Tag Archives: taxes

California’s Road To Hell

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Those Golden Bears aren’t doing so well these days:

Not only are the businesses in the Golden State facing the federal fiscal cliff tax hikes next year, but they also get a swift retroactive-tax-hike-kick-to-the-shorts for anything earned this year as well.  When you know a certain number of people are going to leave your state after yet another tax hike, it is good to make it retroactive since people can’t leave retroactively…

There was a great article in the San Francisco Chronicle the other day describing how much the state genuinely despises private sector job creators. Unless, of course, those job creators start “supporting” some of the “business friendly” legislators in congress…

The game of tyranny was described in explicit detail by Ayn Rand over 50 years ago in her novel Atlas Shrugged: In a free society, people can start businesses and succeed without ever knowing their local legislator.  The only barrier to success would be their own ability to create something people want better than a competitor.  Power-hungry rulers recognize that the free system doesn’t allow them to gain power.  The same people who created products that make people’s lives easier, produce jobs, and a create a social ladder for society must be made to look evil so that politicians can lever themselves into the system. The rulers use the tragic human character flaws of jealousy and greed to malign the successful.  The accomplishments of the entrepreneurs are discredited (“you didn’t build that”) and their intentions are painted as exploitive rather than constructive.

Once the democratic (or revolutionary) mandate is achieved with popular consent, the legislators use two powerful tools to gain power: business-crushing regulations and heavy tax structures.  The taxes allow the legislators to look “charitable” by funding a redistribution of wealth and creating an entitled class of reliable voters.  The taxes can also be used to subsidize favored groups like unions and large banks that will then support those in power.  The heavy regulations are used as a gun to the head of business.  Legislators create laws that make it difficult/impossible to do business.  If companies want to survive the taxes and regulations imposed by the government, they must “support” the legislators to gain subsidies and loop-holes.  Anyone not willing to play the game are publicly denounced by the politicians as evil exploiters (Wal-Mart, med tech companies, surgeons, etc) and special taxes/regulations are applied to their livelihoods until they submit.  Once everyone is under the thumb or supported by the government, the rulers have ultimate power.

Am I exaggerating?  In addition to the link above, Joel Kotkin describes how business owners feel about political expression in the following article, “For A Preview Of Obama’s America In 2016, Look At The Crack-Up Of California”. The article describes the consequences of “free speech” for California business. The exact same thing is happening on a national scale in DC.  The system is rigged in favor of the tyrant.  Who is a better bet to give money to:  The politician extolling the virtues of liberty and fighting for your right to pursue it, or the politician saying that he is going to crush you when he gains power so you better pony up to the table? We saw what happened to each side when Obamacare passed.  The med tech companies fought for freedom and now have a special tax just for them.  The pharma companies paid tribute to the master and got branded pharmaceuticals on the formularies of the expanded coverage.  Welcome to the ‘Nanner Republic of America…

The scenario has played over and over and over again throughout history.  Democracy is the most insidious mechanism for tyrants, because it needs/uses the sanction of the very frogs being boiled to work.  Forced or fooled, at least 50% of the frogs have to vote for their own demise. If you feel a little sick to your stomach these days, it is because we can see the “cooks” applying butter and salt to the frogs in California and Europe.  A system we thought only existed in banana republics and “those other countries” is suddenly revealing its true colors much closer to home than we had suspected.

It is getting harder and harder to hide the dire consequences of political tyranny… Especially now that Europe and California are laying it out for us in explicit detail.  California, like the US, was once governed by Ronald Reagan.  That fact makes his foreboding quote all the more powerful:

 

Demagogues, Debt, and Atlas Shrugging

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from The People’s Cube

Obama’s pre-election story is that taxing the rich is the key to funding the government and reducing the debt. Even his greatly expanded government will be financed by the rich paying their fair share.

This story is for people who do not understand anything at all about current government spending and the staggering size of our debt. Obama’s story is for uninformed voters. The question is, do the uninformed represent a majority yet?

Lying about the revenue available from taxing “the rich” may get votes, but it won’t change reality. Do the math. There is not remotely, in your wildest dreams, enough money to cover the spending of this government with increased taxes on top earners. The math has been explained many places, including here, and here, and here.

Obama’s proposed ‘tax the rich’ plan will solve about 5% of our deficit problem. And that assumes that productive people will not change their behavior in response to higher taxes, an unlikely assumption. Mike Flynn has just written a good summary of the absurdity of the plan. Others have shown that even if you take all the income from the top 1%, you can only finance this bloated government for a few months. And then what? The golden geese will be dead. Where would you get eggs next year?

France is going to learn this lesson ahead of us. France just elected a Socialist President who rode the class envy train to power. He is promising to tax top earners at 75%. Socialists have the delusion that you can take most of the product of someone’s labor and the person will keep working just as hard. Reality has never worked that way and never will.

Now, France’s richest businessman, Bernard Arnault, is leaving the country. As Daniel Greenfield reports, This Atlas is Shrugging. Arnault, the head of Louis Vuitton, employs 100,000 people in France and around the world. Many other people of substance are fleeing France. The French “Liberation” newspaper reported Arnault’s departure with this headline: “Get lost, rich bastard!”

Yes, you golden geese, you get the hell out. And Liberation people, talk to me in a year or two about how your socialist delusion works out for you. I already know how it works out because this is an old movie with a tragic ending. Reality always bats last.

Another aspect of overwhelming debt that is not discussed often enough is the close relationship between debt and national security. When Admiral Michael Mullen was chairman of the Joint Chiefs of Staff, a reporter asked him to name the most significant threat to U.S. national security. His response was, “Our debt”.

On Monday, speaking to a panel of former members of Congress, Admiral Mullen elaborated on the dire implications of America’s fiscal path to our national security:

“A nation with our current levels of unsustainable debt, being this far out of fiscal balance, cannot hope to sustain for very long its superiority from a military perspective, or its influence in world affairs. That was not intended as a partisan statement then, and it has no partisan meaning now. I was using our growing and unsustainable debt as shorthand for the abundant disorder in our fiscal house, brought upon us, by ourselves, by our own doing. While much has been said since then, little has changed. In fact, I would argue that the mere passage of time, combined with a lack of solutions in the interim, has compounded the problem, as our debt increases seemingly exponentially, and solutions that require compromise seem a figment of the imagination.”