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death tax Archive

Saturday

25

June 2011

0

COMMENTS

We Don’t Need an Investor-in-Chief

Written by , Posted in Economics & the Economy, Taxes

How was anything ever invented before government started “investing” in new technologies? One wonders these things, given the seriousness with which Keynesians seem to believe that if they don’t choose the economic winners and then throw large sums of money at them – other people’s money, of course – then there will be no innovation or growth. The latest example of this faulty attitude involves a plan by the President to spend $500 million “investing” in manufacturing, or something:

President Obama on Friday will announce the launch of the Advanced Manufacturing Partnership (AMP), an initiative that would provide more than $500 million to encourage investments in promising technologies.

It is the administration’s second initiative in less than a month intended to boost U.S. manufacturing.

…“Today, I’m calling for all of us to come together — private-sector industry, universities and the government — to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world,” Obama will say, according to prepared remarks.

What do Obama and his bureaucrats know about manufacturing or what “cutting-edge tools they need to compete with anyone in the world”? He doesn’t seem to know, for instance, that we’re already in a manufacturing “renaissance”, in so far as manufacturing output continues to grow to new heights, breaking its own record, year after year.

Perhaps an even better question is: what makes Obama qualified to spend other people’s money better than they would themselves? Government “investments” are necessarily made according to political criteria, as the first priority of a politician is to get reelected, not turn a profit. And in order for these vote-seeking politicians to spend money on their schemes, it must first be removed from the productive sector of the economy, where individuals with actual skin in the game are much better suited to find investment opportunities that will pay off.

If President Obama really wants to promote investment, he should remove the existing disincentives to savings and investment, such as the capital gains, dividends and death taxes, among other destructive taxes on capital formation. Simply put, we don’t need an Investor-in-Chief to direct investment capital to promising sectors and businesses, we simply need government to get out of the way and to stop making it so difficult for private investors to do so in the first place.

Wednesday

15

December 2010

0

COMMENTS

Wednesday

8

December 2010

1

COMMENTS

Kamikaze Democrats

Written by , Posted in Economics & the Economy, Taxes

As has been widely publicized, the White House and Congressional Republicans have forged a compromise that will prevent tax rates from going up at the end of the year (except for the death tax which will return with a 35% with a $5 million exemption).  In exchange for extending the current individual, capital gains and dividends rates for 2 more years for all Americans, Republicans agreed to support another year’s worth of unemployment benefits (which will reduce employment) and some various tax credits, which will do nothing. Overall, compared to what would happen if capital gains and dividends rate went up, this is a good deal. It’s certainly not the best policy (permanent extension would do a lot more to reduce uncertainty), but it’s better than tax increases (even, yes, on the wealthy).

It’s hard to see what democrats can really complain about either. They get their entitlements, and even by CBO’s gimmick accounting (where keeping tax rates the same has “costs”) most of the bill’s costs still comes from their entitlements, so they cannot complain about that. So why are so many so pissed off that they’re willing to try and scuttle the deal, taking America’s economy down with it?

The only explanation that makes any sense is that they’ve backed themselves into a corner with a decades worth of nonsensical class warfare demagoguery. They’ve falsely blamed Bush’s rate cuts “for the wealthy” (I’d point out for them yet again that Bush made the tax code more progressive, and not less so, but we all know I’d be wasting my time with these people) for everything from spending induced deficits to the financial crisis. Most of them probably really didn’t even believe this crap, but class warfare sells. Why argue for policy based on principle or careful analysis when you can just get one group of Americans pissed off at another group?

Democrats weren’t always this way. JFK argued for significant tax cuts as a way to grow the economy, and he was right. But for the hard left, to not raise taxes now would be to admit that their last ten years worth of rhetoric was a lie. We all know it was, but they are desperate not to admit it. And to protect their baseless ideology, they’ll happily fly the class-warfare fighter into the American economic ship.

Friday

24

September 2010

0

COMMENTS

Completely Out Of Touch

Written by , Posted in Election Time, Taxes

Two recent stories indicate just how clueless and inept is the Democratic Party.  First, we see that Democrats are punting on the issue of taxes:

Senate Democrats huddled behind closed doors for one hour on Thursday trying to figure out what to do about the expiring Bush tax cuts. With no consensus emerging, Majority Leader Harry Reid, D-Nev., decided to postpone a vote until after the election.<

Why are Democrats refusing to address the pending tax hikes which will cripple the economy? Because they know there is majority support in their House caucus, and growing support in the Senate, for extension of all of the tax cuts. The American people want it, too. But this arrogant Democratic majority refuses to let such a vote take place.  They’d rather play class-warfare politics and prevent the tax cuts that would have the biggest economic impact from taking place than do what is best for everyone – across the board protection from rate hikes, including on crucial capital gains, dividends and death taxes.

The second story has to do with the Democratic response to the recently released GOP Pledge to America. Would they respond with a similar clear(-ish) enunciation of their positions, many asked? No. They say they’ll just run on their record.  Seriously.

If I didn’t know better I’d suspect they’re throwing the election.

Wednesday

7

July 2010

0

COMMENTS

Death And Taxes Don’t Have To Go Together

Written by , Posted in Economics & the Economy, Liberty & Limited Government, Taxes

Ray D. Madoff writes in the LA Times that failing to confiscate the acquired wealth of individuals when they pass away will “harm our democracy.”  She reaches this odd conclusion primarily by arguing that, absent an intrusive government willing to pick the pockets of the deceased, our democracy would be harmed by “concentrations of wealth.” She buttresses this argument with the factually incorrect claim that, while “few Americans own an enormous amount … a large number of Americans own hardly anything at all.”

This is simply untrue. Owning a small percentage of American wealth is not the same thing as owning hardly anything.  Madoff ignores that owning a small, or even “unequal,” share of the American pie is still much better than having a large, “equal” or “fair” portion of almost any other, for the simple reason that America creates far more wealth to go around in the first place. This is because America has historically rewarded risk-taking and innovation, while other countries have been more concerned with Madoff’s brand of fairness. The consequence today is that even our poor are better off than the middle and upper classes of other countries.  To understand the backwardness of her agenda, just look at the year she cites as the pinnacle of redistributive fairness, 1976, which was also the heyday of stagflation and malaise.

She also attempts to wave away concerns about double-taxation by arguing that “there is no general principle that says income or property gets taxed only once.”  She supports this claim by saying that the same money is often taxed multiple times as it is earned, spent and passed along.  But each of these activities is economic in nature and represents a separate action.  Paying sales tax while spending the same money one has payed income tax on is not the same as having one’s estate pillaged by the state upon death. Death is not an economic activity.

Contrary to her claims, death taxes are harmful to the economy.  They discourage savings and investment by encouraging people to spend money before it is taxed away, leading to job loss and slower economic growth. Death taxes also hit hard small, family businesses, or those with significant assets tied up in land, like farms.  Would anyone expect major corporations to stay competitive if they had to liquidate and sell off half their assets every few generations?

Madoff’s biggest failure, however, is that she completely ignores the important role of the family unit in economic life.  Households have always been recognized as an economic entity because of the manner in which families work together to advance their economic condition.  To say that a parent has no right to pass on the fruits of their labor to their children and grandchildren is to completely ignore the unique role of the family in economic life.  There’s no more moral justification for taxing estates after death than there is for taxing the allowance a parent might give to a child.  Death and taxes are both be said to be inevitable, but there’s no reason they have to come together.