Sunday, April 25, 2010

Cap and Trade: The Final Pillar

I saw the following video on Kirk Petersen's blog.

The video reminded me of some less entertaining information regarding the hoax that is cap and trade, namely that a Cap and Trade bill is the third (and final) pillar of Obama's three point "blueprint for American Prosperity". (HT: Another Black Conservative)

According to Nanci Pelosi herself, the first two pillars are already in-place: Health Care, and "Education Reform" (the takeover of the student loan industry). Just like all of Obama's policies, it seems that this is yet another hoax designed to put us in chains.

There is a great website out there at (the video included the URL) that has some great information, as well as a petition you can sign and send to your Congressmen. I'd urge everyone to sign it.

Thursday, April 15, 2010

Senate Says "No VAT"

Well, it looks like the U.S. Senate read my post earlier today about the Value Added Tax (VAT). And, according to the Washington Post, it looks like they've gone on-record in an attempt to prove me wrong: If you haven't read it, my post asserted that we would see an attempt to implement a European-Style VAT.

Today's Senate vote does make that seem unlikely, as the vote was a stunning 85-13 in favor of a non-binding resolution that puts the Senate on-record in opposition of implementing a VAT. Of course, the resolution is non-binding, so they can go back on their word, and these days, I wouldn't put anything past the current Congress. Further evidence suggesting that I may have been incorrect is the fact that 6 of the Senators who voted in favor of the resolution are also on the President's debt commission, and the President's rules stipulate that 14 of the 18 commissioners must sign-off on any recommendation(s). So, unless some of these 6 change their minds, it's unlikely to become an official recommendation.

All of the above having been said, I take pride in having been correct about one thing: the nefarious nature of the VAT. The Post quotes John McCain as saying that "the danger in a VAT is that it is a hidden tax, built into the price of most products, and so consumers aren't as aware the government has taken a share of the money." That is precisely the point I made. The American people may not consider the idea of a VAT toxic -- but the tax is an absolutely toxic tax. We will soon see, however, if the tables don't turn and prove my prediction right...

The Tax Man Cometh

Today is the day many in America have dreaded for months: It's tax day. Time to pay the piper. Well, for roughly half of Americans, that's true. Because only 47 percent of Americans owe no income tax for 2009. Meanwhile, the top 10 percent of wage-earners paid about 73% of federal income taxes, and a family of 4 can make as much as $50,000 and still not pay one penny in income taxes. No wonder Congressional Budget Office (CBO) Director Douglas Elmendorf recently proclaimed that our nation's "fiscal policy is unsustainable, and unsustainable to an extent that it can't be solved through minor changes."

Elmendorf goes on to make some pretty good points that many Conservatives, myself included, can agree with, like:
  • "Obama's policies would produce deficits averaging $1 trillion for the next decade"
  • “Government would need to make changes in some set of the large programs, large parts of the tax code that we think of as the fundamental parts of the budget.”
  • "Spending on Medicare, Medicaid and Social Security, plus defense programs and debt interest, will exceed the rest of the federal budget in 10 years if most of the 2001 and 2003 tax cuts are extended, as President Barack Obama has proposed."
But it's that last comment that makes me uncomfortable, as Elmendorf has advocated a tax increase in the same sentence as the suggestion of a massive overhaul of our nation's tax code. If that's not bad enough, couple it with a similar suggestion of a massive tax code overhaul by Paul Volcker, a former chairman of the Federal Reserve, and that makes me very uncomfortable.

While political spectators can't decide whether Volcker was speaking on behalf of the Administration (he chairs the President's Economic Recovery Advisory Board), or himself, I believe this was a test balloon sent up by the Administration. Obama doesn't want to get out there and champion another unpopular idea, nor does he want to directly ask what the American people think, so he gets Volcker to make an off-handed remark about it, while he sits back and watches the reaction. Thus far, since the remark was made on April 6, the reaction hasn't been all that bad, except in the Conservative blogs.

I predict to you that the idea of introducing a VAT will come back as an official policy suggestion by the Administration or one of the Democrat lackeys over in Congress. Therein lies the motivation behind this post: The VAT is perhaps the most nefarious of all the forms of taxation that can be proposed. For Americans, who are not accustomed to the VAT, the concept can be difficult to understand. Moreover, most people who attempt to explain the VAT oversimplify it, and miss some of the worst aspects of the VAT. Let me attempt to explain.

VAT stands for Value Added Tax. And, like a sales tax, it is a consumption tax. (Instead of taxing your income as it is earned, the goods that you consume are taxed as you spend your income.) In this regard, a VAT is similar in concept to a national sales tax. That's where the similarity ends: the entirety of an assessed sales tax is collected when the goods are purchased by the consumer. An assessed VAT is collected in "pieces". As the name implies, a VAT is a tax on the value added to goods at every single step in the manufacturing and distribution process. When a manufacturer purchases raw materials that are then turned into a final product, the difference between the price at which they sell the final product and the price they paid for the raw materials is the value added. The manufacturer pays a percentage tax on the value that they added to the goods. When a wholesaler then purchases the goods from the manufacturer and sells them to a distributor, they will sell these goods at a profit, and so they pay a tax on that value added. This process continues until a retail outlet sells the goods to the consumer (and they pay a tax on the difference in final sales price and the price they paid for the goods). The final tax is a percentage of the value added at every stage in the manufacturing process. However, the nefarious aspect is that the final tax is paid by multiple people and is built into the purchase price paid by the consumer. Neither the consumer, nor anyone else knows the total tax paid on the goods. Additionally, since a VAT is essentially a tax on the profit at every step along manufacturing/distribution chain, it discourages profits. (Aren't profits what we need to grow the economy?)

That is the real problem with the VAT. It makes it easy for the government to collect massive amounts of tax revenue, as nobody knows exactly how much is paid in taxes. Additionally, a small increase in the tax rate goes largely unnoticed because every individual who pays the tax perceives only a small tax increase. While I can agree that America's current fiscal policies do need some drastic changes to reduce the deficit, those changes need to involve cuts to wasteful spending, not massive tax hikes or yet another tax that the average American can't understand. A VAT may be right for a European-style Socialist government, but it's not right for America, and even as the tax man comes to collect today, we need to send him away as he seeks this new tax.

Monday, April 12, 2010

Bow Down to the One You Serve

Barack Obama's repeated bows to foreign heads of state are well documented among the blogosphere. (They have to be documented somewhere, since the mainstream media won't pay any attention to them.) The latest incident got me thinking...

While disturbing, these bows are merely symbolic gestures, meant to reassure these heads of state that America under Democrat leadership will be submissive to the "international community". (Perhaps this is Obama's idea of "repairing America's damaged image throughout the world", which would certainly explain why he has spent more time overseas than any prior President on his repeated World Apology Tours.)

How do I know they're only symbolic? If they were indeed meant to indicate a true submission to foreign authority, then Obama would have listened to China's warning to curb the explosion in spending that he and the Democrats in Congress continue to seek. How ironic: This is one time when I may not mind it if the bows were more than symbolic. Then I realize that would mean that we would be completely subject to a Communist regime. While that may not be too different from the direction we're heading, at least Hu Jintao will admit to being a Communist.

Tuesday, April 06, 2010

Repudiation: Defending America's Constitution

As I laid out in a prior post here, America's Constitution is under assault by the very people who have taken oaths to uphold and defend it. It is my belief that while the Constitution does an excellent job of defending our Liberties, it can not defend itself from assault from those within the three branches of government. Consequently, I believe that Americans need to be empowered with the legal means to defend our Constitution from assault by those we elect.

Fortunately, I am not alone in thinking this: John C. Calhoun, America's seventh Vice President, was of similar thought. Calhoun essentially believed that no matter how many enumerations of government powers or provisions to restrict government powers are present, if the people who benefit from those protection are not empowered with "the means of enforcing their observance", those protections will be, in themselves, insufficient to prevent the party in power from throwing off those restraints and disregarding them. (h/t to Thomas J DiLorenzo writing on (Much like the party currently in power has done, and, some would argue, the Republicans did when they were in control of Congress.)

In any case, finger-pointing aside, it's time that Americans, who enjoy the protection of the Constitution, be given the authority and means to protect it. How can we be so empowered? There are probably several ways, but I have one in-mind, and it's an adaptation of a concept that Calhoun advocated: nullification. The concept of nullification is essentially that if any state disagrees with a Federal law, that state can pass a law nullifying the Federal law. I do not believe that nullification is a sufficient means to defend the Constitution, as it could lead to the legal fabric of America looking like a patchwork quilt, where each state has a different set of Federal regulations which are recognized. No, I think we need to go farther: I believe that the States which comprise the United States need to be empowered as the final arbiter of the Constitutionality of Federal laws (with the ability to override even the Supreme Court).

I am proposing a means of repudiation of overreaching Federal laws. Here's how I envision it working:
  • Every state will have the right to choose the method of repudiation: either a ballot initiative in a general election, or the state legislature can pass a proclamation of repudiation
  • When Congress passes unpopular legislation, states that disapprove can pass a proclamation of repudiation of the specific legislation via one of the above methods.
  • When either 2/3 or 3/5 (or some other percentage to be agreed upon) of states have passed proclamations of repudiation, the Federal law, in its entirety is rendered void. (Note that a Constitutional amendment requires ratification by 3/4 of states. Thus, I think the appropriate percentage for repudiation should be some percentage less than 3/4, but greater than 1/2.)
  • Repudiation can only be used to enforce the tenth amendment. Powers that are specifically enumerated to the Federal government (treaties, declarations of war, etc.) cannot be voided by repudiation.
  • Repudiation has a sunset provision: The required number of states must pass the proclamation of repudiation within a specified time frame (like 5 years) of the passage of the offending legislation.
I know that this idea requires one thing that will likely make its adoption highly unlikely: This would require a Constitutional amendment. Even if a single law could provide for this framework, it would undoubtedly be challenged in the courts. While this does pose a challenge, it's not insurmountable. It can be done. Especially if Conservatives make an idea like this a central "plank" in a larger Conservative platform based on the idea that we will "Never Again" allow government to run amok trampling our liberties and passing bad bills. But we can only keep such a promise by providing a framework that will allow for the rejection of such bad bills in perpetuity.

I am proposing this as a starting point. I am sure there are ways that this idea can be improved, so let me know what you think, and any specific ideas for improvement. There are a few "requirements" that I had when I came up with the idea:
  • It must require action by the individual states (or the citizens thereof), not a "rubber-stamp" item that appears on every ballot that is eventually ignored.
  • It should be necessarily difficult. Getting an initiative on a ballot is necessarily difficult, as is getting a state legislature to act.
  • It should require action by a significant number of the states so as to be necessarily difficult. This also provides a means of demonstrating that laws that are so repudiated are unpopular across a large spectrum of the country.
  • The sunset provision makes it more likely that repudiation will be used for legislation that is obviously bad. This should not be used as another way to make controversial issues turn into long and drawn-out fights.
I am very interested in any comments you may have. I'd like this to be the beginning of discussing some common-sense ways we can wrest control of our government from those who would use its power to destroy the country I love!