Posts Tagged ‘luxury tax’

Note To The Party That Is Pathologically Incapable Of Comprehending Simple Reality: High Tax Rates ‘Failing To Boost Revenues’

February 24, 2012

Somewhere in heaven, Warren Harding and Andrew Mellon are laughing themselves into tears over how pathologically stupid liberals are. 

Keep in mind, for most of our nation’s history we didn’t even HAVE federal income taxes.  Harding and Mellon were the first pair to try lowering tax rates in the belief that rewarding success and investment would stimulate more success and investment – as opposed to the liberal thinking that if you just keep punishing the producers, they will surely produce more.  The bottom line is that Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues every single time we have ever done it.  And the bottom line is that every single time we have allowed liberals to try their Marxist class warfare punish the success of the rich meme, it has backfired.

The federalist papers called the states the laboratories for democracy; the idea was that the states under a relatively weak federal government could try different things; and to the degree those attempts worked or failed, people could vote with their feet.

The only thing that keeps democracy from working, in the federalist sense, is a federal government that usurps power.  Which is of course what we’ve got such that failing states get propped up while successful ones get undermined.

Still, look at what has happened in states like Maryland or New York or California and realize that high-tax liberalism has failed over and over again.  But Democrats are determined to remain stupid.

The quintessential example of this determination to remain pathologically stupid and to ignore reality whenever it gets in the way of liberalism is the infamous yacht tax that taxed the purchase of luxury items.  A central tenet of economic liberalism is that rich people are incapable of changing their behavior, such that Democrats can raise their taxes by a given percentage and thus obtain that same given percentage in higher revenue.  So they imposed a tax on luxury items such as yachts that only rich people tend to buy, figuring that they would thereby increase revenues and punish the rich at the same time.  But guess what happened?  Rich people quit buying those yachts; Democrats gutted entire industries.  And the only people were hurt were the small businesses that built and maintained yachts and other luxury items and the employees who worked in those industries who lost their jobs.

Democrats keep making the exact same mistake over and over and over again.

Democrats cannot learn; to put it in theological terms, they despise the truth and want to believe lies.  They are immune to reality.

And the states with the highest tax rates invariably also have the highest debts.  And high tax Europe – the model Obama is pursuing – is going down the drain.  Which add to further proofs that the economic policies of liberalism are the economic equivalent of a circular firing squad.

And liberals are pathologically stupid wherever you go:

50p tax rate ‘failing to boost revenues’
The amount of income tax paid fell sharply last month in the first formal indication that the new 50p higher rate is not raising the expected amount of revenue.
By Robert Winnett, and James Kirkup
10:58PM GMT 21 Feb 2012

The Treasury received £10.35 billion in income tax payments from those paying by self-assessment last month, a drop of £509 million compared with January 2011. Most other taxes produced higher revenues over the same period.

Senior sources said that the first official figures indicated that there had been “manoeuvring” by well-off Britons to avoid the new higher rate. The figures will add to pressure on the Coalition to drop the levy amid fears it is forcing entrepreneurs to relocate abroad.

The self-assessment returns from January, when most income tax is paid by the better-off, have been eagerly awaited by the Treasury and government ministers as they provide the first evidence of the success, or failure, of the 50p rate. It is the first year following the introduction of the 50p rate which had been expected to boost tax revenues from self-assessment by more than £1 billion.

Although the official statistics do not disclose how much money was paid at the 50p rate of tax, the figures indicate that it is falling short of the money the levy was expected to raise.

A Treasury source said the relatively poor revenues from self-assessment returns was partly down to highly-paid individuals arranging their affairs to avoid paying the 50p rate.

“It’s true that SA revenues are a bit disappointing — it’s still early, but it looks like there’s been quite a lot of forestalling and other manoeuvring to avoid the top rate,” said the source.
 
However, another Treasury source added that the tax deadline had been extended by two days because of industrial action at HM Revenue and Customs. Therefore, it was too early to begin assessing the revenues raised from the 50p rate of tax because about 20 per cent of self-assessment tax is paid in the hours before the deadline.
 
Francesca Lagerberg, head of tax at Grant Thornton, an accountancy firm, said: “My guess is that because the 50 per cent rate was flagged up in advance many taxpayers, particularly those with their own businesses, decided to extract dividends ahead of the change. It highlights the fact that high tax rates don’t always deliver high tax revenues.”
 
George Osborne, the Chancellor, is expected to receive a definitive analysis from the revenue on the 50p rate before next month’s Budget. The Liberal Democrats have insisted that it must stay because it is important to demonstrate that the rich are paying their fair share.
 
David Laws, a Lib Dem MP, has also suggested reducing tax relief on pensions for top earners.
 
The prospect of higher taxation on pensions comes as savers complain that low interest rates and quantitative easing have pushed down returns on savings and pensions.
 
Charlie Bean, the deputy governor of the Bank of England, last night insisted that those people should accept the pain as the price of restoring the wider economy to health.
 
The Confederation of British Industry, in its Budget submission today, urges ministers not introduce new levies on the rich, warning that the UK “will become a less attractive location for entrepreneurs and key employees”.

Wealthy people, confronted by excessively high tax rates, have several options: they can move, they can move their money somewhere else, they can hide or shelter their money.  In our system, they can also take advantage of so many loopholes that the IRS ends up playing a losing game of Whackamole.

Meanwhile, the very premise of liberals is also deeply flawed: even assuming that high taxes would raise more in revenue – which it factually does NOT do – you still have the dilemma that taking more money out of the private economy and putting more money into the pockets of government is counterproductive and frankly immoral.

Conservative principles lack in demagogic power.  They rule in actually WORKING.  As one example of that success, Texas created 38% of ALL the jobs created in America in 2010.

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Tax Hikes On Rich Proven Moron-Stupid; Just Ask Maryland

September 25, 2010

When I was a kid we had two dogs – a cagey wire-hair dachshund, and a typically elitist poodle.

Every single feeding was exactly the same. The dachshund would gobble down her food while the poodle stared at her bowl in haughty disdain.

Then, at some point right about the time when the dachshund had finished eating all the food in her bowl, the poodle would decide that surely the dachshund’s food must be better, and that she’d rather eat it.

So she would go over to the dachshund’s bowl, only alas, there was nothing in it.

Meanwhile, the dachshund would circle over to the poodle’s bowl, and glomb down that food, too.

We had to feed the dogs separately, or that poodle would have literally starved to death. Because as smart as that dog could be in some ways, she was dumb as a box of rocks when it came to common sense. And she just never learned.

Read the following and tell me if you don’t see a similarity between that poodle and the Democrat Party:

MARCH 12, 2010
Maryland’s Mobile Millionaires
Income tax rates go up, rich taxpayers vanish
.

Illinois Governor Pat Quinn is the latest Democrat to demand a tax increase, this week proposing to raise the state’s top marginal individual income tax rate to 4% from 3%. He’d better hope this works out better than it has for Maryland.

We reported in May that after passing a millionaire surtax nearly one-third of Maryland’s millionaires had gone missing, thus contributing to a decline in state revenues. The politicians in Annapolis had said they’d collect $106 million by raising its income tax rate on millionaire households to 6.25% from 4.75%. In cities like Baltimore and Bethesda, which apply add-on income taxes, the top tax rate with the surcharge now reaches as high as 9.3%—fifth highest in the nation. Liberals said this was based on incomplete data and that rich Marylanders hadn’t fled the state.

Well, the state comptroller’s office now has the final tax return data for 2008, the first year that the higher tax rates applied. The number of millionaire tax returns fell sharply to 5,529 from 7,898 in 2007, a 30% tumble. The taxes paid by rich filers fell by 22%, and instead of their payments increasing by $106 million, they fell by some $257 million. […]

A Bank of America Merrill Lynch analysis of federal tax return data on people who migrated from one state to another found that Maryland lost $1 billion of its net tax base in 2008 by residents moving to other states. That’s income that’s now being taxed and is financing services in Virginia, South Carolina and elsewhere. […]

Thanks in part to its soak-the-rich theology, Maryland still has a $2 billion deficit and Montgomery County is $760 million in the red. Governor Martin O’Malley’s office tells us he wants the higher rates to expire “as scheduled at the end of 2010.” But there are bills in both chambers of the legislature to extend the surcharge. The state’s best hope is that politicians in other states are as self-destructive as those in Annapolis.

I swear, you’d be better off putting my poodle in charge of food collection than you would be putting Democrats in charge of anything.

We’ve seen this fundamental, profound ignorance of the plan simple fact that rich people are not stupid, and that they change their behavior when they are hit with taxes in a manner that enormously refutes the most basic Democrat presuppositions:

Starting in 1991, Washington levied a 10% luxury tax on cars valued above $30,000, boats above $100,000, jewelry and furs above $10,000 and private planes above $250,000. Democrats like Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share and privately about convincing President George H.W. Bush to renounce his “no new taxes” pledge.

But it wasn’t long before even these die-hard class warriors noticed they’d badly missed their mark. The taxes took in $97 million less in their first year than had been projected — for the simple reason that people were buying a lot fewer of these goods. Boat building, a key industry in Messrs. Mitchell and Kennedy’s home states of Maine and Massachusetts, was particularly hard hit. Yacht retailers reported a 77% drop in sales that year, while boat builders estimated layoffs at 25,000. With bipartisan support, all but the car tax was repealed in 1993, and in 1996 Congress voted to phase that out too. January 1 was disappearance day.

Over and over again, Democrats keep making the same mistake. They are continually amazed that they keep getting the same results. And then they fiercely insist that those results won’t apply the next time.

The Maryland “tax the rich” example has been demonstrated again and again.

Take New York. Please, as the comic says:

Oct. 5 (Bloomberg) — New York State’s income tax revenue has dropped 36 percent from the same period in 2008, Governor David Paterson said, “frustrating” his attempt to close a projected $2.1 billion budget deficit.

“We added personal income tax, which we thought would make the falloff 10 percent to 15 percent,” Paterson, a Democrat, said on CNBC today, referring to $5.2 billion in new or increased taxes. “This is what is so frustrating. It’s still 36 percent, meaning our revenues fell more in 2009 than they did in 2008.”

Surprise. You’re a dumbass, in a state filled with dumbasses.

Did you confuse New York state with New York City? Fine, let’s talk about New York City:

Charging that it’s “easy to rile against the rich,” Mayor Bloomberg warned yesterday that the income-tax increases being considered for the wealthiest New Yorkers would drive them from the city.

“One percent of the households that file in this city pay something like 50 percent of the taxes. In the city, that’s something like 40,000 people. If a handful left, any raise would make it revenue neutral,” the billionaire mayor said on his weekly radio show.

“The question is what’s fair. If 1 percent are paying 50 percent of the taxes, you want to make it even more? Anybody below that 1 percent, no taxes?”

Legislators in Albany are considering state income-tax hikes for households earning from $250,000 to $1 million to close a budget gap next year of at least $13 billion.

Rush Limbaugh moved from New York to Florida because of the tax burden. That move alone will cost New York $50 million. And you probably can add the loss of LeBron James to that fiasco. And how many average Joes is it going to take to make up for the loss of just those two men’s tax revenues? For no other reason than that New York was so greedy and so stupid that they demanded everything and therefore got nothing.

Take California versus Texas, with California’s punitive liberal-devised tax rates losing big time compared with Texas pro-conservative taxes:

Don’t look now, but there’s a new War Between the States under way, and the south is winning. The most dramatic winner is Texas. The cover story of a recent (July 9) issue of The Economist compared California with Texas and implied that the Golden State is falling apart, while the Lone Star State is leading the nation out of the recession. Then, in a mid-July issue of National Review, Kevin D. Williamson said the nation is “Going Alamo,” with new jobs and businesses tipping southward, draining California, the Midwest, and Northeast of their former economic glory.

One indicator of the trend, according to Williamson, is the cost of renting a U-Haul truck for a one-way move. From Austin, Texas to San Francisco, California, the cost is $900, while a one-way rental from San Francisco to Austin is $3,000, due to the exodus of trucks from California.

All this makes sense. We are a mobile nation. People can move easily enough (especially if they rent), and capital can move even faster. Capital, jobs, and businesses will go where they are most welcome, while capital leaves places where it is punished by higher taxes and over-regulation.

And lo and behold, Texas, with its low taxes, has created 70% of all US jobs since 2008. But liberals don’t want job creation, for all their bogus rhetoric; they want Marxism. They want class warfare. They want redistributionism. They want to “spread the wealth around.” No matter how ruinous it is. And no matter how badly it hurts the little people, who keep falling for class warfare demagoguery the way Charlie Brown keeps falling for Lucy’s promise to hold the football for him.

I wrote the following nearly a year ago:

Americans in high tax states are voting with their feet and leaving. And the states with the highest income taxes such as New York, California, and Hawaii, are facing the biggest revenue shortfalls.

In spite of being warned that liberal class-warfare tax-the-rich-to-extinction policies would lead to Dodo-bird results, New York attacked the rich with a 31% income tax hike. And all they have to show for their eat-the-rich tax policies is record revenue shortfalls.

And how do Democrats react? Do they acknowledge proven, factual, repeatedly-documented reality? They don’t have it in them, anymore than my idiot poodle had it in her. Rather, they insist on performing the same failed experiment again in Illinois. And all that’s going to happen is that the rich will move or shelter their money, such that an even bigger tax burden ends up falling on the working class whom Democrats fallaciously claim to be helping.

And as foolish, as idiotic, as suicidal as putting Democrats in charge of a state is, the only thing worse is to put them in charge of the federal government.

Democrats have been baying to increase the taxes of the rich across the nation even though the plain, simple fact is that tax CUTS raise revenues; they have ALWAYS raised revenues every single time they’ve been tried.

Democrats were so determined to impose tax hikes on the rich that they are willing to ensure that NOBODY gets any tax cuts. The bi-partisan compromise vote was all on the Republicans’ side. And Democrats were afraid to allow a straight up-or-down vote on allowing tax cuts for all Americans. They preferred huge tax hikes for Americans, instead.

You can paint string yellow and sell it to these people as gold. And then you can do it again, and again, and again.

Microsoft CEO Says Obama Tax Plan Will Result In Companies Leaving USA

June 6, 2009

The imperial presidency has issued a new edict to force jobs out of the United States.

What happens if you make the cost of doing business too expensive in a given area?  Either businesses go out of business or they leave for greener pastures.

And, under Obama, the “greener pastures” are anywhere but America.

Tax plan would send jobs offshore, Ballmer says

Microsoft CEO Steve Ballmer said the software company would move some employees offshore if Congress enacts President Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.

Microsoft CEO Steve Ballmer said the software company would move some employees offshore if Congress enacts President Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.

“It makes U.S. jobs more expensive,” Ballmer said Wednesday. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”

Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.

U.S. tax rules let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the U.S.

It’s kind of like New York taxing cigarettes to $11 per pack.  Liberals THINK they will A) pay for their liberal social programs and B) get people to stop smoking.  But they are not living in the real world because what will actually happen is C) people will begin to buy black market cigarettes.

The infamous luxury tax is a great example:

Starting in 1991, Washington levied a 10% luxury tax on cars valued above $30,000, boats above $100,000, jewelry and furs above $10,000 and private planes above $250,000. Democrats like Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share and privately about convincing President George H.W. Bush to renounce his “no new taxes” pledge.

But it wasn’t long before even these die-hard class warriors noticed they’d badly missed their mark. The taxes took in $97 million less in their first year than had been projected — for the simple reason that people were buying a lot fewer of these goods. Boat building, a key industry in Messrs. Mitchell and Kennedy’s home states of Maine and Massachusetts, was particularly hard hit. Yacht retailers reported a 77% drop in sales that year, while boat builders estimated layoffs at 25,000. With bipartisan support, all but the car tax was repealed in 1993, and in 1996 Congress voted to phase that out too. January 1 was disappearance day.

But liberals have to learn the same basic lesson over and over again (which is another way of saying liberals never learn).

Only a fool thinks you get more of something by taxing it.  Only a fool thinks that people won’t change their behavior in order to avoid paying higher taxes.

Which is another way of saying liberals are fools.

Income tax revenues should be a frightening predictor of the future.  Compared to the 2007/2008 average, individual tax revenues were down 40%, and corporate tax revenues were down a stunning 67%! And while these numbers obviously reflect the poor economy, they are also a harbinger of tax sheltering to come as people try every trick to avoid paying taxes that everyone knows will go up and up (just like the taxes on cigarettes).   Obama and the Democrats are going to have to raise taxes across the board in an increasingly desperate attempt to monetize the massive budget gap caused by their massive spending.

And one of those “tricks” will be to simply leave the country to get away from Obama and his frankly stupid policies.

Obama’s Class-Warfare Approach Will Harm Country

July 30, 2008

Barack Obama can fix everything just by taxing the rich. He can massively increase social spending simply by taxing the bejeebers of the evil and greedy rich. You CAN eat your cake and have it too!!!

There’s only one thing wrong (apart from the whole Marxist class warfare thing) with his plan:

Obama foolishly believes that raising taxes on the rich will be a panacea so that he can engage in all kinds of massive social programs (to the tune of $874 billion in new spending). He plans to raise $100 billion by increasing taxes on the rich. What he doesn’t understand is that the rich will change their behavior, begin sheltering their money, and suddenly government will see its stockpile of golden eggs shrink, and keep shrinking. Obama is counting on the rich acting exactly as they have been acting as a result of the Bush tax cuts. But he simply doesn’t understand that that isn’t the way real life actually works.

In today’s paper there was an Associated Press article discussing the federal budget deficit that contained the following statement on taxes vis-à-vis revenues.

McCain promises to renew the full roster of Bush tax cuts enacted in 2001 and 2003 and add many more for businesses and upper income people who pay the alternative minimum tax. The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year. Eliminating the alternative minimum at the same time would cost almost as much.

The sentence “The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year” is completely true – if human beings are simply robot idiots. It’s completely false if people react to changing environmental conditions by changing their behavior. The thing is that people AREN’T robot idiots and they DO change their behavior to avoid negatives and take advantage of positives.

The rich don’t think in stupid, stagnant terms anymore than anyone else does.

Think of the recent high gas prices. Americans have overwhelmingly altered their behavior as a result of the high gas prices, driving nearly 10 billion fewer miles compared to last year. As the price of gas became more and more expensive, Americans reacted by altering their behavior. And if the price of gas goes back down, people will respond by increasing their driving.

And the rich do the same thing. They react to high taxes by sheltering their money, and they react to lower taxes by increasing their investments and growing their business.

The easiest example of this is the luxury tax that Democrats stupidly applied to items like yachts some years back. They saw only the additional revenue they would obtain by “soaking the rich,” but the rich – faced with a 10% additional tax – simply stopped buying yachts and the result nearly destroyed the boating industry. You don’t get rich by being stupid with money. But Democrats think entirely in class-warfare terms, and are simply incapable of learning this lesson.

What liberals – both in politics and in the media – do is look at the tax revenues, put in the higher tax rates they prefer, and calculate that they would make X.XX% more if the tax rate were higher. But that’s simply false, and it has been factually and historically proven false.

The Bush tax cuts produced higher than projected revenue – to the tune of a 35% growth between 2003 and 2006.  In comparison, during the height of the Clinton economy between 1997 and 2000 – when he didn’t have 9/11 (and the subsequent hit to the economy) and we didn’t have wars in Afghanistan and Iraq dragging us down, federal receipts still rose only 28.2%.

A July 13, 2005 New York Times story titled “Sharp Rise in Tax Revenue to Pare U.S. Deficit” said:

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well.

Most of the increase in individual tax receipts appears to have come from higher stock market gains and the business income of relatively wealthy taxpayers. The biggest jump was not from taxes withheld from salaries but from quarterly payments on investment gains and business earnings, which were up 20 percent this year.

A Treasury Department analysis found that the tax cuts prompted the creation of jobs and increased the gross domestic product. It points out that:

Lower tax rates enable workers to keep more of their earnings, which increases work effort and labor force participation. The lower tax rates also enable innovative and risk-taking entrepreneurs to keep more of what they earn, which further encourages their entrepreneurial activity. The lower tax rates on dividends and capital gains lower the cost of equity capital and reduce the tax biases against dividend payment, equity finance, and investment in the corporate sector. All of these policies increase incentives to work, save, and invest by reducing the distorting effects of taxes. Capital investment and labor productivity will thus be higher, which means higher output and living standards in the long run.

Prior to the Reagan Revolution in 1981, the top marginal federal income tax rate was 70% (it is currently 35% under President Bush). At the 70% rate, the top 1% paid only 19% of the federal income tax burden, and the top 5% paid 37%. With the tax rate cut in half, the top 1% are paying more than twice as much of the total tax burden – nearly 40% – and the top 5% are paying nearly 60%.

And not only do the rich pay a higher percentage of their wealth in taxes under the lower taxes of the Bush plan, but they pay a higher ratio of their wealth in taxes than they did when the rates were higher.

If Obama counts on wealthy Americans to act the same with punitive tax rates that they do with low tax rates, he’s simply mistaken. If he raises the rich’s taxes, they will shelter their money and figure out ways to pay less and less. Even John Edwards and John Kerry sheltered their money to avoid paying taxes. And they’re more wonderful than anybody!

And when Obama can’t pay for his $874 billion extra spending by taxing the rich, he’ll come after you.

Don’t fall for the class-warfare strategy. It didn’t work for the Soviet Union, and it won’t work for the United States.

Low taxes is good for ALL the people by providing incentives for business investment and economic growth. The key to any budget is to live within one’s means, and not spend more than one takes in.

An Obama presidency would fail on both counts.