Taxing Your Butts

I couldn’t improve on the Wall Street Journal headline for this story of how states are going to extreme steps to ensure that they get their high taxes on cigarettes, even when their residents buy them from other states over the Internet. This is also the start of states taxing their residents for other things that they buy over the ‘net.

I have said this several times before; but it never ceases to amaze me how a large group of people (smokers) can sit by so mildly and allow themselves to be persecuted so harshly by our rulers. The fact that the rulers are literally exploiting addicts’ need for their drug (nicotine) makes this doubly sickening.

KMK

Understanding Capitalism

Too many people think that the main functions of big companies are to provide places to work for people and to support charitable causes. Neither is true. Their purpose is purely to legally earn a decent rate of return for their owners, the shareholders. If they can’t do that, they should shut down.

I obviously had these cold hard facts of the capitalist corporate world drummed into me in my business classes in college. I’m not sure exactly where Joe Bob Briggs (aka John Bloom) learned this, but he has an excellent discussion of it in today’s column. He mentions that, rather than function as jobs programs, the best corporate officers do everything possible to avoid hiring new employees. He makes the very accurate point that an ideally run corporation, the epitome of perfection, would earn income for its owners with zero employees.

If I didn’t know better, I would have suspected that Walter Williams, the premier economics professor in this country wrote this piece. Well done.

KMK

Gutless Wonders

It has long been axiomatic that the topic of Social Security is the third rail of politics. Anyone foolish enough to discuss changing it will be zapped with 50 million volts of electricity and fried to a crisp. Bush started his term in office with a proposal to allow people to divert a very tiny part of the money that would normally be flushed down the SS toilet into privately controlled accounts similar to IRAs. While it was a very wimpy approach to a very big problem, it was at least a step in the right direction.

As always, any possibility of even one dollar less money being sent to DC for our rulers to control is met with sheer gloom and doom reactions from the liberals and their propagandists in the media. Each time the stock market drops, they love to scream that privately controlled accounts would suffer. As I have explained before, this argument is ludicrous because it assumes that everyone will put all of their retirement money into risky stocks. While some people will do this, most prudent investors will opt for safer alternatives, such as bank CDs.

Bush’s brave attempt to broach the subject of personal control of retirement money has been stopped dead in its tracks and his fellow Republicans have been banned from even bringing up what they call the P word, privatization. I must admit that the GOP has an uphill battle in overcoming the liberal media bias and the difficulties in getting the truth out to the people. However, it would be nice to see the GOP with a bit more backbone. They cave in all too easily to have any confidence in their leadership abilities.

KMK

Laws For Sale

I have mentioned on several occasions how the best possible investment any business can make is a political donation (aka bribe) to our rulers. A few thousand dollars results in millions back in special tax breaks or other consideration. Somebody has put up a parody of that in eBay style, eGray, with PRC Governor Gray Doofus auctioning off special legislation. Nice job.

KMK

Progressive Pricing

I have long said that the one of the biggest of many oxymorons in the government is the term “Progressive” to describe the income tax rates we are charged. In truth, they are actually penalties. If you do well enough to progress into a higher income level, our rulers confiscate a much higher percentage of your income than if you earned less. Joseph Farah has an amusing analogy to illustrate how idiotic & unfair this concept it; having car dealers charge you different prices for the same car based on your income.

Ironically, the normally very candid and hard hitting Mr. Farah fails to mention the historical derivation of the concept of using “progressive” tax rates. It is directly out of the Communist Manifesto. I guess it’s the fear of being branded as a Joseph McCarthy that so many people, including Rush Limbaugh, are afraid to point out how many of the ten planks in the Communist Manifesto have been implemented in this country.

This is also a good place to mention the Flat Tax movement in this country. Many people are claiming that a single tax rate, as Steve Forbes proposed during his presidential campaigns, would be the ultimate panacea for all of the unfairness in our income tax system. While it would definitely be a big step in the right direction, I have refused to endorse this because it is a long ways from what we really need to fix things.

Forbes and his followers claim that a flat tax would allow everyone to file tax returns the size of postcards. That is so naive as to be laughable. While a single tax rate would make calculating the income tax on a specific taxable income figure a little easier, that won’t make tax returns any shorter. All of the fun and games in the tax system are not in the tax calculation. They are in arriving at the taxable income number itself. What kinds of income are taxed? What kinds of things are deductible against the income? Exemptions for kids, etcetera, etcetera, etcetera. To believe that our rulers are capable of devising an income tax system without a ton of different rules for calculating taxable income is as realistic as believing that we can make the sun rise in the West. It is impossible.

The only solution to the current income tax fiasco is to repeal the 16th Amendment and completely eliminate all income and estate taxes. End it, not mend it; to borrow and twist one of that racist hustler Jesse Jackson’s rhymes he uses whenever a government welfare program is threatened.

KMK

Libs Want Our Money

No surprise here. The liberals are predictably calling for higher federal taxes. The easiest way for them to raise taxes is to stop the recent tax cut law before it kicks in. Having a ten year phase-in was idiotic because it always left the opportunity available for the libs to stop it cold before it could really do any good. They are basing the alleged need for higher taxes on more phony deficit predictions.

I only hope that Mr. Bartlett is correct in predicting that Bush 43 will have more backbone than his father did in standing up to the tax hiking spendaholic Congress. Bush 41 wimped out in 1990 and broke his “read my lips, no new taxes” pledge big time; leading to his defeat by the Clintons. A similar cave-in by W will lead to the exact same result, Clinton 44.

KMK

More Creative Accounting

While the corporate world has been receiving a lot of attention for strange accounting tricks, and I have been sure to remind everyone of even worse shenanigans by our rulers in government, the problems are even more widespread. Let’s not forget about the big charities, such as United Way.

A few years ago, I triggered a ton of hate mail for daring to question the value of a middle-man charity that has no other purpose but to pay for a big bureaucracy and send some of the donations to smaller charities which are worthy in United Way’s eyes. I still believe that donations are more effective if you cut out the expensive middlemen and send your money directly to the charities you believe in.

If that isn’t enough of an endorsement of avoiding United Way, how about the fact that they refuse to allow their books to be audited? Could they be hiding something even worse than the CEO’s $225,000 (plus perks) salary?

Speaking of worthy charities, I know of none more deserving than Turpentine Creek Wildlife Refuge & Foundation near Eureka Springs, Arkansas. Since I prepare their tax returns and review their QuickBooks, I know they are completely on the up and up. A recent IRS audit even confirmed that fact; so it isn’t just my opinion.

KMK

Keeping Up the Fight

I have to congratulate fellow Libertarian Karl Kimball for his persistence in working his butt off to allow the voters of Arkansas an opportunity to express their opinion about having to pay sales taxes on human foods and medicines. Animal food is already exempt. Karl has been spear-heading the effort to obtain enough petition signatures to satisfy the Secretary of State. Several thousand signatures were recently tossed out for ridiculous reasons. Now, Karl has come back with 27,000 more, which should be plenty.

As always, the fight isn’t even close to being over. The fans of high taxes are scared to death to allow voters to have any power when it comes to taxation. They will definitely be pulling several more dirty tricks and spending huge amounts of tax dollars to get the initiative kicked off of the ballot, as they have done dozens of times for similar tax cutting measures just in the nine years we have been living here.

The bureaucrats and other fans of big government have good reason to worry, if this poll is accurate. 72 percent of respondents have said they support the repeal of the sales tax on food and medicine. In typical fashion, the tax supporters claim that the respondents are too stupid to know what they are talking about.

KMK