The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for December 5th, 2010

Video: How Tax Cuts Work in Our Tax System

Posted by iusbvision on December 5, 2010

Lee Doren of “How The World Works” explains how tax cuts and increases work in a progressive income tax system like we have here in the United States.

Let us examine some charts that help to illustrate this further.

Here is the tax burden by taxable income that came out at the middle of the Bush Presidency:

You see when tax rates are cut and the economy grows the upper and top parts of the PRODUCER CLASS (notice I did not say rich as many of the super rich are NOT producers) pay the lions share of federal income taxes. Those who produce actually produce more, invest more, take more risk and hire more people when the economy grows. So as they pay a lower tax rate they actually pay more in real dollars because they are punished less by moving their money and takling risk.

Now let us look at the tax burden as it is today. According to the Tax Foundation:

Incomes reported by tax returns at the high end of the income spectrum plummeted from 2007 to 2008, as did their share of the nation’s income and income taxes paid.

In 2008, the top 1 percent of tax returns paid 38.0 percent of all federal individual income taxes and earned 20.0 percent of adjusted gross income, compared to 2007 when those figures were 40.4 percent and 22.8 percent, respectively. Both of those figures—share of income and share of taxes paid—were their lowest since 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes.

Each year from 2005 to 2007, the top 1 percent’s constantly growing share of income earned and taxes paid set a record. That trend reversed in 2008. In fact, the income share for the top 1 percent of tax returns was lower in 2008 than in 2000, largely due to differences in capital gains.

Another indicator of this reversal in the income and tax shares of the top 1 percent is that during 2007, the top 1 percent had actually paid more in federal income tax than the bottom 95 percent, a comparison that was much remarked on a year ago. But the diminished income of the top 1 percent in 2008 means that the comparison no longer holds. During 2008, the bottom 95 percent (AGI under $159,619) paid 41.3 percent of the total collected, a larger share than the 38.0 percent paid by the top 1 percent (AGI over $380,354).

The top-earning 5 percent of taxpayers (AGI over $159,619), however, still paid far more than the bottom 95 percent. The top 5 percent earned 34.7 percent of the nation’s adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.

So why did the percentage of the tax burden of “the rich” during most of the Bush presidency go UP year after year till 2007, even after the so called “tax cuts to the rich”?

And why in 2008 did a huge portion of the tax burden get shifted to the working middle class and poor?

It is just as we said, if the incentive is there to produce, if the taxes are low and if the risk is measurable those wealthier Americans and producers will take more risk and be more economically active. If you remove the incentive by threatening them with taxes, cap & trade, ObamaCare, tons of regulations, bureaucrats and the corruption that always follows such policies it creates uncertainty investors and producers can no longer make a measured risk. This is when they bottle their money up or invest it in China, who is smart enough not to punish investors and producers for taking risk.

This shows that the tax rate that the producers or “the rich” pay is secondary to certainty, confidence, and economic growth as to how much tax they pay in real dollars.

It is ironic that the left, who claims to pass this stuff in the name of the middle class and “soaking the rich”, in real dollars accomplish exactly the opposite of their stated intent. It ends up that it is the producing middle class who gets soaked with more tax burden and more inflation.

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Posted in 2012, Chuck Norton, Economics 101, True Talking Points | 1 Comment »

Newt Gingrich is running for President and talks Wiki-Leaks

Posted by iusbvision on December 5, 2010

At 9: 26 in the video Gingrich talks about how flawed our government information system is. He gives a great analysis.

Posted in 2012, Chuck Norton | Leave a Comment »

CPI: Big Polluters Freed from Environmental Oversight by Stimulus (government picking winners and losers)

Posted by iusbvision on December 5, 2010

Before we begin it should be clear that the “Center for Public Integrity” CPI is a far left outfit complete with all the spin and trimmings. And while the story they tell is spun I find it to be directionally accurate. While it is rather obvious that environmental regulations go way beyond science and are in fact used to pick winners and losers for purposes of corruption, influence and donations; this article demonstrates that fact with detail. Unknowinglyand in it’s own way, the CPI has made the case against leviathan government and the kind of “Chicago Style” regulations that always result from it as well as this web log ever could.

http://www.publicintegrity.org/articles/entry/2565/ :

In the name of job creation and clean energy, the Obama administration has doled out billions of dollars in stimulus money to some of the nation’s biggest polluters and granted them sweeping exemptions from the most basic form of environmental oversight, a Center for Public Integrity investigation has found.

The administration has awarded more than 179,000 “categorical exclusions” to stimulus projects funded by federal agencies, freeing those projects from review under the National Environmental Policy Act, or NEPA. Coal-burning utilities like Westar Energy and Duke Energy, chemical manufacturer DuPont, and ethanol maker Didion Milling are among the firms with histories of serious environmental violations that have won blanket NEPA exemptions.

Even a project at BP’s maligned refinery in Texas City, Tex. — owner of the oil industry’s worst safety record and site of a deadly 2005 explosion, as well as a benzene leak earlier this year — secured a waiver for the preliminary phase of a carbon capture and sequestration experiment involving two companies with past compliance problems. The primary firm has since dropped out of the project before it could advance to the second phase.

Agency officials who granted the exemptions told the Center that they do not have time in most cases to review the environmental compliance records of stimulus recipients, and do not believe past violations should affect polluters’ chances of winning stimulus money or the NEPA exclusions.

The so-called “stimulus” funding came from the $787-billion legislation officially known as the American Recovery and Reinvestment Act, passed in February 2009.

Documents obtained by the Center show the administration has devised a speedy review process that relies on voluntary disclosures by companies to determine whether stimulus projects pose environmental harm. Corporate polluters often omitted mention of health, safety, and environmental violations from their applications. In fact, administration officials told the Center they chose to ignore companies’ environmental compliance records in making grant decisions and issuing NEPA exemptions, saying they considered such information irrelevant.

Some polluters reported their stimulus projects might cause “unknown environmental risks” or could “adversely affect” sensitive resources, the documents show. Others acknowledged they would produce hazardous air pollutants or toxic metals. Still others won stimulus money just weeks after settling major pollution cases. Yet nearly all got exemptions from full environmental analyses, the documents show.

Ralated:

Corruption: Stimulus Funds Spent in Democrat Districts…

Posted in 2012, Alarmism, Campus Freedom, Indoctrination & Censorship, Chuck Norton, Corporatism, Obama and Congress Post Inaugration, True Talking Points | Leave a Comment »