"Render to all what is due to them: tax to whom tax is due .........."-Romans 13:7
Muriel and I went to see "Secretariat" this past Friday night. Christian writer, director, and producer Randall Wallace has made an excellent film appropriate for all ages. "Secretariat" is a feel good movie and because the overall framework of the story is based on history, the outcome is predictable. None of this diminishes its enjoyment.
Wallace says that one of the themes is that there is joy in becoming what you were made to be, an echo of the reformation theology of vocation, but, maybe due to the political season, I picked up on another theme that made me angry.
In one of the sub-plots, Penny Chenery takes over her father's horse farm when he passes away. Her most immediate obstacle is finding a way to pay the $6 million estate tax without selling the farm. Imagine. Her father had worked all of his life to build up a successful business and upon his death, the government steps in and takes so much that the family has to scramble to find a way to hang onto their inheritance. This is nothing more than outright thievery.
The reason that it made me so angry is that this year the estate tax is at the level that it should be--zero. On January 1st, 2011, it is going to rise to 55% unless Congress acts to extend what is known as "The Bush Tax Cuts". So far they have refused to act before the elections and if the Dems lose the House and Senate, may refuse to act out of spite. The American Revolution was brought on by taxation policies less confiscatory than this.
Secretariat's story took place in 1973, but Dell Tackett tells a modern version of the same taxation story at http://link.brightcove.com/services/player/bcpid599539952001?bctid=629270648001 . Dr. Tackett tells the story of 80 year old Eugene Sukup of Sheffield, Iowa, who has built up a successful business and what the family faces upon his death in light of taxes policies that are soon to be put in place. If this doesn't light your fire, your wood is wet.
Monday, October 18, 2010
Tuesday, October 12, 2010
The "Rich" and Taxes
Below is a link to a good article on how the rich view taxes. The Dems have really fouled things up by not extending the Bush tax cuts. And Obama wonders why the economy is not improving. Go figure.
http://www.nytimes.com/2010/10/10/business/economy/10view.html
http://www.nytimes.com/2010/10/10/business/economy/10view.html
Wednesday, September 22, 2010
We're No. 1(1)
The link below is to an article by Thomas Friedman on the reasons for why the U.S. seems to be lagging in a number of areas. Well worth the read.
http://www.nytimes.com/2010/09/12/opinion/12friedman.html
http://www.nytimes.com/2010/09/12/opinion/12friedman.html
Monday, September 20, 2010
Misguided Generosity
There is something intrinsically wrong with enacting legislation to fix economic problems because economic problems cannot be fixed with political solutions. The results always carry unintended consequences because those enacting the legislation are acting from a flawed worldview. Taking money from people who one thinks do not deserve it and giving it to those who one thinks do deserve it is not compassion, it is cheap generosity . Worse yet, it is outright theft.
In a Biblical worldview, yes, we are supposed to care for the poor, but it is not the government's responsibility to do so, it is the responsibility of the church. When government intrudes on what is not its rightful sphere two things happens. In this case, the church abdicates its responsibilities and the government usually makes matters worse.
The recent mortgage crisis is a case in point of good intentions gone awry. The Fair Housing Act was a nice idea, but based on a flawed premise which was the idea that everyone who wishes, should be able to have a house, whether they can afford it or not. So what did congress do? Led by Rep. Barney Frank and Sen. Chris Dodd , they enacting legislation to force lending institutions, to abandon sound lending practices and lend to borrowers who would not have ordinarily qualified. The quasi-government institutions, Fannie Mae and Freddie Mac, major contributors to the Democrats, then put then bought these "sub prime" mortgages from the banks giving the impression that the mortgages were government backed, which encouraged the banks to continue the practice. Of course other factors came into play and I am not absolving the banks of wrong doing, but congress was the major catalyst. The result was a massive bailout of the banks with taxpayer money, Frank and Dodd denying all responsibility, the banks taking all of the blame and the mortgagees getting off with no penalty.
Now congress is at it again. President Obama is touring the nation blaming the continuation of the current recession on the refusal of businesses to hire while sitting on massive amounts of cash. Unemployment hovers around 10% and stubbornly refuses to come down despite massive infusion of taxpayer dollars. No one stops to think that maybe congress, once again offering political solutions to economic problems, has contributed to the problem of non-expansion by business.
It works like this. Employment benefits have traditionally been given for 26 weeks. Congress has responded to the recession by extending them another 73 weeks. Think about it. That is almost two years worth of benefits for not working. Once again, congress has taken money from some and given it to others with unintended consequences. In Pennsylvania, 73 weeks of unemployment translates to $2260 a month or $41,245 over the 73 week period. Why would anyone work when they can make more on the dole and many have reached that conclusion. Small businesses that would like to expand can't for lack of workers willing to take the entry level positions available.
If Obama wants the recession to go away, he only need to look to himself and his party for the reasons. Democrats played a huge part in creating this mess and they are playing a huge part in its continuation.
In a Biblical worldview, yes, we are supposed to care for the poor, but it is not the government's responsibility to do so, it is the responsibility of the church. When government intrudes on what is not its rightful sphere two things happens. In this case, the church abdicates its responsibilities and the government usually makes matters worse.
The recent mortgage crisis is a case in point of good intentions gone awry. The Fair Housing Act was a nice idea, but based on a flawed premise which was the idea that everyone who wishes, should be able to have a house, whether they can afford it or not. So what did congress do? Led by Rep. Barney Frank and Sen. Chris Dodd , they enacting legislation to force lending institutions, to abandon sound lending practices and lend to borrowers who would not have ordinarily qualified. The quasi-government institutions, Fannie Mae and Freddie Mac, major contributors to the Democrats, then put then bought these "sub prime" mortgages from the banks giving the impression that the mortgages were government backed, which encouraged the banks to continue the practice. Of course other factors came into play and I am not absolving the banks of wrong doing, but congress was the major catalyst. The result was a massive bailout of the banks with taxpayer money, Frank and Dodd denying all responsibility, the banks taking all of the blame and the mortgagees getting off with no penalty.
Now congress is at it again. President Obama is touring the nation blaming the continuation of the current recession on the refusal of businesses to hire while sitting on massive amounts of cash. Unemployment hovers around 10% and stubbornly refuses to come down despite massive infusion of taxpayer dollars. No one stops to think that maybe congress, once again offering political solutions to economic problems, has contributed to the problem of non-expansion by business.
It works like this. Employment benefits have traditionally been given for 26 weeks. Congress has responded to the recession by extending them another 73 weeks. Think about it. That is almost two years worth of benefits for not working. Once again, congress has taken money from some and given it to others with unintended consequences. In Pennsylvania, 73 weeks of unemployment translates to $2260 a month or $41,245 over the 73 week period. Why would anyone work when they can make more on the dole and many have reached that conclusion. Small businesses that would like to expand can't for lack of workers willing to take the entry level positions available.
If Obama wants the recession to go away, he only need to look to himself and his party for the reasons. Democrats played a huge part in creating this mess and they are playing a huge part in its continuation.
Thursday, September 16, 2010
Bittersweet
One cannot explain to those who haven't experienced it the joy of a father when his son returns from war. My oldest son, Saddler, arrived home from Afghanistan for two weeks of R and R.
I think back to my joy when he came home from Iraq in 2005 and I think it is stronger this time around. Does that mean that the love that a father has for his son grows stronger over time? I think it must.
During the first combat tour, I found out what my Dad must have experienced when I was in Vietnam. A constant nagging of missing my son and a background worry for his safety. I don't know if my Dad prayed for me or not, he passed away in 1986, but I sure lift Saddler up in prayer every day, sometimes several times a day.
Civilians will never understand the sacrifices that our men and women and their families are making for the country. There is no way to explain it to them so that they truly understand. It is not only the soldiers who bear the burden, but the wives and children also. My daughter-in-law has been a single mom for almost a year now, coping with the demands of raising three children and home schooling two of them. My grans miss their Dad terribly. This, without the built in support of an active duty family as Saddler is with the National Guard.
If you happen to see our men and women in uniform, please do not pass up a chance to thank them personally for doing what most will not do. Sacrifice themselves for the good of others.
I think back to my joy when he came home from Iraq in 2005 and I think it is stronger this time around. Does that mean that the love that a father has for his son grows stronger over time? I think it must.
During the first combat tour, I found out what my Dad must have experienced when I was in Vietnam. A constant nagging of missing my son and a background worry for his safety. I don't know if my Dad prayed for me or not, he passed away in 1986, but I sure lift Saddler up in prayer every day, sometimes several times a day.
Civilians will never understand the sacrifices that our men and women and their families are making for the country. There is no way to explain it to them so that they truly understand. It is not only the soldiers who bear the burden, but the wives and children also. My daughter-in-law has been a single mom for almost a year now, coping with the demands of raising three children and home schooling two of them. My grans miss their Dad terribly. This, without the built in support of an active duty family as Saddler is with the National Guard.
If you happen to see our men and women in uniform, please do not pass up a chance to thank them personally for doing what most will not do. Sacrifice themselves for the good of others.
Wednesday, August 18, 2010
Tax Cuts for the Rich
In addition to death and taxes, there is another thing in life that is certain. When attempting to gain political power or hold on to it, the Democrats are going to ratchet up their class warfare rhetoric.
With the looming November elections and facing the prospect of losing control of the House and maybe the Senate also, Obama is crisscrossing the country spouting nonsense about the "rich" not paying their fair share of taxes. Obama accuses the Republicans of wanting to cut taxes for millionaires, regulations for special interests and basically let Americans fend for themselves. He then offers the standard Democrat talking points: Raise taxes on the rich, target tax cuts to the middle class ( which never seems to happen) and raise taxes on businesses (which is impossible).
The question is, are the Democrats on to something? The fact is that the top 1% of wage earners, those making more than $400,000 pay 40% of all federal income taxes collected and the top 5%, those making more than $160,000, pay 61% of all federal income taxes. The bottom 50% of wage earners, those making $33,000 or less, pay less than 3% of all federal income taxes collected. Forty percent of Americans pay no income tax at all. No wonder there is a constituency that doesn't mind how much the federal government goes into debt. They have no skin in the game.
Bill Freeze of "Real Clear Markets" has crunched the numbers on who pays what in taxes and the results will surprise a lot of people. It turns out that George Bush did not decrease taxes on the rich, he increased them. Both Clinton and Bush served eight years in the Presidency, but when Clinton was in office, Federal Revenue from individual income taxes was $5.66 trillion. When George Bush was in office, Federal Revenue from individual income taxes was $7.45 trillion. The "rich", the top %1 of taxpayers, not only forked over a trillion dollars more to the Federal Government under Bush, their share of the burden increased from 33% to 38%. In addition, the rich paid a blended rate of 20.6% under Clinton but paid income tax at a blended rate of 21.3% under Bush.
What is a "blended rate". Well, when one pays income tax, say on $500,000, one doesn't pay a flat rate of 35% on the entire amount. Rounded off, the first $8,000 is taxed at a rate of 15%, from 8001 to $34,000 is taxed at a rate of 15%, from $34,001 to %172,000 is taxed at a rate of 28%, from 172,001 to $374,000 is taxed at a rate of 33% and all over $374,001 is taxed at 35%. Hence the "rich" paid a "blended average" of 21.3% under Bush.
How did Bush cut taxes and have the "rich" paying not only more, but a greater effective rate?
Well, when taxes go down, the "rich" change their behavior. Those that work, work harder and longer. They expand their business, creating jobs. The "idle rich" change their investment behavior and instead of investing in low yield bonds, invest in higher yield taxable vehicles, the kind of investments that finance companies that create jobs. When marginal tax rate go up, the opposite happens. The rich cut back on work and contract instead of expand business and the "idle rich" alter their investments to vehicles that require less taxes. The "rich" are usually happy to pay more of a "blended" tax rate as long as they are taking home more after tax dollars.
If Bush had reigned in spending during his tenure as President, then he would have left Obama a surplus instead of a deficit because revenues to the treasury went up 30% percent under his watch. Now Obama is dead set on letting the Bush tax cuts expire in the middle of a recession. Tighten your belts folks, because we are in for some hard times until we get rid of this fellow.
With the looming November elections and facing the prospect of losing control of the House and maybe the Senate also, Obama is crisscrossing the country spouting nonsense about the "rich" not paying their fair share of taxes. Obama accuses the Republicans of wanting to cut taxes for millionaires, regulations for special interests and basically let Americans fend for themselves. He then offers the standard Democrat talking points: Raise taxes on the rich, target tax cuts to the middle class ( which never seems to happen) and raise taxes on businesses (which is impossible).
The question is, are the Democrats on to something? The fact is that the top 1% of wage earners, those making more than $400,000 pay 40% of all federal income taxes collected and the top 5%, those making more than $160,000, pay 61% of all federal income taxes. The bottom 50% of wage earners, those making $33,000 or less, pay less than 3% of all federal income taxes collected. Forty percent of Americans pay no income tax at all. No wonder there is a constituency that doesn't mind how much the federal government goes into debt. They have no skin in the game.
Bill Freeze of "Real Clear Markets" has crunched the numbers on who pays what in taxes and the results will surprise a lot of people. It turns out that George Bush did not decrease taxes on the rich, he increased them. Both Clinton and Bush served eight years in the Presidency, but when Clinton was in office, Federal Revenue from individual income taxes was $5.66 trillion. When George Bush was in office, Federal Revenue from individual income taxes was $7.45 trillion. The "rich", the top %1 of taxpayers, not only forked over a trillion dollars more to the Federal Government under Bush, their share of the burden increased from 33% to 38%. In addition, the rich paid a blended rate of 20.6% under Clinton but paid income tax at a blended rate of 21.3% under Bush.
What is a "blended rate". Well, when one pays income tax, say on $500,000, one doesn't pay a flat rate of 35% on the entire amount. Rounded off, the first $8,000 is taxed at a rate of 15%, from 8001 to $34,000 is taxed at a rate of 15%, from $34,001 to %172,000 is taxed at a rate of 28%, from 172,001 to $374,000 is taxed at a rate of 33% and all over $374,001 is taxed at 35%. Hence the "rich" paid a "blended average" of 21.3% under Bush.
How did Bush cut taxes and have the "rich" paying not only more, but a greater effective rate?
Well, when taxes go down, the "rich" change their behavior. Those that work, work harder and longer. They expand their business, creating jobs. The "idle rich" change their investment behavior and instead of investing in low yield bonds, invest in higher yield taxable vehicles, the kind of investments that finance companies that create jobs. When marginal tax rate go up, the opposite happens. The rich cut back on work and contract instead of expand business and the "idle rich" alter their investments to vehicles that require less taxes. The "rich" are usually happy to pay more of a "blended" tax rate as long as they are taking home more after tax dollars.
If Bush had reigned in spending during his tenure as President, then he would have left Obama a surplus instead of a deficit because revenues to the treasury went up 30% percent under his watch. Now Obama is dead set on letting the Bush tax cuts expire in the middle of a recession. Tighten your belts folks, because we are in for some hard times until we get rid of this fellow.
Tuesday, August 10, 2010
Proposition 8
So U.S. District Judge Vaughn R. Walker struck down California's Proposition 8, passed by over 7 million Californians to protect marriage as the union of one man and one woman.
Imagine the hubris of an unelected guy in a black robe to overturn the historical and traditional definition of marriage that has been in existence since the dawn of civilization. Now I know that some will say that different cultures have defined marriage differently and point to those that allowed polygamy. Well, even in polygamous households, the marriages took place one at a time, not as a group. Each marriage was still between one man and one woman.
The arrogance of an unelected judge to overturn the express will of the people of a state is beyond comprehension. silly me, I thought that under the Constitution we were a government of the people and by the people. If Judge Walker's ruling is allowed to stand, and there is a 50/50 chance that it will, then the people of California have come under the rule of one man.
That this issue is a Constitutional issue is absurd. It is a stretch to say that the equal protection clause of the 14th Amendment applies, because no one is being denied their rights on the basis of citizenship. Homosexuals enjoy the same rights as that of any citizen. they can choose to marry anyone of the opposite sex that they wish. No citizen has the constitutional right to enjoy special privileges based on his actions.
In Judge Walker's ruling is the idea that laws, which have any basis in faith or even commonsense morality, are unconstitutional as he stated that, "The evidence shows conclusively that moral and religious views form the only basis for a belief that same-sex couples are different from opposite sex couples. Did you get that?: The idea that morality or a religious basis cannot be a factor in deciding law.
Now that would be a shock to the late Dr. M.L. King who based his entire civil rights movement on the idea of Biblical morality. The Black pastors of Birmingham asked Dr. King why he was breaking the law and he replied in his famous "Letter From a Birmingham Jail" that there were two types of laws: just and unjust. King state that one had a moral and legal responsibility to obey just laws, but one had a moral responsibility to disobey unjust laws. the difference was that a just law was a law was in accordance with the moral law of God land an unjust law was a law that was out of harmony with the moral law. This is straight out of the tradition of Augustine, Aquinas and later, Blackstone, whose "Commentaries" formed the basis of our legal system for the first 150 years of America's existence before we devolved to case law and began relying solely on the opinion of judges.
Being a homosexual himself, Walker's opinion exudes resentment to the idea that the state can somehow consider heterosexual couples superior to homosexual couples and he doesn't believe that there is any reason from the state's point of view to differentiate between them. Well, he could not be more wrong. From the state's point of view, heterosexual couples are superior.
Although for various reasons, not all heterosexual marriages produce children, in the normal course of things, they do. Homosexual couples are incapable of producing children by themselves. Marriage then normally leads to a family, and it is the family that is the basic building block of any society. The only reason that government would have any interest in the institution of marriage at all is that of promoting the welfare of families. It is in the family that future generations are socialized, taught responsibility, discipline and a host of other virtues that will produce good citizens. Therefore any wise government will institute policies that will support an institution that produces good citizens.
Judge Walker, in his arrogance, fails to realize that we don't get to define marriage. It has already been defined by history, tradition, and yes, by God himself. All we get to do is to recognize it.
Imagine the hubris of an unelected guy in a black robe to overturn the historical and traditional definition of marriage that has been in existence since the dawn of civilization. Now I know that some will say that different cultures have defined marriage differently and point to those that allowed polygamy. Well, even in polygamous households, the marriages took place one at a time, not as a group. Each marriage was still between one man and one woman.
The arrogance of an unelected judge to overturn the express will of the people of a state is beyond comprehension. silly me, I thought that under the Constitution we were a government of the people and by the people. If Judge Walker's ruling is allowed to stand, and there is a 50/50 chance that it will, then the people of California have come under the rule of one man.
That this issue is a Constitutional issue is absurd. It is a stretch to say that the equal protection clause of the 14th Amendment applies, because no one is being denied their rights on the basis of citizenship. Homosexuals enjoy the same rights as that of any citizen. they can choose to marry anyone of the opposite sex that they wish. No citizen has the constitutional right to enjoy special privileges based on his actions.
In Judge Walker's ruling is the idea that laws, which have any basis in faith or even commonsense morality, are unconstitutional as he stated that, "The evidence shows conclusively that moral and religious views form the only basis for a belief that same-sex couples are different from opposite sex couples. Did you get that?: The idea that morality or a religious basis cannot be a factor in deciding law.
Now that would be a shock to the late Dr. M.L. King who based his entire civil rights movement on the idea of Biblical morality. The Black pastors of Birmingham asked Dr. King why he was breaking the law and he replied in his famous "Letter From a Birmingham Jail" that there were two types of laws: just and unjust. King state that one had a moral and legal responsibility to obey just laws, but one had a moral responsibility to disobey unjust laws. the difference was that a just law was a law was in accordance with the moral law of God land an unjust law was a law that was out of harmony with the moral law. This is straight out of the tradition of Augustine, Aquinas and later, Blackstone, whose "Commentaries" formed the basis of our legal system for the first 150 years of America's existence before we devolved to case law and began relying solely on the opinion of judges.
Being a homosexual himself, Walker's opinion exudes resentment to the idea that the state can somehow consider heterosexual couples superior to homosexual couples and he doesn't believe that there is any reason from the state's point of view to differentiate between them. Well, he could not be more wrong. From the state's point of view, heterosexual couples are superior.
Although for various reasons, not all heterosexual marriages produce children, in the normal course of things, they do. Homosexual couples are incapable of producing children by themselves. Marriage then normally leads to a family, and it is the family that is the basic building block of any society. The only reason that government would have any interest in the institution of marriage at all is that of promoting the welfare of families. It is in the family that future generations are socialized, taught responsibility, discipline and a host of other virtues that will produce good citizens. Therefore any wise government will institute policies that will support an institution that produces good citizens.
Judge Walker, in his arrogance, fails to realize that we don't get to define marriage. It has already been defined by history, tradition, and yes, by God himself. All we get to do is to recognize it.
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