Tax Effect on Government Income

Thomas Sowell has published on Townhall.com that raising taxes on the rich does not usually increase income for the government, as President Obama has told the American people it will.

Many people are under the impression that those who oppose higher taxes claim that if taxes are lowered or not increased, the money left in the coffers of the wealthy will “trickle down” to the rest of the population. Nobody seems to know where this claim for “trickle down” effect came from; but it has never been the claim of knowledgeable economists. And…“trickle down” is not the reason conservatives want the Bush tax cuts to stay in effect for everyone.

Several presidents, including President Obama, know that raising taxes does not usually increase government income. As President Kennedy once explained, investors' "efforts to avoid tax liabilities" made them put their money in tax shelters, because existing tax laws made "certain types of less productive activity more profitable than other more valuable undertakings" for the country.

The Obama campaign's attacks on Mitt Romney for putting his money in the Cayman Islands substantiate the point that President Kennedy and others have made, that higher tax rates can drive money into tax shelters, whether tax-exempt municipal bonds or investments in other countries.

As far back as the 1920s, a huge cut in the highest income tax rate -- from 73 percent to 24 percent -- led to a huge increase in the amount of tax revenue collected by the federal government. Why? Because investors took their money out of tax shelters, where they were earning very modest rates of return, and put their money into the productive economy, where they could earn higher rates of return, now that those returns were not so heavily taxed.

This was the very reason why tax rates were cut in the first place -- to get more revenue for the federal government. The same was true, decades later, during the John F. Kennedy administration. Similar reasons led to tax rate cuts during the Ronald Reagan administration and the George W. Bush administration.

All of these presidents -- Democrat and Republican alike -- made the same argument for tax rate reductions that had been made in the 1920s, and the results were similar as well. Yet the invincible lie continues to this day that those who oppose high tax rates on high incomes are doing so because they want to reduce the taxes paid by high income earners, in hopes that their increased prosperity will "trickle down" to others.

 Well…all this nonsense about “fairness” we are hearing from the President is just election year propaganda. The top 10% of present day earners already pay 50% of the federal budget—where’s the “fairness” in that figure?

The Stupidity of the American Electorate

Citizens of Ohio have recently voted to allow casino gambling into the state. Several casinos have already been opened.

The Horseshoe Casino in Cleveland, after seven weeks of operation reported $350 million has been wagered there. After paying the winnings, the casino has had a gross income of $42.6 million. The Hollywood Casino in Toledo has reported $240 million wagered with a $22.8 million gross income.

To me it seems amazing how stupid the Ohio electorate has been to allow such a travesty of common sense to enter our state. It seems that people must be dying to get rid of their hard-earned money.

Of course, there are those who will say that a casino pays a lot of taxes; and that helps the state. But…AT WHAT A COST! I am sure that money collected by the casinos has eaten into the household savings of many families that could ill afford to give the money away. Loss of family money in compulsive gambling has caused divorce and family disruption in many homes. Is increasing the tax base worth all that?  

Democracy—How It’s Changed!

We are seeing very different varieties of democracy in the world today. We see what is being called “post-liberal democracy” and “pre-liberal democracy.” Both of them are very different from the old-fashioned kind of democracy, which was characterized by classical liberal ideas—those that espoused individual liberty, limited government, property rights, and democratic sovereignty.

In America and much of Europe (think Greece), we are seeing “post-liberal” democracy, a form of government that replaces the old and seemingly worn out democracy of classical liberalism with a form that emphasizes social rights, social goods, intrusive government, and transnational law.

Opponents of this kind of “post-liberal” democracy claim that there just is not enough money in the kitty to pay for it; and further stretch of the national bank account will destroy the nations that try it. Furthermore, we have the prime example of this kind of socialistic government obviously before us, i.e., the USSR. (What a failure that was! It could not supply the goods and services the people needed.)

On the other hand, we are seeing in the Middle East, a form of democracy which might be called “pre-liberal” democracy. “Pre-liberal” democracy is democracy shorn of the values Westerners typically associate with democracy: free speech, religious liberty, social tolerance, equality between the sexes, and so on. This “pre-liberal” democracy seeks to replace the classic qualities of Western societies with democratically elected officials who would replace the old Western values with a religious form, i.e., Islam and Sharia law. Of course—this “pre-liberal” democracy is chosen by popular vote of the people. That is why it is called “democracy.”

There are definite limits on what this “pre-liberal” democracy can do for the people in a nation that adopt it. Classical expressions of democracy such as freedom of speech and sexual equality will be suppressed just as soon as they collide with Islamic paradigms. But…this form of democracy is seen by the people as preferred to the governments it replaces—the governments of Saddam Hussein, Hosni Mubarak, and other tyrants of the Middle East.

I cannot help wishing that we could get back to the old-fashioned variety of American democracy—the pre-New Deal variety of democracy. I know there were abuses in that kind of government; but the government take-over we are seeing in America today with Obamacare, the Dodd-Frank bill, and other laws just give me a bleak outlook on America’s future.

Much of this blog post was redacted from an editorial on page A-11 of the Wall Street Journal of 19 June 2012.

Why the Divide Between Liberals and Conservatives?

Jonathan Haidt has written a book titled The Righteous Mind: Why Good People are divided by Politics and Religion. In his book, he notes that in the 1980’s, Lawrence Kohlberg theorized that children go through stages of moral development, culminating in a “post-conventional” attitude that questions social norms and revises them to accord with higher principles of justice. In other words, the mature, morally developed person is a liberal.

 Haidt, a psychologist, has become more and more convinced that our morality flows from our emotional reactions rather than from reasoned responses. 

The author designed an experiment, which determined that our innate moral intuitions fall into six categories: care, freedom, fairness, loyalty, authority, and sanctity. Care, freedom, and fairness focus on individuals. We see someone suffering, and our care sensibility is aroused; we try to help that person. Loyalty, authority, and sanctity focus on social realities. An example of this latter sensibility is our attitude toward desecration of the American flag. That does not harm any individual; but it does damage our moral sense of patriotic loyalty.

Both those who self-identify with liberalism and conservatism participate in the three sensibilities of care, freedom, and fairness; but only the ones who self-identify as conservatives consistently participated in the sensibilities of loyalty, authority, and sanctity on the test administered by Mr. Haidt.

To see how well liberals and conservatives understand one another, Haidt devised a special test. He constructed a list of questions with liberal and conservative bias points. Then, he administered the questionnaire to both liberals and conservatives, asking the liberals to answer the questions as they thought conservatives would answer; and he asked the conservatives to answer as they thought the liberals would answer.

He found that the conservatives understood well the attitudes of the liberals; but the liberals could not answer the questions the way conservatives would answer. Apparently, the liberals could not conceive that anyone with good sense would think like a conservative.

Due to the apparent lack of understanding on the part of liberals, Haidt concluded that the ill-tempered rancor between liberals and conservatives is due to the difficulty liberals have in mentally grasping the moral concerns of conservatives, especially those concerns that are heightened and given shape by religion.

Liberals in general seem to summarily dismiss the thoughts of those who have concerns about loyalty, authority, and sanctity. Liberals would dismiss conservatives to rhetorical extermination and denounce them as “not mainstream.”

I believe that this above attitude may be the root of the difficulties we have in America between liberals and conservatives.

Human Life Takes Another Hit!

In 1976, the infamous Roe v. Wade decision of the Supreme Court took place; and Nancy and I began our campaign to try to stamp out the heinous practice of abortion on demand in the United States. Legal abortion was established in the U.S.; and now we have seen a total of 54 million lives lost through that procedure (3700 are done daily in this country)—by far the most common reason for those abortions is the convenience of the parents.

 One argument we used against abortion in those early days was that if the U.S. allowed abortion, euthanasia was bound to follow. The disrespect for human life would escalate; and other forms of killing would legally follow. We were derided out of the house for presenting that argument. Nobody thought that Americans would ever stand still for such an egregiously immoral act as euthanasia. Well…now we can see the truth of those fears: assisted suicide is now legal in Oregon, Washington state, and Montana.

Now the slide toward human killing continues to progress: Peter Singer, from the Department of Bioethics at Princeton University, has been saying for years that it is ethical to kill newborn babies for reasons of birth defects and for convenience of the parents. He has advocated killing them up to about 28 days of age, because he believes that fully human life does not exist until that time.

Now, two more prominent voices in the field of “bioethics” have arisen: Alberto Giubilini and Francesca Minerva associated with Monash University in Australia and Oxford University in the U.K. have published in the Journal of Medical Ethics an article titled “After-birth abortion: Why should the baby live?” In that article they say “…after-birth abortion (killing a newborn) should be permissible in all cases where abortion is, including cases where the newborn is not disabled.” These two are advocating the killing of newborn babies for any reason even if it’s simply because the newborn baby will be too stressful, or the baby is going to cause a financial hardship—or even if the baby isn’t the right gender.

This scenario is scary! Before you know it if this kind of thinking is incorporated into our laws, the right life will really be determined by some committee or some doctor who knows better than the patient whether his/her life is worth continuing.

If any of my readers are touched by this development in our American society, as I am, you might look at the following link: www.lifeissues.org/sbc (copy and paste this into your browser).

Sinful—yes. But…by nature??

All Christians would agree that mankind is sinful—this is a basic doctrine of our faith. We recognize sin in actions and attitudes—in the position of our hearts and in our values. But…what does it mean to be sinful in our natures? Eph 2:3 says, in part, “…(we) were by nature children of wrath, like the rest of mankind.” Yes, Christians recognize sinful behavior, but what about this business of being sinful by nature? King David was so convinced of his own sin that he proclaimed that when he was born he was a sinner. He wrote that when he was “brought forth” from his mother’s womb, he had been “brought forth in iniquity.” (Ps 51:5) A similar idea is affirmed in Ps 58:3, “The wicked go astray from the womb, they err from their birth, speaking lies.”

Sin is not, I believe, an entity in and of itself. It is, rather, the absence of something—God. Sin is the natural condition of things when God is not manifest. Sin is like darkness. Darkness is not something in itself; it is the absence of light. Likewise, sin is simply raw existence in the absence of God.

The natural character of man manifests sinful quality. Sin is more than doing or thinking evil. Sin is a deeper thing than that. It indwells our very character. I can illustrate “sin by nature” from an animal model.

Several years ago, I was walking through the Sahel in northern Senegal. The Sahel is the grassy strip of land south of the Sahara Desert. For a few weeks in early spring, it’s rolling country is covered with green, waving, grass dotted by small groups of trees. It is very beautiful. As I walked along, I came upon the carcass of a dead cow. Overhead circled several vultures. As I watched, the vultures descended to feed on the cow. As they landed, I saw that they were huge animals and very beautiful. There were two different species—one stood six feet tall; and the other stood five feet. As the vultures converged on the dead body, they began to fight viciously among themselves. They pecked, kicked, flapped, bumped, pushed, and shoved one another. They fought violently over the carcass. There was not one single evidence of charity, generosity, or mutual respect among the group of vultures.

I thought to myself, “This is sin, personified!!” This was sin by nature. Those giant birds did not evidence any kindness or cooperation, at all! They were acting “by nature.” I believe that this bird-behavior is just the kind of effect we see in human beings who have not been touched by Christ’s Spirit—sinful “by nature.”

Still, there are those who would deny that young children are sinful. After all, they have not had the opportunity to sin. Really?? I would ask you to look carefully at the behavior of young children. They are just as selfish and belligerent as they can possibly be. Yes, they manifest sin “by nature.” God has not touched their little hearts, yet! They need to be taught and socialized before they can be tolerated by others. Later, hopefully, they will be indwelt by Christ’s Spirit and redeemed of their natural tendency toward sin.

You might think that my comparison of vultures and men is far-fetched. Well…I’m not so sure that my comparison is very far from the unvarnished truth. We, all, like vultures have gone astray!

Freedom of Religion in America?

The following was copied from the “Washington Update” of the Family Research Council dated 5/22/12.

Nothing seems to stand in the way of President Obama's political agenda--not Congress, not the Constitution, and certainly not the church. When he ordered faith-based groups to turn their backs on church teachings and fund life-destroying drugs, the White House was asking for a fight. And yesterday, they got it. After months of trying to negotiate, the Catholic Church bombarded the Department of Health and Human Services with 12 lawsuits, representing an army of dioceses, hospitals, schools, and charities across eight states and the District of Columbia. A total of 43 entities--including Catholic powerhouses like Notre Dame, Catholic University, Catholic Charities, the entire Archdiocese of New York and Washington, D.C.--will fight to end the strangling of religious freedom in America.

With the first wave of mandate rules scheduled to take effect on August 1, Cardinal Timothy Dolan said:

 "Time is running out, and our valuable ministries and fundamental rights hang in the balance. We have to resort to the courts now." Even the Fighting Irish, who once invited President Obama to speak at their university recognize what is at stake.

"[I]f one presidential administration... can use religious organizations to advance policies that undercut our values, then surely another administration will do the same for another very different set of policies, each time invoking some concept of popular will or the public good, with the result these religious organizations become mere tools for the exercise of government power, morally subservient to the state, and not free from its infringements. If that happens, it will be the end of religious organizations..."

Never in the history of our nation has the federal government reached into the church and imposed its will over the protest of the faithful. "When did the government get into the business of defining for us the extent of our ministry?" Cardinal Dolan wanted to know. This isn't about birth control. It's about government control. And every time religious freedom conflicts with this administration's agenda, freedom seems to lose. Together, America's faith community is rising up to say "enough!" If this President wants to drive religion out of the public square, then his administration will have to go through thousands of priests, pastors, and rabbis first. They understand, as we do, that this war has implications--not just for religious liberty--but for every liberty. If the church can be conscripted to advance a liberal political agenda, then anyone can. "At the deepest level, we are witnessing an attack on the institutions of civil society that are essential to limited government."