A stat every Liberal should read

Steve at Motor City Times gives us job, tax, and spending numbers from Singapore, HMMMMMM

Shocker…

Singapore’s economy expanded more than economists estimated last quarter, averting a recession even after the central bank refrained from monetary stimulus as it sought to contain elevated inflation.

Proof that an economy can grow without government spending. Of course this will come as a surprise to any off the shelf lib. All the keep saying is that an economy can’t grow without government spending.

Also, in case you are wondering, Singapore also has one of the lowest tax rates in the world as well.

Employment increased last year even amid a smaller annual expansion, with the jobless rate at a six-quarter low of 1.9 percent in the three months ended September.

The country’s tax rates are among the world’s lowest, luring investment from companies such as Rolls-Royce Holdings Plc, Europe’s largest maker of commercial aircraft and ship engines, which opened a S$700 million ($572 million) manufacturing and assembly plant in February.

Well, what do you know, less government, less spending, less taxation equals more jobs and more economic growth!

 

Another analysis of Rick Perry’s tax plan

From the Blogmocracy. Read the whole thing, but here is a preview

When reading Rick Perry’s economic plan, it may seem very familiar to you. That’s because it is. For anyone who doubts Perry’s conservative bona fides, a review of this plan should immediately alleviate those fears. This plan is a comprehensive list of the very things we free marketeers have been saying for years. It is also very similar to what has been offered both by Newt Gingrich and Herman Cain. Right off the bat here are my main impressions of the plan, the highlights so to speak. Perry introduces his idea for a flat tax, proposes balancing the budget by statute and by cutting spending. He seeks to eliminate special tax breaks for behaviors approved by government, and a massive roll back of onerous regulation inflicted by a bloated Executive Branch. You may recall that yesterday I came out in favor of Newt Gingrich based on his 21st Century Contract With America, but I also hedged somewhat by stating that any of the Gingrich, Perry, Cain trio would be O.K. with me. With that in mind, I will give Perry’s plan an overall grade of A-. There is room for improvement, but all in all, it is Red Meat for us Conservatives.

TAXATION

Perry starts out by pointing to a little talked about government statistic.  It costs American Taxpayers $483 Billion per year to comply legally with our current tax code.  Remember that figure for later, it will be important.  If you log onto the IRS website, you will see an estimation from the IRS as to what percentage of Americans who pay taxes, in fact overpay.  This percentage usually hovers around 90%.  According to the IRS’ taxpayer advocate in testimony before congress, this is due to the fact that the tax code has become too complicated for even the IRS to follow anymore.

Personal story:
Last year, I called a CPA on behalf of a client.  I asked about a specific deduction a client wished to take.  The CPA gave me a negative response, saying, “that’s ridiculous.”   The client pressed on, so I called the IRS help line.  The IRS told me sure, the deduction is good, and here is the publication that I found that info in.  I called the CPA back, feeling somewhat not confident in the info, first being conflicted, and also the IRS’ own disclaimer about their answers not being guaranteed.  As it happens, they were both wrong.  The CPA, graciously followed up by reading the entire publication and not just the first paragraph, or even only the first sentence as I suspect.  As it happens the deduction was allowed, but with very severe caveats.  The client was not Warren Buffett, but an average American tax paying citizen.

Why does this happen? Over the last decade, there have been 4428 changes in the tax code.  There will be 350 changes for 2012.  60% of Americans employ the help of paid professionals to file their personal returns.  One mistake Perry makes here is one that I have noticed personally.  Many of the professionals hired have no actual training or expertise in tax law or preparation.  There are a lot of people who operate tax preparation businesses with no more expertise than the software they purchased at their local book store.  While I do not wish to disparage the fine software products being sold,  It is not the same as paying for the services of a CPA or an Enrolled Agent.

Perry also points out that the Average Corporate Rate paid in the United States is the second highest rate of any industrialized nation.  While most of the other industrialized nations around the globe are lowering their rate of confiscation, our government is seeking to increase our corporate tax rates.  Perry has also done his homework and refers to a graph originally produced by Art Laffer.  In this particular chart, Laffer pointed to the past, and noticed that no matter what tinkering occurred with the tax code, revenues were consistently around 18% of GDP.  Fluctuations in tax rates only served to affect GDP in the long term, while increases or decreases in revenue were only affected by increases or decreases in GDP.

As I said go read the entire piece. This plan, along with Perry’s conservative stances on many other issues, guns, life, energy, small government, States rights, is a big reason I am endorsing Perry for president.

Hey Libs, make up your minds

Quite a quandary the Left faces over tax hikes. They want more revenues, so they can spend more on entitlements. They love higher taxes because it soothes their perverse desire for “fairness”, AKA wealth redistribution. But higher taxes, DECREASE revenues. so what is a Lib to do? Silver Fiddle explores this dilemma

Big government statists make the common mistake of confusing taxes and revenue. They are not the same thing

Taxes are an assessment by government on your earnings. Revenue is the money flowing to the US treasury as a result of taxation. There is not a direct correlation between the two.   In fact, government data shows that often it is an inverse relationship.

Liberal Nostalgia

Poor liberals, staggering blindly around Left and Right Blogistan, suffering under the crack-brained theories of a Robert Reich or Rachel Maddow, parroting nonsensical “theories.”  The latest shiny ideological bauble that has enraptured Left Blogistanis is the idea that government can restore fiscal sanity by returning to the sky high tax rates of the 1950′s.

Why 70% Tax rates won’t work

…and this is what Mr. Reich and his friends always fail to mention—the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.

President John F. Kennedy’s across-the-board tax cuts reduced the lowest and highest tax rates to 14% and 70% respectively after 1964, yet revenues (after excluding the 5%-10% surtaxes of 1969-70) rose to 8% of GDP. 

President Reagan’s across-the-board tax cuts further reduced the lowest and highest tax rates to 11% and 50%, yet revenues rose again to 8.3% of GDP. The 1986 tax reform slashed the top tax rate to 28%, yet revenues dipped trivially to 8.1% of GDP.  (WSJ – Alan Reynolds)

Poor Libs, reality keeps getting in the way of their feelings.