Voice For Liberty

Tag: Barack Obama

  • The rich don’t have enough money

    Even if President Barack Obama gets his way in upcoming tax negotiations, we’ll still be a long way from tackling the deficit.

    The document General Explanations of the
    Administration’s Fiscal Year 2013 Revenue Proposals, Table of Revenue Estimates     holds the details:

    Obama Administration projection of increased tax revenue

    If Obama is successful in his plan to increase taxes on upper-income taxpayers, it will bring in — according to this estimate by the Treasury Department — $56 billion in 2013. If additional tax expenditures are eliminated, revenue could increase by $83 billion. Both of these numbers are projected to rise in future years.

    To place these numbers in context: In fiscal year 2012, which ended just one month ago, the federal government spent an estimated $3,500 billion. The largest tax revenue increase Obama hopes for is 2.4 percent of this.

    Considering only the deficit from 2012, estimated at $1,100 billion, the $83 billion tax hike is 7.54 percent. But that’s only the deficit, which is the amount we borrow, not the amount we spend.

    These tax increases are not going to solve our problems with the federal budget. That’s assuming that the tax hikes will not cause economic harm.

    The federal budget is so out of balance compared to the size of the economy that even the wildest dreams of liberals won’t balance the budget. The Tax Foundation has calculated from IRS data that if government taxed 100 percent of the income earned by those who earn over $1 million, it would raise $709 billion. That’s not really close to last year’s deficit of $1,100 billion.

    And then, why would these people work?

  • You should be able to photograph your ballot

    Kansas Secretary of State Kris Kobach wants to make it illegal to photograph your completed ballot, and he wants the power to enforce this law.

    There’s a thorny question here: Who owns your ballot? You, or the state? If you, then can you be prohibited from photographing something that you own?

    The usual argument for such a law is that it constrains the buying and selling of votes. A photo of your ballot, it is said, would be proof to a vote-buyer that you delivered the service you promised, if you were to sell your vote. With no ability to prove your vote, it’s thought that there would be fewer buyers.

    I don’t think, however, that the state should start judging why people voted as they did. Those who voted for Democrats in Kansas: Did they do so because these candidates promised to take more money from others in order to spend more on schools for their children?

    Those who voted for Barack Obama: Did they do so because he promised to take more taxes from high income earners to give everyone else more “stuff?”

    When a political party transports someone to the polling place because they believe the voter will vote in their favor: Is that buying a vote? Or only providing free shipping and handling?

    As H.L. Mencken wrote some years ago — before government got really big — “Every election is a sort of advance auction of stolen goods.” Whether the sale is implicit or explicit, it doesn’t change what’s happening. There’s no need to create new laws or enforcement powers.

    If we’re really interested in reducing the market to buy and sell votes, let’s reduce the power of government to give away stuff that someone else has paid for.

  • Obama II, from New York Times

    The New York Times lays out the agenda for the second term of President Barack Obama. It could be “invigorated,” the newspaper writes.

    The Times editorialists write that now the president “can make real progress on issues neglected in the first.” I wonder: Why did he neglect these issues?

    Then: Obama intends to “build on and improve the significant accomplishments of the last four years.” The problem is that these accomplishments are harmful to our country. They harm our economy, they extinguish liberty and freedom, they will lead to less prosperity for everyone.

    Here’s what a second Obama term might attempt, according to the Times

    “Address climate change with more vigor, going beyond auto-mileage standards and renewable-energy jobs to possibly advocating tougher carbon emissions standards.” I’d like to think that the Obama Administration learned from debacles like Solyndra, but there’s no evidence it has.

    “Working with Republicans to fix the immigration system.” We’re long overdue for this, and I think I can support what the president is likely to propose. We’ll see.

    “He also hinted that combating poverty might move higher on his priority list.” But Obama’s vision of fighting poverty is likely more of the same: direct payments, government job training, more spending on public schools, etc. None of this supports what is really needed: a vibrant economy.

    “In coming months, after he persuades Congress to keep taxes from rising on the middle class, he should push to restore a fair estate tax and raise the low capital gains rate to the level of ordinary income.” A pro-growth policy, one that would create prosperity for everyone, would be to eliminate taxes on capital. Raising this tax means that there will be less investment in the United States as investors seek to find more attractive grounds for investment. This is so important. Ask yourself this: Who earns the higher wage — the man digging a ditch with a shovel, or the worker operating a power backhoe? The backhoe is capital. Someone had to defer current consumption in order to save to buy the backhoe. As taxes on capital rise, people have less incentive to save and invest.

    The Times says Obama’s victory was decisive. At least they didn’t say it was a mandate, as some have said. We’ve suffered through a campaign, won by a man who showed that he would do anything to hold on to power.

    We’ve heard President Obama tell Russia that he can be more “flexible” after the election. Some might interpret this — considering domestic policy — as meaning that Obama will govern more to the left, seeking to expand government spending even more than he did in his first term.

    But there’s a possibility — small, I’m sad to reckon — that flexibility might mean that the president disregards the radical left and embraces principles of economic freedom and personal liberty. This is the way Barack Obama could rescue our economy and build a legacy that he and the country could be proud of.

  • Economic growth is slowing

    While the United States economy started to grow after the recent recession, the trend in growth is slowing.

    During the 80s and 90s the federal government spent at around the level of 19 percent of GNP. Now the federal government spends at the rate of 25 percent of the economy. Add in state and local governments, and we’re at 36 percent.

    This is not trickle-down government, it’s suffocating government, where government threatens to overwhelm the private sector. As government intervenes in more areas of the economy, as Obama’s bureaucrats extend their span of control over the economy (think General Motors), we have a certain process taking place. Charles Koch in September in Wall Street Journal observed: “Put simply, cronyism is remaking American business to be more like government. It is taking our most productive sectors and making them some of our least.”

    This didn’t start when Barack Obama assumed office. The process was already in place. But it has accelerated under the current president. Not by accident, but by design.

    Most people worry about deficits and debt. But do you think President Obama is truly concerned about huge deficits year after year, with many more predicted? These huge deficits are not a bug in the program. They’re a feature. The point of the deficits is to create a crisis that makes it necessary to raise taxes. Government grows again.

    Yes, President Obama inherited a tough economy when he took office nearly four years ago. But, according to the official record-keepers, the recession ended in the summer of 2009. Does it feel like the recession is over?

    Do you remember “Recovery Summer?”

    Here’s a news report: “Vice President Joe Biden today will kick off the Obama administration’s Recovery Summer, a six-week-long push designed to highlight the jobs accompanying a surge in stimulus-funded projects.”

    What year was that? 2010. Does it seem like we’re in recovery?

    Now David Axelrod denies that there was such a claim.

    George Will accurately diagnosed the problem two years ago: “We can’t tolerate any more of the Obama cure.”

  • Cost of an Obama tire job: $900,000

    It’s entirely predictable that trade sanctions are costly to the country that imposes them. Yet politicians can be persuaded to support them in the name of saving American jobs and getting “tough” with countries perceived to be a problem.

    We see this in the case of President Barack Obama and the tariffs, or taxes, on tires imported from China. Here’s what The Peterson Institute for International Economics said in its report US Tire Tariffs: Saving Few Jobs at High Cost:

    However, our analysis shows that, even on very generous assumptions about the effectiveness of the tariffs, the initiative saved a maximum of 1,200 jobs. Our analysis also shows that American buyers of car and light truck tires pay a hefty price for this exercise of trade protection. According to our calculations, explained in this policy brief, the total cost to American consumers from higher prices resulting from safeguard tariffs on Chinese tires was around $1.1 billion in 2011. The cost per job manufacturing saved (a maximum of 1,200 jobs by our calculations) was at least $900,000 in that year. Only a very small fraction of this bloated figure reached the pockets of tire workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home.

    The additional money that US consumers spent on tires reduced their spending on other retail goods, indirectly lowering employment in the retail industry. On balance, it seems likely that tire protectionism cost the US economy around 2,531 jobs, when losses in the retail sector are off set against gains in tire manufacturing. Adding further to the loss column, China retaliated by imposing antidumping duties on US exports of chicken parts, costing that industry around $1 billion in sales.

    It’s not like this hasn’t happened before. When President George W. Bush imposed tariffs on imported steel, the result was similar. The Consuming Industries Trade Action Coalition found that steel trade protectionism resulted in the loss of nearly 200,000 American jobs, and cost approximately $4 billion in lost wages over ten months. A further conclusion was that “more American workers lost their jobs in 2002 to higher steel costs than the total number employed by the U.S. steel industry.”

    Instead of these presidents bowing to the very concentrated special interests that benefit from trade protectionism, we should embrace trade with other countries.

    But it’s easy to beat up on certain countries when jobs are lost, blaming the problem on foreigners. Mitt Romney should take this advice, as the Wall Street Journal recently editorialized: “This China-bashing is especially odd for Mr. Romney, who professes elsewhere that he wants to expand trade because it will create jobs. So trade is good for America except when it is conducted by ‘cheaters’ who happen to sell more of some goods and services to us than we sell to them. This is called mercantilism, not free trade.”

  • Obama’s regulatory extremism

    In the introduction to his book Democracy Denied, Phil Kerpen gives us a history lesson on the grab for executive power by presidents through the use of “signing statements.”

    Elizabeth Drew made the case against Bush’s abuse of executive power in a lengthy New York Review of Books piece called “Power Grab.” She specifically highlighted Bush’s use of signing statements (a technique to object to elements of a law while signing it, and refusing to enforce those elements), the detention of foreign combatants at Guantanamo, and warrantless wiretaps. She concluded that Bush was a tyrant.

    Kerpen explains how the view from the oval office can make one forget campaign promises:

    Even the Bush practice that raised the most ire — the use of signing statements — was embraced by Obama just weeks after he took office, when he said: “it is a legitimate constitutional function, and one that promotes the value of transparency, to indicate when a bill that is presented for presidential signature includes provisions that are subject to well-founded constitutional objections.” Contrast that with what Obama had said about signing statements on the campaign trail: “This is part of the whole theory of George Bush that he can make laws as he is going along. I disagree with that. I taught the Constitution for 10 years. I believe in the Constitution and I will obey the Constitution of the United States. We are not going to use signing statements as a way of doing an end run around Congress.”

    Not that Obama alone takes criticism for exercising presidential power contrary to the actions of Congress, as he describes the auto industry bailout in the last days of the presidency of George W. Bush. A bill didn’t make it through Congress, but Bush “repurposed” TARP funds — intended for banks — and used them for an auto bailout in the amount of $17.4 billion.

    It is this use of executive power and agencies to bypass the will of people — as expressed through Congress — that is detailed in a book authored by Phil Kerpen and published at this time last year: Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America — and How to Stop Him.

    Kerpen’s website is philkerpen.com, and it features excerpts from the book along with a theatrical trailer.

    Kerpen explains the problem by describing a solution: The Regulations from the Executive in Need of Scrutiny Act, or REINS Act. This proposed law would require any major regulatory action to be approved by Congress and receive the president’s signature. Kerpen writes: “We have regulators who are effectively writing and executing their own laws. The major policy decisions that affect every aspect of our economic lives are moving forward without consent of the people’s legitimately elected legislative branch.”

    The problem is that often Congress passes generic laws and leaves it to regulatory agencies to write the rules that implement the law. By requiring Congressional and Presidential approval of major regulations, agencies will be accountable to the current Congress, and lawmakers will have a chance to ensure that actual regulations are consistent with the intent of enabling legislation.

    Cap-and-trade energy legislation provides an example of Kerpen’s thesis, which is “how the Obama administration was disregarding Congress and the American people to accomplish its objectives through regulatory backdoors.” The legislation passed the House, but couldn’t pass the Senate. So what happened next? Kerpen explains Obama’s detour around Congress:

    Just to show you how unfazed the Obama administration was by the political defeat of cap-and-trade, consider what’s on page 146 of Obama’s 2012 budget: “The administration continues to support greenhouse gas emissions reductions in the United States in the range of 17 percent below 2005 levels by 2020 and 83% percent by 2050.” Those just happen to be the same levels required by the failed Waxman-Markey cap-and-trade bill. Obama is telling the EPA to just pretend that the bill passed and regulate away.

    In fact Obama’s EPA was already moving full steam ahead to implement a global warming regulatory scheme that could even be more costly than cap and trade — without the approval of the American people and without so much as a vote in Congress.

    The remainder of the chapter details some of the ways EPA is accomplishing this backdoor regulation.

    The Patient Protection and Affordable Care Act, otherwise known as ObamaCare, is another topic Kerpen covers where regulation is replacing lawmaking by Congress:

    Nancy Pelosi was right in more ways then she realized when she infamously said “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.” Not only was the more than 2,000-page bill negotiated in secret and so densely complex that few humans could understand it, it also deferred most of the really difficult and important decisions to the regulators, including dozens of brand-new boards, committees, councils, and working groups. So even after ObamaCare had been passed there was no way to know what was really in it until the bureaucracy was assembled and began issuing regulations.

    Kerpen describes the bill that passed as not “finished legislation,” and is now being interpreted by bureaucrats, the most powerful being HHS Secretary Kathleen Sebelius. Her office is now, according to Kerpen, “issuing a whole string of official guidelines and regulations that attempt to ‘correct’ the draft law, often by asserting things that the law doesn’t actually say.”

    Other chapters describe regulation of the internet (net neutrality), card check, the Dodd-Frank financial regulations, and energy regulation. All of these represent the Obama administration either ignoring Congress or creating vast new powers for itself. The chart Kerpen created shows the plays being made.

    Obama regulatory extremismKerpen’s chart of Obama regulatory extremism. Click for larger version.

    What about regulatory reform? Obama’s doing that. In January he wrote in the Wall Street Journal: “We’re looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for — and reduce — the burdens regulations may place on small businesses.”

    In a chapter titled “The Back Door to the Back Door: Phony Regulation Reform” Kerpen explains that this promise or regulatory reform by the president is a sham. Kerpen describes the executive order that implements regulatory review this way: “The new executive order is the regulatory parallel to the Obama administration’s strategy on federal spending, which is to spend at astonishing, record rates and rack up trillions of dollars in deficits while paying lip service to fiscal responsibility by establishing a fiscal commission.”

    And in a gesture of true public service, Kerpen introduces us to Cass Sunstein, the man who is heading the Office of Information and Regulatory Affairs (OIRA), the agency that will be conducting the purported review of regulations. A quote from Sunstein: “In what sense is the money in our pockets and bank accounts fully ‘ours’? Did we earn it by our own autonomous efforts? Could we have inherited it without the assistance of probate courts? Do we save it without the support of bank regulators? Could we spend it if there were no public officials to coordinate the efforts and pool the resources of the community in which we live?”

    Kerpen sums up Sunstein’s political philosophy of central planning:

    The idea of Sunstein’s “nudge” philosophy is that the fatal conceit of central economic planning can somehow succeed if it is subtly hidden from view. Sunstein thinks that if he imposes regulations that steer our choices instead of outright forcing them, he can achieve desirable social objectives. … Given Suinstein’s views and the central role he will have in reshaping federal regulation to be “more effective,” we need to be deeply concerned that any changes that come out of the process may make regulation less apparent, but no less costly — and more effective at crushing genuine individual choice and responsibility and substituting the judgment (even if by a nudge instead of a shove) of a central planner.

    The challenge, Kerpen writes in his conclusion to the book, “is to change the political calculus to elevate regulatory fights to the appropriate level in the public consciousness. We must make sure the American people understand that a disastrously bad idea becomes even worse when it’s implemented by backdoor, unaccountable, illegitimate means.”

    Kerpen recommends passage of the REINS Act as a way to restore accountability over regulatory agencies to Congress. The two messages Congress needs, he writes, are: “You can delegate authority, but you can never delegate responsibility,” and “If you fail to stop out-of-control regulators, voters will hold you accountable.”

  • ObamaCare explained: What could go wrong?

    An Illinois State Senate candidate who happens to be a physician diagnoses and explains the problems with the Affordable Care Act, also known as ObamaCare. Here’s a transcription of what Barbara Bellar said:

    Let me get this straight: We’re going to be gifted with a healthcare plan we are forced to purchase,
    and fined if we don’t,
    which purportedly covers at least 10 million more people,
    without adding a single new doctor,
    but provides for 16,000 new IRS agents,
    written by a committee whose chairman says he doesn’t understand it,
    passed by a congress that didn’t read it but exempted themselves from it,
    and signed by a president who smokes,
    with funding administered by a treasury chief who didn’t pay his taxes,
    for which we will be taxed for four years before any benefits take effect,
    by a government which has already bankrupted Social Security and Medicare,
    all to be overseen by a surgeon general who is obese,
    and financed by a country that’s broke.

    So, what the blank could possibly go wrong?

  • The Obama tax cuts

    In the presidential debate last week, President Barack Obama spoke of his tax cuts: “So at the same time that my tax plan has already lowered taxes for 98 percent of families, I also lowered taxes for small businesses 18 times. And what I want to do is continue the tax rate — the tax cuts that we put into place for small businesses and families.”

    Are these Obama tax cuts “real” cuts that will lead to economic growth, or just government spending programs in disguise? For tax cuts to be productive in growing the economy, they have to be associated with something positive, namely with work, saving, or investment. What many people positively respond to is a reduction in marginal tax rates, that is, the tax that must be paid on the next dollar earned.

    Many of the Obama tax cuts were part of the stimulus bill passed in February 2009. Polls show that very people know of these tax cuts. Many were temporary.

    The largest item that benefited most people was the Making Work Pay Tax Credit, a two-year program that rebates $400 per year to individual taxpayers, or $800 per year for married couples. The program was effective for tax years 2009 and 2010 only. This is not a reduction in marginal tax rates, although the program will reduce the average tax rate that people pay. It is simply a reduction in the overall amount of tax someone must pay.

    This tax credit is not associated with any positive effort or activity by the recipients other than doing what they already do. The same criticism applies to the Bush tax rebate in 2008, too.

    Besides the Making Work Pay Tax Credit, the Obama tax cuts consisted of other tax credits that apply not to everyone, but only to people who qualify.

    For example, a child care tax credit pays up to $1,200 per year in child care expenses. Obviously, the only people who can claim this credit are working people with children who chose to place them in daycare. Beyond that, it is not a “tax cut” by any stretch of the imagination. Properly, it is a spending program implemented through the tax system. Sometimes called tax expenditures, these measures often escape the usual scrutiny and appropriations process that spending receives. Since they’re billed as a “tax cut,” they sound like a good thing to most people, as few like paying taxes.

    If we need any more evidence that these programs are really spending disguised as tax cuts, consider the description of the child care tax credit as provided by the Internal Revenue Service: “It is a refundable credit, which means taxpayers may receive refunds even when they do not owe any tax.” That’s right. Even if you have no income tax liability, you can still get a tax credit — that is, a payment from the government.

    As to the claim of 18 business tax cuts, a CNN analysis finds “If extensions or expansions aren’t double counted, the list comes out to 14 tax breaks — and only five are still around.”

    In its analysis of the business tax cuts, a New York Times article concluded “As you can see, some of these aren’t tax cuts in the way many people would define them. Rather, they’re tax incentives — you’ve got to spend money (on health insurance, a new employee or new equipment) to save money.”

    An example of one of the temporary business tax measures that were part of the ARRA stimulus bill was bonus depreciation. This measure allowed businesses to capture depreciation of assets more quickly than usual. This reduces taxable income, and therefore would act as an incentive for businesses to make capital investments.

    Ironically, when business jets received a similar accelerated depreciation benefit, President Obama denounces this as a harmful tax break.

    These measures, while reducing the amount of tax a business might pay, don’t change the marginal tax rate. Reducing marginal tax rates is what contributes to growth.

    There has been the temporary payroll tax cut, which is a reduction in tax rates that pay for Social Security and Medicare. This tax, however, applies only to income up to $110,100, so after that level, the reduction no longer applies. Further, this is an example of reducing taxes, but not making corresponding reductions in spending. This means that government has to borrow more, which is a negative factor for economic growth.

    Programs that reduce the average tax rate like Obama’s Making Work Pay Tax Credit and the Bush tax rebates of 2008 aren’t effective because they don’t affect the marginal rate — the rate paid on the next dollar earned. While anything that reduces the burden of taxes is welcome, we ought to implement the type of tax cuts that spur economic growth.

    Who responds most positively to reductions in marginal tax rates? As Jeffrey A. Miron explains, it is the most economically productive members of society:

    The Bush cuts provided lower taxes on ordinary income, especially for taxpayers at the high end of the income distribution. These are some of the most energetic and productive people in society; raising tax rates would discourage their effort and entrepreneurship. High-income taxpayers also have multiple ways of avoiding high tax rates, so any revenue gain from raising rates would be modest. The Bush cuts also lowered taxes on dividend and capital gains income; maintaining these lower rates is even more important for economic performance. Capital is mobile: when it is taxed heavily here, it flees somewhere else, meaning lower investment and employment in the United States. And because capital income taxes discourage investment or drive it overseas, they generate little if any tax revenue. (Jeffrey A. Miron, “Why the Bush Tax Cuts Worked”)

    It is these “energetic and productive” people that are responsible for a great deal of business activity and job creation. When these people take steps to avoid taxes it means less productive economic activity and more unproductive tax shelters.

    In Slaying Leviathan: The Moral Case for Tax Reform, author Leslie Carbone explains the harm of high marginal taxes, especially progressive taxes, where rates become higher as more income is earned:

    The discouragement of earning money by working, saving, or investing inherent in any income tax is exacerbated by progressivity. While any high tax rates are economically destructive, high marginal rates are even worse, because high marginal rates particularly discourage productivity and inhibit economic growth. … By lowering potential pay off, high investment taxes especially discourage risky investment. Discouragement of risky investment squelches technological advancement, because new technologies are the most risky. This means our progressive tax system actually reduces progress and inhibits improve quality of life.

    If the goal of the Obama Administration is to create private sector economic growth instead of growth in government, it needs to keep the Bush tax cuts in place and avoid increases in marginal tax rates for everyone, especially the most productive members of society. A better strategy would be to reduce these tax rates farther to create even more economic growth.

  • Barack Obama, the myth and the reality

    The Washington Examiner has produced a lengthy report titled The Obama you don’t know. The reality of Obama is different from the myth, even the myth that First Lady Michelle Obama promoted at the recent Democratic National Convention.

    In the introduction to the series, editor Mark Tapscott writes:

    In an effort to get a clearer picture of Obama — his shaping influences, his core beliefs, his political ambitions and his accomplishments — The Washington Examiner conducted a four-month inquiry, interviewing dozens of his supporters and detractors in Chicago and elsewhere, and studying countless court transcripts, government reports and other official documents.

    Over the years and in two autobiographies, Obama has presented himself to the world as many things, including radical community organizer, idealistic civil rights lawyer, dynamic reformer in the Illinois and U.S. senates, and, finally, the cool presidential voice of postpartisan hope and change.

    With his air of reasonableness and moderation, he has projected a remarkably likable persona. Even in the midst of a historically dirty campaign for re-election, his likability numbers remain impressive, as seen in a recent AP-GFK Poll that found 53 percent of adults have a favorable view of him.

    But beyond the spin and the polls, a starkly different picture emerges. It is a portrait of a man quite unlike his image, not a visionary reformer but rather a classic Chicago machine pol who thrives on rewarding himself and his friends with the spoils of public office, and who uses his position to punish his enemies.

    Summarizing, Tapscott wrote “To paraphrase Tammany Hall’s George Washington Plunkitt, Obama has seen his opportunities and taken them, over and over.”

    The series is available at the newspaper’s website at The Obama you don’t know. A report on the series from Fox News is available at 10-part report raises questions about narrative of Obama’s early life. Video is below.