Ht tip to Ann Barnhardt via Vanderleun.

Megan McArdle quotes her reader Trimalchio‘s explanation of why the Left’s Tax-the-Rich rhetoric is fraudulent.

For anyone who wants to discuss the revenue side of the budget debate knowledgably, I highly recommend spending some time with the IRS’s Statistics on Income. Table 1.1 under Individual Statistical Tables is a good place to start: http://www.irs.gov/pub/irs-soi…

You can see, for example, that total taxable income in 2008 was $5,488 billion. Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion. Effective tax rates as a percentage of taxable income seem to top out around 27%.

You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 (“Clinton era”) marginal rates on income over $200,000, let’s call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That’s not accounting for the further middle class tax cuts that are usually proposed along with these “millionaires’ taxes.”

Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.

Alternatively, you might also notice that while taxable income in 2008 was $5,488 billion, adjusted gross income on all returns was $7,583 billion on taxable returns only (with an additional $680 billion on untaxable returns), which means that $2,095 billion isn’t even in the tax base. $592 billion of that difference is exemptions, which are not tax expenditures, and $1,512 billion is deductions, which are mostly tax expenditures.

My point is just that I don’t see how deficits this large can be closed with income taxes on the rich, even at marginal rates far higher than anything we’ve seen in the post-1986 era. Paying for spending at near-term levels, not even considering entitlement and interest payments that will accelerate a decade out, would have to include meaningful base broadening by eliminating tax expenditures like the mortgage interest deduction or the employer health case deduction, or would have to rely on new taxes like a VAT.

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Even if we outright confiscated the wealth of all of this country’s billionaires, we couldn’t break even for this single year.

The grand total of the combined net worth of every single one of America’s billionaires is roughly $1.3 trillion. It does indeed sound like a “ton of cash” until one considers that the 2011 deficit alone is $1.6 trillion. So, if the government were to simply confiscate the entire net worth of all of America’s billionaires, we’d still be $300 billion short of making up this year’s deficit.

That’s before we even get to dealing with the long-term debt of $14 trillion, which if you’re keeping score at home, is between 10 to 14 times the entire net worth of all of the country’s billionaires, combined.

Warren Buffet

The really objectionable feature of the compromise Republicans in Congress made with the democrats to get the Bush tax cuts extended was the agreement to restore the death tax. It is obviously unfair and immoral to single out a small minority of Americans as a target for punitive taxation on the basis of excessive achievement or good fortune. Most Americans do not believe that government should set limits on opportunity or that we ought to have a tax system designed to prevent the accumulation of sufficient wealth to provide economic independence.

Warren Buffet, despite being notoriously wealthy himself, supports the death tax enthusiastically. Christopher Chantrill, at American Thinker, explains why.

Here’s a story about Warren Buffett, the estate tax, and the life insurance industry.

Did you know that the life insurance lobby is actively lobbying to restore the estate tax?

Why would the life insurance industry care about that? It turns out that ten percent of life insurance industry revenue is related to the estate tax. Wealthy people take out life insurance in order to reduce estate taxes because when you die, your life insurance payout doesn’t count as part of your estate.

Did you know that Warren Buffett owns six life insurance companies? Did you know he supports the estate tax? You do now.

Warren Buffett isn’t just noted as an owner of life insurance companies and a supporter of the estate tax. He’s also noted as a buyer of family businesses. As Dick Patten shows, these two business strategies support each other.

A family business owner or farmer takes out a large life insurance policy which he sinks tens or hundreds of thousands of dollars into each year. When he finally passes away, the life insurance pays out his policy to his family–tax free…

Even as Mr. Buffett’s insurance companies are “protecting” family businesses from the IRS, he is buying companies that are forced to sell themselves to pay the death tax. Mr. Buffett’s ability to buy family businesses at bargain basement prices depends on families being desperate to sell-and nothing produces family businesses desperate to sell quickly like a 55% bill from the IRS on all of the businesses’ assets.

Estate taxes must be paid to the U.S. Treasury within a year of the testator’s death. In cash.

Daniel Henniger identifies serious tax reform as the key issue that Congressional Republicans ought to make the centerpiece of the alternative they offer to the American people.

Last week the two chairmen of President Barack Obama’s bipartisan deficit commission, Democrat Erskine Bowles and Republican Alan Simpson, issued a set of “draft” recommendations that includes this: a new U.S. individual income tax system with only three rates—8%, 14% and 23%. You would have to move to Estonia to get a top marginal rate near 23%. Also, they would drop the U.S.’s self-destructive corporate rate of 35% to 26%.

Then yesterday came another “bipartisan” group, led by former Sen. Pete Domenici and Alice Rivlin, Bill Clinton’s OMB director and also a member of the deficit commission. Their goal: a system “to improve incentives to work, save and invest” with two personal tax rates of 15% and 27%, and a corporate rate of 27%. Theirs includes a 6.5% sales tax; Bowles-Simpson, a surprise, has no sales tax.

Proving reform fever can catch anyone, Treasury Secretary Tim Geithner on Tuesday called for a fundamental overhaul of our tax system, which “is not a sensible way to run a country.”

Lower tax rates are suddenly moving to the center of the political debate.

Saving the most important for last, Michigan GOP Congressman Dave Camp, who surely will be chairman of the tax-writing Ways and Means Committee in January, delivered a strong reform speech Tuesday. “What we need,” said Rep. Camp (also a member of the Bowles-Simpson commission), “is a comprehensive reform of the tax code that expands the tax base and lowers rates.”

Putting this in context: The current fight between the Obama White House and congressional Republicans over whether the top rate should be 39.6% or 35%, notwithstanding its immediate importance for the economy, is a ridiculous sideshow to what serious people now want to do to sync up our tax system with the goal of strong economic growth.

Words found nowhere in the deficit commission’s draft include “fairness,” “the wealthiest,” and “the top 1%.” The explicit purpose of its tax proposals is to “make America the best place in the world to start and grow a business.”

Even in our current political universe of smirking cynics, this is progress—a bipartisan presidential group has put the subject of lower tax rates at the center of the policy debate.

Yes, yes, I understand the deficit commission gets down to 8-14-23 by eliminating every hallowed tax expenditure in the tax code and by taxing capital gains at ordinary rates.

But still. 23%.

Feel free to sniff at a 23% top rate. I won’t. The new Republican Congress shouldn’t either. Nor should the lifeboat full of moderate Democratic senators heading toward the 2012 whirlpool.

Read the whole thing.

The country wants real action taken to turn the economy around. This is the proposal that would do it.

Qui sait ce qu'ils taxeront ensuite ?

Hat tip to David Wagner.

The economy is a disaster, the federal government is operating at a deficit unequaled in the history of the Republic, it is essential to find a way of coping with the National Debt in order to restore economic confidence, and the democrats naturally want to raise taxes.

Scott A. Hodge looks at the options for taxing our way back to a balanced budget.

To erase this year’s estimated $1.5 trillion deficit, we would need either to:

Enact a 25% VAT (Greece is still a mess with a 19% VAT);

or,

Take 130% of the taxable profits earned by U.S. companies this year (that’s what you call net opperating losses);

or,

Raise the top three tax brackets (28%, 33%, and 35%) to 100%. Actually, this would still not raise enough money to erase the deficit – of course, assuming all the wealthy taxpayers didn’t flee to Switzerland.

or,

Take 100% of the business income earned by individual taxpayers in 2008.

In other words, new taxes are not the solution to Washington’s deficit problem. That is, unless we want to wreck our economy for decades to come.

Hat tip to James Pethokoukis via the News Junkie.

Remember all the RINO Republicans back in the GOP majority Congress that voted on George W. Bush’s tax cuts? The only way it was possible to pass any tax reductions was to allow liberals to include expiration clauses.

The Snow Report lists the tax increases we have to look forward to.

In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

The 10% bracket rises to an expanded 15%

The 25% bracket rises to 28%

The 28% bracket rises to 31%

The 33% bracket rises to 36%

The 35% bracket rises to 39.6%

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Hat tip to Dr. Mercury.

Ouch! I don’t get to type this often…: “He had acetylene torch injury to the penis.”

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John Hinderaker from Power-Line, respects Obama’s behavior.

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Conservative cultural commentary venues The Notes and Culture11 went under. (link 1 & link 2).

Some people think they were not populist enough, but I am inclined to believe that the fact I never previously heard of either one of them could be part of the problem.

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Cigarettes $10 a pack in NYC.

New Yorkers ought to take up chewing tobacco.

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Write fiction based on your own life experience and they’ll sue you.

Hat tip to Walter Olson.

The democrats are in charge up in my home state of Pennsylvania, and this is what you get:

0:31 video

Some days it’s easy to be happy that I don’t live there anymore.

Today’s Day By Day illustrates Richard’s point about the sophistication of Tea Party commentary

Richard Fernandez notes that Tea Parties have taken the political debate to deeper than customary levels of analysis, which may possibly be connected to the recently discovered fact that Tea Party activists are not really the rubes and yokels that the community of fashion inevitably supposed they were.

Perhaps the greatest distinction between the Tea Parties and the televised “debates” between candidates is that issues are raised at fundamentally different levels. In the first the money is for the candidate to dispense. In the second it is about how much he has a right to dispense not at the margins but structurally. The psychological difference is captured perfectly by Barack Obama’s response to the Tea Parties. ABC News reported that

Speaking at a Democratic fundraiser tonight, President Obama touted his administration’s tax cuts and said that the recent tea party rallies across the nation have “amused” him.

“You would think they should be saying thank you,” the president said to applause.

Members of the audience shouted, “Thank you.”

‘Thank you for what?’ the Tea Partiers might respond, ‘it is our money.’ The incendiary potential of that type of conversation may explain the heat which has been generated by the crashers and anti-crashers at these events. The Tea Parties are less a debate than political clash. Glenn Reynolds at Instapundit has a number of links to sites which have promised to infiltrate the Tea Parties and efforts repel boarders. It has the aspect of conflict and consequently generates many of the same emotions. Dana Milbank at the Washington Post was nearly beside himself at the sight of these “faux populists”, only recently described as hicks, but now revealed to have Harvard Degrees.

A CBS News/New York Times poll released on Tax Day found that Tea Party activists are wealthier than average (20 percent of their households earn more than $100,000, compared with 14 percent of the general population) and better educated (37 percent have college or postgraduate degrees vs. 25 percent of Americans ).

Milbank should be careful about opening that can of worms lest it lead to a discussion of whether the half of US households who pay Federal Income Tax so it can be transferred to the other half should have any say on how their money is spent. Because the only thing worse than the narrative that Tea Partiers are the ingrates who should be saying “thank you” to the quality that wisely governs them is the reverse: a narrative where the Tea Partiers are the quality who dare to question the ingrates that govern and write about them. Any idea that threatens to invert the positions of the elite and the peasantry is by definition subversive. The real problem with portraying the rebels as well educated and smart is that it begs the question of what their critics are.

“As goes California, so goes the nation,” boasts this Tea Party video by Lipstick Underground.

5:33 video

I heard about it from a liberal classmate who was not pleased by this video’s high professional quality.

Stop Taxing Us web-site

Hat tip to Norman Zamcheck.

April 15th: “[F]or nearly half of U.S. households it’s simply somebody else’s problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization.”

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St. Vincent’s Hospital in Greenwich Village on Manhattan’s West Side, the last Roman Catholic hospital in New York City, is closing after 160 years.

Via Walter Olson and Matt Lehrer,

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Guilty and White once more:

Jonathan Kay, managing editor of the National Post, attends a workshop on racism at the Toronto Women’s Bookshop:

The central theme of the course was that this twinned combination of capitalism and racism has produced a cult of “white privilege,” which permeates every aspect of our lives. “Canada is a white supremacist country, so I assume that I’m racist,” one of the students said matter-offactly during our first session. “It’s not about not being racist. Because I know I am. It’s about becoming less racist.”

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It is difficulty to shoot an AK missing its buttstock accurately

The Taliban are compensating for bad equipment and poor marksmanship with well-planned ambushes. Captain Grace describes their tactics.

We operated the entire deployment, on every patrol, in the horns of a dilemma. Insurgent forces would engage our forces from a distance with machine-gun fire and sporadic small arms and carefully watch our immediate actions. From day one, at the sound of the sonic pop of the round, Marines are taught to seek immediate cover and identify the source/location of the fire. Cover is almost always available in Afghanistan in the form or dirt berms, dry/filled canals and buildings. Marines tend to gravitate toward the aforementioned terrain features. So what the insurgents would do was booby-trap those areas with I.E.D.s. Whether they were pressure plates or pressure release, they were primed to detonate as Marines dove for cover. Back to the horns of a dilemma. Do I jump for the nearest cover? Run to the nearest building? Jump in the nearest canal? Do I take my chances and stand where I am and drop in place? Not necessarily the things you need to be contemplating as rounds are impacting all around you.

Hat tip to Isegoria.