Laffer on Government Spending – Today’s Quote

What I’m not saying is that all government spending is bad.  It’s not – far, far from it, but there is no free lunch, as a former colleague of mine used to say. There is no public tooth fairy.  Father Christmas does not work on the Treasury staff this year.  You can never bail someone out of trouble without putting someone else into trouble.

Dr. Arthur B. Laffer

Americans Deserve the IRS – Today’s Quote

Individually, Americans do not deserve to be subservient to such a fear-mongering, intimidating and powerful agency as the Internal Revenue Service; but collectively, we do…

In order to squeeze out of us half of what we produce [taxes and regulatory burden], a government tax collection agency must be ruthless and able to put the fear of God into its citizens. The IRS has mastered that task. Congress has given it powers that would be deemed criminal if used by others…

The bottom line is that members of Congress need such a ruthless tax collection agency as the IRS because of the charge we Americans have given them. We want what the IRS does — namely, to take the earnings of one American so Congress can create a benefit for some other American. Don’t get angry with IRS agents. They are just following orders.

Dr. Walter E. Williams via Americans Deserve the IRS

Williams on Taxation – Today’s Quote

Dr. Walter E. WilliamsTaxes are necessary to fund the constitutionally mandated functions of the federal government.  If Congress spent according to its authority under Article 1, Section 8 of our Constitution, taxes wouldn’t be any more than 5 percent of the gross domestic product, as it was between 1787 and 1920, as opposed to today’s 20 percent.

Dr. Walter E. Williams via Price Versus Cost

Mayday, Mayday! – Today’s Quote

May DayIsn’t it appropriate that the month of the tax begins with April Fool’s Day and ends with cries of “Mayday!”

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Andrew’s Note:  Think about it for a minute or follow the link… I know you expected a comment on communism or socialism today…not a tax quote…just so that I don’t disappoint…here’s a little graphic to get your capitalist blood pressure up!

Internet Tax Madness

Let’s play make believe for a moment so that we can understand the Internet Tax Madness that is going on in the Senate right now… with the aptly misnamed Marketplace Fairness Act, S. 743.

Pretend you own a successful specialty store in Vail, Colorado selling the world’s best widgets (or maybe prepper supplies).  Everything’s going along swimmingly until there’s a convention of State and local politicians and bureaucrats from all over the country in town.  Several of the conference attendees, let’s call them Larry, Moe & Curly decide to skip out of their taxpayer funded educational opportunity and stop by your store.  While they’re browsing your store they notice a couple of their neighbors, let’s call them Joe and Shemp from back home buying your wonderful widgets with their hard earned money.

When you ring up Joe and Shemp’s sale you follow all local laws including collecting applicable local taxes.  When Larry, Moe & Curly notice Joe & Shemp’s purchases they turn green with envy.  You notice them whip out a couple of slide rules and start calculating something.  What they are calculating is all the ‘lost’ tax revenue that they could have made if Joe, Shemp and everyone else would have purchased their widgets back home…so that Larry, Moe & Curly’s various levels of state and local government could have taken their ‘fair share.’

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Government’s Hidden Cost – Today’s Quote

Dr. George WillThe regulatory, administrative state, which progressives champion, is generally a servant of the strong, for two reasons. It responds to financially powerful and politically sophisticated factions. And it encourages rent-seekers to exploit opportunities for concentrated benefits and dispersed costs (e.g., agriculture subsidies confer sums on large agribusinesses by imposing small costs on 316 million Americans).

Such government inevitably means executive government and the derogation of the legislative branch, both of which produce exploding government debt. By explaining these perverse effects of progressivism, the Hudson Institute’s Christopher DeMuth explains contemporary government’s cascading and reinforcing failures.

Executive growth fuels borrowing growth because of the relationship between what DeMuth, in a recent address at George Mason University, called “regulatory insouciance and freewheeling finance.” Government power is increasingly concentrated in Washington, Washington power is increasingly concentrated in the executive branch, and executive-branch power is increasingly concentrated in agencies that are unconstrained by legislative control. Debt and regulation are, DeMuth discerns, “political kin”: Both are legitimate government functions, but both are now perverted to evade democratic accountability, which is a nuisance, and transparent taxation, which is politically dangerous.

Today’s government uses regulation to achieve policy goals by imposing on the private sector burdens less obvious than taxation would be, burdens that become visible only indirectly, in higher prices. Often the goals government pursues by surreptitious indirection are goals that could not win legislative majorities — e.g., the Environmental Protection Agency’s regulation of greenhouse gases following Congress’s refusal to approve such policies. And deficit spending — borrowing — is, DeMuth says, “a complementary means of taxation evasion”: It enables the political class to provide today’s voters with significantly more government benefits than current taxes can finance, leaving the difference to be paid by voters too young to vote or not yet born.

…High affluence and new technologies have, DeMuth believes, “led to unhealthy political practices.” Time was, the three basic resources required for effective political action — discretionary time, the ability to acquire and communicate information and persuasion skills — were scarce and possessed only by elites. But in our wealthy and educated society, interest groups can pressure government without being filtered by congressional hierarchies…

Dr. George Will via Uncle Sam’s hidden cost: The surreptitious funding of the welfare

Happy Tax Freedom Day ®

Five days later than last year…

Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year. Tax Freedom Day provides Americans with an easy way to gauge the overall tax take-a task that can otherwise be daunting due to the multiplicity of taxes at various levels of government and “hidden” taxes and fees that are often buried in the cost of living. Tax Freedom Day computed by dividing total tax collections by the nation’s income, as reported by the Bureau of Economic Analysis. Every dollar that is officially called income by the government is counted, and every payment that is officially considered a tax is counted. The resulting percentage is then converted into days of a 365-day calendar year.

Tax Freedom Day 2013 is April 18th. In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 29.4 percent into the year. To read the full report, click here.

via Tax Freedom Day ® | Tax Foundation

Tax Day and Back from Travel

Tax Day

Today’s a good day to reflect on what a fair level of taxation is.  If someone taking 100% of the fruits of your labor is slavery and taking 0% is absolute economic freedom then what’s the balance that results in the least loss of freedom yet maintains our necessary spending?  I say necessary because as Dr. Thomas Sowell says in today’s quote “The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.”  There’s no doubt that we’ve collectively elected generations of politicians from both parties who have been hell bent on taking our hard earned income in order to line their pockets, favor their friends and build their pet projects.

Back From Travel

I’m just back from a few weeks of travel and will share some of the thoughts I’ve been toying with over the next week or so and some of the preparedness projects that the weather will finally let me tackle.

Sowell on The Real Economic Goal – Today’s Quote

The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.

Dr. Thomas Sowell

Faber on Systemic Crisis – Today’s Quote

When you print money [qualitative easing], the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn’t flow evenly into the system.

Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S.

So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.

Marc Faber via FABER: Gold Won’t Be A Place To Hide – Business Insider

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