FUNDAMENTAL TRUTH #73: “Politics is about overspending and vote-buying while getting some poor dumb bastard to pay for it.” -Old Pithy

Posted by PITHOCRATES - July 5th, 2011

Washington is Show Business for the Ugly

The founding of America heralded the end of aristocratic rule.  And this is a problem.  For aristocrats.  Those who feel they’re better than everyone else.  Especially those who aspire greatness, and wealth, through political office.  Such as Liberal Democrats.  And RINO Republicans.  Those who like to mingle in the world of the beautiful people.  Rubbing shoulders with the fabulously rich.  And A-List celebrities.  Attending the best parties.  Meeting the best people.  Eating the best food.  Drinking the best booze.  It’s a beautiful life.  The only problem is the price of admission.  You have to be rich and/or talented to get in.  And rich and talented aspiring politicians aren’t.

At least, not at first.  But politics offers them that opportunity.  Rush Limbaugh said Washington is show business for the ugly.  There may be a lot of truth in that.  You see, the beautiful people are, well, beautiful.  That’s their ticket to celebrity and fame.  And access to that beautiful life.  From movie stars being discovered sitting at a drug store counter to talentless reality stars.  Being attractive can be a shortcut to fame.  Beautiful people go the front of the line at the best clubs.  And often get a free pass in.  Because people want to be around beautiful people.  Even if they’re unknown.  That’s the power of being beautiful.  Which can be a problem for the beautifully challenged.

Of course, having talent is a way around not being beautiful.  Those nerds in high school went on to be millionaires.  Even billionaires.  Those geeky guys that never had a date in high school now have the most beautiful women chasing them.  For their money, of course.  But they are still chasing them.  And they learned something.  It’s not important to be beautiful.  As long as you’re rich.  Because it turns out that money can buy a lot of happiness.  Sure it’s the shallow and superficial kind.  But you’ll be at the best parties.  Rubbing shoulders with the other fabulously rich.  And A-list celebrities.  That’s a pretty sweet life.  And one that many covet.  But what do you do if you’re neither beautiful nor talented?  You, of course, go into politics.

You have to be a Real Good Liar

Those with no talent or ability can try to trade in on their appearance.  If they’re considered too ‘ugly’ to get by on their looks alone then they can enter a career of lying.  Politics.  Where you say you care about the little people and promise to give them things if only they will vote for them.  You do anything to get into office.  Because once you do you’re set for life.  Salary and benefits for Congress people are better than anything you’ll get working in the private sector.  And the retirement package is insane.  You live the rest of your life with a large percentage of your Congressional salary.  And you keep a lot of the perks from your Congressional days.  In other words, being elected to office is a ticket into a new aristocracy.  Just like in days of old.  And once you’re in people will treat you as if you are better than everyone else.

It’s a fairytale life.  And a lot of people want it.  People that you have to beat in some election.  Often without the help of any voter election fraud if you’re just starting your political career.  So you have to be a real good liar.  You have to suspend all reason and logic.  And promise, promise, promise.  Even with astronomically high deficits you promise to give people more if they vote for you.  Because you have a plan.  You’re going to shift the tax burden to those who can afford it.  Go after the rich who don’t pay their fair share.  And cut corporate welfare.  With these savings you will be able to spend more on the poor and disadvantaged.  It’s a powerful sales pitch.  And it works well if they are not well educated (thank you public education) and don’t understand taxes and their impact on the job-creating economy.  Also, the more poor and disadvantaged they are the better.  Because the rich and middle class aren’t going to vote higher taxes on themselves.  Only the poor and disadvantaged (who are not well educated on taxes and their impact on the job-creating economy) will continuously vote to raise taxes on those who have more than they do.  Classic class warfare.  So it’s important that your programs fail.  Because you don’t want to help these people.  Not if you’re relying on them to help you sustain your better life.

Of course having a large percentage of the population dependent on your government policies and programs isn’t enough.  It will make the elections easier but it isn’t going to pay the bills.  These people are, after all, a burden.  They consume a lot of the tax base.  But most don’t pay any taxes.  Sure, you can live a comfortable life on a Congressional salary.  But there’s so much more to be had out there with the power to write laws and regulations.  When you can decide winners and losers in the economy you wield considerable influence.  And that influence is worth something.  Especially to crony capitalists.  Who look to profit not by competing in the free market.  But by having friends in high places.  Friends who will reward them well in exchange for a little cash and perks thrown their way.  And by a little I mean a lot.  Of course the good politician makes sure these crony capitalists are only profitable with their help.  Because the less they need their special favors the less of their cash and perks find their way to Washington.

Higher Tax Rates ultimately Reduce the Amount of tax Dollars Collected

Politics is nothing more than a ballet of leverage.  Who has pull.  Who can use it best.  And who is willing to screw the little guy.  You use the poor and disadvantaged to win elections.  But you do everything within your power to keep them poor and disadvantaged so they can keep helping you win elections (we’ve been fighting a war to end poverty since LBJ‘s Great Society of the 1960s and we haven’t won it yet which should tell you something).  You use crony capitalism to enhance your wealth and wellbeing.  But you make sure this corporate welfare only serves one person.  You.  So you don’t necessarily want to see your crony capitalists doing well in the free market.  Far from it.  For if they can do well without your help they’re not going to stay your bitch.

So, to succeed in politics you need to do a couple of things.  You need to redistribute wealth from those who create it to those who don’t.  And form mutually exclusive relationships with crony capitalists.  We call it tax and spend.  And legislation.  They use the progressive income tax system to spread the wealth.  And write legislation that rewards their friends while punishing the enemies of their friends.  Taxes for revenue.  And legislation for power and wealth. 

But the revenue is never enough (as the deficits show).  Despite the progressive income tax system.  Where, in the name of fairness, the richer you are the more taxes you pay.  And the poorer you are the fewer taxes you pay.  But keeping as many people as poor as possible has its drawbacks.  The more poor there are the fewer there are paying taxes.  Which requires raising taxes on the non-poor.  The rich.  And the middle class.  Which has a real big side affect.  After a point, higher taxes reduce economic activity.  It’s the law of diminishing returns.  The higher tax rates ultimately reduce the amount of tax dollars collected.  So they consider other sources of revenue besides the income tax.  Money that is ‘outside’ of the economy.  Money that’s ‘parked’.  Untouched by income and excise taxes.  Such as estates of the dead.  And the wealth of the living.  There is an estate tax.  But no wealth tax.  Yet.  And, oh, do they want one.  Like in some European countries.  Because the rich don’t work.  They invest.  They don’t live on income.  They live on ‘investment’ income.  Capital gains.  Which is taxed at a lower capital gains rate.  Not the confiscatory rate of the progressive tax system.  Worse, as the government sees it, they only pay taxes on their capital gains.  Not their capital.  Their wealth.  And that’s a lot of money parked outside the economy that they want a piece of.

Something ‘outside’ the Economy to Tax

But a wealth tax has its problems, too.  You can move wealth.  If you tax wealth the wealthy will just invest their wealth elsewhere.  Like rich Europeans have done.  No.  They need something better.  Something the rich can’t escape.  And, ideally, finding something ‘outside’ the economy to tax.  Something like the Las Vegas model.  The casinos in Vegas bring a lot of money into the city.  The casinos are very profitable.  And Las Vegas and Nevada profit well, too (before the subprime mortgage crisis, at least).  Many other cities have tried to cash in on these fat profits but have failed to match the success of Vegas.  Caesars Windsor is doing well because it is in a smaller city across the border from a larger metropolitan area.  A metropolitan area with a lot of people.  And if just a fraction of them crossed the border it would swell the Windsor economy.  And like Vegas, Windsor does have a little vice to offer.  A bit of the naughty that you can’t get in that metro area.  For the good people of Metro Detroit have a higher legal drinking age.  They don’t have gentlemen’s clubs with nude dancers that serve alcohol.  And prostitution is illegal.  But all of these things (to a certain extent) are available in Windsor.  Just across the border.  Where, like Vegas, what happens in Windsor stays in Windsor.  Plus Windsor has an active nightlife.  Safe streets.  And a touch of an international flair.  The money poured into Windsor.  When Detroit finally added three casinos to get a little piece of that action that’s what they got.  A little piece.  The casinos were money makers.  But Detroit did not enjoy the boom that Windsor did.  Why?

Windsor did well for the same reason Vegas did well.  They’re both destination cities.  People travel to them.  They’ll fly there for a vacation.  Or cross an international border for a night out.  These are the people spending and losing their money in these casinos.  Not the good people of Windsor.  Or the good people of Las Vegas.  It’s outside money coming into the local economy.  Which is a net add.  The problem Detroit has is that it’s not a destination city.  It’s cold in the winter.  It’s suffered blight and decline.  And still has a reputation as being unsafe.  People aren’t going there.  It’s just the people already there that are gambling away their money.  These people are just going out to dinner less.  Going out to fewer movies.  Going out to fewer clubs.  Etc.  The problem in Detroit is that there is no new money coming into the economy.  All that casino money was just local money people were spending someplace else in the local economy.

Despite what they say, politicians know high taxes don’t stimulate economic growth.  It just transfers money from one person to another to spend.  There’s no net gain.  Like in Detroit with their casinos.  They would love a wealth tax.  But the rich could easily avoid it by moving their wealth.  But there is something that even they can’t avoid.  Taxing energy.  Rather, the emissions created by energy.  In the name of combating global warming.  Cap and trade.  Emissions trading.  Making people buy ‘permits’ for their emissions.  That can be traded.  Creating a permit exchange similar to a stock exchange.  Governments forcing private entities to buy ‘shares’ of pollution.  Brilliant.  Because you can’t escape the use of energy.  It is a part of our very existence.  So you can’t escape it.  And the Europeans have taken it to the Las Vegas model.  The European Union (EU) will force international airlines flying into EU airspace to pay in essence an extralegal tax.  Which is the greatest kind of tax a government can use.  A tax whose full benefits will go to their constituents.  But a not a dime of which their constituents will pay.  If you put this to a referendum, the people will pass it.  Because people will have everything to gain.  And nothing to lose.  Other than the trade war such an extralegal tax would most likely provoke.  And the accompanying economic crash and withering recession.

In the mean time, though, the ruling elite, the new aristocracy, will be able to maintain their privileged lives.  Mingling with the beautiful people.  The fabulously rich.  And A-List celebrities.  Which is really all they care about anyway.

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Estate Taxes and Social Security – are the Dead People or Cash Piñatas?

Posted by PITHOCRATES - December 18th, 2010

The Lord Taketh Away.  And the Lord Giveth.

I sat in some construction meetings for a small church building a new nave.  I learned a few things about churches.  And construction.  First of all, church projects have a lot of alternates in their bid proposals.  Because they always want more than their budgets can pay for.  But they’re ever hopeful.  When they pass that basket around.  To add some of those alternates.  Even ask for donations during construction.  From the contractors building their new nave.  But the biggest thing I learned was the value of dead people.

This church had grandiose plans.  A pipe organ.  A light dimming system.  A sound system.  And some really nice (and expensive) chandeliers (they install some plain-Jane lights until they could afford the more spectacular lighting).  But, alas, they did not raise enough money to include all of these things.  And to make matters worse, they ran into some unexpected costs.  They had to make cuts.  Even some of the things that they had already approved.  The owner’s representative was not a happy camper.  He had to sit in a lot of meetings to reach a consensus on what to cut from the project.  But there was never any consensus.  Then, one day, he came to the construction meeting with a big smile on his face.

Someone had died.  And he was a parishioner.  A well-to-do parishioner.  The owner’s rep got a heads up on what the dead guy had bequeathed to the church.  And it was enough to not only keep the approved alternates.  But big enough to add a few other things.  And he smiled.

Death and Taxes – A Liberal’s Favorite Things

In all fairness to the church, they did a lot of charitable work in their community.  But there are other people who smile when old people die.  And they’re not helping the community as much as stuffing their pockets and the pockets of their friends.

Social Security is a great cash piñata for the government.  That’s why they are dead set against privatizing Social Security.  You see, it’s a numbers game.  Or racket.  Working people pay into a ‘retirement fund’ while they work.  Then when they retire, they get ‘benefit payments’.  And if you die the day after retiring, the government gets a big smile on their face.  Why?  Because they get to keep your ‘retirement fund’.  And that just wouldn’t happen if you had your retirement in a 401(k).

Private retirement investments (IRA, 401(k), insurance policy, etc.) are private property.  If you die before using those benefits, they go to your spouse, kids or other next of kin.  It’s your money.  And it stays in your family.  Well, some of it, at least.

When people use other investments other than the federal government, the government has other ways of getting your money when you die.  It’s called the estate tax.  The government sees the death tax as a statement of their generosity.  Instead of a 100% tax rate upon your death like with Social Security, it’s closer to 50% (depending on the current tax code).  Like George Harrison sang in Taxman, the government is basically telling us that we should just be thankful they’re not taking it all.

The Final Solution for Efficiency’s Sake

Liberal Democrats are obsessed with death.  To them it’s convenience and efficiency.  They like euthanasia.  They talk a lot about dignity at the end of life, but it’s also a great money saver.  As some sick and dying people can take a long time to die.  And Medicare and Medicaid pay for a lot them while they’re taking their time to die.  But euthanasia can change that.  And has.  In some of the more ‘bluer’ (i.e., liberal) states.

They like abortion, too.  They talk about it empowering women.  But is also a great money saver.  When unmarried teens get pregnant and they carry their baby to term, that baby will consume a lot of government benefits.  Of course, this is a double-edge sword.  The use of abortion (and birth control) has reduced the birthrate.  At a time the size of government has been expanding.  Which means there will be fewer taxpayers down the road to pay for that expanding government.

Of course, Obamacare brings it all home for the liberal Democrat.  The government will make healthcare a model of efficiency.  By deciding who should get treatment.  And who should get a pill to help them manage their pain.  Until they die.

Scary, isn’t it?  They deny it.  And they don’t use the word ‘death panels’ in the Obamacare legislation, but there are boards.  Who make healthcare decisions.  Based on cost.  And the only way to make healthcare more efficient is to spend less.  And you spend less when more sick and old people die.  And when it comes down to it, what is an old person?  Someone who is no longer a useful taxpayer.  But, instead, is a tax consumer.

And keeping them alive is just bad business when you’re in the business of life and death.

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Estate Taxes – Washington’s Insatiable Greed

Posted by PITHOCRATES - December 13th, 2010

Taxing the Dead

Liberal Democrats like dead people.  Because when people die, there’s inheritance to tax (see Democrats not pleased with deal on estate taxes by Seth McLaughlin posted 12/12/2010 on The Washington Times).

“If someone leaves an estate of a billion dollars, under their proposal, they would gain $100 million over what the Democrats are proposing for the estate tax,” Rep. Jan Schakowsky, Illinois Democrat, said on MSNBC’s “The Rachel Maddow Show.” “Imagine, Paris Hilton will be able to get an extra $100 million under their plan. It’s obscene. It’s absolutely an offense to us and to most Americans.”

A levy on the transfers of big inheritances, the estate tax has become emblematic of philosophical differences that exist on Capitol Hill, where Mr. Sanders and other liberal-leaning lawmakers claim wealthy Americans simply can afford to contribute more to the national kitty and conservatives say the tax does not deliver the bang for the buck that Democrats claim and that the federal government shouldn’t have a financial stake in how people pass along their personal fortunes.

Yeah, but whose money is it in the first place?  And how many times do the rich have to pay taxes on their money?  They tax their income at the highest rates.  They tax their capital gains from Interest and dividends.  And if they’re business owners, they pay a corporate income tax, payroll taxes and other business taxes before they get to pay further taxes on the personal income their businesses pay them.  Tax, tax and tax. 

And they call the rich greedy?

There’s One for You, Nineteen for Me

All right, just how greedy are these rich? 

The first Bush cuts began phasing the estate tax out in 2001 from a top rate of 55 percent to 45 percent in 2009 and then to zero in 2010, with the per-person exemption also rising from $1 million to $3.5 million.

So, if Paris Hilton’s daddy bequeaths her a billion dollars, she gets to keep $450,000,000 while the government gets $550,000,000 (at the 55% estate tax rate).  The government gets more than half of her inheritance.  Schakowsky is right.  I am offended.  I am offended that the government can take over half of anyone’s inheritance while doing nothing to earn that money.  Like the Hiltons did. 

And my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)

(The Beatles’ Taxman).

The government wants your money.  They want it when you work.  When you retire.  And when you die.  Have you ever wondered why the government is so opposed to privatizing Social Security?  Because your Social Security ‘retirement fund’ is taxed at 100% at your death.

Public Sector Unions are Expensive

So why do they want so much of our money?  Because public sector unions are expensive (see Government Unions vs. Taxpayers by Tim Pawlenty, governor of Minnesota, posted 12/13/2010 on The Wall Street Journal).

The majority of union members today no longer work in construction, manufacturing or “strong back” jobs. They work for government, which, thanks to President Obama, has become the only booming “industry” left in our economy. Since January 2008 the private sector has lost nearly eight million jobs while local, state and federal governments added 590,000.

Federal employees receive an average of $123,049 annually in pay and benefits, twice the average of the private sector. And across the country, at every level of government, the pattern is the same: Unionized public employees are making more money, receiving more generous benefits, and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt.

It never changes.  The politically connected always exploit the masses.  The only difference today from yesterday’s noble classes and aristocracy is that membership isn’t based on blood.  They don’t inherit title and rank these days.  Which probably explains why the ruling elite has no qualms about a confiscatory estate tax.

Public Sector Unions and Dictators

It’s not easy screwing the masses in a democracy.  You need help.  Some political muscle.  Some guns for hire.

Public employee unions contribute mightily to the campaigns of liberal politicians ($91 million in the midterm elections alone) who vote to increase government pay and workers. As more government employees join the unions and pay dues, the union bosses pour ever more money and energy into liberal campaigns. The result is that certain states are now approaching default. Decades of overpromising and fiscal malpractice by state and local officials have created unfunded public employee benefit liabilities of more than $3 trillion.

Life in Cuba and North Korea is deplorable.  And yet their rulers have held power for decades.  And how did they do this?  Well, life may suck for your run of the mill North Korean and Cuban, but life is very good for those around the dictators.  They take care of the dictators.  And the dictators take very good care of them.  One can’t survive without the other.  So they take care of each other.

Ditto for public sector unions.

Who’s Exploiting Whom?

Once upon a time factories were like Dickens novels.  So the unions organized.

The moral case for unions—protecting working families from exploitation—does not apply to public employment. Government employees today are among the most protected, well-paid employees in the country. Ironically, public-sector unions have become the exploiters, and working families once again need someone to stand up for them.

Government work.  When someone is goofing off at work, the joke is that they’re doing government work.  Because government workers get paid very well.  For phony baloney jobs.  Many of these jobs are so useless that no one would ever notice if we eliminated them.  Life would go on as before.  Well, we would probably be taxed a whole lot less.  But other than that, the elimination of these jobs wouldn’t make the slightest difference in anyone’s life.

But we’re stuck with these jobs.  And we pay for them.  With confiscatory taxes.  Even after we die.  So, like George Harrison said, you better declare those pennies on your eyes.  When they lay you in your coffin.  Because the taxman is coming for you.  And your estate.

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