New York’s High Tax Rates makes it Difficult for People to Willingly Work in New York

Posted by PITHOCRATES - March 29th, 2014

Week in Review

If you ever wondered why the communists built the Berlin Wall this is why (see Man Takes Selfies for Proof to the IRS by Brian Koerber posted 3/18/2014 on 3/18/2014 on Mashable).

Anne Jarvis’ father, Andrew, is an architect that splits his time between his firm’s branches in New York City and Philadelphia. The commute became so overwhelming that he began to rent an apartment in NYC to improve his quality of life.

Upon further inspection of tax laws, Andrew learned that in order to avoid being taxed by New York, he would only be allowed to live in the city 182 days or less out of the year. In preparation for disputes against his living situation, he began taking selfies, as a way to prove to the taxman that he spends more time in Philadelphia, than he does in New York.

When a taxing authority taxes too much the natural inclination of free people is to move.  And that’s what was happening in East Berlin.  The best and brightest that drove the economy were walking across the street into the West.  Leaving behind only the less-educated and the less-skilled.  So to stop this brain-drain the communists built the Berlin Wall.  To keep the best and brightest from going to where life was better.

Those on the left will read this story and call this architect greedy.  For he enjoys the privilege of working and living in New York City part of the year.  And should pay for that privilege.  In particular so they can have more free stuff paid for by the best and brightest.  But if New York starts taxing his income that doesn’t mean Pennsylvania will stop taxing his income.  No.  They both will tax his income.  As if he’s two different people.  That is, he will pay the taxes of two people.  Is that fair?  Would even those on the left call that fair?  Of course if you suggest they should pay two cellular bills (theirs and somebody else’s) they would say, “Wait a minute.  That is NOT fair.”  But the architect?  They’d probably say something like, “He’s rich.  He can afford to pay the income taxes of two people.  And should.”

Being rich is a relative term.  It basically means anyone making more than you these days.  So even people who win the lotto don’t consider themselves rich when it comes to paying income taxes.  They’ll say that having to give almost half of their winnings to the taxman is unfair.  But having two states tax this architect is fair.  Because he can afford it.  For he earns that every year.  While they only won one lotto.

The way New York City is going they will have to build a wall around Manhattan if they expect to keep the best and brightest from fleeing their oppressive tax rates.  Or they’ll have to get the federal government to tax all states oppressively high so people have no better place to go.  Which explains why big-government liberals are all for expanding the power of the federal government.  For their oppressive liberal policies won’t work if the people can move to another state to escape them.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , ,

Progressive and Regressive Taxes and Marginal Tax rates

Posted by PITHOCRATES - January 6th, 2014

Economics 101

(Originally published July 9th, 2012)

The Beatles fled Britain to Escape a Confiscatory Top Marginal Tax Rate of 95%

George Harrison wrote Taxman.  The song appeared on the 1966 Beatles album Revolver.  It was an angry protest song.  For George Harrison was furious when he learned what exactly the progressive tax system was in Britain.  In the song the British taxman is laying down the tax law.

Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman, yeah I’m the taxman

That’s one for you, Mr. Harrison.  And nineteen for us.  The government.  Meaning that for every £20 the Beatles earned they got to keep only £1.  This is a 95% top marginal tax rate.  A supertax on the super rich imposed by Harold Wilson’s Labour government.  So if the Beatles earned £1 million because of their incredible talent and hard work touring in concert, working on new albums in the studio and making movies, of that £1 million they got to keep only about £50,000.  While the government got £950,000.  If they earned £10 million they got to keep about £500,000.  While the government got £9,500,000.  As you can see 5% is a very small percentage.  Which is why George Harrison got so angry.  The harder they worked the less of their earnings they were able to keep.

Is this fair?  George didn’t think so.  Nor did his fellow Beatles.  For they fled Britain.  Moved to another country.  Becoming tax exiles.  For they were little more than court minstrels.  Who the government forced to entertain them.  Earning a lot of money so they could take it away.  To help pay for an explosion in social spending Harold Wilson unleashed on Britain.  Socializing the UK like never before.  And all those social benefits required a lot of taxes.  Hence the progressive tax system.  And marginal tax rates.  Where the super rich, like the Beatles, paid confiscatory tax rates of 95%.

The Top Marginal Tax Rate was around 70% under President Carter and around 28% under President Reagan

As social spending took off in the Sixties and Seventies governments thought they could just increase tax rates to generate greater amounts of tax revenue.  For governments looked at the economy as being static.  That whatever they did would result in their desired outcome without influencing the behavior of those paying these higher tax rates.  But the economy is not static.  It’s dynamic.  And changes in the tax rates do influence taxpayer behavior.  Just ask the Beatles.  And every other tax exile escaping the confiscatory tax rates of their government.  Because of this dynamic behavior of the taxpayers excessively high tax rates rarely brings in the tax revenue governments expect them to.

Even when it comes to sin taxes government still believes that the economy is static.  Even though they publicly state that taxes on alcohol and tobacco are to dissuade people from consuming alcohol and tobacco.  (The U.S. funded children’s health care with cigarette taxes clearly showing the government did not believe these taxes would stop people from smoking).  Perhaps some in government look at sin taxes as a way to discourage harmful habits.  But the taxman sees something altogether different when they look at sin taxes.  Addiction.  Knowing that few people will give up these items no matter how much they tax them.  And that means tax revenue.  But unlike the progressive income tax this tax is a regressive tax.  Those who can least afford to pay higher taxes pay a higher percentage of their income to pay these taxes.  For sin taxes increase prices.  And higher prices make smaller paychecks buy less.  Leaving less money for groceries and other essentials.

Most income taxes, on the other hand, are progressive.  Your income is broken up into brackets.  The lowest bracket has the lowest income tax rate.  Often times the lowest income bracket pays no income taxes.  The next bracket up has a small income tax rate.  The next bracket up has a larger income tax rate.  And so on.  Until you get to the high income threshold.  Where all income at and above this rate has the highest income tax rate.  This top marginal tax rate was around 70% under President Carter.  Around 28% under President Reagan.  And 95% under Harold Wilson’s Labour government in Britain.  An exceptionally high rate that led to great efforts to avoid paying income taxes.  Or simply encouraged people to renounce their citizenship and move to a more tax-friendly country.

When the Critical Mass of People turn from Taxpayers to Benefit Recipients it will Herald the End of the Republic

Progressive taxes are supposed to be fair.  By transferring the tax burden onto those who can most afford to pay these taxes.  But the more progressive the tax rates are the less tax revenue they generate.  What typically happens is you have a growing amount of low-income earners paying no income taxes but consuming the lion’s share of government benefits.  The super rich shelter their higher incomes and pay far less in taxes than those high marginal tax rates call for.  They still pay a lot, paying the majority of income taxes.  But it’s still not enough.  So the middle class gets soaked, too.  They pay less than the rich but the tax bite out of their paychecks hurts a lot more than it does for the rich.  Because the middle class has to make sacrifices in their lives whenever their tax rates go up.

As social spending increases governments will use class warfare to increase taxes on the rich.  And they will redefine the rich to include parts of the middle class.  To make ‘the rich’ pay their ‘fair’ share.  And they will increase their tax rates.  But it won’t generate much tax revenue.  For no matter how much they tax the rich governments with high levels of spending on social programs all run deficits.  Because there just aren’t enough rich people to tax.  Which is why the government taxes everything under the sun to help pay for their excessive spending.

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold, I’ll tax the heat,
If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
‘Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.

This is where excessive government spending leads to.  Excessive taxation.  And confiscatory tax rates.  Taking as much from the wealth creators as possible to fund the welfare state.  And as progressive tax systems fail to generate the desired tax revenue they will turn to every other tax they can.  Until there is no more wealth to tax.  Or to confiscate.  When the wealth creators finally say enough is enough.  And refuse to create any more wealth for the government to tax or to confiscate.  Leaving the government unable to meet their spending obligations.  As the critical mass of people turn from taxpayers to benefit recipients.  Heralding the end of the republic.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Preventing Future IRS Scandals is as Easy as Changing the Tax Code

Posted by PITHOCRATES - May 30th, 2013

Politics 101

The Tea Party was the Driving Force in returning the House of Representatives to the Republicans

The IRS is very powerful.  It can seize your property.  It can throw you in jail.  It can ruin your life.  There is no other arm of the government honest people fear more.  Because it is so powerful.  America did away with debtor’s prison.  Because it was inhuman to jail a person over a debt.  Unless you owe it to the federal government.  Then all of that compassion goes out of the window.

The recent scandal of the IRS targeting conservative groups is especially chilling.  For the Tea Party was the driving force in returning the House of Representatives to the Republicans.  Infuriating the Democrats.  As well as the Obama administration.  When President Obama ran for reelection in 2012 he had little to run on.  The economy was horrible.  No one was talking about Obamacare because the majority of Americans don’t want it.  It was so bad that the Democrat president had to highlight his single national security achievement—killing Osama bin Laden—while ignoring his domestic policy achievement.  Obamacare.

Then Benghazi threatened to ruin everything.  An attack on an American mission that killed four Americans.  Including a serving ambassador.  Making matters worse was that it was an al Qaeda affiliated terrorist group that was responsible for it.  This did not play well with the campaign message.  ‘Osama bin Laden is dead.  And General Motors is alive.’  President Obama had already won the War on Terror.  So he couldn’t have a terrorist attack during his reelection campaign.  So they hit the Sunday morning talk shows and said there was an anti-Muslim video on YouTube that created a spontaneous uprising.  Where average Libyans on the street then pulled out rocket propelled grenades and mortar launchers from their back pockets.  And launched a military assault on the American mission.

The IRS silenced the Tea Party during the 2012 Election by Harassing them and their Donors

You don’t hear much about the YouTube video anymore.  During the 2012 reelection campaign, though, both the president and the secretary of state pushed it hot and heavy.  Even apologized for it in a video to play in Pakistan.  And arresting the obscure filmmaker on some other charge.  And it worked.  Benghazi faded into the background.  Despite the Obama administration denying the American ambassador additional security.  And issuing a stand-down order for forces that could have gone to help the Americans under attack.  This order coming about 7 hours BEFORE the last two Americans died.  To this day we don’t know who gave that stand-down order.  And we don’t know where the president was when all of this was unfolding in Libya.

But it worked.  The misinformation spun from the White House won the president a second term.  And people started talking about what the Republicans had to do to start appealing to women and Hispanics.  For the early postmortem said that was why the Republicans lost.  They turned off women and Hispanics.  But something was wrong with that conclusion.  Because the conservative base didn’t turn out on Election Day.  That’s why the Republicans lost.  To explain that some said the problem was that Mitt Romney wasn’t a true conservative.  And he turned off true conservatives.  But that doesn’t make sense, either.  Because Romney may not have been the most conservative Republican to run for president but next to President Obama the man was practically Ronald Reagan.  There had to be some other reason why conservatives didn’t turn out like they did in the 2010 midterm elections that returned the House to the Republicans.

That was the million dollar question.  What happened to the Tea Party?  Who were so instrumental in turning out conservatives to vote in the 2010 midterm elections.  It’s as if they sat out the 2012 election.  For we didn’t hear their voice like we heard it in 2010.  And now we have a plausible explanation for that.  The IRS.  They delayed and made it so difficult to get their 501(c)(4) tax-exempt status that some just gave up trying.  Finding themselves and their donors getting IRS audits both for their businesses and their personal returns.  As well as other arms of the federal government auditing them from the Department of Labor to the EPA.

Everyone wins with a more Simplified Tax Code except those in Power who use it to Attack their Political Enemies

Did the White House coordinate this?  We don’t know.  Yet.  The IRS commissioner visited the White House 151 times.  While his predecessor visited the Bush White House about 1 time.  So that looks suspicious.  And silencing the Tea Party did help the president win reelection.  For silencing the Tea Party sure didn’t help Mitt Romney.  So it looks probable that the Obama administration used the nonpartisan IRS to attack their political enemies.  As they were determined not to suffer another Tea Party uprising like that which lost them the House of Representatives in 2010.  Right now the circumstantial evidence is pretty damning.

This is not what the Founding Fathers had in mind.  That was the point of limited government.  So it didn’t have this kind of power over people it perceived as political enemies.  And the source of this power is the complex and convoluted tax code.  That serves those in power better than the people they serve.  Allowing them to reward friends and punish their enemies.  One would almost have to believe the reason why the current administration ran the deficit up to record highs is to further empower the IRS.  By creating the need for ever more tax revenue.  And the need for more strenuous collection efforts.  Not to mention using the tax code to facilitate a permanent state of class warfare.  For the government needs this complex and convoluted tax code to make sure the rich pay their fair share.  As well as using it to reward their friends.  And punish their enemies.

So perhaps it’s time to revamp the tax code.  Some are talking about it.  As they always do.  But there is so much resistance because of the power the tax code gives those in power.  And those in power quickly shoot down any talk about a flat tax or a national sales tax as being unfair.  Regressive.  Hitting low-income earners harder than the rich.  But perhaps this is exactly what we need.  So everyone feels the pinch of the taxman.  So people won’t be so quick to give the taxman more powers.  Because a lot of low-income people don’t stay low-income.  And one of the quickest ways of raising low-income earners out of poverty is with a better and stronger economy.  And there is one thing that does that better than anything else in the world.  Low tax rates.  So let’s take a look at different tax plans for a married couple filing jointly.

Federal Taxes Current Brackets Flat Tax National Sales Tax

(For the national sales tax we assumed everything above a certain savings rate is spent somewhere in the economy.  Those who earn more can save more.  In our example the saving rates are 1%, 8%, 15%, 20%, 25% and 30 %.)

Those earning only $15,000 will pay more under a flat tax or a national sales tax.  But the IRS becomes far less intrusive and far less powerful.  Because it will be so much simpler.  Giving honest people less to fear about.  And giving those in power less power to attack their political enemies.  Making it harder for them to cheat during elections.

Also, lower tax rates will bring money sheltered outside of the country back home. Which those rich people will invest here.  To get even richer.  And probably end up paying more taxes than they were before.  Because they won’t have any need to shelter it.  While all the new jobs they create will increase tax revenue further.  Because there will be more people working and paying taxes.  So everyone will win with a more simplified tax code.  Except, of course, those in power who use the tax code to attack their political enemies.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Higher Marginal Tax Rates cause Millionaires to leave Britain and Reduce Tax Revenues

Posted by PITHOCRATES - December 2nd, 2012

Week in Review

The Beatles were part of the British Invasion.  They came to the US, conquered, earned obscene amounts of money and went home.  And when they did the British took about 95% of their earnings.  Prompting George Harrison to write the song Taxman.  “There’s one for you, nineteen for me.  ‘Cause I’m the taxman.”  If you do the math (1 divided by 20) that comes out to a top marginal tax rate of 95%.  Shortly thereafter the Beatles were no longer British.  They became tax exiles.  And they weren’t the last Brits to leave their highly taxed country (see Two-thirds of millionaires left Britain to avoid 50p tax rate by Robert Winnett posted 11/27/2012 on The Telegraph).

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million [$1.6 million US] to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election…

Last night, Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.

Far from raising funds, it actually cost the UK £7 billion [$11.235 billion US] in lost tax revenue…

Mr Osborne argued earlier this year that the 50p rate was deterring entrepreneurs from coming to Britain.

So many politicians say rich people won’t leave if they raise income tax rates.  But the evidence is that they do.  And who can blame people like George Harrison?  Being a Beatle wasn’t easy.  The band broke up before anyone was older than 30.  Because they couldn’t stand it any longer.  Imagine doing something that you enjoy less and less while giving about 95% of your income to the taxman.  If you’re going to do something you don’t enjoy for the money you will want to at least keep the majority of what you earn.

So, does raising tax rates to confiscatory levels make rich people leave the country?  Yes.  And if they leave what percentage of their earnings does the taxman get?  Zero percent.  So what brings in more tax revenue?  A 95% tax rate taxing no income?  Or a much lower tax rate taxing any income?  The lower tax rate taxing any income, of course.  Because it takes two things to make tax revenue.  A tax rate.  And income to tax.  For a tax rate without income to tax is useless.

www.PITHOCRATES.com

Share

Tags: , , , , , , , ,

Progressive and Regressive Taxes and Marginal Tax rates

Posted by PITHOCRATES - July 9th, 2012

Economics 101

The Beatles fled Britain to Escape a Confiscatory Top Marginal Tax Rate of 95%

George Harrison wrote Taxman.  The song appeared on the 1966 Beatles album Revolver.  It was an angry protest song.  For George Harrison was furious when he learned what exactly the progressive tax system was in Britain.  In the song the British taxman is laying down the tax law.

Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman, yeah I’m the taxman

That’s one for you, Mr. Harrison.  And nineteen for us.  The government.  Meaning that for every £20 the Beatles earned they got to keep only £1.  This is a 95% top marginal tax rate.  A supertax on the super rich imposed by Harold Wilson’s Labour government.  So if the Beatles earned £1 million because of their incredible talent and hard work touring in concert, working on new albums in the studio and making movies, of that £1 million they got to keep only about £50,000.  While the government got £950,000.  If they earned £10 million they got to keep about £500,000.  While the government got £9,500,000.  As you can see 5% is a very small percentage.  Which is why George Harrison got so angry.  The harder they worked the less of their earnings they were able to keep.

Is this fair?  George didn’t think so.  Nor did his fellow Beatles.  For they fled Britain.  Moved to another country.  Becoming tax exiles.  For they were little more than court minstrels.  Who the government forced to entertain them.  Earning a lot of money so they could take it away.  To help pay for an explosion in social spending Harold Wilson unleashed on Britain.  Socializing the UK like never before.  And all those social benefits required a lot of taxes.  Hence the progressive tax system.  And marginal tax rates.  Where the super rich, like the Beatles, paid confiscatory tax rates of 95%.

The Top Marginal Tax Rate was around 70% under President Carter and around 28% under President Reagan 

As social spending took off in the Sixties and Seventies governments thought they could just increase tax rates to generate greater amounts of tax revenue.  For governments looked at the economy as being static.  That whatever they did would result in their desired outcome without influencing the behavior of those paying these higher tax rates.  But the economy is not static.  It’s dynamic.  And changes in the tax rates do influence taxpayer behavior.  Just ask the Beatles.  And every other tax exile escaping the confiscatory tax rates of their government.  Because of this dynamic behavior of the taxpayers excessively high tax rates rarely brings in the tax revenue governments expect them to.

Even when it comes to sin taxes government still believes that the economy is static.  Even though they publicly state that taxes on alcohol and tobacco are to dissuade people from consuming alcohol and tobacco.  (The U.S. funded children’s health care with cigarette taxes clearly showing the government did not believe these taxes would stop people from smoking).  Perhaps some in government look at sin taxes as a way to discourage harmful habits.  But the taxman sees something altogether different when they look at sin taxes.  Addiction.  Knowing that few people will give up these items no matter how much they tax them.  And that means tax revenue.  But unlike the progressive income tax this tax is a regressive tax.  Those who can least afford to pay higher taxes pay a higher percentage of their income to pay these taxes.  For sin taxes increase prices.  And higher prices make smaller paychecks buy less.  Leaving less money for groceries and other essentials.

Most income taxes, on the other hand, are progressive.  Your income is broken up into brackets.  The lowest bracket has the lowest income tax rate.  Often times the lowest income bracket pays no income taxes.  The next bracket up has a small income tax rate.  The next bracket up has a larger income tax rate.  And so on.  Until you get to the high income threshold.  Where all income at and above this rate has the highest income tax rate.  This top marginal tax rate was around 70% under President Carter.  Around 28% under President Reagan.  And 95% under Harold Wilson’s Labour government in Britain.  An exceptionally high rate that led to great efforts to avoid paying income taxes.  Or simply encouraged people to renounce their citizenship and move to a more tax-friendly country.

When the Critical Mass of People turn from Taxpayers to Benefit Recipients it will Herald the End of the Republic

Progressive taxes are supposed to be fair.  By transferring the tax burden onto those who can most afford to pay these taxes.  But the more progressive the tax rates are the less tax revenue they generate.  What typically happens is you have a growing amount of low-income earners paying no income taxes but consuming the lion’s share of government benefits.  The super rich shelter their higher incomes and pay far less in taxes than those high marginal tax rates call for.  They still pay a lot, paying the majority of income taxes.  But it’s still not enough.  So the middle class gets soaked, too.  They pay less than the rich but the tax bite out of their paychecks hurts a lot more than it does for the rich.  Because the middle class has to make sacrifices in their lives whenever their tax rates go up. 

As social spending increases governments will use class warfare to increase taxes on the rich.  And they will redefine the rich to include parts of the middle class.  To make ‘the rich’ pay their ‘fair’ share.  And they will increase their tax rates.  But it won’t generate much tax revenue.  For no matter how much they tax the rich governments with high levels of spending on social programs all run deficits.  Because there just aren’t enough rich people to tax.  Which is why the government taxes everything under the sun to help pay for their excessive spending. 

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold, I’ll tax the heat,
If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
‘Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.

This is where excessive government spending leads to.  Excessive taxation.  And confiscatory tax rates.  Taking as much from the wealth creators as possible to fund the welfare state.  And as progressive tax systems fail to generate the desired tax revenue they will turn to every other tax they can.  Until there is no more wealth to tax.  Or to confiscate.  When the wealth creators finally say enough is enough.  And refuse to create any more wealth for the government to tax or to confiscate.  Leaving the government unable to meet their spending obligations.  As the critical mass of people turn from taxpayers to benefit recipients.  Heralding the end of the republic.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , ,