Tag Archives: economy

Tax Increases on Corporations Help – Right?

I’m not sure why progressives don’t understand the concept that increasing expenses on corporations, whether they are large or small, results in the costs passed on the consumers. They somehow think that as companies have decreased expenses and thus increased margins, that all the money is passed on to the evil CEO’s. That’s just dead wrong and stupid.

Most important and often overlooked by idiotic progressives is the fact that when you increases the tax burden to business, it just get’s passed on to the consumers. That makes it a double whammy. Consumers pay normal taxes (income, sales, fees) plus the increased pricing on goods and services from the increased corporate tax burden. This adds to inflation which decreases spending power and further devalues the dollar.

When you listen to the drumbeat of the progressives, they are constantly calling for higher tax rates. The wealthy can afford it right? Big, evil corporations can afford it right? Just tax the corporations and watch the state coffers grow!

The warning – from executives at Microsoft, Hewlett-Packard (HP), Bank of America Merrill Lynch and Intel – spoke of the “damaging impact” on Ireland’s “ability to win and retain investment” should the country’s corporation tax rate be increased from 12.5pc.

Google issued its own statement. Considering the fact that Google employs about 2,000 people in Ireland, the government may want to pay attention. Damaging impact to the ability to win and retain investment? Yep.

You mean raising the expenses on companies means that they might turn to another location? Certainly – just take a look at the number of Fortune 500 companies who are incorporated in Delaware. Delaware offers many advantages, one of which is the exemption from Delaware corporate taxes if your business doesn’t conduct business in Delaware. Also, the filing and application fees are very low. So low that many other states are now trying to duplicate the pro-business environment of Delaware.

Granted, Delaware is a small state. However, it just goes to show you that businesses will generally look to decrease expenses and overhead whenever possible. That means looking elsewhere if necessary.

I can tell you that in my business as my expenses increase, the cost is passed on to my customers. If I am able to decrease expenses, then in many cases that results in savings to my customers. This trickles down (that evil term, right?) to the consumers of the products and services of my clients. Those consumers have more disposable income allowing them to purchase more, so on and so forth.

Is it really that hard to understand?

Number of Employees – Worldwide

Intel – 79,800
Microsoft – 88,414
Hewlett Packard – 304,000
Google – 23,331

Just what did Obama inherit

click for larger image

I don’t know how many times Obama has spouted off about “inheriting” this and all that. He makes me tired just listening to the rhetoric so I decided to remind everyone about a few things.

(Well, that and my cousin Daniel decided to jump in the pool with some rhetoric without facts.)

Ok – so let’s first remind ourselves of what branch of government controls the money? Easy – Congress does.

Wait a minute! You thought the president controlled the money? Wrong. The president (and staff) submit a budget to Congress, but no money can be spent without Congressional approval. Here is how it basically works or you can read here for more:

  • President submits the budget request each year to Congress.
  • The House and Senate committees draft resolutions and send them to the respective floors.
  • Once a resolution is reached after conferences, etc, a conference report reconciles the Senate and House versions to become binding.

Now that we’ve established that Congress really controls the purse strings, how does that factor into what Obama inherited? To answer that, we now need to review the timelines.

First a little disclaimer. I am not siding 100% with Republicans. Most of them have been nearly as fiscally irresponsible as the Democrats. The problem here is pretty clear.

There is a HUGE gap between those that believe government is the answer and those that believe too much is the problem. — me on Facebook

Ok – so what about the timelines and Obama’s claimed inheritance? Just a few years ago, 2006 to be exact, the Democrats took control of the House and Senate. That means that since then, they have controlled the purse strings.

Wait just a second? You mean that Bush and the Republicans weren’t responsible for the 2007 economic fallout? For the most part – no they weren’t. However, Bush and many Republicans did push for the first bail-out. That was a huge mistake, and was the final nail in Bush’s fiscal coffin with a lot of conservatives.

Yeah – but the economy was failing before 2007? Well, yes and no. We were steaming along pretty good, but the ice berg was just under the surface. You see, back in 1998 there was this thing called the Gramm-Leach-Bliley Act which I posted about back in 2008. Like I said back then, it was a combination of lax oversight by Congress, and the natural greed which precipitated everything.

It doesn’t take a genius to figure out that loaning money to people who are nowhere near qualified – is a recipe for disaster. Like most recipes, simmering for a while turns out the best. That’s exactly what happened in the Subprime Mortgage fiasco in 2007. The rest of the pot just boiled right on over.

Yeah, yeah – so what about the time-line? Ok, back to the refresher on Congress controlling the purse strings. Remember that “budget surplus” that everyone touts from the late 90’s under Clinton, which was really a projected surplus? Remember those great economic times everyone loves to talk about? What party controlled both houses of Congress starting from1994-1999? It was the Republicans – from 1994 until 2007.

Ok – so what about the Reagan Revolution? Well, the Senate was controlled by Republicans from 1981-1985, and then the Democrats took over both houses. Just a few short years later, we experienced a mild recession during George H. W. Bush’s term. Do you see the pattern here?

Thank you very much you liberal morons.

Obama's Inheritance

I can’t stand it when Obama mentions his “inheritance” concerning the economy and other things. Did he forget that he was a US Senator prior to his presidential election? Did he forget what party has controlled Congress and the purse strings since 2006? Did he forget that he encouraged the Bush Bailout that most of his fellow Democrats voted against? No – he didn’t forget. He helped create his own inheritance.

“For the rest of today and as long as it takes, I’ll continue to reach out to leaders in both parties and do whatever I can,” Obama said. “To the Democrats and Republicans who opposed this plan yesterday, I say — step up to the plate and do what’s right for this country.” – Barack Obama – September 30, 2008.

click me for larger view

Here are a few simple bullet points:

  • Barack Obama was elected to the US Senate in 2004.
  • Democratic control of Congress started after 2006 elections.
  • The estimated spending by the Federal government under Obama will dwarf all previous spending.
  • The Obama Administration and Congress have done nothing to decrease the national debt.

Is there any question about the outright lie that Obama is spinning here?

Sure, Bush should have constrained spending. As a matter of fact, that is one of my biggest problems with George Bush – the lack of fiscal discipline. However, ultimately the Congress controls the purse strings – and the Democrats (especially under Obama) think the purse strings are very long.

Here is the worst part. We don’t have the money to spend. We, as a country, are borrowing the money that we are spending. As we’ve all heard, the US is so far in debt to China and other countries, that will be lucky if we ever make it out.

“Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.” – Thomas Jefferson

You will hear some say that the “common defense and general welfare” clause of the US Constitution allows the Federal government the power to regulate health care and justify the deficit spending. Wrong answer. If Congress were actually following the Constitution on that point, we wouldn’t be $12 trillion in debt now would we? You can’t have it both ways Congressmen.

You just can’t spend your way out of debt. It doesn’t work. Obama doesn’t care.

Revisiting Obama's Post-American World

I’m sure a lot of you have seen the picture in your email. It was taken in May of 2008 and the title of the book is “The Post-American World” by Fareed Zakaria.

By the title, you would think this was horribly anti-American. However, if you read about the book or just plain buy and read it, you will begin to see what is driving some of Obama’s policies today – during his Presidency.

Don’t get me wrong – I’m not justifying The Great One’s actions, but it is a good idea to know what drives the opposition. Oddly enough, there are some things that Zakaria has right.

This is a world where the U.S. had the lowest corporate tax rate 20 years ago and now has the second highest — not because the U.S. rate was raised, but because everyone else lowered theirs!

Now, I haven’t researched all of the tax rates over the last 20 years. However, it is widely reported that the US has the 2nd highest corporate tax rate so I will take Zakaria at his word.

Let’s keep it simple. What other “corporate issue” has taken place over the last 20 years? Can we say “outsourced labor”? Do you see the parallel? Raise the tax rate, or least don’t decrease it, and you put your businesses at a higher vulnerability.

The solution goes back to the Reagan era and trickle down. Decrease expenses on the corporations and upper-income earners and the money will flow.

The U.S. can thrive in this economic environment because it is not a zero-sum game. The pie is expanding and we can all have our share.

Maybe Obama should pay closer attention to this book. After all, the liberals moan and complain about taxing the rich more – but this guy argues somewhat against that.