Tuesday, November 09, 2004

Taxes

John Kennedy was a democrat. He cut taxes in 1963 to stimulate the economy, and it worked. He said in a well known speech that we should "Ask not what your country can do for you, but what you can do for your country". As far as I know, this has been largely forgotten by modern day democrats. Today the liberal mantra is what can your government do for you. Steal from those who work hard for their success and give it away. Reagan followed in Kennedys footsteps with tax cuts in 1982, again they worked and America was prosperous, regardless of the socialistic ways of Carter that dragged us into recession. Bush has cut taxes too, and it is working. By studying history we can replicate its successes.

11 Comments:

At 11:53 PM, Blogger SheaNC said...

It's clear that you've been duped by republican propaganda. Don't feel bad -- it happens a lot. Here's the truth:

http://www.americanprogressaction.org/site/pp.asp?c=klLWJcP7H&b=131769

As you can see, the economy has always fared better under democratic administations. Democrats might "tax and spend", but republicans simply "spend and spend", which makes things a lot worse. Their administrations are simply a party at the working classes' expense. They know that sooner or later, a democrat will have to come along to correct the economic mess the republicans created. Then, the republicans can point the finger of blame on the democrat for all the economic woes of the world, fire their blood with hate propaganda, and repeat their cycle like the burrowing insects they are.

By the way -- Nixon was a criminal who condoned political corruption. Quite a namesake to choose for yourself.

 
At 7:57 AM, Blogger Richard Nixon said...

Thanks for your comments, and especially your link. I am happy to see my theory proven by your article. First, all the experts concur that the Clinton administration had the fluke of the internet bubble...which started crashing in his last year in office, leaving our current president with an economic mess. Next on the list is Johnson who was still reeiving the benefits of Kennedys tax cuts. Next is Kennedy followed by Reagan. Thanks for proving my point, and thanks for noting the irony in my name, it was deliberate.

 
At 7:42 AM, Blogger Richard Nixon said...

Don't Let Fiscal Phantoms Stop Reform
November 17, 2004; Page A17

While Democrats and the media distract themselves over an anomalous polling question concerning "moral values," it turns out the election was about economics, specifically entitlement and tax reform, stupid.
Thank goodness, for these are real problems susceptible to discussion and consensus about what constitutes good policy. This column has long maintained, for instance, that when all else fails in trying to cope with our health-care mess, reformers will have no choice but to hit upon the real solution: tax reform.
Ditto the problems with Social Security and Medicare. The way out of these thickets is via a fundamental overhaul of the tax system, too.
From this perspective, it's only a matter of tactics whether tax reform is the thin wedge the administration uses to reform entitlements or the other way around. We eagerly await the polling and focus-group metrics that will determine the most politically promising approach. For tidiness’ sake, our preference would be to start with tax reform.
Details can be conjured up later, but the basic architecture would be elimination of the income tax -- "income" being a too vague and loophole-ready concept -- in favor of some kind of consumption tax. Thus any money put aside for future consumption -- aka savings -- would remain untaxed until it's consumed.
Presto, this would eliminate the perverse double taxation of saved income now rife in the system. The natural incentive would be restored to encourage people to save for future consumption, say, for retirement or old-age medical expenses.
This being done, it would be a relatively simple matter of getting out of the working-age population's way with a Social Security and Medicare payroll tax opt-out. Let workers have a choice of whether to remain in the existing federal retirement programs (with all the risk of future benefit cuts) or take ownership of their payroll taxes in the form of private investment accounts.
OK, any reform involving two Big Bangs, rather than merely one, faces the likelihood that an election will intervene, empowering the forces of reform fatigue. So the other possible approach is to let entitlement reform effectively achieve tax reform.
Last year's Medicare bill, which authorized Health Savings Accounts for the masses, is already testing the Fabian approach to reforming the massive middle-class entitlement known as the tax deductibility of employer-provided insurance. Workers and employers alike are just beginning to notice the opportunity here, changing the incentives to over consume and misallocate health care, and creating gains that the worker and employer can share.
If it all works out, employer-provided, gold-plated insurance that is now the rule -- with all its inbuilt incentives for medical inflation -- will become obsolete. From there it would be no biggie to throw Medicare payroll taxes into the pot and let private solutions be extended past age 65.
What HSAs are doing for medical spending and savings, Social Security reform would do for retirement savings.
Option Two produced by the president's 2001 Commission to Strengthen Social Security seems to be the favorite, allowing workers to direct one-third of payroll deductions into a private account up to an annual limit of $1,000. Workers in return would give up a commensurate share of their future federal benefits.
But why any limit at all? Here's where the screaming about the deficit begins, with Democrats insisting essentially that Social Security is unreformable because so-called transition costs would "explode" the deficit. This is a council of despair if not suicide, not to mention a basic misunderstanding: Fiscally, reform is not only doable but mandatory; only the politics are needlessly difficult.
Deficits create additions to the national debt, and are a problem only to the extent that we can't pay back the debt without hardship, because we spent the borrowed money unwisely. Problem One is that we fib to ourselves about the true dimensions of the debt because we count promises made to bondholders (current value $3.9 trillion) but not promises made to future retirees ($10 trillion for Social Security and $62 trillion for Medicare in present value, beyond what's already promised in future payroll-tax receipts).
Even the modest reform proposed by the 2001 commission would reduce by $15 trillion the amount of general tax dollars necessary to prop up Social Security over the next 75 years. Transition cost: between $1 trillion and $1.4 trillion over 10 years. Done right, in other words, Social Security reform would appear to increase the deficit yet actually reduce the nation's real indebtedness from Day One.
Look at it another way: If a homeowner who refinanced his home on advantageous terms kept his books the way the federal government does, the transaction would be seen as huge annual deficit and increase in his debt. On paper, it would look like his financial well-being had declined drastically, when in fact it had improved.
We can prove this to ourselves by enacting Social Security reform, then offering an additional $1 trillion in bonds into the Treasury market to cover the make-goods for current pensions. The reaction of the market would be . . . nothing.
Unless bond investors are dumb, they'd finance the transition without a hiccup in much the same way housing lenders recently swallowed a vast lump of new housing debt (while extinguishing a fair amount of old debt in the process). Indeed, Treasury investors would look out 30 years at a pleasant sight -- themselves no longer facing a war with seniors for the overcommitted revenues of the federal government.
Fail to get that fix in place, and sooner or later the prospect of just such a war is bound to produce rising interest rates, inflation and other Brazilian symptoms of an impending fiscal crash.

 
At 9:35 PM, Blogger Richard Nixon said...

http://www.cato.org/fiscal/tax-policy.html
Visit here for all you tax answers.

 
At 7:46 AM, Blogger Richard Nixon said...

http://www.taxreform.com/toc.html

Great info on all sorts of alternative tax policies.

 
At 8:28 AM, Blogger Richard Nixon said...

More good common sense talk about taxes. Thanks Thomas Sowell.
http://www.humaneventsonline.com/article.php?id=5893

 
At 10:23 AM, Blogger Richard Nixon said...

Another example of supply and demand...it works.
http://www.washingtonpost.com/wp-dyn/articles/A15372-2004Nov26.html

 
At 11:37 AM, Blogger Richard Nixon said...

An article by Walter Williams...
http://www.townhall.com/columnists/walterwilliams/ww20040908.shtml

Income inequality
Walter E. Williams (archive)

September 8, 2004

Last month, the U.S. Bureau of the Census reported its findings on income and poverty. Median real income remained constant between 2002 and 2003 at $43,000; the official poverty rate rose slightly from 12.1 percent to 12.5 percent for a total of 36 million Americans; poverty rates by race remained unchanged at 8 percent among whites, blacks 24 percent and Hispanics 22 percent. Dr. Daniel H. Weinberg, Bureau of Census division chief, added that income inequality remained unchanged with the lowest 20 percent of households ($18,000 and below) earning 3.5 percent of national income and the highest 20 percent ($86,900) about 50 percent.

The poverty report gives vice-presidential hopeful Sen. John Edwards a little fodder for his "Two Americas" stump speech. That's the one where he says, "(There's) one America that does the work, another America that reaps the reward. One America that pays the taxes, another America that gets the tax breaks." This is demagoguery and unadulterated dishonesty that can only appeal to the misinformed and ignorant.

Let's look at who doesn't pay taxes. According to a study done by Scott Hodge, president of the Washington, D.C.-based Tax Foundation, and his colleagues, 41 percent of whites, 56 percent of blacks, 59 percent of American Indians and Aleut Eskimos, and 40 percent of Asians and Pacific Islanders will have no 2004 federal income tax liability. The Tax Foundation study concludes, "When all of the dependents of these income-producing households are counted, there are roughly 122 million Americans -- 44 percent of the U.S. population -- outside of the federal income tax system."

Who does pay federal income taxes? The top 20 percent of income earners pay 80 percent, and the top 50 percent pay 96.5 percent of total federal income taxes. Given these figures about who does and does not pay federal income taxes, what are we to make of John Edwards' stump speech? He's right in one sense. One group of Americans -- those at the top -- work and pay virtually all federal income taxes, and another group -- those at the bottom -- work and pay little or no federal income taxes.

There's another issue about income inequality. If it's your vision that out there somewhere there's a pile of money to be divided among Americans, the reason the top fifth of Americans have much more than the bottom fifth is that they got to the pile of money first and took an unfair share. Justice, of course, would require that their ill-gotten gains be confiscated and redistributed to their rightful owners. But in a free society, income is mostly determined by one's ability and willingness to produce goods and services that satisfy his fellow man.

The top fifth of income earners (earnings greater than $84,000) are not only more productive and have higher skills and education than the bottom fifth of income earners, they work more hours and have more people in their household working.

There's something else that gets little attention. There's considerable income mobility in our country. According to Internal Revenue Service tax data, 85.8 percent of tax filers in the bottom fifth in 1979 had moved on to a higher quintile, and often to the top quintile, by 1988. Income mobility goes in the other direction as well. Of the people who were in the top 1 percent of income earners in 1979, over half, or 52.7 percent, were gone by 1988.

Here's my question to you. What are we to make of politicians, and other charlatans and quacks, who are knowingly dishonest and use the politics of envy to exploit American ignorance for political gain? It's immaterial whether you're for George Bush or for John Kerry winning the White House -- do you think politicians running on the politics of envy bodes well for the future of our country?

 
At 9:01 PM, Blogger Richard Nixon said...

A new update from Rush Limbaugh citing the NYTimes;

BEGIN TRANSCRIPT

RUSH: The New York Times has done it again, and they are quoting the Congressional Budget Office, I don't think accurately. Here's the headline: "Report Finds Tax Cuts Heavily Favor the Wealthy."

Now, the New York Times is actually blaming Reuters in this story, because they're the first ones that did it. Let me tell you what The Times says and then we'll give you the truth and this is why we keep the information on who pays what in taxes permanently at RushLimbaugh.com, because you're going to see this story in the New York Times today and you're going to be able to go to my website and see the truth about who pays taxes, who pays the vast majority of taxes.

And, of course, when there's a tax cut that comes down, it's inevitable that the people who pay taxes get the tax cut. And I forgot the number off the top of my head, but we're up to now something like 38% of all taxes are paid by the top 1%. How can you have a tax cut and those people not get one? And if the purpose for the tax cut is to stimulate the economy the people that pay the taxes have got to get the tax cut.
At any rate (reading from Times), "Fully one-third of President Bush's tax cuts in the last three years have gone to people with the top 1% of income who have earned an average of $1.2 million annually, according to a report by the CBO to be published today. The new estimates confirm what independent tax analysts have long said, that Mr. Bush's tax cuts have been heavily skewed to the very wealthiest taxpayers. Those are the people, however, who pay a disproportionate share of federal taxes."

So we are making inroads. The New York Times finally makes that admission. This used to never show up anywhere near a mainstream press report on tax cuts. "In addition, the report gave Republicans support for their contention that tax reduction had brought some benefit to people in almost all income categories." Well, there's the story! But what's the headline? "Report Finds Tax Cuts Heavily Favor the Wealthy."

Well, we find out that those are the people who pay a disproportionate share of federal income taxes and we find out buried down deep, "The report also gave Republicans support for their contention that tax reduction had brought some benefit to people in all income categories. People with the bottom fifth of income, for example, averaging earnings of $16,000 a year saw their effective tax rate drop to 5.2% from 6.7%. Yet because lower and many middle-income families have been paying very little federal income tax in the first place, those in that bottom fifth of earnings received an average tax cut of only $250."

So? They're not paying any taxes! They're paying a very small portion of the federal income tax burden in the first place! That's the whole point. It's all on my website, ladies and gentlemen. "The tax cuts of 2001 and 2003 reduced tax rates for people in all income brackets but they had a disproportionate effect on people at the very highest levels because they had already been paying a disproportionate share of total federal taxes and in part because stock dividends get a special lower rate." Two times in the same article the New York Times is forced somehow to get it right, amazing progress, ladies and gentlemen! I'm feeling extremely happy about this, despite their misleading headline.

Now, I have just received from a guy who works for the Joint Economic Committee in the Senate a little report here about the CBO tax report, and there's of course a different spin on this from what Reuters gave it, which is where the New York Times got it. The New York Times got their data from Reuters.
A new CBO report produced at the request of congressional Democrats confirms that tax cuts since 2001 increased the share of federal income taxes paid by the highest earners. Increased! It increased the share of federal income taxes paid by the highest earners, while decreasing the tax share of lower and middle income groups. This always happens. Every time you lower the marginal rates they end up paying more, because they report more income, and there's more tax on the income because the rates are lower, so they're reporting more income. They pay more taxes. Their share of the total bite increases even though their tax rate goes down. This has always been the case. That's the whole point of supply-side economics. You know, this is what's never ceased to amaze me. The Democrats have always run around and said the rich need to pay their fair share. They're paying more than their fair share! And every tax cut they get they end up paying even more, of more of their fair share.

The CBO analysis, Effective Tax Rates Under Law, 2001 to 2014, shows that the income tax remains highly progressive, the top 5% of earners paying more than half of all federal income taxes. As a result of the tax cuts since 2001, all taxpayers face lower effective federal income tax rates than they would have without the tax cuts. While many characterize the CBO report as evidence that the tax cuts shifted the burden of taxation to the middle class, the CBO data show precisely the opposite effect. The tax cuts actually made the tax system more progressive. The highest 20% of earners now pay a larger share of federal income taxes than they would have without the tax cuts.

Because when you take it down to the lower 20%, you're into the income levels where you people are still being paid with withholding, it's not all -- independent contractor -- the point is that they report more income. They shelter less, they report more income, and the rate comes down, and tax revenue increases. And since their taxes, even though the percentage is higher. So the amount of money taken from them in taxes is higher. It's all common sense. It never has ceased to amaze me how people don't get this.

They get stuck on these percentages and they get stuck on the size of a tax cut, and they say, well, somebody making $400,000 a year gets a tax cut of $4,000, and somebody making $16,000 gets a tax cuts of $250. How's that fair? Somebody gets $4,000 and they don't need it. They don't need it. That's nobody's job to tell you who and what you don't need, especially not the government's. And that's what they focus on and everybody gets sidetracked.

Here are the numbers. You'll be stunned. The overwhelming majority of federal income taxes are paid by the very highest income earners. The top 1% of income earners pay about 32% of all income taxes. The top 5% pays 51.4%. The top 10% of high income earners, pay 63.5%. The top 20% of income earners pays 78% of all federal income taxes. The top 20%.

Now, if you're going to have a tax cut that is broad-based and reaches 78% of the people, I'm sorry, you're going to be cutting taxes on the top 20%. It's unavoidable! And guess what? It worked! It stimulated the economy. Where would we be without them?

Here's the final number. The bottom four-fifths, 80% - the bottom 80% of income earners pay just 20%, 22% of the federal income tax burden. The bottom 80% pay only 20% of the burden. Now, how in the world can anybody with a brain come forth and say, "I am against tax cuts for the rich. I'm only going to have a tax cut for the middle class." If you give a tax cut to people in the bottom 20%, you're not going to stimulate anything. They're not paying any taxes anyway. But we're making progress. We're making progress. That's why this thing is going to stay on my website in perpetuity. So you can see it.

http://www.rushlimbaugh.com/home/menu/ny_times_top_20
__pay_80__of_taxes_.guest.html

 
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