Random ruminations from your resident curmudgeon...
One thing that we have learned in the first three years of the Obama administration is that we should look closely at any major piece of legislation that the White House champions in Congress. Why? There are always some hidden bombs- very negative surprises- that are tucked away inside a bill that would most likely prevent that legislation from passing if these items were known to the public. President Obama's recently proposed budget is no different. Buried deep with his budget is a proposal to raise the tax rate on dividends from the current 15% rate to 44.8%. "Big deal," you say? It's only those rich folks that get those dividends anyway, right? According to the IRS data of tax filings, nearly 75% of all dividend payments go to taxpayers age 55 or older. This means that many people in retirement have dividend paying stocks as an investment to help supplement their retirement income. Historical data indicates that dividend payouts are highly sensitive to the rate of taxation on dividends. Raising that tax rate causes companies to cut dividends and retain the cash rather than pay it out. The dividend tax rate was cut to 15% on January 1, 2003. That year, dividends reported on tax returns rose from $103 billion to $196 billion. By 2006, that number had grown to $337 billion. Think those who depend on dividends to augment their income would be happy to know that this is in the budget? This is exactly why this is buried deep within the budget. And it is further proof that Washington is totally clueless about how to get the economy healthy.
I asked my wife where she would like to go for our anniversary. She said, "How about somewhere I have never been?" I suggested the kitchen. Ya know, it's pretty comfortable outside in the doghouse.
The lack of real world perspective and experience in Washington is stunning. Those that make critical decisions that affect us in the real world have an appalling lack of understanding of how the real world works. The latest example of this occurred Monday, when senior White House adviser Valerie Jarrett made these comments when she spoke at North Carolina Central University regarding raising and extending unemployment benefits,
"...We need to make sure we continue to support this important safety net. It is not only good for the family, it is good for the economy. People that receive that unemployment check go out and spend it and help stimulate the economy, and that is healthy as well."Spoken like a true bureaucrat. The stupidity of this comment is blinding. So the administration wants to remove billions of dollars from the private sector through higher taxes, return just pennies on the dollar to unemployed Americans, and somehow they believe this will stimulate the economy? Holy Shnikey! No wonder we are in the mess we are in.
I am boycotting shampoo. I am demanding real poo.
Much, if not most, of the left's economic policy is predicated on being "fair". Those on the left have made it their singular goal to be fair, and in their world, that means everyone achieving the same outcome. "Fairness" is a wonderful populist theme, which is why most politicians seize the concept of fairness. Yet each of know that life is not remotely fair. Trying to achieve "fairness" in economic outcomes or tax policy is a canard that those who aspire to political office use to promote class warfare and further their own ends. Here is the salient point of this rant: when government at any level raises taxes, people respond and change their behavior to avoid those higher taxes. Every. Single. Time. "Fairness" is nothing more than political cover for politicians attempts to grab more of your hard earned money. Perhaps the better approach from Washington would not be attempting to equalize outcomes under the guise of "fairness, but instead removing obstacles that make it extremely difficult for everyone to rise above their current economic station in life.
A penny saved is a Congressional oversight.
And that, my friends, is my view.