one-third higher in 2005 than in 1991. The CBO results don't fit the prevailing media stereotype of the U.S. economy as a richer take all affair -- which may explain why you haven't read about them... The poorest even had higher earnings growth than the richest 20%... When CBO examined surveys of the same poor families over a two year period, 2001-2003, it found that ‘the average income for those households increased by nearly 45%.’ That's especially impressive considering that those were two of the weakest years for economic growth across the 15 years of the larger study. (Emphasis added)
More from the Census Bureau demolishing this liberal axiom of rampant income equality:
"From 2001 to 2005 -- the last year data was available -- there was virtually no statistical change in income inequality, based on a statistical test by the Census Bureau, requested and released by Congress's Joint Economic Committee... One key factor is a disparity in labor market participation. According to the report, of the bottom fifth of households 58.7 percent have no earners. Meanwhile, of the top fifth, 76.3 percent of households have two or more earners." (Emphasis added)
There are several reasons almost half of the bottom quintile have no earners and some of those would cross social and cultural lines (e.g. absentee fathers, which could bring up another bevy of reasons), but that’s not our focus at this point.
The fact is, the general populace of America has been getting richer (thanks to a basically free economy). But don’t tell that to your liberal friends, that’s akin to feeding garlic to Dracula.
"In the fourth quarter of 2006, total net worth -- that is, everything people own minus what they owe -- jumped 7.4 percent to $55.63 trillion. The United States has added as much wealth in the last decade as we did in our nation's first 220 years... The average household in America owns about $487,095 worth of stuff, free and clear. That's a big jump from recent years; since 2001, average household wealth was $373,170; so in five years we've become a third richer."
The author appropriately ends the piece with "we’ve never had it so good." And that’s the truth, but don’t tell that to some people who have turned President Kennedy’s words inside out. "Ask not what you can do for your country, but what your country can give you out of the public treasury."
In fact, because of President Bush’s tax cuts, the bottom two quintiles paid no federal income taxes in 2004 and they received 55.6 % of all federal spending. For one to assert they they’re not getting any assistance is foolish at best, ignorant at worst.
Our uber-progressive tax code already guarantees that the "rich" will pay a much higher portion of income taxes, that’s already been documented in this article.
"According to a recent study by the nonpartisan Congressional Budget Office (CBO), those who make more than $43,200 (the top 40 percent) pay 99.1 percent of all income taxes. Those who made more than $87,300 in 2004, the top 10 percent, paid 70.8 percent of all income taxes. In other words, 10 percent pay 7 out of every 10 dollars and their share of the burden is rising."
"By the end of the Clinton administration, Americans' average tax burden had reached the historically unprecedented level of 33.6 percent. Under the current administration, the total tax burden has gotten as low as less than 30 percent... As reported by Congress' Joint Economic Committee, the richer half of the American population pays almost 97 percent of income taxes. And most of that -- 54 percent -- is paid by those in the top 5 percent. Those ranked in the top 1 percent -- the richest of the rich -- pay more than 34 percent of all personal income taxes collected by Uncle Sam. What's more, the Congressional Budget Office last month found that the after-tax income of those "superrich" actually declined after the Bush tax cuts -- by 8.3 percent from 2000 to 2004." (Emphasis added)
The next time you some schmuck whine about "income equality" or "the rich are getting richer and the poor are getting poorer" you can take them aside and correct them. Maybe they’ll listen, maybe they won’t. You can lead a horse to water but you can’t make him think (critically that is).
I think it’s high time I added a few more comments pertaining to those evil Bush tax cuts for the rich and free trade–two items liberal Democrats regularly demonize and lie incessantly about, preying upon the ignorance of others.
The Bush tax cuts have been a boon to the economy and no amount of caterwauling by the left can change that. We had 52 consecutive months of job growth until recently, but that’s not the only news. Answering again the charge that "the rich got off easy while the middle class and poor continue to be saddled with heavy burdens":
"In 1980, with Jimmy Carter still as president, the top 1 percent of filers, those who reported an adjusted growth income of $80,580 or more, paid 19 percent of all federal income taxes. That was actually less than the total tax share of people collectively in the 11th to 25th percentiles, that is, middle income taxpayers making roughly between $24,000 and $35,000 (in 1980 dollars), and also less than the total share of those earning between $13,000 and $24,000, who represented the 26th to 50th percentiles."
"A decade later, despite tax cuts in the 1980s that many critics claimed benefited the rich, our top 1 percent of filers were paying more of the total--25 percent of the country’s tax bill—than anyone else. The portion of taxes paid by the top filers continue to grow throughout the 1990s and into the new century, pausing only for recessions, which are generally periods in which the share of taxes paid by the rich falls because their incomes tend to decline the most. By 2005, the most recent year data are available, our top 1 percent of filers were paying nearly 40 percent of the federal income tax bill, while those in the 2nd to 5th percentile paid another 20 percent. Every other group saw its share of the tax bill decline, sometimes substantially. Those taxpayers in the 26th to 50th percentile (that is, with an adjusted gross income roughly between $31,000 and $62,000) paid 11 percent of all federal income taxes, down from 20 percent back in 1980, while those in the 11th to 25th percentiles (earning between $62,000 and $104,000 today), paid 16 percent of the federal tax bill, down from 24 percent in 1980." (Emphasis added)
This little tidbit is even more damning to liberal economic philosophy:
"[A] labor union-supported policy group released a study noting that Connecticut now has the largest gap between the rich and the poor in the nation. The local pages of the New York Times dutifully reported on this study and asked, what could be done as a remedy? Raise taxes, the advocates urged, heedless of the fact that in Connecticut the top 5 percent of the state’s taxpayers already bear the bulk of the state’s income tax burden. The situation is much the same in neighboring New Jersey and in New York where, for instance, the top income bracket represents just 0.4 percent of taxpayers, but they pay one-third of the state’s income tax."
If that’s not enough for my liberal friends who think the Bush tax cuts hammered the middle class and "working poor" while the rich padded their pockets.
"The total effective federal tax rate -- for income, payroll and excise taxes -- for the bottom 20 percent of U.S. households was halved from 1979 to 2005. From 2000, the year before President Bush took office, to 2005, after his tax cuts had fully kicked in, their total effective federal tax rate fell by nearly a third... The total effective federal tax rate for the top quintile fell by a mere 7.3 percent from 1979 to 2005 and by 8.9 percent from 2000 to 2005. If you look at households with children, the difference is even more stark -- for the top incomes, taxes have risen, while those at the bottom saw a whopping 85.7 percent cut... The total effective federal tax rate for the middle quintile has fallen faster than the top two quintiles. The effective tax rate for middle-class Americans has fallen since the late 1970s. While that was happening, the median after-tax household income jumped by more than a quarter."
The data does not suggest that the middle class and poor are shouldering a larger tax burden after the Bush tax cuts, in face the opposite is demonstrated. "The rich" are making more, but they’re certainly shouldering a larger portion of the income tax burden while the bottom 3 quintiles less. Lastly: "Of those who filed returns (themselves a subset of the population), just half accounted for 97 percent of the Treasury's total income tax revenue. The top half's share of total payments has been growing steadily for the past 20 years. The top 10 percent of taxpayers kicked in 70 percent of total income tax. And the famous top 1 percent paid almost 40 percent of all income tax, a proportion that has jumped dramatically since 1986."
Despite this evidence you will see leftists in the Senate, House, and their willing accomplices in the antique media demonizing corporations, people who fund capital ventures and anyone else they can sling mud at. These people are either stupid or have some kind of socialist agenda. The above data demonstrates that progressive taxation and higher taxes on "the rich" don’t work and are economically regressive.
Let’s take a short trip down memory land for those who aren’t old enough to "appreciate" the high taxes of the Carter Administration. Those of you who are old enough to remember this would probably rather forget it.
"GDP [in 1980] shrank 0.2% while prices soared at close to a 12% rate. Unemployment topped 7%, on its way to more than 9%. Interest rates peaked the next year at a scary 21%... By 1989, inflation had fallen to 4%, the prime rate to 9% and unemployment to just 5%, with 18 million new jobs created. Over the same period, GDP grew at a 3.2% annual clip, a third faster than under the previous two presidents, Gerald Ford and Jimmy Carter." (Emphasis added)
The article goes on to touch on several issues (some not related directly to taxes and I added my own two cents as well). We need to make the Bush tax cuts permanent, cut the capital gains tax to 10% (or eliminate it, Australia has no tax on capital gains), cut the corporate tax rate to 25% (only Japan has a higher rate among OECD members), eliminate the AMT and the Death (Estate) Tax. I see no good reason why we shouldn’t go back to a top income tax rate of 28% that we enjoyed under Reagan. We’ll have a lot of trouble getting that past the cloture vote in the Senate with so many Socialists residing there.
Our last piece of business pertains to taxes as well, but those who do not pay them. This sect of society is growing at an alarming rate, despite the evil Bush tax cuts for the rich. In recent decades there has been a large movement of people from the taxpaying to the "I don’t pay taxes" group. For example:
"In a 2005 study of the income tax base, the Tax Foundation calculated that 43.8 million federal tax returns, representing about 91 million Americans, would have no tax liability in '06. Adding about 15 million families and individuals with too little income to file a return, the organization reckoned that 121 million people, or 41% of the population, were outside of the income tax system. It also noted that the percentage of returns showing no liability at all climbed to 32.4% from 18.5% in the two decades ended in 2004." (Emphasis added)
Factor in this asinine stimulus package set to hit next month and those figures will rise. Why people who pay no (or very little) taxes are getting "stimulus" checks is beyond the pale. These people aren’t going to stimulate the economy anyways, most of it will be used to write off debt. They’re not the ones buying cars and yachts, the economic stimulus will do little good in the short-term and no good in the long-term.
If Bush is trying to starve all those poor people to death and take all their money he’s certainly doing a poor job by yanking millions of them off the tax rolls.
Now onto free trade. This is another issue completely and totally misunderstood by liberals, either by purpose or by ignorance. I’ve already written on free trade above, so we’ll try not rehash all that but let’s start out with our trade deficit concerning NAFTA.
Leftists everywhere are wringing their hands about that dang NAFTA and the trade deficits its creating. They list off several lies which will be dealt with shortly are already have been. 1) Jobs are leaving the country at an alarming rate. 2) We have a massive trade deficit because of NAFTA and 3) It’s killing the economy. That my friends, is pure, unadulterated B.S. Raw sewage if you will and nothing could be further from the truth.
We do have a sizeable trade deficit concerning NAFTA but two things must be noted in response to that: 1) Trade deficits aren’t necessarily bad for the economy (see above) and 2) the deficit has grown quite a bit since 2000 because of energy.
"There is no question that the imbalance of trade within Nafta has soared since 2000. That deficit has almost doubled to nearly $140 billion in 2007, from $77 billion in 2000. But the deficit in manufactured goods did not displace U.S. factory production. What the antitrade advocates have been hiding from the candidates (or maybe don't know themselves) is that almost all of the increase in our Nafta deficit since 2000 has been in increased U.S. imports of energy from Canada and Mexico. In fact, $58 billion of the $62 billion increase in our Nafta deficit has been in energy imports. That's 95% of the total increase. We need that oil and gas, and we would rather get it from our friendly neighbors. Surely no one seeks to argue that America would be better off saying no to Mexican and Canadian oil and gas, advocating that we instead import that energy from less secure sources farther from our borders."
If protectionists are serious about "balancing" this out; then go drill ANWR, the OCS and expand drilling in the Gulf of Mexico. If that happened there would be virtually no trade deficit concerning NAFTA, but then we’d have to listen to the incessant complaints from the green lobby. But I digress.
America is better off because of NAFTA and for the most part, unrestricted international free trade. The Bush Administration will be remember for a lot of good and bad things, one of the primary positives is expansion of FTAs.
"The U.S. is the world's largest recipient of foreign direct investment. In 2004, foreigners owned $5.5 trillion in U.S. assets and had $2.3 trillion in sales. They produced $515 billion of goods and services, accounting for 5.7% of total U.S. private output, and employed 5.1 million workers — or 4.7% of the U.S. work force — in 2004. In 2006 alone, foreign investors spent $184 billion investing in U.S. businesses and real estate, the highest amount foreign investors have spent since 2000."
"Between 1996 and 2006, about 15 million jobs were lost each year and 17 million created. That's an annual net creation of 2 million jobs. Roughly 3% of the jobs lost were a result of foreign competition. Most were lost because of technology, domestic competition and changes in consumer tastes. Some of the gain in jobs is a result of "insourcing." Foreign companies such as Nissan, Honda, Nokia and Novartis set up plants, hire American workers and pay wages higher than the national average. According to Dartmouth College professor Matthew Slaughter, "insourced" jobs pay 32% higher than the U.S. average."
"Daniel W. Drezner, professor of political science at the University of Chicago, notes that U.S. manufacturing employment between 1995 and 2002 fell by 11%. Globally, manufacturing job loss averaged 11%. China lost 15% of its manufacturing jobs, 4.5 million manufacturing jobs, compared with the loss of 3.1 million in the U.S. (Emphasis added)
Make sure you send those 5+ million jobs back when you renege on all those FTAs we've signed onto.
Leftists and their ilk like to make hay about the "fact" that China is going to take out the U.S. as the number one economic powerhouse in the world because of their massive trade surplus. "China’s sending their products everywhere, everything is made in China now." You can virtually insert any other country into this faulty but oft-repeated mantra.
Max Whitmore noted (although this was not the primary focus of the article):
"The world's GDP (official exchange rate basis) in 2005 was over $44 trillion. In 2006, it is estimated that this grew by about 4.5 percent making the 2006 number about $46 trillion (final numbers are still not available). Of this $46 trillion, the U.S. and the EU account for about $13 trillion each, or 52 percent of the total. Japan is about $5 trillion or about 11 percent. The United Kingdom (Britain) accounts for just over $2 trillion or about 4.5 percent. China comes in at about $2.5 trillion or about 5 percent... China is proud of its $2.5 trillion GDP. But, listen to this hard fact. Since 2001 the U.S. has increased its GDP by $2.7 trillion. Yes, in other words, China's long trek to $2.5 trillion GDP was duplicated by the U.S. in 5 years. Now, that's a real 5-year plan!!" (Emphasis added)
Hillary Clinton, at a recent campaign stop complained to her cretins, "We need to still be a manufacturing nation... I don’t think a country that doesn’t make things can remain strong and vibrant and leading in the global economy."
How many of the people hearing that believed it? Of those who believed it, how many could back up their belief with facts? Hillary would’ve been sobbing at the invention of the refrigerator because it put the ice man out of work. Lots of jobs are lost because industries become more efficient or like the guy delivering ice–they’re phased out of existence.
These United States still produces plenty of goods, perhaps Mrs. Clinton and her supporters should do a little research? The following quote may be one of the best of the year:
"The real beef of the Democratic candidates and their union allies is that all that stuff was made with fewer unionized workers than in years past. We can make more and better things with fewer workers because of soaring productivity. Please remind me what’s so bad about that." Absolutely nothing Mr. Griswold.
Let’s briefly focus on the damage tariffs do to the general populace. Two examples; the first being tariffs on rice in the Philippines and the second, shoe tariffs right here at home.
"Alone among World Trade Organization member nations, the Philippines imposes quantitative restrictions on rice imports, implemented by a government monopoly. Since the 1970s, the state-owned and controlled National Food Authority (NFA) has maintained tight controls on rice imports. This policy has stood in sharp contrast to other countries such as Vietnam, Indonesia and Bangladesh, which have abolished, privatized or sharply reduced the authority and scale of their food monopolies – and enjoyed more efficient production and cheaper consumer prices."
"Not so in Manila, where succeeding presidents and NFA administrators have defended the NFA as necessary to shield rice farmers from low world prices and ensure stable supplies for consumers. Unfortunately, this policy has had exactly the opposite effect: The incomes of the Philippines's rice farmers have consistently ranked in the lowest quintile of the population, and domestic consumer rice prices are roughly double world prices. Worse, the NFA is now one of the largest drains on the nation's already precarious fiscal resources, requiring an annual subsidy of at least 1.2 billion Philippine pesos ($29 million) from national coffers, not to mention uncollected tariffs and opportunity losses due to price premiums borne by Filipino consumers..."
"Now, world rice prices have doubled in less than five years, due to a combination of increased demand from rapidly growing countries like India and China, production shortfalls in key food-producing countries such as Australia and Bangladesh, and a shift of many farmers to bio-crops such as corn in response to high fuel prices. Today the margin between the Philippines's imported and domestic rice prices has shrunk to around zero from an average of 100% of domestic prices, and the NFA's accumulated debt has mounted to at least 50 billion pesos. Should the banks stop lending to the NFA, it is doubtful that the government can effectively come to its rescue."
Looks as if protectionism and massive government-mandated subsidies are doing the Philippines a lot of good. You know who it’s hurting the most? The poor! Pertaining to shoe tariffs in these United States, the poor are the ones hurt the most by those as well.
"A $2.28 pair of sneakers arriving at the border is assessed a 48 percent excise tax, adding $1.09 to the price, which is passed along to shoppers. To put the tax in perspective, the $1.09 border tax is roughly three times the 39-cent federal tax on a $2.28 pack of cigarettes, four times the national gas tax, and twice the $13.50-per-gallon tax on whiskey, vodka, and other spirits. And as the sneakers travel through the supply chain on the way to the retailer's shelf, the tariffs are magnified by retail markups and state sales taxes... Shoes account for just one percent of total imports but raise almost $1.9 billion out of $25 billion in annual U.S. tariff tax revenue, about 8 percent of the total. After markups and sales taxes, shoe tariffs made up $4 billion to $5 billion of the $55 billion Americans spent on shoes last year." (Emphasis added)
Those tariffs don’t hurt Bill Gates when he needs some new footwear, but it does hurt the middle class and the "working poor." Which political party claims to care about the poor? Which political party is always puffing its chest out and declaring they will protect the little guy? Now that you’ve answered that, ask yourself this: Which political party typically votes in favor of tariffs and against FTAs? Who’s looking out for you? It’s not the Democrat Party.
In closing, I feel the need to say something about the pending FTA with Colombia. Colombia is a reliable ally in a region that is becoming more and more hostile to us every year. Uribe has done a fine job rooting out corruption and rampant drug-dealing–he’s improved the life of the average Colombian exponentially.
This FTA will not only improve relations with an ally, but it will also strengthen the economies of both countries. Think we don’t have a vested interest in an FTA with Colombia? Think again.
"International trade has become increasingly critical to U.S. economic growth. For example, total trade (that is, exports plus imports) in 1960 equaled only 7.8 percent of U.S. GDP, while by 2007, that had risen to 28.8 percent of GDP. Expanding trade means the creation of more high-paying jobs. According to the U.S. Trade Representative's office, U.S. exports support one in every five manufacturing jobs and more than 900,000 agricultural jobs, while export-related positions pay 13% to 18% more than the national average..."
"As for Colombia, over the past five years, from 2002 to 2007, U.S. merchandise exports to Colombia rose from $3.6 billion to $8.6 billion - a 139 percent increase, while inflation came in at 15 percent over the same period. According to the Office of the U.S. Trade Representative, of the more than 9,000 U.S. businesses exporting to Colombia, 8,000 are small and medium-sized firms...[W]hile over 90 percent of U.S. imports from Colombia now enter our country duty-free, U.S. exports to Colombia face tariffs up to 35 percent... Once implemented, the agreement will eliminate tariffs on more than 80 percent of American exports of industrial and consumer goods immediately and 100 percent of American exports over time." (Emphasis added)
I’ll say it again, when you quash those FTAs and demonize international free trade, make sure you send all those jobs back that it has created. Have a nice day.
1 I have no problem with someone being a "rich" (Democrats need to define this term, from what I’ve seen to them it means: Someone with one more dollar than me), successful businessmen (and women, even I have succumbed somewhat to political correctness) are the backbone of this country creating jobs and strengthening the economy. It seems liberals have a perverted view of the "rich," those who "won life’s lottery" and were born with a silver spoon in their mouths. Most people who are "rich" earned it by working long arduous hours and much self-sacrifice. I for one don’t feel jealous at all but can only admire their work ethic.
2 Our tax code is a sham as it is and liberals (most of who utilize plenty of loopholes avoiding taxes) only want to make it worse. The top 50% of wage earners already pay 96.54% of all income taxes collected and the top 1% pay more than 1/3. Logically, if you have a cut in income taxes those who pay the majority will get a bigger cut. I think it’s unfair to force those who earn more money to pay a higher percentage, the playing field should be leveled and everyone pay the same percentage, whether you earn millions or thousands. The only concession I would make is those who make "very little" (sorry for the ambiguity) would pay no income taxes.
Even in my correspondences with Senator Tom Harkin I’ve seen this ignorance (or perhaps it would be better put a vehement dedication to liberal policy no matter the foolishness attached to it) and contradictory behavior concerning the economy. Harkin inadvertently made a good case for reforming our tax code when he pointed out to me (e-mail correspondence 4/1/05) that most of the "large estates" have assets which were not previously taxed. He was fighting against repealing (or seriously lowering) the death tax. If those "largest estates" are creatively avoiding taxes via loopholes then we need to reform the tax code, not jack up the death tax. I must thank Senator Harkin for being so candid.
3 Pushback: "Hahaha Enigma, you just contradicted yourself, you don’t believe Affleck will be affected by a minimum wage increase because he’s rich but yet you believe the super-rich elitists should pay the same income tax % as those who are dirt poor." This dog won’t hunt for several reasons. Affleck is not the employer, he is the employee and I doubt many in his line of work are anywhere near the minimum wage rate. However, as the above data demonstrates, if Affleck owned a business that primarily employed minimum wage work (as many do) and the minimum wage was increased it would put him in an economic crunch. Moreover, if Affleck was theoretically put out of work because of a minimum wage increase that trickled down to him, he has enough in the bank to survive. However, those who were depending on those minimum wage jobs to get themselves established in the job market would be hung out to dry in the event of a layoff.
4 This figure is still above 5 million today with foreign direct investment in the U.S. at nearly $100 billion and companies headquartered abroad support an annual payroll of $324.5 billion, an average compensation of $63,428 per employee, over 32 percent higher than compensation at all U.S. companies.
Walter E. Williams, in a critique of one of Pat Buchanan’s anti-free trade rants stated:
"Mr. Buchanan writes, ‘Imports surged to $188 billion for the month [of July], as our dependency on foreigners for the vital necessities of our national life ever deepens.’ That means we imported $188 billion worth of goods. Do foreigners keep all those dollars they earned under a mattress? They are not that stupid. They use those dollars to import capital goods such as U.S. stocks, bonds and U.S. Treasury notes. They might use some of it to build factories in the U.S. such as Honda, Novartis and Samsung. The dollar amount of those purchases is going to equalize the value of what we import. We sport a huge surplus in our capital account with foreigners. As such, they are dependent on us for a safe and profitable place to invest their earnings. That dependency contributes to our economic growth."
Professor Williams also alluded briefly to the loss of manufacturing jobs in these United States being directly attributed to technological advances–now less people can produce more, ergo, some people will be laid off.
5 The number of Americans "living in poverty" is always overstated because Census Bureau data only includes monetary income, not so-called "in-kind benefits" such as housing assistance, the Earned Income Tax Credit, Medicaid, school lunches, et al. For more on that go here.
