Jim Rogers - Central planners' policies are punishing the prudent in favor of rescuing the irresponsible

I read the following by financial commentator Jim Rogers and it really fits with what I think has been happening for the last couple of years:

To Rogers, the bigger danger that concerns him is the hollowing out of the 'saving class' resulting from this situation. Central planners' policies are punishing the prudent in favor of rescuing the irresponsible. This has happened before in world history, and the aftermath has always had grievous economic, social -- and often human -- costs:

Throughout our history – any country’s history – the people who save their money and invest for their future are the ones that you build an economy, a society, and a nation on.

In America, many people saved their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting 0% return, or virtually no return, on their savings and their investments. We’re wiping them out at the expense of people who went deeply into debt, people who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.

If you go back in history, you'll see what happed to the Germans when they wiped out their savings class in the 1920s. It didn’t lead to good things down the road for Germany. It didn’t lead to good things for Italy, which did the same thing. There were plenty of countries where it wiped out the people who saved and invested for their future. It’s usually a serious, political reaction, desperation in some cases, and looking for a savior and easy answers is usually what happens when you destroy the people who save and invest for the future.

- PeakProsperity.com

The United States all of a sudden has no shortage of irresponsible people. Nothing is anyone's fault anymore. Too many demand free money and more from the Government. And all too often Liberals and even Conservatives are giving it to them, in exchange for votes at election time.

Don't get me wrong, some people do legitimately deserve assistance, but way less than we are supporting now. And none of these people are going to help build a better country. It is the saver who invest and it is investment that drivers our country and others to an ever better future. It is also savings and investment that improves the welfare of many. Take the 'evil' oil companies. If they really were making so much money and were such cash cows, why not say 'me too' and put some money into these corporations? You can do direct investing in ExxonMobil for as little as $250. Is that too much money, well that is the point of saving. You save until you have enough to buy what you want. Point to someone who has no money and I bet I can point to their way too expensive sneakers, sunglasses, clothing, car, gadgets, vacations, etc... that they also don't have money for but somehow manage to get anyway.

Worse, many of them are liable to have children that will also require support for most of their lives. The Democrats are counting on this, because these people will continues to be their base voters for years to come. 

This is also why the Democrats are pushing to legalize illegal aliens and provide them with a 'Path to Citizenship'. Many of these illegal aliens are 'High Needs' parents. It does not mean that there is something wrong with their children or that their children need special care. Instead, it is the parents that need to be told and reminded about everything about being a good parent to their children. This was as explained to me by a pediatrician in Washington, DC. My kid's first pediatrician. This was during a checkup where she was advising us that she was leaving because she was being burned out due to all the high needs parents she had to deal with. It just so happened that these 'high needs' parents bills were being paid by tax payers. Even the co-pay. It was not that the parents did not have $10, $15 or even $20 to pay for the ability to take their kid to the doctor. It was simply because if they did have to pay anything, they would not take their kid to see a doctor. 

This is the heart of the problem. And this problem will only grow until we stop paying out like a broken ATM.

Go hear to listen to the entire Jim Rogers Interview on Peak Prosperity.

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nextgeneration.tv - Michelle Fields: The National Debt Is Unfair to the Next Generation

This video was highlighted on Instapundit:

This nation has a spending problem that is placing a massive debt load on younger generations. Hear why this is so unfair as Next Generation Correspondent Michelle Fields talks about our national spending problem. - Video Link

I look forward to seeing more from this new initiative. I do believe that the other side started talking about 'fairness'. So lets talk...

The website is http://www.nextgeneration.tv/
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2.3 Percent Tax on Medical Devices To Kill Thousands of US Jobs

Keep in mind that the US Government's definition of 'Medical Devices' that will be subject to a 2.3% tax on gross sales includes even such generic items such as rubber gloves. Even better, the tax applies to products that are are also used in veterinary medicine.

So vet visits are probably going to go up as well. And since this is a gross sales tax, regardless of profit or loss, it seems that some medical manufactures are thinking twice about having their manufacturing in the US:

According to the Treasury Department, the medical device companies actually stand to benefit from the law. Though the 2.3 percent tax hits the industry, the department argues that the millions of new health care customers insured as a result of the law will increase the demand in hospitals to order more equipment -- in turn boosting medical device companies' profits.

That’s not how the industry sees it. Stephen J. Ubl, president of the Advanced Medical Technology Association, said this week in response to the IRS rules that the tax could cost thousands of jobs – and is already causing companies to lay off workers and cut back on research and development.

“While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing as many as 43,000 jobs and hurting the ability of medical technology companies to find tomorrow’s treatments and cures. It should be repealed,” he said. - Fox News

Sure, you can say that it is only 2.3 percent, but this is out of a maximum of 100%, any more and the business involved is operating at a loss. Out of that 100% revenue total needs to come all of the expenses of the business from raw materials, salaries, manufacturing, research and so on. And lets not forget that if you manage to make a profit, you need to pay taxed before passing those profits to the shareholders, who then pay taxes on this same profit again.

As I have said before, President Obama and the Democrats hate your job. This is just one more example where they are doing nothing to protect these jobs or the industry as a whole, which I would dare say is probably a global powerhouse of development and innovation and at the end of the day a source of massive amounts of tax revenue both directly from the corporations as well as from those who back these companies and eventually profit from them.

Update: 11 Dec 12
 Surprise! Senate Democrats are calling for a delay in implementing this job-killing tax:

In a letter to Majority Leader Harry Reid, 18 Democrat senators and senators-elect have asked for “a delay in the implementation” of the Obamacare medical device tax. Like most of the significant tax increases in Obamacare, the medical device tax is scheduled to take effect on Jan. 1, 2013, conveniently after the 2012 presidential election.

Each of the 18 Democrat signatories voted for or supported Obamacare in the first place. And now they want a sweetheart exemption from one of its most onerous provisions. Even in Washington DC, that shows a lot of gall. - ATR.Org (Click to read the list of Democrat Senators signing the letter)

There is one way to delay the tax, delay ObamaCare!
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Howard Dean: "The Truth Is Everybody Needs To Pay More Taxes, Not Just The Rich"

I have said it before, the rich do not have enough money to pay for all the Democrats spending demands. At least one prominent Democrat is willing to admit this:

The only problem is -- and this is initially going to seem like heresy from a progressive is -- the truth is everybody needs to pay more taxes, not just the rich. And it's a good start. But we're not going to get out of this deficit problem unless we raise taxes across the board, to go back to what Bill Clinton had and his taxes. And if we don't do that, the problem is the pressure is going to be on spending even more. - Real Clear Politics

Click the link and watch the interview. Howard Dean admits that the country would actually be better off if we go over the 'financial cliff' and return to the Clinton era tax rates for everybody, because that is how you really increase Government tax revenue.

Increasing taxes on the rich only solves 8% of the deficit problem. President Obama and the Democrats are silent about the other 92% of the solution because they have no intention of solving the problem.

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Obama to Republicans - Eliminate the Debt Limit Now, Spending Cuts Later, Maybe

In an earlier post I covered Treasury Secretary Timothy Geithner's proposal/demand that Congress simply eliminate the debt limit.

Treasury Secretary Timothy Geithner said the U.S. “absolutely” should get rid of the debt ceiling as soon as possible.

“It would have been time a long time ago to eliminate it,” Geithner told Bloomberg TV on Friday. “The sooner the better.” - HuffPo (Found at Hot Air)

As it turns out, this is the demand that was made today to the Republican members of Congress as part of the fiscal cliff solution talks.

House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, an immediate new round of stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits. - NY Times

The 'deal' includes no cuts to Government spending. Only a suggestion to discuss cuts sometime next year. The offer is so ridiculous that Republican Senator Mitch McConnell burst into laughter. Unfortunately, this meeting confirms my belief that the Democrats have no intention of dealing with the Nation's debt problem.

Geithner’s visit to his office left McConnell discouraged about reaching a “balanced” deal on tax hikes and spending reductions designed to prevent a shock to the economy in January. “Nothing good is happening” in the negotiations, McConnell says, because of Obama’s insistence on tax rate hikes for the wealthy but unwillingness to embrace serious spending cuts. - Weekly Standard

So there you have it, Obama and the Democrats are unwilling to commit to any real spending cuts, outside of cutting spending for the Military. They have already run the country for four years with no budget. Now they are demanding to be able to run the country with no limit on spending.

Like I said before, they have no intention of solving the debt and deficit crisis. If they did, they would know how high the debt would grow before a plan of increased revenue and decreased spending would eliminate the deficit. Of course they might have even more plans for increasing spending. Perhaps legalizing the illegal aliens and giving them Obamacare benefits. That would surely increase Government spending.

Keep in mind that raising taxes on the richest 2% will only solve about 8% of the deficit problem.  This demand is confirmation that President Obama and the Democrats have no intention of solving the debt problem. 

They plan to run up the debt as far as it can go.

 

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Senator Dick Durbin (D-IL) Lies: 'Social Security does not add one penny to the debt. Not one penny.'

So the latest story concerning the fiscal cliff the US is facing is news that some Republicans in Congress are thinking of being flexible when it comes to their 'Grover Norquist' no tax increase pledge. However, I think this issue brought out a huge lie pushed by Democrats in general but said by Illinois Democrat Senator Dick Durbin. He said that

 'Social Security does not add one penny to the debt. Not one penny.' 

His statement was in response to Republican demands that entitlement spending reform be on the table . Basically Senator Durbin is claiming that there is no need to reform Social Security Entitlements because Social Security is not a part of this nation's spending/deficit crisis. Unfortunately, this is not the case and Senator Durbin for sure knows that this is a lie. Zero Hedge explains:

This statement is a lie that is covered over by a dopy accounting system called the Unified Budget. In this magical world, the deficits driven by entitlements are hidden. The reliance on this accounting fiction is a dangerous path for liberals to take. The fact is, SS (and the other government retirement programs for Federal workers and the Military) are running billion dollar cash deficits today and will run Mega-Trillion dollar cash deficits for the next seventy-five years. Every penny of those deficits will result in more borrowing from the public.

These deficits may be “Off Budget” in the magical world of Unified Accounting, but they do add to the publicly held debt on a dollar-for-dollar basis. The Rating Agencies are part of the Cliff discussion (like it or not); those folks are no dopes and they fully understand that Senator Durbin is all wet with his talk of Off Balance sheet debt. - Zero Hedge

If a publicly traded company did this sort of accounting gimmickry, shareholders would eventually lose their investments and people would go to jail. Ironically, Democrat politicians would then be crowing to every TV camera how we need even more laws to prevent this kind of criminal behavior, all the time committing a much larger theft right out in the open.

Worse, the Social Security Trustee report notes that Social Security will run out of money around 2033, unless Social Security taxes are raised (or benefit rules reformed).

Finally, the Trillions of dollars in assets that the Social Security Trust fund has are currently held in the form of US Treasury Bonds. In short, the money was given to the Government and spent. The Government will then have to redeem the bonds as the money is needed to pay Social Security recipients. This means that they will have to get the money from somewhere. Given that the Government plans to run a deficit into the sunset, that means that they will either have to print or borrow the money.

Graphs pictured above were taken from the US Government's own Government Accountability Office. The article is titled 'Federal Debt Basics'. Clearly, this is a topic Senator Durbin and many of his follow Democrats would fail if a grade was given. Unfortunately, it is we who suffer as a result of their incompetence and criminal behavior if they had to be judged the same way that they demand businesses be held to account.

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"A federal law requiring advance notice of mass layoffs does not apply to" Government Layoffs...

I have never worked for the Government, other than my time in the US Navy Reserves. I have worked for a US Government contractor. This was on my last ship, the USNS SILAS BENT. At the time the management of the ship had just passed to a company called Dyne Marine Services. The company was eager to win over the merchant marine crew that they were going to send to the ship. They even flew us to their headquarters to tell us how great they were and how we were a part of the team. What they didn't tell us, was that the Fair Labor Standards Act didn't apply to the jobs that we were about to take.

The Fair Labor Standards Act 1938 (abbreviated as FLSA; also referred to as the Wages and Hours Bill) is a federal statute of the United States. The FLSA established a national minimum wage, guaranteed 'time-and-a-half' for overtime in certain jobs, and prohibited most employment of minors in "oppressive child labor," a term that is defined in the statute. It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage. - Wiki

Now, I have no proof that their omission was done on purpose, but given that I personally asked if work over 8 hours a day and over 40 hours a week considered overtime in a room full of seafarers and company bigwigs to get confirmation that my comments were correct. What I did not ask, and what they did not offer, BUT MUST HAVE KNOWN, was that overtime would be paid as straight pay, not at 'time-and-a-half'. And why ask given that overtime for sailors means just that. Unless some sneaky bastard figures that their company can manage Government owned ships at a cheaper rate by screwing sailors out of their pay And keep in mind that sailing is 24/7, so we were all counting on a minimum of 16 hours overtime a week for simply standing watch on weekends. 

The crew had various ways of dealing with this financial setback. Many refused to work any non-mandatory overtime. I took the opportunity to work as many hours as possible. The Third Mate mad it a habit of being right at the gangway to welcome all new crew with the question 'Hey, did they tell you that overtime was at straight pay?' I have to say that it was pretty amusing to watch the smiles disappear off the faces of newly joining crew, even before they got off the gangway. (Given that this went on for 6 months, kind of suggests that the guys in the office doing the hiring were intentionally not informing new crew. It just goes to show you you really need to beware when a company tells you how great they are. They might be hiding something.) 

The reason I bring this up is the news that the Government is trying to delay layoff notices from going out to thousands of Government contractor employees until after the Presidential Election.

Under the WARN Act -- The Worker Adjustment and Retraining Notification Act -- companies with more than 100 employees must give 60 days' notice if there is to be a mass layoff during any 30-day period for 500 or more employees (or for 50-499 employees if they make up at least 33% of the employer's active workforce). But in guidance issued on Monday, Assistant Labor Secretary Jane Oates said never mind about those pink slips: "Questions have recently been raised as to whether the WARN Act requires Federal contractors...whose contracts may be terminated or reduced in the event of sequestration on January 2, 2013, to provide WARN Act notices 60 days before that date to their workers employed under government contracts funded from sequestrable accounts. The answer to this question is 'no.' In fact, to provide such notice would be inconsistent with the purpose of the WARN Act." - CNSNews.com

The excuse given for this is that despite the cuts that are currently law, it is not possible to WARN anyone of layoffs because no specific projects or contracts have been officially notified that they would be part of the spending cut. Plus, Congress MIGHT actually repeal sequestration.

5. Application of WARN Act to Potential Sequestration. Although it is currently known that sequestration may occur, it is also known that efforts are being made to avoid sequestration. Thus, even the occurrence of sequestration is not necessarily foreseeable. In addition, the sequester’s impact on particular accounts will depend at least in part on Fiscal Year (FY) 2013 funding that Congress has not yet enacted. Perhaps more importantly, Federal agencies also have some discretion in how to implement the required reductions if sequestration were to occur. Given that Federal agencies, including DOD, have not announced which contracts will be affected by sequestration were it to occur, and that many contracts may be completely unaffected, the actual contract terminations or cutbacks that will occur in the event of sequestration are unknown. Thus, in the absence of any additional information, potential plant closings or layoffs resulting from such contract terminations or cutbacks are speculative and unforeseeable. - US Govt Notice (PDF)

I have to admit that this makes sense. Yes thousands of people are going to get laid off. You know that you are going to be one of them. And yet, nobody will know for sure until the very last minute. That is, unless their employers send them a courtesy warning in advance of any mandated by the law. Apparently this is something that employers can do. Imagine if you as a taxpayer or as a business owner started behaving on how Congress might act. You might end up receiving a fine or worse some jail time. But the Government, the rules do not apply to them, ESPECIALLY if there is a Democrat in office. Not that rules apply to a Republican in office, it is just that the Democrats (and the media) are very vocal in making sure Republicans don't get away with breaking the laws.

Anyway, I suspect that is is just some wasteful posturing on behalf of a Government lackey who either is trying to keep the current president in office or truly believes that in this case it's perfectly OK not to tell people that they are going to be without a job shortly after the election.

What I would like to see is the DOD actually announce which programs they plan to cut because of sequestration. Then the pink slips can go out, as they should. (Note: I am not in support of suck cuts to our National Defense. As it is, the DOD was the only Government Dept that I know of that was actively cutting their spending before this mess. The ax needs to fall elsewhere.)
 

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About Those Trillions Being Held In Tax Havens Around The World...

Given that about half of all Americans are not paying taxes and are now receiving benefits from the Government, and with things even worse in other countries, politicians and the press are trying to place blame on the lack of an unlimited supply of money to pay for these social programs on rich people who are somehow hiding assets from taxation in tax havens around the world:

The Tax Justice Network, a campaign group, estimated last weekend that as much as $21 to $32 trillion of financial assets are sheltered in offshore tax havens, representing up to $280 billion in lost income tax. - CNBC

First, while it sounds like a very large number, it is very deceptive. That is because, while some of the money is illicit and the beneficial owners are hiding the money from taxation, much of this money is there legally and that the beneficial owners do not owe any additional tax on these funds. 

Worse, look at the study's own estimate of lost tax revenue: 'up to $280 billion in lost income tax'. While in itself a large amount, it is still a mere 1% of the total. At the very least this story is just more evidence that the real problem is excess spending and not enough taxation (other than the growing percentage of the population escaping taxation entirely, and that is not the rich who already pay and pay more...).

Even worse, the potential amount of last tax revenue, assuming the 'best case' scenario, is not even 1/4 of the US 2012 budget deficit of 1.2 Trillion dollars. So even if this lost income tax could be recovered AND IF the US got all of the proceeds, it would not even make a difference in stemming the US's march towards bankruptcy. Greece itself would need just about  the whole amount to help dig itself out of their current fiscal crisis.

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Dan Mitchell - 'The Tax System Explained in Beer'

Dan Mitchell shares in his recent post 'The Tax System Explained in Beer' a great example showing just how messed up our tax system is:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this…

• The first four men (the poorest) would pay nothing
• The fifth would pay $1
• The sixth would pay $3
• The seventh would pay $7
• The eighth would pay $12
• The ninth would pay $18
• The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

• And so the fifth man, like the first four, now paid nothing (100% saving).
• The sixth now paid $2 instead of $3 (33% saving).
• The seventh now paid $5 instead of $7 (28% saving).
• The eighth now paid $9 instead of $12 (25% saving).
• The ninth now paid $14 instead of $18 (22% saving).
• The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. - International Liberty

There is a huge difference from the story and our tax status, as in the story, all the men voluntarily decided to share the bill and share it in a lopsided fashion. In the end, the richest man decided that the company was no longer worth the price and decided to no longer participate. This is not something that you can easily do with your tax bill. Instead the others, who all pay less, demand that those who earn more pay ever more to meet some mythical 'Fair Share'. You know what a fair share is? IT is where people simply pay their taxes and don't feel like they are being taken advantage of. And at that point, the desire, and incentive, to cheat on one's taxes (or simply avoid taxation) diminishes and disappears, no longer being seen as a worthwhile activity. 

Tax avoidance and tax evasion are present in our society simply because the scenario above is not fair. Not at all.

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Obama 'Jobs Bill'? - School Renovations?

Is it me or does the Obama Jobs Bill have nothing to do with encouraging job growth in America? The more I hear about this plan, the more it stinks.

One of the huge issues I have is that the plan intends to spend money to upgrade schools. It sure sounds nice, but education is something that is traditionally funded within the states. It is after all one of the things that your property taxes pay for.

When buildings are that old, they start falling apart. They start leaking, and ceiling tiles start to cave in, and there’s no heat in the winter or air-conditioning in the summer. Some of the schools the ventilation is so poor it can make students sick. How do we expect our kids to do their very best in a situation like that? The answer is we can’t. Every child deserves a great school, and we can give it to them, but we got to pass this bill. Modernizing America’s schools is just one of the many ways the American Jobs Act will create jobs in industries like construction hit hard by the recession - WhiteHouse.Gov

The issue here is not whether it is a good idea to renovate schools or not. Sure it is. This issue here is how it is paid for. Schools have budgets and many of those needs to be passed by the local population that is asked to pay for it. Spend too much money and the voters are going to start saying no to 'extras' such as after school activities and sports as well as renovations.

So when the local community refuses to pay for these things, why should the Federal Government step in and spend the money on people who have decided not to spend their own money on these things? There is lots of talk about 'fairness' and there is nothing fair in this process. Each state has it's own opportunity to tax. Some tax a little and some tax lots. And some elect not to tax income.

So when the President steps in and promises to spend money the locals refuse to, this is little more than a subsidy to that state's voters. Worse, this is a sort of mission creep by the Federal Government into an are that was traditionally handled by the States. This mission creep will increase Federal spending.

The same applies for the other kinds of renovation work the Presdent is proposing for transportation projects. This is outside of the work on Federal highways. Again, this is work that should be paid for by the people of the state.

Unfortunately, the President can get away with this because for some reason people seem to forget that they pay state income and local property taxes. The quote above is from the President's speech from September 13th in Ohio.

Just today, the President was making promised in Texas that his jobs Act will put close to 300,000 teachers back to work:

The White House today released a report that outlines the devastating impact the recession has had on schools and students across the country. Teacher Jobs at Risk highlights the significant cuts in education spending that have resulted from state budget shortfalls since 2008, including the loss of nearly 300,000 teaching jobs across the country. And in the coming school year, without additional support, many school districts will have to make another round of difficult decisions. As a result of state and local funding cuts, as many as 280,000 teacher jobs could be at risk. Unless they receive federal assistance, many school districts will be forced to reduce the number of teachers in their classrooms, or turn to other measures such as shortening the school year or cutting spending on schoolbooks and supplies. - WhiteHouse.Gov

Again, it is up to the states to decide how much they are willing to spend on education. Who is to say what the right number of teachers is? It could be that many of the jobs that have been let go, were added during years of healthy tax revenue without proper regard to whether the positions were genuinely needed or not. This is what Governments are supposed to do when money gets tight, either find more money, or reduce expenses.

One more thing. None of these jobs is going to create new tax revenue for the Government. These are State Government jobs. The money to pay for these jobs comes from people paying their taxes and mainly private industry jobs. It is those kinds of jobs, manufacturing, energy, building, service, etc that the Government needs to encourage. The President can easily set in motion a huge business boom. All he need do is get out of the way of energy production of oil, coal and gas and power plant construction, whether it be natural gas, coal, nuclear or hydroelectric. These two things will then spur the demand, and funding, for improved infrastructure, simply to get the supplies to help build the oil, gas and electric businesses. If we can get this moving, lots of other industries that support this will follow.

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Globe and Mail: "IRS bearing down on Americans in Canada"

Many Americans both Conservative and Liberal are upset with how their Government is functioning at the moment. I know I am not happy with the idiocy that is going on and the lies being put forward that somehow, we would be able to continue spending the outrageous amounts of money that the Government is currently spending, IF ONLY rich Americans paid a little more. Even Americans living overseas cannot escape the long arm of the US Government, which has decided to extend the arm of the Internal Revenue Service, the dreaded IRS, into the pockets of Americans overseas, even those who have no link to the country other than to have been born in the US or born by US parents. Apparently, there are lots of them. From this story, there are about a million living in Canada alone:

One person who’s off the hook is my brother. He was 11 when we moved to Canada. At 17, he got a draft notice. So he renounced his citizenship (after a long lecture from a consular official). I suppose I could renounce, too – but they won’t let you do that until you’ve filed your back tax returns. As many as a million U.S.-born residents of Canada are caught in this Kafkaesque nightmare. Finance Minister Jim Flaherty has written an indignant letter to leading U.S. newspapers. All of us are getting wildly conflicting professional advice. At first, Brian and his wife, who are by no means wealthy, decided to come clean. But when they were told they’d be on the hook for $250,000, they changed their minds. - Globe and Mail

I lived in Finland for three years while doing my MBA. Two of those years I filed a tax return. The third year I didn't because I didn't meet the minimum reporting threshold. It turns out that it was good that I did because a short while later I moved back to the US and applied for a GreenCard for my soon to be Finnish wife. One of the requirements was providing copies of my previous three years Income Tax Returns, or an explanation of why I didn't file.

This experience did result in not pursuing US Citizenship for my wife. We did have plans at the time to eventually move back to Finland, and we knew that it would be better tax-wise if she did not obtain US tax liability.

It is odd however, to see the amount of effort that the IRS is extending to track down money overseas the US thinks it can extort from Citizens, however unfair, while at the same time they do little to nothing to hunt down illegal aliens living within the US who are working without the legal authorization to do so, are conspiring with their employers to not pay/evade taxes (in some cases also committing identity theft) and are simply getting a free pass. 

• It is not fair. 
• It is discrimination. 
•  It cannot last. 

 Unfortunately, I think it is going to get a lot more painful before it gets better. This is an illustration of a pile of $100 bills totaling $15 Trillion. That is $2,500 per person on earth. That is a hell of a bill to pay off and it is still growing. And this is why the US Government is trying to fleece Americans living abroad, they are simply running out of places to rind more revenue.

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ObamaCare and Blood Donations

I passed by a blood drive in the area on Saturday. I was asked if I wanted to donate and the first thing that passed into my mind was Obamacare. It was a cynical thought of whether ObamaCare required blood donation. This is how bitter I feel about the crap that is ObamaCare.

You see, when the Government steps in and demands to run the show on anything, like healthcare, then they can go find the blood. As it is, they were out in an area of tax-payers. Why not go and stick needles in the half of the population that does not pay any taxes? Really, if they are not contributing tax revenue, they can contribute in other ways, like giving blood. Of course they won't, unless they get paid to do it. And this is the joke of the whole system and the Democrats pushing it. They repeatedly call for the better (revenue-earning) half of the population to do their 'fair share' and pay more taxes. And yet, there is a huge portion of the population that pays no share towards the common good. They only consume. Even when the contribute, they won't, unless there is something in it for them. Where is the fairness in that.

The only confidence I have is that the unfairness of this system will be it's doom.
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P.S. No, I didn't donate blood. I do however vow that I will donate once ObamaCare is repealed. At that point I leave it to the nurse to get a full pint out of me. My body stops giving after about a half pint.

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Spotted in Bermuda - Dan Mitchell, Brian Garst

Last night returning to my hotel I ran into Dan Mitchell of the Cato Institute and Brian Garst of the Center for Freedom and Prosperity and Big Government.

They were working on a press release concerning events they were following here and I will add it once it comes out.

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Scrap the 'Tax by the Mile' Idea for Transportation - Everyone Should Pay

The idea of taxing drivers based on how much they drive keeps coming back in the news. I covered this back in April, 2009 in the post 'A (GOVERNMENT CONTROLLED) TAXI METER FOR EVERY CAR IN AMERICA!'. Now the President is pushing this idea ahead and a way to get more tax from the population.

The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive.

The plan is a part of the administration's "Transportation Opportunities Act," - The Hill

That's great if you want to turn every car and truck in America into a taxi earning for the Government.

Here are some additional thoughts (in addition to my original post linked above) on this subject an how funding for the building of roads and bridges should be shared between the entire population.

First, a well-developed, well-maintained public transport infrastructure is in the benefit of every American. While some use the roads every day, everyone benefits from them, including those without a car. Need a policeman, Fireman or ambulance? They can't get to you if you without a road to get them there. While the need is rare, the need in those cases is urgent if not life-threatening. So just because you do not use it everyday, it does need to be maintained regardless of your use. And imagine trying to sell your house if there was no road to get to it. Use a bike or walk on the sidewalk. This is possible only as a result of road building. If you are going to tax drivers by the mile, why not also bikers and walkers?

So with this one issue in mind, it is not fair to burden only a segment of the population with funding of this infrastructure.

Then, as i wrote before, a mileage tax on cars is like putting a Government-controlled taxi meter in every vehicle in America. Outfitting every car and truck in America with tracking devices just to collect more tax has to be one of the dumbest ideas, ever. It would also be one of the most expensive projects, simply to put in place the tracking devices to levy and collect the tax information. And of course, it is not going to be the Government that pays, but car owners.

Worse, cars are already taxed in relation to how much they drive through a tax on gasoline. Sure, the rate is different for everyone, based on how much your car consumes as well as how much city/highway driving you do. However, everyone who drives pays and there is no need to make any changes to the cars (such as adding hundreds of dollars of GPS tracking and metering equipment) as the tax is collected at the pump.

One of the complaints of the current system is that people who choose hybrid cars save money because their cars use gasoline more efficiently than people who choose gas guzzlers. But there is an easy solution to this problem. Simply get rid of the $7,500 tax credit buyers of these cars receive and use that money for road building. The Administration would never do that because this would kill off the market for these cars, despite it solving the reduced gas tax revenue problem they create. And keep in mind that this is a problem the Government created in the first place for offering the tax credit.

Also, Democrats conveniently forget one reason for having a gasoline tax was to encourage drivers to conserve gasoline. Unfortunately for the rest of us, conserving gasoline means less tax money for Congress to waste. So our reward for being 'better citizens' is more taxes. In this case a proposed tax on every mile that you drive your car.

Also, lets not forget that the driving-force for a pay-by-mile tax is that the idea of raising gasoline taxes higher is universally unpopular. So as a fix, they decide to simply invent a new tax revenue stream. By all means raise the gas tax and incur the anger of the voting public. I can't see how this alternative is going to make people less angry. Really, they are going to violate the personal property of millions of American in installing tracking devices.

In addition to scrapping the credit for hybrids and electric cars, how about also scrapping the multi-Billion Dollar ethanol gas subsidy.

Ninety organizations are calling for an end to the $6 billion-dollar-a-year subsidy that encourages the production of ethanol biofuel from maize in the United States.

Ethanol makes up about 10 percent of the gasoline fueling cars in the United States, and almost all of it is made from maize.

"It’s renewable and domestic, home-grown," says Bob Dinneen, president of the Renewable Fuels Association, who adds that this home-grown source of energy is reducing the nation's dependence on foreign oil.

A 2007 U.S. law requires motor fuel to include renewable fuels. And - for blending in ethanol - gasoline makers get a tax credit that adds up to about $6 billion this year. - VOA News

In addition to direct savings from ditching the ethanol subsidy, all drivers would benefit immediately due to better gas mileage from running on an all-gas mixture.

Worse, the money already extracted from car owners (and even residents in general) in some places is obscene. Certain Metropolitan areas subsidize their mass transit project through overcharging tolls for vehicle drivers. I just drove back from New York and the sight of a sign noting that the Toll to cross the Verazanno Bridge was $13 was shocking even with the knowledge that this is the round trip price. Still that is $6.50 for each direction. It is well understood that a good portion of that toll is destine to subsidize the subways. How much? Try half!

MTA Bridges and Tunnels (B&T) operates seven bridges and two tunnels that form essential links for vehicular highway transportation in the New York City metropolitan region. With an average daily traffic of more than 800,000 vehicles using the nine crossings and more than half of its $1.4 billion in revenue dedicated to mass transit, B&T plays a significant role in enhancing regional mobility. - MTA 2011 Final Proposed Budget (PDF Link, page 186)

Overbilling Car drivers to support the region's public transit system is only part of the redistribution that is going on in the NY City area. Take these additional taxes:

What You're Paying the MTA When You Don't Use It

• .34% payroll tax on all employers (to include school districts and local governments)
• 5% additional sales tax on car rentals
• Surcharge on drivers' licenses and car registrations
• .375% of the sales tax
• 17% surcharge on corporate taxes
• Surcharge on telephone taxes
• .3% Mortgage Recording Tax-1; .25% MRT-2 - Link

All of this in order to prevent fare hikes and cuts in service. And yet, all of these acts mask the true costs of the service of public transport. It also puts off the need to fight waste and abuse when such a large slush fund is available to cover over the difference from actual revenue (bus and train fares) from actual expenses.

So drivers are already paying. Perhaps, money already extracted from drivers should be used on roads and the place to raise additional revenue should be in raising public transit fares. They are the ones who are not paying their 'fair share'. Their share is being partially paid off the backs of car owners.

Declaring that only some benefit from a well developed road infrastructure is simply false. Also, the excuse given for requiring all Americans to have health care in ObamaCare was that all Americans will eventually need medical care. the same applies to roads. Everybody needs them. So everybody should pay.

P.S.

One real screw in this tax meter plan of Congressman Oberstar is that we are already taxed on lots of roads that we drive on. Are they going to tax us for driving through Delaware on I-95 where the tolls per mile cost more than the cost of gasoline to drive through the state? Is this little machine going to tax us for driving on our own property and on local roads and 'unimproved' roadways? And if the answer is that they will not be taxing us on all roads, why should people who do not use them have these meters installed in their cars?

And how are they going to prevent massive fraud by users disabling these machines? That might be as simple as blocking the GPS signal. It would be impractical to integrate these machines to existing cars in a way that would defeat tampering. And if they ever did manage that feat, surely people will just start not registering vehicles because they can't afford the taxes that come with it. This would be a real possibility out west where the distances to be driven are large and the possibility of an encounter with law enforcement minimal. Then again, you register your car with your state, not the Federal government. So would they expect State Authorities to enforce Federal Tax-Meter regulations?

Surely there are many more issues out there that this Congressman is not interested in hearing about.

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