It appears policy types either "don't get" or "don't care" about one of the most fundamental ideas behind sound fiscal policy..."the more you tax something, the less you get of it." Arthur Laffer created quite the buzz in the 1970s when he developed his now famous "Laffer Curve," which shows that if you tax people at zero percent, you will get zero revenue and if you tax people at 100 percent, you will still get zero revenue because people will simply stop working. Therefore there is a point -- somewhere between zero and one hundred percent -- where you will find maximum amounts of both productivity and revenue. Finding that optimal point will mean widespread job creation and huge financial returns for a nation. Looking to find models of this can be challenging. In spite of the hard cuts in spending being done today, Europe is no place to look for tax solutions.

The...

[Read More]

One of the major ideas behind Obamacare and Romneycare (the Massachusetts government controlled health care program) is to force people to be responsible and get coverage of their own. The methodologies of both programs may actually be having the opposite effect. The reason for this is that governments typically do not understand human nature. They do not understand that if a person is attacked, they will either "fight" or "take flight." The great economist Thomas Sowell once asked in a Forbes Magazine column, "are we like trees?" The answer is clearly "no." Unlike wood that will take the blows, we humans (and our businesses) respond according to the attack.

I recently heard syndicated talk show host, Clark Howard, talk about how the city of Washington, DC has passed a tax charging 5 cents for plastic bags you used to get for free from stores, as an environmental ...

[Read More]

With whatever complaints you had about George Steinbrenner, you have to be impressed with his timing. Because of dying in 2010 and not 2011, he saved approximately $600 million. For quite some time I have been warning people about a concept I call "estaticide." I describe "estaticide" as the extermination of individuals because of the punishing tax implications. That is, people who feel they need to die early in order to be able to have something to leave their loved ones. It is not a serious reality, but I'm sure many Americans will think twice about when they die when they look at people like Steinbrenner. If Steinbrenner has passed away in 2011, his estate would have faced a crippling tax

The situation we have coming in 2011 is due to an interesting path of recent tax history. In 2001, President Bush wanted to provide relief to families that were devastated by the death of a family member. It is bad enough that mom or dad have passed away, without pickin...

[Read More]

Recently I stumbled on a fascinating article at ZeroHedge.com on the "50 ugliest facts about the U.S. eCONomy."  It paints quite a picture.  I suggest you read the article in its entirety, but here are some of the facts that stuck out to me:

- "According to the Tax Foundation's Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4.  Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent."  Obviously, in the real world, we would hopefully have people who are not participating in the tax system at all (roughly half of the population) to get into the action.  Still, even the most casual observer can see how such tax rates would wipe out the economy as capital would take flight to...

[Read More]

Gov. Chris Christie has dominated the news more than virtually any other state leader recently, with the possible exception of Arizona's Jan Brewer (because of immigration) and Louisiana's Bobby Jindal (due to the BP crisis). Yet, Christie's problems are no more profound than those facing other governors around the country. Many are on the brink of financial ruin and all are looking for answers to their fiscal problems. Christie is getting noticed because he speaks with a candor people have not seen in politicians for years and he is treating his state's problems with a boldness that demonstrates that he takes them seriously. Christie is talking about the privatization of many services.

Early in the governor's new administration, Christie created a New Jersey task force designed to identify ways the state could save money. According to the ...

[Read More]

Rarely would one expect to find anything interesting from an agency called the National Center for Health Statistics (NCHS), but a report on how emergency rooms are used and by types of groups is creating quite the stir among advocates of government health care and ammunition for opponents of socialized medicine. NCHS is the nation's primary health statistics agency and its new report suggests that the perception of our emergency rooms being dominated by the uninsured is based more on fiction and propaganda than on fact and reality.

The prominent use of the emergency room by the uninsured was one of the most frequently heard arguments for the President's socialized medicine program. Since people know they can get treatment there without paying immediately (if at all), they would fill up the room regardless of how small the need. The argument goes on that this care costs so much more and when done for non-emergency needs, it creates a disruption of care for tho...

[Read More]

For decades the cost of college has roughly been double or even triple the pace of inflation. The increases in recent years have been so fast and high, many are concerned that we are about to witness another bubble in America similar to the housing one that we have yet to fully recover. Recently, I saw from the National Center for Policy Analysis (NCPA and they quote extensively, Naked Law) that there are many indicators that this bubble is about to burst.

The cost of going to college is now doubling every nine years, on average, because there are typically eight percent increases each year.Because the government has made it extremely easy for students to get money (and even "more money" in increases) thanks to the government, supportive parents and immediate gratificat...

[Read More]

We have known for years that our debts and deficits have been out of hand, but the Congressional Budget Office (CBO) is painting a picture that is almost sci-fi in its proportions. It is the kind of picture that we would assume would come from the Third World or, at least, from Greece or Spain in the EU.

The founders of this republic designed a uniquely American political model that promised fiscal integrity. Simply put, the federal government was limited to 17 specific powers, none of which would cause the kind of financial strain our country faces today. Meanwhile, all other powers were left to the states, but the inability of those governments to print money made them fiscally healthy and naturally small. Because of this, it took almost 200 years for the federal debt to reach $1 trillion. Many found that alarming at the time, but since then we have arrived to the point that we add a $1 trillion to the debt every year.

The CBO is now arguing tha...

[Read More]

Article I, Section 8 of the Constitution makes it clear -- the federal government is limited to 17 specific powers and nothing more. To make sure the people understood such, the founders gave us the Tenth Amendment, which states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." The founders wanted a weak federal government and strong states for several reasons, among them:

The delegates to the Constitution Convention were sent there to represent the interests of the states. There was no national government and it had no representation at that event. It was entirely about the interests of state governments.

The states knew it was better to have problems solved in specific states, instead of making any issue a national problem. The concept is simple, "divide and conquer...

[Read More]

Conservatives have gotten rather animated about this idea that approximately 50 percent of the population does not pay taxes. They point at this as an example of a government that lulls the majority to sleep by keeping their tax burden low (or even "no"), while pounding the wealthy minority in order to keep themselves in power. Conservatives are half right, the intention of the "soak the rich" philosophy is to make the rest of America believe it is not paying taxes, and is thus distracted from the government's irresponsible fiscal activities.

Those who are offended by the fact that the federal government does not directly tax such a huge population, should be angry, but the story should not end there. It is not that these people are not paying taxes, it is that they are paying taxes through a ...

[Read More]