Read my lips!

No new taxes, so promised President George Bush the senior.  Many believe that he failed to win re-election largely as a result of breaking that promise.  Lots of Republican law makers made the same promise as a way of getting elected.  They did it one better that the former president by putting their promise of no tax increases in writing; thank you Mr. Norquist.  And now, as they face the so called fiscal cliff many of these fair weather fiscal conservatives are already making it known that they are ready to jump on the liberal tax and spend band wagon.  After all, they say, we are only raising taxes on the wealthy.

What about the fiscal cliff?  If Congress does nothing an across the board spending cut will be imposed and taxes will go up on just about everyone. The CBO says that the spending cuts will be in the neighborhood of $511 billion.  That means that rather than borrowing $1.2 trillion in 2013 the United States would only have to borrow $1.1 trillion.  If I’m doing the math right that is about a 3% cut.  That doesn’t seem like a draconian cut to me.

The tax increase is another matter. It’s really going to hurt.  This tax increase, if it happens, will be the largest single tax increase in the history of the Republic.  If the Bush tax cuts are allowed to sunset then virtually everyone that pays taxes will pay a lot more. According to an October 2012 analysis by the Urban Institute and Urban-Brookings Tax Policy Center, the average tax increase per household would amount to $3,500, with the average middle class household seeing about a $2,000 increase. Many working people will start paying federal income taxes again for the first time in years.  Some younger workers will pay income taxes for the first time in their lives.  It will be terrible.

What to do?  I say . . .  Let the people have what they voted for.  Democrats have railed against the Bush tax cuts for years.  The electorate bought the Democratic line on taxes when they re-elected the president.  I say let President Obama and his collectivist allies go over the fiscal cliff.  The fiscal conservatives should stand on principle and vote against any increase in taxes for anyone.

When we go over Mr. Obama’s cliff the tax rates will skyrocket.  Everybody will be mad.  Voters and special interest groups will pressure Congress to lower taxes on the middle class and lower income workers.  The Democrats will bring bills to the floor to lower taxes for some while keeping taxes high for higher income earners and corporations. Liberals will push the fiscal conservatives to vote for targeted lower taxes.  The fiscal conservatives should then say, “read my lips,” no more stop gaps. No one-offs.  No more tweaking a hopelessly broken tax code.  NO DEAL!  Here’s our plan to reform the entire tax code.  Here’s our plan to eliminate the current tax mess and replace it with a low and simple flat tax for individuals and for corporations.

Of course the liberals will reject any plan that does away with their “progressive” tax code.  So be it.  Tax reform could then become the rallying point for fiscal conservatives in the 2014 and 2016 elections.  How does this sound?  The liberals stuck you with the record high taxes that have created economic stagnation.  Fiscal conservatives will bring you very low taxes and the growth and prosperity that will ensue. 

 

Mark VanSchuyver

The end justifies the means?

"In collectivist ethics it (the principle that the end justifies the means) becomes necessarily the supreme rule; there is literally nothing which the consistent collectivist must not be prepared to do if it serves 'the good of the whole,' because the 'good of the whole' is to him the only criterion of what ought to be done."  F. A. Hayek, The Road to Serfdom [pps.166-167]

During a presidential debate in 2008 moderator Charlie Gibson asked candidate Barack Obama why he supported raising capital gains taxes in light of the historical record. Raising capital gains rates has resulted time and again in a net loss in tax revenue to the government Gibson explained.  Mr. Obama’s response was entirely consistent with his collectivist ideology.  He said, “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.”  In other words the end justifies the means.  For Mr. Obama the end is “fairness” no matter what it costs.

“To impose a tax (capital gains tax) that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one, not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless,” Charles Krauthammer

When viewed through collectivist glasses the motivation for President Obama’s economically destructive policies become a bit clearer.  Consider his subsidies for “green” energy projects like ethanol, wind turbines, solar panels and the like that have wasted taxpayer money hand over fist.  Why do the president and his allies in Congress keep throwing tax payer money at these green losers?  Answer, the end justifies the means.  The end, in this example is green utopia.

President Obama’s “Affordable Health Care” bill (aka Obama Care) will drive costs up for consumers because it eliminates competition.  Mr. Obama’s government-controlled-health-care law comes with a whole bunch of new taxes and includes penalties for those who don’t want to buy health insurance.  Government-controlled-health-care will reduce services and it is going to cost the American People a fortune.  Obama Care sacrifices cost, quality, and availability of health care for the sake of “fairness.”  Obama Care makes no economic sense so why did the president push it through?  Because the end (in this case fairness), in the collectivist ideology, justifies the means.

How does an individualist view this means justifying the end principle?  F. A. Hayek says it best; “The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals.”

 

Mark VanSchuyver

Re-boot!

Unless Congress acts soon our country will hit the “fiscal cliff.” On January first, 2013 the Bush tax cuts will expire and everyone will pay higher taxes. On January first across the board spending cuts will be imposed on the military and other government services, the Alternative Minimum Tax threshold will drop and that means that more people will be taxed as if they were rich who are not rich, Social Security taxes will rise by 2%, federal unemployment benefits will expire, and approximately 22 new taxes will be imposed by the Patient Protection and Affordable Care Act (i.e. Obama Care) and the Health Care and Education Reconciliation Act of 2010. On January 1^st capital gains taxes will rise dramatically. The tax increases that will be imposed if we hit the fiscal cliff on January 1st will add up to the largest single tax increase in the history of the United States of America.

How might a collectivist view the fiscal cliff? Perhaps by saying that, "tax increases on others are good but any tax increase on me is a bad." In keeping with his/her collectivist principle of equality of outcome it will surely seem right to in the collectivist's mind to tax the rich. Which means, "tax anyone who has more money than I do and give some of that green to me so life will be fair by gum!"

How might an individualist view the fiscal cliff? Perhaps by saying . . . "The collectivists won the general election. The collectivists want higher taxes and more government spending. The collectivists have been complaining about the Bush tax cuts for years. The collectivists won, so let them have their cake and let them eat it too. Let the Bush Tax cuts expire. Let the tax rates go up on everyone. Let Obama Care engage with its mandate to purchase insurance or pay a big fine/tax and its 22 or so new taxes many of which will hit low income workers. Let the Social Security/Medicare taxes go up by 2% or more. Let capital gains taxes go up and up and up.  Let all the borrowing and deficit spending and stimulus spending go up and up into infinity.  After all, this is the will of the people as demonstrated in the general election.  Let Rome burn and then someday soon when we become like Greece and hit bottom maybe the American People will wake up and realize that there is no free lunch. The Nation cannot prosper and grow by borrowing and spending beyond its means."

I count myself as an individualist and here's what I say.  Let the Country hit the fiscal cliff and then, re-boot!  Re-boot with a Federal Government that cannot spend money on anything that it is not authorized to spend money on (i.e. the 20 or so powers articulated in Article One, Section Eight of the Constitution). Re-boot with a very low flat-tax that is applied to everyone in the work force so that everyone has skin in the game. Re-boot with a balanced budget amendment and a cap on tax increases for the Federal Government. Re-boot with a clearly defined separation of government and the private sector. Re-boot so that the Government gets back to its constitutionally authorized duty to protect individual rights and gets out of the business of running car companies, banks, solar panel companies, green battery companies, hospitals and the zillion other things that are being run or controlled by the Federal Government. Re-boot so that the Government gets out of bed with the private sector, i.e. no more crony capitalism, no more bailouts, no more picking winners and losers, no more subsidies, no more currency manipulation, no more payouts to special interest groups, no more corporatism. Re-boot so that individual rights including private property rights are truly and actually protected by the government.

Mark VanSchuyver

Collectivism Vs. Individualism

The American People have spoken. President Obama will be president for four more years. The Senate is now more firmly controlled by the Democratic Party. The House remains in Republican hands but the election has all but crushed the Grand Old Elephant’s spirit. There is no doubt about it, America is tacking hard to the “left.”

It’s a tough pill for me to swallow. How could American’s vote for a man who has delivered four years of record spending, record debt, record unemployment, and record government intrusion into the private sector? Mr. Obama gave us bailouts, wasteful and ineffective stimulus spending, destructive currency manipulation, more stimulus spending via never-ending quantitative easing, and record levels of new debilitating regulations that are strangling the private sector and driving businesses overseas. With the “Affordable Health Care Act (aka Obama Care) now sure to take effect another 1/6^thof the Nation’s private sector is about to be assimilated by the federal government. Is the country lost? Have we chosen to become Greece? Are we truly on the road to serfdom?

I’m not ready to throw the towel in just yet. I suspect that many voters don’t understand the underlying ideology that fuels the Obama Administration. I think the majority of American’s know that the country is on the wrong path. They know that bigger government is not the solution to our problems but they don’t know how to make the argument for something better. They get tangled up in policy details or the particulars of this or that issue. American’s seem to be lost in the fog of cable TV.

With that in mind I shall now do my best to articulate the Obama ideology in contrast to its opposite. Here we go.

President Obama is, and I am basing this on four years of observation, a collectivist.

Collectivism, social organization in which the individual is seen as being subordinate to a social collectivity such as a state, a nation, a race, or a social class. - Encyclopedia Britannica

The opposite of collectivism is individualism.

Individualism, political and social philosophy that emphasizes the moral worth of the individual. - Encyclopedia Britannica

These two ideologies are polar opposites. The collectivist believes the needs of the group always outweigh the needs of the individual. Collectivist believe the ends justify the means. Collectivists believe in equality of outcome (e.g. equal pay regardless of contribution). Collectivists believe in “positive rights” that impose an obligation on others to act (e.g. everyone has a right to a house. I don’t have a house therefore someone else must be forced to buy me a house). People, from the collectivist's point of view, are not to be trusted.

The individualist believes in the sovereignty of the individual. Individualists believe in equality of opportunity. Individualists believe in “negative rights,” that force no obligations onto others (e.g. life, liberty, the pursuit of happiness, and property rights). The end does not justify the means. Most people, from the individualist's point of view, want to do the right thing and are trust worthy.

These two ideologies are based on foundational principles that can be used to analyze virtually every political discussion or policy issue. Let’s consider something that happened this week, the Black Friday Wal-Mart walkout. Some employees of non-union Wal-Mart, with the help of union leaders and others walked off the job in several Wal-Mart stores in several states to protest “unfair wages.” Those who walked off the job were identifying with the collectivist notion that life should be made to be fair.

The collectivist worker thinks, “Someone else makes more money than I do. Therefore Wal-Mart is responsible for my unhappiness. In the name of fairness we the collective will force Wal-Mart to give me what I have not earned. We will take the money from Wal-Mart by force. It is not fair that someone else makes more money that I do. I therefore demand that someone with a gun (i.e. government starting with the National Labor Board) come down here and make Wal-Mart pay me what I want. There must be social justice! I demand equality of outcome!"

How would an individualist who worked for Wal-Mart react? He/she might say, “If Wal-Mart doesn’t pay enough to make me happy then I will go and work somewhere else or start a business of my own. Nothing is stopping me. I am responsible for my own happiness. I have the same opportunity as the next guy/gal. The world does not owe me a living. Asking the government to take money from Wal-Mart that I didn't earn, and give it to me in an effort to achieve equality of outcome would be nothing more than legalized theft. And theft, in any form, is immoral.”

Mark VanSchuyver