8 Steps For Revitalizing The U.S. Economy

Industry Week  has a piece in their online edition by Dr. Ken Mayland, an economist who covers manufacturing and business trends. 
Here are Dr. Mayland's "Eight Steps For Revitalizing The U.S. Economy".  I've been ranting about seven of these for years, and I don't even have a Doctorate in Economics.  Or a Masters.  Or a Bachelors.  I do, however, work in the shipping and logistics industry, and that qualifies me to comment on these things. 

1.  Kill the 2010 health care reform bill.

Well, duh, of course.  Nobody knows who exactly wrote it.  Nobody knows what it is supposed to accomplish.  It's too long for anyone to know what is in it.  A lot of people who lobbied for it have now been exempted from it.  But everyone fears it. 

2.  Do a "reverse course" on developing domestic energy and ease access and permitting for all forms of energy production.

Yeah.  Drill, Baby, Drill.  The Green Energy Scam is slowly being exposed.  Within a year and a half, it'll be dead as a doornail.  Drill, Baby, Drill.  Now.   

3.  Eliminate the minimum wage. Mayland said: "Economists have long know that politicians cannot legislate the productivity of a worker. If you raise the minimum wage above the basic productivity of the worker, the worker will be fired or not hired." Mayland said since the minimum wage was last raised, the biggest increase in unemployment has been among teenagers -- "exactly where you would expect a minimum-wage increase to hurt."

The minimum wage is zero.  The higher you set an artificial price floor for unskilled workers, the more of them you condemn to earning the true minimum wage - zero. 

4.  Repeal the Frank-Dodd financial reform law and Sarbanes-Oxley, which he said put U.S. businesses at a disadvantage compared to businesses in other countries.

I know absolutely nothing about this.  Some might say that this shortcoming has never prevented any of my other rants, but there you have it.  I know nothing about SarbOx.  But this guy does. 

5.  Rein in EPA and the National Labor Relations Board.

Or we could continue to allow the NLRB to tell businesses where they can and can't operate.  Pick one. 

6.  Pass free-trade agreements with Panama, Columbia and South Korea.

This is great as long as it is Free Trade and not Managed Trade.  Any Free Trade Agreement that's 900 pages long is automatically suspect. 

7.  Pare back overly generous unemployment benefits from the current 99 weeks. Mayland cited a scholarly study that if unemployment benefits were 26 weeks, the unemployment rate would be 2% to 2.5% lower.

Yep, and it wouldn't be pretty.  But combine #3 and #7, and you would rapidly approach full employment.  Companies would accomplish more with less.  But it wouldn't be fair !  So we're going to continue to borrow from our fetuses ! 

8.  Trash the tax code and install a flat tax. Mayland said once the appropriate tax rate was determined, taxpayers could fill out their tax return "on a postcard."

Go here for a picture of the Hong Kong tax postcard. 

There you have it.  If Obama and Congress knew that they were going to be propped against a wall and shot if the economy didn't improve within one year, they would implement all of Ken Mayland's Libertarian-ish suggestions tomorrow morning.  Hit the labels below if you want to read earlier rants on any of these topics.

It's not what you know, it's who you know

From Bloomberg News:

President Barack Obama named Jeffrey Immelt, General Electric Co.’s chief executive officer, to head his outside panel of economic advisers, replacing former Federal Reserve Chairman Paul Volcker.

In announcing Immelt’s appointment to take the helm of the newly renamed President’s Council on Jobs and Competitiveness, Obama said the economy is “in a different place” from where it was during the financial crisis when Volcker was brought on, and new ideas are needed to keep the momentum going.

Go here to read about all the mischief that G.E. can get into with Immelt having access to The Teleprompter's screen.  Worth the read. 

“The past two years was about moving our economy back from the brink,” Obama said alongside Immelt during an event in Schenectady, New York, home to the birthplace of GE’s energy business. “Our job now is putting our economy into overdrive.”

And now for something completely different....From the TaxProf Blog:

During his State of the Union address, President Obama said the current tax system is broken. "Those with accountants or lawyers to work the system can end up paying no taxes at all," he said. "But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change."


Just how broken is the corporate tax system? Consider the tax rate paid by two of America's biggest companies — Wal-Mart and General Electric. Wal-Mart paid 34 cents in taxes for every dollar of profit it made in the past three years. General Electric paid just 3.6 cents on the dollar.

Welcome to the mysterious world of the corporate income tax, says tax expert Len Burman at Syracuse University. "There are big companies that consider their tax departments to be profit centers," he says.

That's right; instead of concentrating on making light bulbs, power plants or whatnot, companies use the tax system to boost their profits.

Here's what's funny about this....G.E., the ultra-wholesome, greenie, in bed with the Statists company, (and manufacturers of The ObamaBulbs) only paid 3.6 % of its income in taxes. 

Wal-Mart, the great Satan, the destroyer of America, exploiter of the people, torturer of kittens, etc., Wal-Mart graciously allows Obama to have 33.6 % of their income. 

I don't care who you are, that's funny. 

The U.S. tax code: Saving and creating unnecessary jobs

Here's a video from The Center For Freedom And Prosperity about the hidden costs, the opportunity costs, and the obvious right-out-there-in-your-face costs of the American tax system:



Here's an example of the Hong Kong tax system:

It's a freakin' postcard. 
In the Hong Kong system, you don't get deductions for doing what Barack and Nancy and Harry like.  You don't get credit for politically correct behavior. 
You pay a percentage of your income to the government. 
(They do have an alternative form, where taxpayers are allowed to take deductions for a few things like charitable donations, care of elderly relatives, and retirement savings.  Go here to read more.  But for the most part, citizens send in the form shown above.)

Now, think of the time and effort you've spent calculating your taxes.  Think of the tax accountants in the U.S. who have spent the last few months discovering tax loopholes, protecting their customers' money from the government, despite the fact that many of these same customers recently voted for a guy whose stated goal was for the government to spend more money. 
Think of the things that your business can't do because of the tax implications.
Think of the employees you're now reluctant to hire because it would put you in a new Obamacare bracket. 

If you're in the Obama administration, think of how much energy was required for you to be a successful tax cheat. 
The Flat Tax is an idea whose time has come.  Hit the link to learn more. 

Press "1" for English (and pay $50.00)

I ran into this all the time in China, where there would be an unspoken Chinese price and a "Barbarian" price.

This is the first time I've seen the English/Spanish variation.

Shouldn't those who have more be asked to pay more? Or does that idea seem kind of offensive?
Discuss amongst yourselves.

Photo from Flikr.

But that's not fair ! ! !

The wealthiest 1% of the nation pays ____ % of the taxes.
The wealthiest 5% of the nation pays ____% of the taxes.
The wealthiest 25% of the nation pays ____% of the taxes.
The wealthiest 50% of the nation pays ____% of the taxes.

The Corner on National Review Online has a story featuring the current % breaks.

Discuss amongst yourselves....vote accordingly. You're going to hear a lot about this next November. And if you work for Uncle Sam, why not just tell the people in the brackets above that "this is the amount of tax you're going to pay. It's what you paid last year WITH all your deductions. We've done the math, and unless you really screwed up, it's what you'll pay this year WITHOUT any deductions. You don't have to give any more of your money to the Tax Shelter Priesthood, or make any last minute donations of your husband's underwear."

More Glaring Omissions

I woke up screaming this morning because of a glaring omission in the post below. I failed to mention that Hillary once took $2.00 tax deductions for giving Bill's used underwear to charity.

That would have been the perfect factoid to illustrate that people claim all possible tax deductions which are worth the hassle, regardless of their political inclinations, or love of Big Govt.

I don't know why I should expect to gain a readership for these mad ravings while making that kind of mistake.

The Whited Sepulchre regrets the error.

Rahm Emmanuel and The Flat Tax

Rahm Emmanuel, former advisor to Bill Clinton, Democratic Congressman from Illinois, and Israeli Tank-Tread polisher during Gulf War I, has almost gotten it right with his flat tax.....
Ideas Primary » Blog Archive » The Middle-Class Flat Tax

"The principle is simple and fair: no middle-class family with an income of under $100,000 should ever have to pay an effective tax rate of more than 10%. If the amount they owe after calculating their taxes is more than 10% of their income, they won’t have to pay a dime above 10%. If what they owe is less than 10%, they’ll pay the lesser amount, and the Middle-Class Flat Tax will not apply."

So far, so good. Milton Friedman, the Libertarian demigod, couldn't have said it any better. If this proposal is succesful, the entire Tax Shelter Priesthood - Accountants, Tax Lawyers, and other Experts - can all be retrained at our Nation's Community Colleges. Careers in shipping, logistics, drafting, and electronics beckon. Because we're going with a flat tax for everybody, right? No more deductions, no more loopholes. The requirements for sheltering money from the government are incredibly wasteful, and devour a huge amount of resources. Here's more from Rahmbo....

Here’s how the idea works: As we’ve already pointed out, the current tax system is stacked against the ordinary taxpayer. Tax breaks go to those who need them least, while people who play by the rules get the shaft. What makes Americans most angry about the tax code is not just that it’s complex, but that they know the complexities are there because the game is rigged. They’re right- just look again at the difference between the wealthiest Americans’ tax bracket,and the effective tax rate they actually pay. In theory, taxpayers with incomes of $10 million or more are in the 35% tax bracket. But according to the New York Times survey, their average effective rate in 2003 - thanks to an average tax cut from Bush of more than $1 million - was 22%. In other words, the brackets themselves are a kind of tax fraud: What the wealthy actually pay bears no relation to the higher rates a progressive society intended them to pay."

Yes, the United States Tax Code is basically an elaborate record of the bribes paid to the dealers by the players in a long-running Blackjack game. Amen.

Emmanuel has nailed it. Except for the last line, which is standard boilerplate about the "rates a progressive society intended them to pay." I don't think our Founding Fathers came up with the progressive tax scale. Emmanuel's trying to equivocate the "tax" definition of progressive (escalating) with the currently fashionable "democrat" definition of progressive (warm and fuzzy feeling).

No one in his right mind wants to throw any more cash than necessary into the Gaping Maw of The Government Beast. I claim every deduction possible. If you can read this blog without moving your lips, or slobbering on your computer, then you claim your deductions too. Call your self a Progressive, Social Democrat, Marxist, Statist, etc., etc., etc., it doesn't matter. In between the Clinton White House and running for Congress, Rahm Emmanuel worked with an investment banking firm, and made an estimated 18 million dollars. Does anyone doubt that he took advantage of some accounting and legal advice to hang onto just a little bit of that 18 million? Maybe at least 7o% of it?

"Give unto Caesar the things that belong to Caesar" worked great for itinerant rabbis. But if our Lord and Savior Jesus Christ had gotten a job, and had to fill out a W-2 form, he would have claimed all his tax deductions. Caesar could just go figure out some other way to pay for his damn aquaducts.

I wish there were more deductions for children. I also wish there were huge deductions for weiner dogs. I wish I had the political influence to make it so. The incredibly wealthy, though, have ways of getting their tax percentage down to a level that roughly equals my tax percentage. But is there anything wrong with that? Who doubts that Bill Gates and Warren Buffet will spend money more wisely and create more jobs for the rest of society than Nancy Pelosi and Trent Lott? And should Gates and Buffet be required to hire a plague of Tax Law advisors to help them do so?

In William Faulkner's final novel, The Reivers, a vile old man digs a trench across a road that runs near his property. Then he floods the trench. He then makes a living pulling travellers out of the mud. The current tax code is a trench. Flooded by the very people who are paid to pull you out of it.

Some people resent the wealthy for manipulating their tax percentages and rates. Others say good for them; help starve the beast. But here's the strange part....I'm a member of a charitable organization that feeds street people, provides clothing for them, and will soon be providing temporary shelter for them during the winter months. This organization has some wealthy members who could buy and sell me several times over. But I don't resent the wealthy members who give less than I do. In fact, when I see that they're obviously donating less, I feel guilty that I don't give more.

What's up with that? Why does the charitable organization, which has a broad sampling of political views in it's membership, not need collectors, accountants, and lawyers to regulate it's donations? Could it be a competence issue with the charity, as compared to the government? Or could it be that I don't like paying the government to blow up Mosques, produce high school graduates who can't read a tape measure, and NOT fill in the potholes on Meadowbrook?

Regardless of the reason behind it, and I suspect it's all just an anti-Republican wedge issue, I hope Rahm Emmanuel's flat tax goes through. It would mean the end of the tax shelter industry for a lot of wealthy accountants and lawyers. But I'm hiring dock workers. If they can drive a forklift, they'll earn even more. And the government will only get 10%.