The American Dilemma and How We Can Fix It

Posts tagged ‘taxes’

HILLARY CLINTON AND THE MOB

It would be dishonest if I didn’t admit that I’ve never been a fan of Hillary Clinton’s.  In fact, I wrote a piece elsewhere about twenty years ago in which I spoke of her as “The most dangerous woman in America.”  If my feelings on that have softened over the years it is for several reasons.  The first is that Mrs. Clinton seems to be embarked on a course of self-destruction which may well minimize her ability to attain a position of serious power.  The second is that a substantial number of challengers to that title have emerged, Sen. Elizabeth Warren being in the vanguard of those.

Despite the fact that I’ve never signed on to the Hillary Fan Club, I wish her nor anyone else any harm.  And I fear for her safety because of some statements that she recently made, specifically her remarks this week that, “Trickle down economics doesn’t work – we’ve seen that fail rather spectacularly.”

The economic theory to which Mrs. Clinton referred in that speech suggests that by lowering tax rates on those who are the wealthiest, that saves them money which they will in turn invest in creating jobs and that those jobs will create more jobs and that everyone in the economy will benefit because there will be more people employed and the taxes that they pay on their earnings will more than overcome the amount of the tax reduction which was originally given.

Of course, those like Mrs. Clinton on the left will naturally acknowledge a corollary that is the reverse of the trickle down theory.  If you believe that cutting tax rates on the wealthiest does nothing to stimulate job creation, then you naturally must believe that increasing them will have no negative impact on job creation, the consumer or the economy overall – other than to raise additional tax revenues which can then funnel into the national Treasury to be misspent by those in positions of power in Washington.

That is a statement that might involve some personal peril for the former First Lady.

In Nevada we have three propositions on the ballot.  The third of these, (cleverly named Proposition 3), wants the voters to decide whether to allow Nevada to collect a 2% tax on the revenues of companies if those companies’ revenues exceed $1 million per year.  Incidentally, it doesn’t matter whether the company is profitable or if it loses money.  That’s Govthink at it’s finest.  The purported beneficiary of these funds to be collected will be our schools.  As one might expect, the NEA has endorsed this proposal.  And the AFL-CIO which initially supported the idea has, perhaps because of their experience in sponsoring Obamacare, have now changed their view and opposes its passage.

Without discussing the arguments pro and con, (I voted “NO”), this is yet another tax which purportedly will benefit a specific cause – and which will, almost as soon as it is passed, wind up being something that goes into the General Fund and will be used for whatever purposes those in Carson City choose.  I saw this same scenario when Illinois authorized the creation of the state lottery – which was to benefit education.  I gave it three years before those proceeds were swept into the General Fund – and, as I recall, it only took two.

Among the plethora of political ads that one would expect the week before an election, there have been a substantial number which have urged Nevadans to vote “NO” on Prop 3.  I have yet to see one that advocates its passage – which suggests to me that the “NO” side has a lot of money backing it.  Considering the fact that casinos are the principal source of revenue to the state and that they clearly would be subject to this proposed tax, it doesn’t require an Einstein to guess that they are among the funders for these ads.  And if you questioned that, one of the spokespeople advocating the defeat of the measure is none other than His Honor, the much beloved former Mayor of Las Vegas, Oscar Goodman.

Before becoming Las Vegas’ mayor, Goodman spent most of his career as an attorney – more specifically as a defense attorney.  He handled many high profile clients and represented them with vigor and very positive results.  Among those he defended were people associated with “the Mob” including Meyer Lansky, Frank “Lefty” Rosenthal, “Fat Herbie” Blitzstein (whose grandson owns a maintenance company that services my pool), Nicky Scarfo and Anthony “Tony the Ant” Spilotro.  It would be fair that many in the underworld viewed Mayor Goodman as their “go to” guy when it came to defending them from prosecution.  And it’s hardly a secret that before Nevada’s casinos became corporate entities, they were controlled and run by “The Mob.”

As I write this, one of Mayor Goodman’s ads appeared on FOX News.  The text of the ad (slightly paraphrased because I don’t type as fast as he can speak) is:

“If Prop 3 passes it will have an impact on everyone in Nevada.  Do you know what happens when a corporation gets a tax increase?  They pass it on to all of us.  They fire their own employees.  This will cost us more in what we pay at the grocery store, what we pay for health care, it’s going to smack all of us right in the jaw.”

Wait a minute.  That’s trickle down economics.  The only difference is that in this case the former mayor discusses the impact of an increase in tax rates rather than a decrease.

While I don’t recall reading any stories that Hillary Clinton plays polo or enjoys horseback riding, I would suggest that before she snuggles up for a good night’s rest, it might behoove her to check for any equine body parts that might have unexpectedly been placed under the covers.

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THE OXYMORON

We are all familiar with phrases which are composed of two words that seem to be inherently contradictory such as “Jumbo shrimp.”  We describe this as an oxymoron.  Occasionally we find one word which has the same characteristic and it is to that we turn our attention today.  The word I would like to examine is “Malnutrition.”

Of course, “Mal” means bad while the part of the word to which it is attached, “Nutrition” is something that sustains us.  When we use this word, our minds often gravitate to graphic images of children in the third world.

We have probably all seen pictures of infants and children so lacking in food that they have understandably become the poster children of private agencies asking that we send donations to remedy their horrible situations.  Even as a child I was moved to start making a monthly donation to CARE to help these poor kids.

Many years later it is still the same story.  There are children (and adults) who do not eat enough or nutritiously enough on a regular basis.  This problem is not limited to the third world – it exists in America as well.

The reason that millions die of starvation every year is the same as it was when I was a child.  Our ability to procreate exceeds our ability to provide.  And in the United States we encourage this overpopulation with its inevitable resultant consequences as a matter of both social and fiscal policy.

Consider our distribution of supplemental funds to those living at or below the poverty level in this country.  How much does a recipient receive on a monthly basis?  That is determined as a function of how many adults and children are in that particular family.  Each additional child provides an additional income.  Sadly the poor are often the uneducated and there have been reports of some recipients intentionally bearing more children simply to get the additional monthly stipend.

Our income tax laws also promulgate this same sort of “reward” for people with large families.  Each additional dependent provides an additional deduction from Form 1040.  Apparently the Congress which crafted the Internal Revenue Code subscribes to the biblical injunction, “Be fruitful and multiply.”

Nutrition or, if you prefer, malnutrition is at the fundamental core of the problem that we euphemistically call, “healthcare.”   Now that the Supreme Court has decided that Obamacare’s dictate that most Americans purchase health insurance is a Tax, I would like to explore a few ideas on how an informed health-Tax policy might actually set us on the road to becoming a healthier nation in the future

We tax cigarettes and alcohol for one stated reason – they are supposed to be “bad” for us.  The fact that both the Federal and State governments derive huge amounts of revenue from these taxes is corollary to my argument.  Nor am I alleging that the use of tobacco or alcohol are good.  I accept the statement that they are deleterious to our health.

With the high court’s ruling,  we have potentially embarked on a new era of taxation in order to support our healthcare system.  It would be beneficial  if medical scientists and nutritionists would develop a list of other things that, like smoking and drinking, are bad for us and which we might tax.

Mayor Michael Bloomberg of New York City has already correctly identified one of those.  That is soda (or pop) depending on where you live.  He has put forth several proposals that would either tax each soda sold in the city or limit the quantity that could be sold to a consumer in one purchase.

The reason is that refined white sugar (or perhaps even worse, artificial sweeteners) have long term detrimental effects on our health.  I’ve attached a link that outlines the history of refined white sugar’s role in the advancement of slavery as well as its harmful effects when consumed over long periods of time – but there are many others which come to the same conclusion should the reader wish to explore this subject more fully.

http://macrobiotics.co.uk/sugar.htm

If I were to go with one of the Mayor’s proposals it would be the first one.  Add a tax to the cost of each soda that is sold, whether at the supermarket or at restaurants.  This may surprise some of you who realize that I write from a Libertarian point of view – supporting yet another government tax.  But I view this as consistent with my principles.

I believe that everyone should be free to do whatever he or she wants without government intervention or interference – up until the point that their behavior affects me.  At that point I have the right – no I have the responsibility – to get involved in the conversation.

It is clear that the explosion in so many chronic diseases including diabetes and cardiovascular problems could be greatly reduced if we made good dietary and lifestyle choices.  The failure to do that on the part of some of our citizenry affects all the rest of us in terms of the cost and availability of our healthcare.  Just as we penalize smokers and alcohol users, the same logic should apply to diet.

There are many who probably do not understand the effects that their food choices have on their health.  Obviously government does understand this since it now requires the listing of ingredients in products, the number of calories that a particular item contains, the amount of saturated and non-saturated fats that can be found in a meal to cite a few examples.

There are certainly many who, despite the fact that they realize their food choices are unhealthful, continue to make those same choices.   Bad habits are hard to break – particularly if we have held to them for long periods of time.  And while I give credit to the fast food industry for introducing more healthful choices for their customers, I suspect that those represent a fairly small portion of their overall sales.

It would have been difficult to advance this argument with any hope of success as few as ten years ago.  You can imagine the reaction from the soda giants, Pepsi Cola and Coca Cola (which today will still lobby strongly against it).  But whether it was simply a matter of expanding their line of products or because they realized that the handwriting might be on the wall, both of these now sell bottled water which has been a fast growing segment of their businesses.

The longest journey begins with a single step – and we have a long way to go before we become a healthier nation.  Perhaps Mayor Bloomberg’s proposal to tax carbonated beverages is that first step – and one in the right direction.

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A MAN OF FEW WORDS

There was a man from Vermont named Calvin Coolidge who became the 30th President of the United States.  He was dubbed, “Silent Cal” because of his terse conversational style.  I have just finished reading Claude M. Fuess’ excellent biography.  We would do well today to emulate much of what President Coolidge espoused and did during his time in office.

Coolidge rose through the ranks to become the Governor of Massachusetts.  He came to the nation’s attention when in 1919 the Boston Police went on strike.  Boston’s Police Commissioner, Edwin Curtis had threatened to suspend any officers who organized in a union.  He ultimately carried out his promise.  As a consequence, three quarters of the force walked off the job.

Samuel Gompers then the President of the AFL stated that the Commissioner acted inappropriately in denying the Boston Police’s right to form a union.  Several days of rioting and lawlessness ensued in the absence of law enforcement.  Coolidge responded to Gompers via telegram:

“Your assertion that the Commissioner was wrong cannot justify the wrong of leaving the city unguarded.  That furnished the opportunity, the criminal element furnished the action.  There is no right to strike against the public safety by anyone, anywhere, any time.”

As Governor, Coolidge signed into law a reduction in the number of hours that women and children were allowed to work; presented the State Legislature with a balanced budget by trimming expenses without raising taxes and vetoed a bill that would have provided state legislators a fifty percent pay increase.  He also vetoed a bill that would have allowed beverages with low levels of alcohol to have been sold in the state, although he personally opposed Prohibition:

“Opinions and instructions do not outmatch the Constitution…”

In 1920 Coolidge was surprisingly nominated to be Vice-President on the ticket headed by Warren G. Harding.  Harding’s administration was plagued with scandal and it was largely through Coolidge’s efforts and reputation that faith was restored in the White House when President Harding passed away suddenly in 1923 and Coolidge succeeded him.

Coolidge was nominated the Republican candidate for President at that party’s convention in 1924.  Despite the sorrow he experienced because of the unexpected death of his younger son, he conducted his re-election campaign in a dignified manner, without speaking poorly of his opponents, preferring to express his opinion on his theory of how government should be conducted.

The Coolidge administration, guided by its Treasury Secretary, Andrew Mellon, the third highest taxpayer in the country after John D. Rockefeller and Henry Ford, lowered the rate of Federal taxation while reducing spending so that by the end of his first elected term in office, one quarter of the national debt was retired.  The only Americans who paid income taxes as a result of their policies were the top two percent of income earners.

Coolidge was adamant in his support of equal civil rights for all Americans and signed into law the “Indian Citizenship Act” granting all Native Americans full citizenship.

“Our Constitution guarantees equal rights to all our citizens, without discrimination on account of race or color.  I have taken my oath to support that Constitution.”

Perhaps the most often repeated, if perhaps apocryphal exchange, which highlighted Coolidge’s moniker as “Silent Cal” was reported to have occurred between the President and writer, satirist, Dorothy Parker.

Parker was supposedly seated next to the President and said,

“I have a bet with a friend that I can get you to say more than two words.”

Coolidge reportedly turned to her and said,

“You lose.”

Perhaps the essence of Coolidge’s view on the office to which he had been elected was best expressed in his statement:

“The words of a President have an enormous weight and ought not to be used indiscriminately.”

As this man of few words believed, less is more.  Words for all of us to remember.

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