Bashing Obama’s Class-Warfare Tax Policy on CNBC

No left-winger to debate in this appearance.

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Political Alchemy, Part I: Turning Spending Increases into Tax Cuts

Politicians in Washington have come up with something far more impressive than turning lead into gold or water into wine. Using self-serving budget rules, they can increase the burden of government spending and say they are cutting taxes instead.

This bit of legerdemain is made possible, thanks to the convolutions of the personal income tax, by adopting or expanding refundable tax credits. But in this case, “refundable” does not mean the government is returning money to taxpayers. Instead, it means that money is being redistributed to people who do not earn enough to be subject to the income tax.

This is hardly a trivial issue. According to the Congressional Budget Office, the amount of income redistribution being laundered through the tax code is now so large that the bottom 40 percent of the population has a negative “effective” income tax rate. In simple terms (though perhaps with profound political implications), the income tax is a revenue generator for a big share of the population.

And the problem is going to get worse if the President’s budget is approved. Buried in the fine print, on pages 188-189 of the Analytical Perspective of the Budget, you will see that the President is proposing to increase this hidden form of spending by more than $152 billion over the next ten years.

It is worth noting that proponents argue that it is okay to classify this new spending as tax cuts because it somehow offsets other tax payments, especially the payroll tax. I’m sympathetic to lower taxes on everybody, including the poor, but surely it is better to be honest and simply cut the taxes that people pay. The current methodology, by contrast, is open to abuse. Heck, I’m surprised politicians don’t classify other forms of spending as tax cuts. Maybe corporate welfare can be reclassified as a corporate tax cut (I better stop lest I give the political class any ideas).

Defenders also assert that some so-called refundable tax credits, particularly the earned income tax credit, are designed to encourage work. That is partly true, but credits like the EITC are withdrawn as income climbs, and this means poor people face punitive marginal tax rates, so the overall effect on hours worked may be negligible.

The right approach, of course, is to get the federal government out of the racket of redistributing income.

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Political Humor

This is supposedly an actual letter to the government. I’m skeptical, but it is rather amusing because it could be true.

Dear Sirs,

I’m in the process of renewing my passport, and still cannot believe this.  How is it that Radio Shack has my address and telephone number and knows that I bought a TV cable from them back in 1987, and yet, the Federal Government is still asking me where I was born and on what date.

For Christ sakes, do you guys do this by hand? My birth date you have on my social security card, and it is on all the income tax forms I’ve filed for the past 30 years. It is on my health insurance card, my driver’s license, on the last eight damn passports I’ve had, on all those stupid customs declaration forms I’ve had to fill out before being allowed off the plane over the last 30 years, and all those insufferable census forms that are done at election times.

Would somebody please take note, once and for all, that my mother’s name is Maryanne, my father’s name is Robert and I’d be absolutely astounded if that ever changed between now and when I die!!!!!!

I apologize, I’m really pissed off this morning. Between you an’ me, I’ve had enough of this bullshit! You send the application to my house, then you ask me for my  address.

What is going on?  Do you have a gang of Neanderthal asses working there!

Look at my damn picture. Do I look like Bin Laden?  I don’t want to dig up Yasser Arafat, I just want to go and park my ass on a sandy beach.

And would someone please tell me, why would you care whether I plan on visiting a farm in the next 15 days? If I ever got the urge to do something weird to a chicken or a goat, believe you me, I’d sure as hell not want to tell anyone!

Well, I have to go now, ’cause I have to go to the other end of the city and get another  copy of my birth certificate, to the tune of $60. Would it be so complicated to have all the services in the same spot to assist in the issuance of a new passport the same day?? Nooooo, that’d be too damn easy and maybe make sense.  You’d rather have us running all over the  place like chickens with our heads cut off, then find some idiot to confirm that it’s really me on the damn picture – you know,the one where we’re not allowed to smile?! (bureaucratic  morons)  Hey, you know why we can’t smile?  We’re totally pissed off!

Signed – An Irate Citizen.

P.S.. Remember what I said above about the picture and getting someone to confirm that it’s me?  Well, my family has been in this country since 1776 ……..I have served in the military for something over 30 years and have had security clearances up the yingyang……….However, I have to get someone ‘important’ to verify who I am – you know, someone like my doctor WHO WAS BORN AND RAISED IN INDIA  !

Sincerely,

You Sure In The Hell Should Know Who I Am.

…………………And you want them to run our health care!

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