Transfering Wealth

The lefties of our nation and the globe as well, insist that “fairness” can only be achieved by transferring wealth from the “haves” to the “have-nots.” As one can expect from most socialist reasoning (an oxymoron…emphasis on MORON), the holes in their policy are massive. Bernie Madoff sits in a jail cell as police, prosecutors, and plaintiff’s attorneys confiscate every remnant of his former ill-gained fortune. Now he appears to be broke. Should someone be required to share their wealth with the former prince of ponzi? I suspect that when we speak of transferring wealth from the “richer” to the “poorer,” we are in reality discussing transferring earned wealth from producers to socialist-voting looters. A person’s “right” to the wealth of others is determined by her or his likelihood of voting a certain way.

Transferring wealth is more complex than merely dropping a dollar into the bucket of a curbside beggar. The various governments, non-government agencies (NGA’s), non-profits, churches and other elements of the society employ a number of coercive devices to generate wealth-sharing. First, there is the direct tax, direct payment method. Welfare, Social security, Medicaid and Food Stamps are the most brazen examples. Some transfers are more indirect. They might include tax credits for munchkins (children), subsidies for behaviors (education) and massive industry and corporate subsidies or tax breaks. Straight forward foreign aid is direct. Sweet trade deals for preferred countries are an indirect form of the share the wealth mentality.

The transfer of wealth may also involve some subtlety (or sneakiness, if you prefer). Laws that include certain prohibitions may create a competitive advantage for one or another industry or company. For example, when I served in the legislature, there was a representative who introduced an absolutely devastating axle tax for the trucking industry. And….he introduced a similar bill every session…year after year. As I fielded the calls from truckers in my district and notes from lobbyists representing independent truckers, I sought to discover why he would introduce such a job-killing piece of   legislation. My older colleagues informed me that the offending representative was “in the pocket” of the railroads. No one took his legislation seriously, and it would not go anywhere, but just like biennial elections, he introduced it every session to earn his campaign check. When those pieces of legislation are taken seriously and passed, then a law-induced transfer of wealth is the result. Wait, there’s more.

Nearly every regulatory initiative passed by nearly every legislative body or agency impacts some industries more than others…a subtle transfer of wealth. Within given industries some companies may be more adversely affected than their competitors by new rules because of their size, location or any number of intervening factors….in essence a transfer of wealth because compliance costs are not fairly assessed. The great dream of the socialist agenda, ObamaCare, is the epitome of a wealth transfer mechanism at every level. The more than one thousand, one hundred (1,100) waivers granted so far to corporations and labor unions with the “correct” political leanings is the epitome of an indirect and sometimes subtle transfer of wealth. As you can detect, wealth transfers involve much more than simply “robbing Peter to pay Paul.” They also include subsidizing Paul and giving him tax breaks. They may involve regulating Peter at a much greater level than Paul so that Paul gains a competitive advantage. Think of coal, oil and natural gas rules and regulations versus the subsidy packages for wind power, solar systems, and bio-fuels. And yet…the “green” technologies are not competitive on the open energy market.

Licensing and registrations are another form of wealth transfer that operates outside the public view. In my early days as a broadcaster, there were no licensing fees for stations to operate once they had paid the initial start-up licensing amounts. Now stations must pay annual fees based upon their transmitter power, their markets and their gross revenues. In other words the more successful stations must pay a penalty for their efforts while the ones that are not so successful get by with lower fees. Stations that have made the effort to attract topnotch on-air talent and hire competent sales people must subsidize the regulatory administrative costs for less popular stations.

Transferring wealth by force is how the government functions. Government by its very nature is the definition of force. In a world where liberty reigns, wealth would be transferred unfettered by government coercion. A series of voluntary transactions wherein quality, productivity and service would thrive is the model for free commerce. While government stacks the deck and enforces its preferences, wealth is transferred….and we’re all much poorer and less free.

Comment:   cearlwriting@hotmail.com     or    www.littlestuff-minoosha.blogspot.com

Taxing Madness

The Obamacare legislation that the U.S. House of Representatives neglected to defund is laden with many new taxes and fees. President Obama has called for the repeal of the Bush-era tax rates, and for Congress to increase taxes on the rich. In Obama-speak, rich is someone who earns more than $200 thousand per year or $250 thousand for a couple. Tanning salons, pottery sheds, independent pizza shops, 4-pump gas stations and ice cream trucks may conceivably qualify as “rich” under the new lexicon. I do not know what you believe, but I think that we are already over taxed. The marketplace informs us that a value of a product or service is determined by its appeal. Deep within my skeptical core I know that I do not receive reasonable value for my tax “investments.” In fact, I would characterize most of the programs and initiatives supported by taxation as rip-offs and scams. We all know that Social Security is a vast Ponzi scheme, and many other government programs are overfunded today with massive funding increases due later on down the road. Think of bonds issued by many local and state governments…the payments continue as the bridges and roadways crumble. If government were competing in the marketplace, it would fail. We would have an opportunity to attend a massive liquidation sale as the hard assets of the various agencies, departments, bureaus and directorates were offered to the highest bidder (OK, so I’m dreaming…sue me).

Many of those agencies and bureaus are increasing fees for some of their services and transactions which, in effect, raise taxes on those various functions for those who use those services. The U.S. Congress and the profligate administration make the Sheriff of Nottingham look like a warm and fuzzy kind of guy when it comes to tax assessment and tax collection. As the government grows, as its regulation, rules and laws increase it embarks on a frenzied search for more revenue to pay for its regulatory excesses. True, they can and do borrow trillions of dollars, but they require vast sums of our hard earned dollars just to pay the interest on the debt. Their irresponsible management of the nation and our communities coupled with heavy borrowing…weakens the value of the dollar, and thus, leading to inflation which becomes a pernicious method of increasing our taxes through bracket creep. Our cost of living increases under the weak dollar, inflationary regime thus adding additional strains to our budgets. The result is that taxpaying citizens must do more with less while government does less and takes more. This is not a formula for prosperity. This is not a formula for serenity. This cycle makes King George III’s tea tax seem like small potatoes.

In the past three years Tea Party or Tea Party-type organizations have sprung up all over the nation as every-day citizens have joined together to combat the growing power, excessive spending and irresponsible borrowing by the government. Each local group has its own identity and priorities thus lending an air of confusion and disunity when an incident or issue requires action. In addition, the effectiveness of the Tea Party citizen groups is limited because of government abuse at so many levels and in so many arenas. It is somewhat like trying to fill a bucket with water while trying to catch a mist. While the Tea Parties and disgruntled citizens may have the power to retard the growth of government, I suspect that their impact will be minimal. The crisis for our nation is approaching much too quickly for the Tea Party-effect to be truly meaningful.

The answer for dealing with an oppressive, tyrannical government may be more chaotic and disruptive than many of us have assumed. It doesn’t seem feasible for us to send new legislators, congresspersons or administrators to government positions quickly enough to reverse the harm that has already been done to our country. The bureaucracy is infested with leftists who will drag their feet and resist any attempt to roll back their power and authority. Politicians by their nature want to be liked, and because the looters and the lefties have historically been louder and more forceful than the producers, it will be extremely difficult to capture the ears and the interest of enough politicians to assure success. The tipping point may have been reached, and the only remedies available may be for individual states to leave the union and form new like-minded alliances or federations. Dissolution of the federal government remains a possibility as it continues on its deadly path toward economic destruction. On the other hand, as long as the power rests in Washington the leviathan will fight for its survival even if it requires destroying the states, the economy and what remains of the nation. Government will confiscate every asset available to protect itself. The people will pay…again.

Comment:  cearlwriting@hotmail.com   or   www.littlestuff-minoosha.blogspot.com

The Prince and the Paupers

As the President was addressing the nation (or the tiny audience that watched) yesterday, I found that my reaction was as predictable as his rhetoric. I do not believe that he is aware that the “all men are created equal” society of the United States has different expectations for our leaders than Kenyans have for their historic royalty. Vague royal pronouncements from the Prince do not allay the concerns and worries of the people. They sense that he is transforming them into paupers. After all, he does take pride in his transformational presidency. When the nation is wallowing in absolute insolvency, he can call another press conference and claim “Mission Accomplished.”

Obama used a term during his address that I found staggering for its effrontery. He claimed that part of his deficit reduction plan would be to save a trillion dollars through spending reductions in the tax code. That little term provides a picture window insight into the real attitudes and ideology of the poseur. The implication of the statement is that all money belongs to the government, and any portion of it that the people are permitted to keep is an expenditure…spending. So, the imperial prince of mendacity has determined that the government should cut spending by raising taxes. He wants more money from taxpayers so that he doesn’t have to curtail the goody packages that he hands to his most loyal supporters.

El Presidente’ delivered a laundry list of pandering programs that he asserted were national priorities. Perhaps they are national priorities in his elitist statist mind, but a thorough examination of Article I, Section 8 of the Constitution of the United States reveals no evidence of the existence of any of those programs or goals. Not there. Not constitutional. Perhaps they are worthy. Maybe they are good for the country, but they are not constitutionally mandated or allowed. Nearly every president in our short history has overstepped the bounds of the constitutional limitations. In 1794 a group of western farmers objected to higher excise taxes on whiskey (to pay down the national debt) and resisted. President Washington sent the militia to force their compliance with the offensive tax. Congress has not been immune from blatantly violating their constitutional constraints. Every time some bubble headed legislator has an idea, they manage to further infringe on the rights of the people. So, Obama is not unique, but his sheer audacity and casual disregard, perhaps even contempt, of the constitution is breathtaking and ominous.

Given the willingness of both parties of Congress to cavalierly violate the Constitution and the natural rights of the people, we cannot expect them to suddenly acquire a constitutional conscience. Congress is complicit in the lawbreaking frenzy. Congressmen and Congresswomen believe that their intellects and their compassion are superior to ours; therefore they believe they are obligated to protect us from ourselves. Who, pray tell, will protect us from them? So, in the current environment where the President wishes to raise taxes and promise token reductions in federal spending as we speed towards fiscal collapse, the Congress will provide minimal resistance. They will engage in high sounding rhetoric and predictions of woe (truthfully, for once), but in the end they will hop on board the President’s fast track to failure. It is not coincidental that as the needs of the people increase, and the government lurches to supply them, the people’s abilities and capabilities to solve their own problems diminish. Feed the wolf on a regular basis, and he will forget how to hunt. Government programs have coddled us to the point that our survival as individuals and as a nation will be problematic if the system would collapse.

As we circle back to the President’s address and its underlying philosophy, my pessimistic assessment is that on April 13^th, 2011 at approximately 1:45pm EDT, Barrack Hussein Obama delivered a suicide note for the United States of America. Congressman Paul Ryan responded with a statement that was equivalent to insisting that the President postpone the evil deed for a day or two. Under both scenarios we die. One lingers more than the other. Sometimes politicians believe that they are god-like. Apparently they are because they control the life and death of a great nation, and, it seems they choose death.

Comments:  cearlwriting@hotmail.com   or   www.littlestuff-minoosha.blogspot.com

Going to the Fair

Today I wish to explore some of the lesser known benefits of the Fair Tax. As we briefly mentioned in previous columns the Fair Tax would (as currently structured) eliminate all federal taxes on individuals and businesses except for excise taxes, extraction taxes (mining etc.) and fees. The AMT, the alternative minimum tax, is one that would be discarded under this proposal. The AMT is a noxious class-warfare, social-engineering device that was levied to capture tax dollars from high and middle income families who were/are entitled to deductions that, in effect, reduce their tax obligation to nothing or peanuts. In other words, even if you complied with the tax code and legally deducted expenses to which you were entitled, your government decided that you should pay taxes anyway—deductions be damned. This gem of equity was initiated in 1969 and updated in 1982 and is NOT indexed for inflation. So, in essence, some 18 years after the “update,” we find that middle income people are being pounded by this surcharge. This unethical tax that surprises so many citizens on April 15th will be tossed into the dustbin if the Fair Tax becomes law.


One of the engines of a vibrant economic system is capital (the others are freedom, creativity and effort). When you as a wage earner have paid your taxes, provided a living for your family and perhaps purchased a home, you may take whatever amount of money remaining and invest it. You have already paid taxes on it, remember. You may start a business, buy some land, a mutual fund or stock. When at a later time, you decide to sell your investment because you’ve retired or you have large expenses, then the government assesses you for your capital gain. These funds are, in effect, removed from the pool for business expansion and job creation. This job-killing, enterprise-choking tax will not exist under the Fair Tax.

Our present tax code is contained in more than 40,000 (yes, 40 thousand) pages. It is nightmarish in its complexity, and there is a multitude of anecdotal accounts of people calling the IRS for help and receiving conflicting information. In other words, the code is too difficult for the enforcers to understand. This phenomenon leads to an environment whereby it is nearly impossible for a long-form tax filer to be in total compliance. In a sense, even if you were diligent and patriotic, it might be possible to find you in violation of some obscure or vague regulation. Additionally, many wage earners and salaried people are unaware of the size of their federal tax bill. They live their lives based on the “net amount” in the paychecks without calculating the difference between gross and net. One of the beauties of the Fair Tax is its transparency. The employed individual receives the entire paycheck less VOLUNTARY deductions then is fully cognizant of the tax liability when a transaction occurs.

Earlier I discussed the complex maze that is the current tax code. There are two primary reasons for the existence of such an unintelligible mess: 1) special favors and exemptions (vote buying); and 2) stealth taxes. Members of Congress become nearly orgasmic when they can secure benefits in the tax code for well-heeled and politically generous sectors, corporations or individuals. Coincidentally, campaign contributions often correlate with the special benefits legislation. Hmmm, there’s a pattern developing here, Claudine. The Fair Tax will stop the protective backslapping buddy system that is our current tax code…if the amendment is written tightly enough to prevent “tweaking” for special interests. The “stealth” tax elements are those “minor” adjustments that appear to have little effect, but in the aggregate have a negative impact on taxpayers and the economy. The AMT is a prime example of a stealth tax that originally was targeted toward wealthy tax “avoiders” but has become just another broad-based “revenue enhancement.” Other stealth taxes could be the “tweaking” of the “progressive” brackets or altering the brackets on any number of tax schemes or schedules. The openness of the Fair Tax would minimize political opportunities for reaching into our purses and wallets.

One more benefit that I wish to discuss is the impact of the Fair Tax on non-profits. Presently many organizations operate under the umbrella of a non-profit, but actually promote political agendas. These so-called non-profits are exempt from federal corporate taxes. A couple of the more prominent examples of such entities are ACORN and NPR. NPR, for example, is a money swallowing shell game with its nearly incessant fund raising meanwhile it avoids paying federal taxes while the commercial sector must comply. The Fair Tax would eliminate this inequity without eroding the purchasing power of the public broadcast property. I should note here that I am adamantly opposed to “public broadcasting,” but until Congress sees fits to cease funding it, we can level the playing field as much as possible. Churches that function as non-profits would realize a massive advantage with the Fair Tax. Under the current system they operate as if their First Amendment rights for political speech have been sacrificed upon the altar of “tax free” status. With no appreciable differential in cash flow requirements, the Fair Tax would relieve churches of the fear that their status could be changed by the IRS if it were decided that they were “political.” Political speech is the most protected of all speech, and it seems to me that churches should speak without fear of retribution from the government. In my view, every church member with a conscience should support the Fair Tax for this reason alone.

More tomorrow. Comment: earl4sos@gmail.com or cearlwriting@hotmail.com

More Fair, Less Taxing

Following yesterday’s entry, I received feedback from several readers. So, before diving into today’s discussion, I will address several of their concerns. By all means, the Fair Tax should NOT be implemented unless and until the 16th Amendment has been repealed. In addition, the IRS must be abolished. If the Fair Tax were to be utilized, then the respective states would be the “tax collectors” for the federal government. Currently 44 of our 50 states have a state sales tax which means that they are equipped for including the Fair Tax on the cash registers within their domains. One advantage of moving our tax system to a consumption basis rather than a labor/capital base as it is now is that the states will be collecting the tax and will have the means to enforce 10th Amendment/nullification issues by withholding the portion of federal taxes that are used for unconstitutional activities. It’s called the power of the purse.


As an ardent supporter of Constitutional principles, I fully understand that the federal leviathan was originally intended to rely on Fees, Duties, Imposts and Excise taxes to fund its operations. Clearly the size, reach and cost of the federal monstrosity have far exceeded its constitutional mandate. My personal view is that we could return to constitutional government and tax policy overnight. We would undoubtedly suffer some upheaval and dislocation, but freedom is a marvelous thing. Observe an animal that has been released from its cage or its tether. In the beginning the poor creature is tentative and fearful, but in most cases begins to explore the broader environment with gusto. Again, I believe that the cold turkey approach could be effective, but ……… it’s not politically feasible.

My reasons for preferring a modified version of the Fair Tax are rooted in political reality. To attempt to massively reduce government, radically alter the tax structure and diminish the power of politicians and bureaucrats would generate a flurry of opposition from those who govern us and from many of those who are governed. My primary purpose for choosing the Fair Tax as a transitional mechanism is that I believe that a “little taste of freedom” may trigger the urge for more of it. Secondly, the income tax and its progressive incarnation are absolutely evil. You own your body, your labor and your property. The taxation of labor is a form of piecemeal slavery, and it is compounded by the withholding of tax liabilities before the worker or citizen receives the fruits of labor (pay). The government gets its portion of your labor before your receive the remainder. That is wrong. God Almighty asked the Hebrews to give Him the first 10% of their earnings. Today, the government insists on the first dollar and more. Personally, I do not believe that the government has a greater interest in my labor than does God. This example is illustrative of the insistence by government to be the preeminent factor in every facet of our lives. We are much better served with government stays in the background while protecting our borders and guarding our God-given rights. When the state becomes the dominant principal in our lives, then our liberty has been dangerously usurped. Just as a toddler requires constant supervision and instruction, the ward of the Nanny State must have every aspect of life controlled.

My vision of a Fair Tax Amendment (following or concurrent with repeal of the 16th) would include a proviso that sets the upper limit for the tax at 23%, and would include strict unambiguous language that limits the tax to new products sold at retail (final consumer destination). Also, I would include two more elements, or place them in a separate accompanying amendment, that would require a balanced budget with no new tax avenues available, and constitutionally establish a drop down feature of the tax. For example the tax rate could be reduced one per cent (1%) every two years, thus resulting in an effective rate of 13% after 20 years. While this number may not force the federal government to live within constitutional parameters, it would demand very serious prioritizing. The 13% figure is not nearly as stringent as it may appear because the tax structure and the overall lower level of taxation will boost economic activity, and thus, generate significant revenues.

We’ll pick up the balance of this discussion tomorrow.

Comment: earl4sos@gmail.com or cearlwriting@hotmail.com