Thursday, September 29, 2011 : Obama’s Teacher Tax Whopper : Obama’s Teacher Tax Whopper

Obama’s Teacher Tax Whopper

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President Obama’s claim that he pays a lower tax rate than a teacher making $50,000 a year isn’t true. A single taxpayer with $50,000 of income would have paid 11.9 percent in federal income taxes for 2010, while the Obamas paid more than twice that rate — 25.3 percent (and higher rates than that in 2009 and 2008). And if the $50,000-a-year teacher were in Obama’s tax situation — supporting a spouse and two children — he or she would have paid no federal income taxes at all.

The outcome is the same whether we count payroll taxes or not, and even if we look at what the $50,000 earner will pay on 2011 income. Whatever the assumption, the rates Obama paid were higher — and usually much higher.

The president was on safer ground when he stuck to talking about billionaire investor Warren Buffett, who wrote in a much-quoted Aug. 14 New York Times opinion piece — headlined “Stop Coddling the Super-Rich” – that he paid a lower effective tax rate than any of the 20 other people who work in his office. That may well be true, though we have no access to Buffett’s tax returns or those of his employees.

But the president went too far when he started using his own tax rate to make the argument that “millionaires and billionaires” should pay higher taxes. On Sept. 26, Obama said at a Democratic National Committee event in West Hollywood, Calif.:

Obama, Sept. 26: I shouldn’t be paying a lower effective rate than a teacher, or a firefighter, or a construction worker. And they sure shouldn’t be paying a higher tax rate than somebody pulling in $50 million a year. It’s not fair, and it’s not right. And it’s got to change.

And earlier, at a town hall meeting in Mountain View, Calif., Obama said:

Obama, Sept. 26: Somebody who’s making $50,000 a year as a teacher shouldn’t be paying a higher effective tax rate than somebody like myself or Jeff [Weiner, CEO of Linkdin], who’ve been incredibly blessed.

When we asked the White House about this, spokesman Matthew Vogel said: “The President was not offering a literal comparison of his personal tax rate. … He doesn’t say ‘I pay a lower tax rate than my secretary’ or anyone else.” We disagree. The president said: “Somebody who’s making $50,000 a year as a teacher shouldn’t be paying a higher effective tax rate than somebody like myself.” And in our judgment, that’s as “literal” as any comparison gets. Readers may interpret the president’s words as they please. The fact is, Obama pays higher rates than the $50,000-a-year teacher he mentioned.

Obama has released his returns for 2008, 2009 and 2010. What they show is that he made millions, mostly from the sale of two best-selling books, and he also paid millions in federal income taxes. His federal income tax rates for those years were 31.3 percent, 31.9 percent and 25.3 percent, respectively. And those are all higher than rates paid by anybody making $50,000 a year, whether they are a teacher or “a firefighter, or a construction worker.”

A family like the Obamas — with two children under age 17 — would actually have received a $37 tax refund in 2010 on income of $50,000, thanks largely to the $1,000 per child tax credit and Obama’s $800 “Making Work Pay” tax credit. Those are our calculations, which we confirmed with Nick Kasprak, an analyst at the Tax Foundation.

A childless couple making $50,000 would have paid more — but still only a rate of 6.1 percent, assuming only the standard exemptions and deductions. And a single taxpayer would have paid 11.9 percent, still far short of the Obama’s effective federal income tax rate.

It’s the same even if we include federal payroll taxes. We calculated that Obama’s overall rates — including payroll taxes — would be 31.8 percent in 2008, 32.2 percent in 2009 and 26.5 percent in 2010. For Obama’s $50,000-a-year teacher, the equivalent rate in 2010 would have been 25.3 percent if single and without children, 19.9 percent if married without children, and 14.1 percent if married with two children under age 17.

Any way we figure it, the $50,000-a-year teacher (or firefighter, or construction worker) paid a lower rate than Obama last year. What’s more, the teacher will pay an even lower overall rate on this year’s income. The “Making Work Pay” credit has expired, which will push up the effective income tax rate a bit (though still nothing close to Obama’s). But that loss is more than offset by this year’s “payroll tax holiday,” which has cut the worker portion of Social Security taxes by 2 percentage points — which is worth $1,000 to workers (including teachers) making $50,000.

We don’t deny that there’s some truth in the general point Obama and Buffett make about “millionaires and billionaires” sometimes paying lower tax rates than ordinary, middle-income workers. But stress the word “sometimes.” Very wealthy people often take some or all of their income in the form of dividends and profits on capital gains, which are taxed at lower rates than ordinary income. It’s also the case that Social Security taxes fall only on wage and salary income, and only up to a limit that is currently $106,800. So our $50,000 teacher pays Social Security taxes on every dollar of income, while those same payroll taxes fall only on a relatively small portion of the earnings of somebody making $1 million.

Nevertheless, the president pursued his applause line well beyond the boundaries of truth when he started claiming (or if you prefer, insinuating) that he himself pays a lower rate than a middle-income teacher. He doesn’t.

– Brooks Jackson

Memo to tax wonks: Our methodology is as follows:

  • We calculated Obama’s federal income tax rate for each year by dividing the amount on line 60 of his form 1040 (“total tax”) by the amount on line 22 (“total income”).
  • We calculated Obama’s Social Security taxes on the assumption that he and his employer (the U.S. government) each paid the required 6.2 percent on his Senate and White House pay up to the maximum for taxable wages, which was $102,000 in 2008 and $106,800 for 2009 and 2010.
  • Since there is no limit on the amount of taxable wages for Medicare taxes, we assumed that both Obama and his employer each paid the 1.45 percent rate on every dollar he reported on line 7 of his Form 1040 (“Wages, salaries, tips” from Form W-2).
  • In all cases, when calculating combined payroll and income tax rates, we have followed the same method used by Buffett in his New York Times piece (and in general by economists and tax analysts as well). That is, we have counted the employer-paid portion of both Social Security and Medicare taxes as though they were paid by the worker, and we have also added those amounts to the worker’s income when calculating the overall rate. This is based on the economic theory that employers see the taxes as a part of total compensation, and that they would pay it as salary if the worker paid that half of the tax instead. (Although this also happens to be the method most favorable to Obama, the results still disprove his claim.)
  • For our hypothetical $50,000 earner, we calculated 2010 federal income tax liabilities using the 2010 “Tax Calculator” on the H&R Block website. Those calculations agree with the independent calculations of analyst Kasprak at the Tax Foundation. We used the Tax Foundation’s “2011 Marginal Rates Calculator” for 2011 figures.

Cain: Most Blacks 'Brainwashed' By Liberal Views

Cain: Most Blacks 'Brainwashed' By Liberal Views

Cain: Most Blacks 'Brainwashed' By Liberal Views

Thursday, 29 Sep 2011 12:04 PM

By Henry J. Reske

GOP presidential candidate Herman Cain said that while African Americans have been brainwashed to oppose conservative views, many are rethinking their position and may not necessarily vote for President Barack Obama’s reelection.

Cain, the former head of Godfather’s Pizza, made his comments on CNN’s “The Situation Room” in response to a questioned posed by host Wolf Blitzer, He asked, “Why is the Republican Party basically poison for so many African Americans?”

“Because many African-Americans have been brainwashed into not being open minded, not even considering a conservative point of view,” Cain said. "I have received some of that same vitriol simply because I am running for the Republican nomination as a conservative. So it's just brainwashing and people not being open minded, pure and simple."

Blitzer responded, “That’s a strong word to talk about your fellow African Americans, brainwashed?”

“For two-thirds of them, Wolf, that is the case,” Cain said. “Now, the good news is I happen to believe that a third to 50 percent of the black Americans in this country, they are open-minded. I meet them every day. They stop me in the airport. And so this whole notion that all black Americans are necessarily going to stay and vote Democrat and vote for Obama, that's simply not true. More and more black Americans are thinking for themselves. And that's a good thing."

Cain said he was making inroads into the black vote and believed that if he was the GOP nominee a substantial number of African Americans would vote for him.

"I do believe a third (of African-Americans) would vote for me, based upon my own anecdotal feedback,” he said. “Now, they won’t be voting for me because I'm black they’ll be voting for me because of my policies."

Read more on Cain: Most Blacks 'Brainwashed' By Liberal Views
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Tuesday, September 27, 2011

Corporation tax rates around the world. How much do companies pay? | News |

Corporation tax rates around the world. How much do companies pay? | News |

Corporation tax rates around the world. How much do companies pay?

Corporation tax - the rate that companies pay - is a political minefield, as the revelations about Barclays show. Find out how much each country charges - and who is the highest

Get the data

Corporation tax rates around the world. How much do companies pay? Photograph: Dougal Waters/Getty Images

Corporation tax is a political battleground - as this week's revelations about Barclays shows.

Over the last 20 years, corporation tax has increasingly been used as a weapon in the global battle to attract investment from footloose multinationals. Rates have come down from highs in the early 1980s to record lows, as you can see from the chart below:

Press play to see how rates changed over time, compared to national debts. Change the options to see different patterns. Download the spreadsheet for fullscreen version

The data, from the OECD shows that while GDP has stagnated and the national debts of the developed world have increased, rates have gone down. And the developed world's highest corporation tax rates? Interestingly, it's the US (39.25%) and Japan (39.54%).

When Margaret Thatcher came to power in 1979, the corporation tax take, at £4.6bn, formed 5.4% of total tax revenues. Last year, the £38.5bn paid by Britain's companies made up 7% of the government's tax take.
Corporation tax receipts from the financial sector ballooned in the boom years, from less than £6bn in 2003 to £10.3bn in 2007, accounting for more than a quarter of all corporation tax revenues, before crashing to less than £5bn last year, wrote Heather Stewart

Profits have tended to increase as a proportion of GDP across the developed world, while wages have fallen, driven by factors including cut-price labour from China and India. Some of the increase in tax take is down to clever tax planning: as corporation tax rates have dipped below personal tax rates, individuals have had the incentive to create companies and declare profits, instead of paying themselves wages

The full data - including a breakdown year by year back to the 1980s - is below. What can you do with it?

Data summary

Corporation tax rates by country

Click heading to sort. Download this data

Combined corporate tax rate, %
Income from corp. tax, % of GDP
Net debt, % of GDP
GDP change on previous year, %
Australia 30.0 .. 0.4 3.3
Austria 25.0 1.7 41.7 2.0
Belgium 34.0 2.5 82.4 2.1
Canada 29.5 2.5 31.4 3.0
Chile 17.0 .. 5.2
Czech Republic 19.0 3.7 3.5 2.4
Denmark 25.0 2.4 0.3 2.2
Finland 26.0 2.0 -56.6 2.7
France 34.4 1.4 57.1 1.6
Germany 30.2 1.3 50.5 3.5
Greece 24.0 0.0 97.3 -3.9
Hungary 19.0 2.2 61.6 1.1
Iceland 15.0 1.1 45.2 -3.6
Ireland 12.5 2.4 61.5 -0.3
Italy 27.5 3.1 103.3 1.0
Japan 39.5 2.4 114.0 3.7
Korea 24.2 3.7 -36.6 6.2
Luxembourg 28.6 5.4 -41.6 3.3
Mexico 30.0 .. 5.0
Netherlands 25.5 .. 34.7 1.7
New Zealand 30.0 3.3 -4.4 2.2
Norway 28.0 8.2 -157.0 0.5
Poland 19.0 .. 29.0 3.5
Portugal 26.5 .. 63.2 1.5
Slovakia 19.0 2.8 24.5 4.1
Spain 30.0 2.2 43.4 -0.2
Sweden 26.3 2.8 -21.1 4.4
Switzerland 21.2 3.4 5.7 2.7
Turkey 20.0 1.9 8.2
United Kingdom 28.0 2.8 51.3 1.8
United States 39.2 2.1 67.8 2.7

Nero in the White House

Nero in the White House

Nero in the White House

Posted: August 08, 2011
5:20 pm Eastern

© 2011

Three significant historical events have been eclipsed by Obama: 1) Jimmy Carter will no longer be looked upon as the worst president in American history; 2) Richard Nixon and Bill Clinton will no longer be recognized as the greatest liars in presidential history; 3) Clinton's stain on Monica's dress, and what that did to the White House in general and the office of the president specifically, will forever pale in comparison to the stain and stench of Obama.

I need not spend much time on the failure of Obama as president. His tenure has been a failure on every measurable level. So much so, in fact, that some of the staunchest, most respected liberal Democrats and Democratic supporters have not only openly criticized him – some even more harshly than this essayist – but they have called for him to step down.

Richard Nixon's words "I am not a crook," punctuated with his involvement in Watergate, and Bill Clinton's finger-wagging as he told one of the most pathetic lies in presidential history, in the aftermath of Obama, will be viewed as mere prevarications.

Mr. Nixon and Clinton lied to save their backsides. Although, I would argue there are no plausible explanations for doing what they did, I could entertain arguments pursuant to understanding their rationales for lying. But in the case of Obama, he lies because he is a liar. He doesn't only lie to cover his misdeeds – he lies to get his way. He lies to belittle others and to make himself look presentable at their expense. He lies about his faith, his associations, his mother, his father and his wife. He lies and bullies to keep his background secret. His lying is congenital and compounded by socio-psychological factors of his life.

Never in my life, inside or outside of politics, have I witnessed such dishonesty in a political leader. He is the most mendacious political figure I have ever witnessed. Even by the low standards of his presidential predecessors, his narcissistic, contumacious arrogance is unequalled. Using Obama as the bar, Nero would have to be elevated to sainthood.

As the stock markets were crashing, taking with them the remaining life saving of untold tens of thousands, Obama was hosting his own birthday celebration, which was an event of epicurean splendidness. The shamelessness of the event was that it was not a state dinner to welcome foreign dignitaries, nor was it to honor an American accomplishment – it was to honor the Pharaoh, Barack Hussein Obama. The event's sole purpose was for the Pharaoh to have his loyal subjects swill wine, indulge in gluttony and behavior unfit to take place on the property of taxpayers, as they suffer. It was of a magnitude comparable to that of Tyco CEO Dennis Kozlowski's $2 million birthday extravaganza for its pure lack of respect for the people.

Permit me to digress momentarily. The U.S. Capitol and the White House were built with the intent of bringing awe and respect to America and her people. They were also built with the intent of being the greatest of equalizers. I can tell you, having personally been to both, there is a moment of awe and humility associated with being in the presence of the history of those buildings. They are to be honored and inscribed into our national psyche, not treated as a Saturday night house party at Chicago's Cabrini-Green.

The people of America own that home Obama and his wife continue to debase with their pan-ghetto behavior. It is clear that Obama and family view themselves as royalty, but they're not. They are employees of "we the people," who are suffering because of his failed policies. What message does this behavior send to those who today are suffering as never before?

What message does it send to all Americans who are struggling? Has anyone stopped to think what the stock market downturn forebodes for those 80 million baby boomers who will be retiring in the next period of years? Is there a snowball's chance in the Sahara that every news program on the air would applaud this behavior if it were George W. Bush? To that point, do you remember the media thrashing Bush took for having a barbecue at the White House?

Like Nero – who was only slightly less debaucherous than Caligula – with wine on his lips Obama treated "we the people" the way Caligula treated those over whom he lorded.

Many in America wanted to be proud when the first person of color was elected president, but instead, they have been witness to a congenital liar, a woman who has been ashamed of America her entire life, failed policies, intimidation and a commonality hitherto not witnessed in political leaders. He and his wife view their life at our expense as an entitlement – while America's people go homeless, hungry and unemployed.

Read more: Nero in the White House

Monday, September 26, 2011

Small dent in jobless rate seen from Obama's plan - BusinessWeek

Small dent in jobless rate seen from Obama's plan - BusinessWeek

Small dent in jobless rate seen from Obama's plan

Even if Congress heeds President Barack Obama's demands to "pass this bill right away" and enacts his jobs and tax plan in its entirety, the unemployment rate probably still would hover in nosebleed territory for at least three more years.

Why? Because the 1.9 million new jobs the White House says the bill would produce in 2012 falls short of what's needed to put the economy back on track to return to pre-recession jobless levels of under 6 percent, from today's rate of 9.1 percent.

That's how deep the jobs hole is. The persistent weakness of the U.S. economy has left 14 million people unemployed and more than 25 million unable to find full-time work.

Economists of all stripes pretty much agree that it will be a long, hard road no matter what Congress does. Right now, the Republicans who run the House and the Democrats who lead the Senate aren't finding much common ground.

Obama estimates his American Jobs Act would lower unemployment by just a single percentage point by next year, to just over 8 percent, heading into the 2012 presidential election.

Burned before by making overly optimistic job-creation predictions, the White House turned to prominent outside economists to crunch the numbers.

The projection of 1.9 million new jobs, a 1 percentage point drop in the unemployment rate and a 2 percentage point increase in the gross domestic product under Obama's plan came from Mark Zandi, chief economist of Moody's Analytics.

But Zandi said in an interview his forecast also is based on an assumption that "the president's entire package is passed by the end of the year," a slim prospect given the current divided leadership in Congress, and that there are no other budgetary policy changes.

"I assumed that it would be paid for," Zandi said. "I didn't know when I did that simulation how the president proposed to pay for it."

Since then, Obama has said he would pay for his $447 billion package with permanent income tax increases of about $150 billion a year, mostly on wealthy individuals and corporations, in addition to spending cuts. That's drawn criticism from Republicans, who say any tax increases could further stall the fragile recovery.

Zandi, who has advised both Republican and Democratic lawmakers, said he's still sticking with his forecast, mainly because the stimulus in the plan, including a temporary reduction in Social Security taxes for both employees and employers and infrastructure spending, would come in 2012 and be paid for later.

But there is one feature Obama doesn't emphasize.

Zandi said his job-creation figure only applies to 2012.

"Beginning in 2013, and certainly into 2014, the plan is a drag on the economy because the stimulus starts fading away," he said. "So by 2015, the economy is in the same place as now, as if there were no jobs package."

Also, Zandi said, his forecast does not leave any room for a new recession. If that happens, all bets are off.

"So it's very important to get as many people working as fast as possible," he said. "If we go back into recession, it is going to be very difficult to get out. And it's going to cost taxpayers tremendously."

Job creation has ground to a virtual standstill. The economy produced a scant 20,000 net new jobs in June, 85,000 in July and none in August. Economic output, as measured by the GDP, has been growing this year at an anemic annual rate below 1 percent.

The global economy is showing no signs of strengthening. A divided Federal Reserve is nearly out of ammunition for additional stimulus. And the U.S. is once again facing the possibility of a government shutdown at the end of next week.

Obama promoted his package anew in his Saturday radio and internet address, saying the mix of tax cuts and direct spending would put tens of thousands of teachers back to work and modernize at least 35,000 schools. He again called on lawmakers to pass the bill "right now."

The Obama-Zandi target of 1.9 million new jobs next year, or 158,000 a month, is somewhat higher than private analyses that suggest the plan would create 100,000 to 150,000 jobs a month.

Heidi Shierholz, economist for the labor-leaning Economic Policy Institute, calculates it would take job growth of 400,000 every month for three years in a row to get back to the 5 percent jobless rate last seen in December 2007, at the recession's outset.

"To get down to 5 percent in five years, we need around 280,000 jobs every month," she added. "Right now, we're more than two years into the official recovery, and we're still bumping along at extremely low levels."

What if Obama gets none of what he requested? She said failure to renew some current anti-recessionary programs such as extended unemployment insurance and the existing Social Security tax break for employees "will be a big blow" both to the economy and to the employment picture.

More likely, Congress will probably produce a watered-down version.

As long as the GDP grows at an annual rate beneath 2.5 percent, it cannot create enough jobs for new entrants into the workforce, let alone to re-employ those laid off during the downturn, said Martin Regalia, chief economist for the U.S. Chamber of Commerce, the nation's biggest business lobby.

The chamber estimates it will take 20 million jobs over the next decade to get the economy back to pre-recession levels. It has its own jobs plan, which includes increased trade, greater oil drilling, quicker road and bridge construction and temporary corporate tax breaks.

"If you want to go from 9.1 percent down to 5.5 or 6 percent unemployment, you're going to have to grow roughly at 4.5 percent (GDP) for three years," Regalia said. "I don't see that in the forecast."

In the first six months of this year, the GDP grew at a scant 0.7 percent rate. Private forecasters see it growing about 2 percent in the final six months of 2011, about 2.5 percent throughout 2012, and increasing to about 3.2 percent in 2013.

Obama is quick to acknowledge a rocky road ahead.

"For a decade now, incomes and wages have flat-lined for the American people -- for ordinary Americans, for working families," he says. "They are working harder, making less, with higher expenses. And that's been going on for a long, long time."

Scary truth about Obamacare keeps seeping out | Examiner Editorial | Opinion | Washington Examiner

Scary truth about Obamacare keeps seeping out | Examiner Editorial | Opinion | Washington Examiner

Scary truth about Obamacare keeps seeping out

When House Speaker Nancy Pelosi famously said that she had to pass Obamacare through Congress so that we could find out what was in it, Americans were given a preview of what they are seeing now -- a profusion of legislative errors and broken promises related to President Obama's virtual government takeover of health care. Just this month, we have seen another tranche of bad Obamacare news.

Last week, Howard Dean, former governor of Vermont and chairman of the Democratic National Committee from 2005 to 2009, acknowledged that -- as Obamacare's critics have contended all along -- the bill will prompt many employers to drop their health plans. "Most small businesses are not going to be in the health insurance business anymore after this thing goes into effect," he said. Dean, of course, spun this as a cost reduction for business. But in fact it undercuts two key promises Obama made in order to pass his bill. First, if you like your health coverage, you probably won't be able to keep it. Second, millions of Americans will be dumped by their employers into subsidized insurance exchanges, which means that Obamacare will add significantly to the deficit.

Then again, thanks to a glaring but heretofore unnoticed flaw in the bill's language, Obamacare might not cost as much as expected because it won't serve those it was intended to help. Because supporters failed to read their bill before passing it, the letter of the law provides that low-income Americans in many states will not be eligible for the promised subsidies to purchase insurance. This simple technical mistake, reported this month by Investor's Business Daily, threatens to un-insure millions of those currently insured if they are dumped by employers into federally established insurance exchanges.

Also last week, we learned the true nature of another of Obamacare's empty promises. One of the key programs that made Obamacare appear deficit-neutral on paper -- the CLASS Act -- has now been exposed as nothing more than an accounting gimmick. On paper, this old-age care program brought in extra revenue in its early years by charging premiums without paying out benefits until the out years. It thus helped Obamacare's bottom line temporarily, but obliterated it in the long run. The fact that Obama's Department of Health and Human Services shelved the program indefinitely exposed the president's sleight of hand. Obamacare was designed to game the budget referees so that a massive, budget-busting bill could pass under the radar.

Obamacare, like most large-scale government schemes, has proven to be one man's dream and most Americans' nightmare. Obama has not yet paid the full political price for its passage, but Americans will pay even more dearly if the courts leave it in force.

New gaffe: Obama hails America's historic building of 'the Intercontinental Railroad' -

New gaffe: Obama hails America's historic building of 'the Intercontinental Railroad' -

New gaffe: Obama hails America's historic building of 'the Intercontinental Railroad'

Barack Obama's political rally by the Brent Spence Bridge in Ohio 9-22-11

"We’re the country that built the Intercontinental Railroad," Barack Obama.

That's what the president of the United States flat-out said Thursday during what was supposed to be a photo op to sell his jobs plan next to an allegedly deteriorating highway bridge.

A railroad between continents? A railroad from, say, New York City all the way across the Atlantic to France? Now, THAT would be a bridge!

It's yet another humorous gaffe by the Harvard graduate, overlooked by most media for whatever reason. Like Obama saying Abraham-Come-Lately Lincoln was the founder of the Republican Party. Or Navy corpseman. Or the Austrian language. Fifty-seven states. The president of Canada. Etc.

If you talk as much as this guy likes to talk instead of governing, if you believe you are a Real Good Talker as much as this guy does, you're gonna blow a few lines. But this many?

No doubt, we'll see a collection of Obama's Best Bombs on 'Saturday Night Live' this weekend, one right after the other. No doubt. Can you imagine the media coverage of such repeated historical ignorance if it had been the last Ivy League alum president who said it?

The Democrat had traveled to Ohio on Thursday to tout his American Jobs Act, the....

...$447-billion boondoggle he proposed to a joint session of Congress this month because his previous $787-billion boondoggle didn't create anywhere near as many jobs as Joe Biden had promised.

This president is in a jam. The economy sucks. Unemployment sucks. His job approval sucks and his economic approval sucks worse. Independents have abandoned the flailing White House occupant, so are some Jews, liberals and even blacks. His Hollywood bundlers had trouble selling out the POTUS fundraisers in L.A. next week.

Obama's own Democratic Party controls the Senate and won't put their leader's jobs bill on the schedule because more wild spending like this doomed bill could also doom some Dem senators next year.

So here's how the ex-state senator from the Chicago machine reacts: At an operating cost of $181,000 per hour, he flies Air Force One nearly four hours roundtrip for 17 minutes of remarks touting infrastructure repairs by a bridge that doesn't need them.

The real reason he's at the Brent Spence Bridge is because it links the home states of both congressional Republican leaders, John Boehner and Mitch McConnell. So Obama can cutely blame Republicans for holding up his jobs bill, even though it's Nevada Democrat Harry Reid.

Obama turns the empty rhetoric into a pep rally for himself, leading the obedient audience to chant, "Pass this bill! Pass this bill!"

This guy, who will ride around in Secret Service SUVs for the rest of his life, has this thing for railroads that other people should ride in. So, according to the White House transcript (scroll down for full version and related stories), here's what passes for Obama leadership:

Now, we used to have the best infrastructure in the world here in America. We’re the country that built the Intercontinental Railroad, the Interstate Highway System. We built the Hoover Dam. We built the Grand Central Station.

So how can we now sit back and let China build the best railroads? And let Europe build the best highways? And have Singapore build a nicer airport?

Quick question: Has anyone ever heard any American express jealousy over Singapore's sweet airport?

Herman Cain Takes On Morgan Freeman For Calling Tea Party Racist |

Herman Cain Takes On Morgan Freeman For Calling Tea Party Racist |

Herman Cain Takes On Morgan Freeman For Calling Tea Party Racist

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Noel Sheppard's picture

As NewsBusters reported Friday, Oscar-winning actor Morgan Freeman during an interview on CNN said members of the Tea Party are racists willing to do whatever they can to "get this black man" out of the White House.

After his win in Saturday's Florida straw poll, Republican presidential candidate Herman Cain responded to Freeman during an interview with Fox News's Neil Cavuto (video follows with transcript and commentary):

NEIL CAVUTO: Morgan Freeman, the actor, has been very critical of Tea Parties, and said that what they’re doing is racist based, and going after and unseating Obama has at its underpinnings racism. I’m paraphrasing here, but what do you make of that argument?

HERMAN CAIN: Well, first of all, I doubt if Morgan Freeman, with all due respect, who is a great actor, has he ever been to a Tea Party? Most of the people that are criticizing the Tea Parties, Neil, about having a racist element, they have never been to a Tea Party.

CAVUTO: But wait a minute, wait a minute. He has played, wait, wait, wait. He has played a President of the United States.

CAIN: Oh. Great, yeah, in a movie. This is real life out here on the campaign trail, man. This is not a movie.

CAVUTO: So, are you offended by that?

CAIN: No, I’m not offended by it. I just, I just think that it is sad that they’re so short-sighted in really understanding what the whole Tea Party citizen movement is all about. I’m not offended by it, because it doesn’t slow down my momentum. It doesn’t slow down the reaction that I get from people. They know that I bring my message from the heart and the head, and they’re responding to it. So, name calling is something that’s going to continue in this because they don’t know how to stop this movement. And this movement is making a big difference in politics, because a lot of the traditional Democrats are moving to the center or moving over to vote for conservatives. They’re taking another look at a Herman Cain.

Cain was spot on.

The past 30 months have been amazing to watch folks on the left tell all kinds of tales about what the Tea Party is. Yet when you ask them if they've ever been to a Tea Party event, they all say "No."

As Cain observed, Freeman is likely one of the millions of liberals that hate the Tea Party but have never once been to an event sponsored by the organization they so passionately despise.

How ironic that these are the same people who claim to be on the more enlightened, open-minded side of the political aisle.

Read more:

Articles: Obama's 'Hate the Rich' Campaign

Articles: Obama's 'Hate the Rich' Campaign

Obama's 'Hate the Rich' Campaign

By Lloyd Marcus

In his so-called jobs speeches, Obama exploits class envy shrouded in fairness. President Obama continues to escalate his divisive assault on achievers, purposely pitting Americans against each other.

Obama's "Hate the Rich" campaign appeals to our lower nature and encourages the sin of covetousness. If Obama's despicable campaign proves successful, it will be a sad commentary about who we have become as a people and how far we have fallen as Americans.

It angers me that Obama and his minions in the liberal media have put achievers, risk-takers, on the defensive. It angers me that Obama's followers think that they are entitled to the fruit of someone else's labor.

Americans are extremely generous and willing to help people in need, domestic and foreign. But no one is entitled to share in the bounty resulting from someone's risk, blood, sweat, and tears. Any government which confiscates and redistributes wealth is immoral and evil.

God has designed life so that success requires backbone -- in other words, taking risks. Playing it safe profits very little. God's system is anathema to liberals. They strive to achieve "equal outcomes" or "fairness," as they describe it, via legislation and redistribution.

Mary and I fed seagulls at the beach by throwing crackers on the sand close to us. Upon calculating the risk, seagulls moved in close and fed. Two bold seagulls feasted on crackers by feeding directly from Mary's hand. Then there were the seagulls who were too fearful to come close enough to retrieve any crackers. Interestingly, the cowardly seagulls screamed in frustration and even attacked the bold seagulls who were enjoying the rewards of their risk-taking.

If a majority of Americans have become spineless, lazy, and envious seagulls, demanding that the government take from the courageous to give to them, then the spirit of America is dead.

Quite frankly, the entitlement mindset turns my stomach. My mom worked as a domestic cleaning white folks' homes. My dad was one of the first blacks to break the color barrier into the Baltimore Fire Dept. My parents were hardworking Christians and honorable people. My four younger siblings and I were not taught that anyone owed us anything. Today, we are all successful, responsible citizens.

I suspect that the mentality of my parents was typical of most Americans in the 1950s. Charities and churches assisted the poor before government replaced daddies (President Johnson's War on Poverty) in 1964, enslaving the poor to a cradle-to-grave dependency on government solely to secure Democrat votes. This strategy continues to devastate the black family; over 70% of black babies are born out of wedlock.

Blacks progressing from being brought to America as slaves to a black man being voted leader of the free world epitomizes the godliness and greatness of America. And yet, Obama and company, displaying a severe lack of character, relentlessly play the race, victim, and class envy cards, designed to divide Americans to further the Obama administration's socialistic agenda.

Great leaders appeal to their followers' higher nature, inspiring them to dig deeper into their souls and soar higher than they thought possible for themselves. America's first president, George Washington, was such an inspirational leader.

As an American who happens to be black, I was badgered, "Lloyd, you should be delighted by the historical context of America electing it's first black president." I was not.

Feeling like a lone voice crying in the wilderness, I dared to follow the instruction of an extraordinary leader, Dr. Martin Luther King, Jr. Therefore, I judged Barack Hussein Obama by the content of his character rather than the color of his skin.

Obama's admitted plan to "spread the wealth around" and his anti-American associations told me that he was the wrong man to lead the greatest nation on the planet. Obama's divisive, dictatorial, and bullying behavior has proven me correct.

Our president is nothing more than a Chicago thug community agitator stirring up discontent, inspiring racial hatred and hatred for achievers. The bottom line of every Obama speech regarding the economy is you have too little because those guys have too much.

Obama's approach is non-presidential, totally low-rent, appealing to our lower nature, and totally despicable. Lord help us.

Lloyd Marcus, proud unhyphenated American, is the chairman of The Campaign to Defeat Barack Obama. Please help him spread his message by joining his Liberty Network. Lloyd is singer/songwriter of the American Tea Party Anthem and author of Confessions of a Black Conservative, foreword by Michele Malkin.

Articles: Don't Blame the Bankers

Articles: Don't Blame the Bankers

Don't Blame the Bankers

By F. Swemson

While it's true that there are some pretty crooked bankers and Wall Street types floating around, bankers as a whole aren't a bunch of crooks, any more than any other group of professionals are (the people who control the "central banks" being the possible exception). At the moment however, American bankers are being denigrated as greedy parasites and the cause of our economic woes on a daily basis by politicians and the media. In fact it's the politicians themselves, and their accomplices in the media who are to blame for our current dire financial position. Bankers are merely their current scapegoat, just as the health insurance companies were during the fight over ObamaCare.

A dominant theme in America's history over the last 100+ years, has been our government's never ending attempts to regulate and control our once free market economy. History shows us clearly, that every single time government has tried to "fix" something in our economy, their actions made things worse rather than better, and oftentimes created new problems as well.

An early example of how government intervention into the free market economy never seems to work out well can be seen in the creation of the first transcontinental railroads. There simply wasn't sufficient traffic in the mid 19th century to justify the huge costs involved in building those railroads, but the government intervened in the belief that a coast-to-coast railway system would enhance America's prestige abroad. They did so by giving huge land grants adjacent to the rail routes to the builders of each railroad. But as the nation's economy and rail traffic grew exponentially, the railroads proved unable to handle the traffic. The reason why was because they were built to get land grants, not to carry traffic. As a result, they were built in the cheapest and most shoddy way possible. In contrast, one of the only railroads that didn't fail, the Great Northern railroad, built by James Jerome Hill, never received any land grants from the government and was 100% financed by private investors.

Starting with a railroad that was already bankrupt, that Hill and his investors purchased, the Great Northern was built a little bit at a time, expanding into the next market only after their previous extension started to turn a profit. Anyone familiar with the term "Robber Barons" knows who got the blame for the failure of the railroads. The free market system was blamed, but the railroads weren't creatures of the free market. Instead, they were government created monopolies. Government interference in the free market caused the problem, and yet the free market system took the blame.

Government interference in the free market didn't reach full bloom until 1890, with the passage of the Sherman Antitrust Act. Americans were always wary of the concentration of power in the hands of the few. Unfortunately they didn't discriminate between political and economic power. It was often heard that it made no difference to the working man whether he took orders from a bureaucrat or from his employer, however that wasn't true. Political power was negative by its very nature. Follow the rules or we'll take away your freedom or your property, the stick. Economic power on the other hand was positive. Do a good job and you'll get rewarded with increased earnings, the carrot.

The government's antitrust case against Alcoa Aluminum, begun in 1937, wasn't brought because Alcoa was doing anything dishonest or malicious in any way. Alcoa was prosecuted due to the mere fact that it dominated the aluminum market, which of course Alcoa had created in the first place. But while they may have had no competition in the aluminum market, Alcoa was still competing with alternative materials such as steel, and even wood, and when it was broken up, it was still a very small market indeed. In fact the entire aluminum industry at the time, was only 1/6th the size of the American shoe industry.

The true destructive nature of the Sherman Act was clearly revealed in the Alcoa decision rendered by Judge Learned Hand, in which he wrote of Alcoa in part:

"It was not inevitable that it should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel."

Alcoa was prosecuted because they did everything so well that nobody could compete with them. In an essay about the case published in 1966, Alan Greenspan wrote:

"ALCOA is being condemned for being too successful, too efficient, and too good a competitor. Whatever damage the antitrust laws may have done to our economy, whatever distortions of the structure of the nation's capital they may have created, these are less disastrous than the fact that the effective purpose, the hidden intent, and the actual practice of the antitrust laws in the United States have led to the condemnation of the productive and efficient members of our society because they are productive and efficient."

Industrialists today are still looked upon as the bad guys. In political cartoons wealthy industrialists and bankers are usually pictured as fat little men with mustaches in black suits and top hats, holding bags of money. They've even made a game of it as evidenced by the fact that the character is recognized by virtually everyone as the "Monopoly Man". The lesson is clear. To the Progressives and collectivists anyone who's rich and successful, probably got there by exploiting the worker or cheating the masses that comprise the market for his goods & services.

Now our government has announced that it's filing suit against 17 of the biggest banks and financial institutions. It's being done for the simple reason that Obama needs a scapegoat to blame the poor economy on, as his blame Bush strategy has become rather tiresome at this point. But are these banks and financial institutions really to blame for the mess we're in?

Since the economic collapse began with the sub-prime mortgage fiasco, we have to look closely at the real culprit, the CRA (The Community Reinvestment Act of 1977). The CRA was passed during the Carter administration, and greatly strengthened during the Clinton years. It was initially motivated by do-gooders on the far left who sought a way to clean up America's inner city slums. They figured that if the people living in those squalid homes actually owned them rather than paying rent to slumlords (like Valerie Jarrett and Tony Rezko), that they'd take pride in their homes and clean up those ghettos themselves. Of course this seemed like a noble idea at the time.

The problem, however, was that the people they targeted didn't have sufficient credit to qualify for the mortgages needed to buy those properties. The CRA fixed that by requiring banks and mortgage companies to put out a certain percentage of their loans to people who weren't creditworthy, i.e., to the poor in the areas where they did business. The banks had no choice but to comply for 2 reasons. The first was that if they didn't, the government threatened to pull their membership in the FDIC, which would make it almost impossible for the banks to attract depositors. The second reason was that after writing those "sub-prime" mortgages, they were able to sell them, with most of them going eventually to Fannie and Freddie.

The banks of course are privately owned businesses, and the executives who run them bear their primary responsibility to their shareholders. So their choices were rather limited. Either comply and make lots of money in fee income (from points and other fees charged when mortgages are generated), or refuse, in which case they'd likely go bankrupt.

With so much easy mortgage money available, people started buying homes strictly as investments. This of course caused the builders to build more housing than the market could absorb. Of course the banks did what they had to do in order to survive. One of the ways they came up with to sell off the mortgages they couldn't sell to Fannie or Freddie, was to package them in bundles and sell them as securities, with insurance (from AIG) to investors.

But it really wasn't insurance. By calling it something else, the government allowed AIG to write those "insurance" policies without having the capital reserves that all insurance companies are required to have in order to be sure that they can cover any potential losses. When the market collapsed, AIG wasn't able to make good on those policies, as a result. AIG of course went bankrupt, and the American taxpayers wound up bailing them out to the tune of $170 billion. Blaming the banks & Wall St. for the subprime fiasco is like blaming a wild animal for biting someone. The bankers were only doing what they had to do in order to survive in a hostile world, just like wild animals do when cornered.

Our current financial mess of course, is a lot more complicated than any of the individual problems of the railroads, or companies like Alcoa. The reason why is that the after effects of all of those years of government interference with our free market economy, are unfortunately cumulative. When you add up all of the ways that the government has screwed around with American business over the last hundred plus years, you get an America that's rife with corrupt crony-capitalism, and so deeply in debt, that any of several different events could have been the straw that broke the camel's back. That it turned out to be the government created housing bubble, shouldn't be surprising to economic historians, due to the enormous effect that a slowdown in the construction industry has on so many other industries that supply both products and services to the nation's builders.

The cause of the problem is easy to see for anyone with an objective and rational mind. The leftist, liberal and progressive elements of our government, in their effort to achieve power at any cost, are killing the golden goose of American business. We're only barely surviving right now, because there's still lots of seed corn for them to consume, but at the rate they're eating it (borrowing) the entire house of cards will likely collapse within the next few years, and I'm not just talking about America, as the death throes of the socialist governments of the European Union take place before our very eyes. It's become so bad that it's doubtful that America could survive another 4 years of an Obama presidency.

54 years ago, when Atlas Shrugged was published, Ayn Rand told us all what to expect if we continued on the path that we were on. I knew she was right when I first read Atlas in 1963. I just never thought it would happen so soon.

Sunday, September 25, 2011

Articles: Tax Demagogues Are Lying Liars, in One Graph

Articles: Tax Demagogues Are Lying Liars, in One Graph

Tax Demagogues Are Lying Liars, in One Graph

By Randall Hoven

The rich pay lower tax rates than we do. Bush's tax cuts were only for the rich. Both the Reagan and Bush tax cuts were sops to the rich. Schmucks like you and me pay all the taxes so the rich can ride free.

You hear these lies every day.

In case you think I make these lies up, here are some examples.

"Changes in tax rates have strongly favored the very, very rich." -Paul Krugman

"Like Ronald Reagan, President Bush began his term in office with big tax cuts for the rich[.]" -Paul Krugman

"We know, for instance, that taxes on the rich have fallen dramatically in recent decades." -Ezra Klein

"The rich pay a huge share of the total taxes in the United States because they have a huge share of the money." -Matthew Yglesias

"If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine -- most likely by a lot[.] Back in the 1980s and 1990s, tax rates for the rich were far higher[.]" -Warren Buffett

"Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that while Mr. Bush's tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top[.]" -Edmund Andrews, The New York Times

"And that's why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations -- tax breaks that small businesses and middle-class families don't get. And if tax reform doesn't get done, this plan asks the wealthiest Americans to go back to paying the same rates that they paid during the 1990s, before the Bush tax cuts." -President Obama

These lies are rebutted by a single graph produced by the Congressional Budget Office, below.

The taxes included in this chart are for all federal taxes, not just income taxes. Each quintile is one fifth of taxpayers, based on income. The top quintile is the one with the highest incomes.

From just this one graph, several observations can be drawn.

  • The most obvious observation is that the higher your income, the greater your federal tax rate is. Taxpayers in the top quintile paid about 25% of their income in federal taxes, while those in the bottom quintile paid about 5% in 2007.
  • The rate for the top quintile has been very steady for the last thirty years: about 25%. In fact, the rate since the Bush cuts went into full effect (2003-07) was about the same as twenty years before (1983-87).
  • The same cannot be said for the lower quintiles; they have trended downward, especially since the Bush cuts in 2003. For the lowest quintile in particular, the rate has drifted downward since 1984, from about 10% of income to about 4%. That is a cut in the tax rate of about 60% for the lowest quintile, versus no cut in rate for the top quintile.
  • Changes in these rates cannot be explained by changes in income. The rate is taxes paid divided by income. If your taxes went up only because your income went up, then your rate would not change.
  • Reagan's tax cuts became fully effective in 1983. But look at the trend in average tax rate for the highest quintile of earners after that. It went up. That upward trend on the richest Americans went up for seventeen years after Reagan's tax cuts.
  • The same cannot be said for the lower quintiles. Tax rates for the lower 80% of taxpayers remained virtually flat, or trended downward, from 1983 to 2000.
  • A cut on the capital gains tax rate became effective in 1997. Do you see any kind of accompanying dip in the average tax rate for the highest quintile in that year or shortly after? Nope. The rate is pretty flat from 1993 to 2000.
  • The Bush tax cuts did cut tax rates -- for all income groups. The cut was about 2%-3% of income for all quintiles. But since the lower income groups were paying lower rates in the first place, the constant cut across income groups meant that tax rates were cut proportionally more for lower income groups. For example: the top quintile was cut from about 27% to about 24%, which is a cut in the rate of 11%. But the bottom quintile was cut from about 7% to about 4%, a cut in the rate of over 40%.

Some lying liars have tried to obfuscate things, sometimes by including multiple taxes (e.g., personal income and payroll) and at other times by complaining that not all taxes are included. The above graph from the CBO includes all federal taxes. However, if you were to look at personal income taxes only, the observations above would be even more obvious. I recommend taking a look at a previous American Thinker Graph for the Day. Since about 2002, the average federal income tax on the bottom 40% of "taxpayers" has been negative: they collect more in credits than they pay in taxes.

There is one minor flaw in the above CBO graph: that top quintile includes a lot of taxpayers. In fact, in 2009, those making over $75,000 constituted the top 20.6% of taxpayers, or approximately the top quintile. So that top quintile includes some of the middle class plus the rich and "mega-rich" (a Warren Buffett term).

So let's look at that top quintile, shall we? The table below shows 2009 average federal income taxes as a percent of income (adjusted gross income less deficit) for the various income groups. The groups with incomes over $75,000 constitute the top quintile, approximately. (Data for the year 2009 is the latest available.)

Average Federal Income Taxes Paid, as Percent of Income


Average tax rate

Under $75K


$75K to $100K


$100K to $200K


$200K to $500K


$500K to $1M


$1M to $1.5M


$1.5M to $2M


$2M to $5M


$5M to $10M


$10M or more


The obvious observation from this data is that the rich pay higher taxes than the poor or middle-class. The rates are strictly progressive up to incomes of $5 M: each income group, up to $5M, paid a higher percentage of income in taxes than the next lower group.

It is true that the very highest income group, those making over $10M per year (the "mega-rich"), paid a lower rate than those making merely a few million. But that group still paid a higher percentage than all groups making less than half a million dollars. The average billionaire would pay a higher tax rate than his secretary unless he paid his secretary a couple million dollars per year.

Does it not strike you as odd that this "anomaly" in progressivity is used to justify increasing taxes on everyone making more than $200K per year? If the top 8,274 taxpayers are the ones who bother you, why are you raising taxes on the top three million taxpayers, a good several hundred thousand of whom already pay a higher rate than those 8,274?

There is a simple reason the "mega-rich" pay a slightly lower average rate on personal income taxes than the merely "rich." That reason is not some dark secret known only to tax loophole experts. It is that most of their income is from capital gains, which is taxed at a lower rate than "normal" income.

And there is a simple reason for that: capital gains have already been taxed in the form of corporate income taxes. Warren Buffett likes to include payroll taxes in his little anecdotal calculations, but he neglects to include corporate income tax, inheritance taxes, and other forms of taxes that are paid disproportionately by the mega-rich.

And by the way, total federal revenue in 2007, well after the Bush tax rates were in effect, was 18.5% of Gross Domestic Product. The 1960-2000 average was 18.2% of GDP. All that tax rate-cutting, and still the actual revenues collected were above the historical average.