Archive for January, 2013
There was a time in the 1970s when California was the fastest growing state in the US. Thanks to their insane spending habits, especially on public employee pensions, California’s taxes have skyrocketed while their economy has tanked. That’s bad news but it isn’t the worst news. It looks like there’s about to be a major exodus of rich people leaving the state:
The Golden State’s new 13.3 percent income tax on top earners prompted golfer Phil Mickelson to say earlier this month he was considering a move, and according to the accountants who advise millionaire athletes, he was just saying what a lot of jocks were already thinking. Federal taxes on the top income bracket just rose by roughly 5 percent, and, while there’s nothing rich athletes can do about that, they are paying attention to which states dip into their game, and how much they take.
“They’re going to have an exodus of people,” said John Karaffa, president of ProSport CPA, a Virginia-based firm that represents nearly 300 professional athletes, primarily in basketball and football. “I think they’ll see some [leave California] for sure. They were already a very high tax state and it’s getting to a point where folks have to make a business decision as well as a lifestyle decision.”
Athletes staying in California are getting hit exceptionally hard. The top federal tax rate just jumped from 35% to 39.6%. California’s top tax rate just jumped from 10.95% to 13.3%, meaning athletes like Phil Mickelson will pay hundreds of thousands of dollars more in income taxes:
It adds up, says Karaffa. As tax season enters full bloom, he expects to see an uptick in the number of clients who will consider leaving California. Under a hypothetical calculation, the tax difference for a single professional athlete making roughly $10 million a year between being a resident of California versus Florida is around $800,000 annually.
It isn’t just Lefty that’s taking notice:
Los Angeles Angels outfielder Torii Hunter, who recently signed with the Detroit Tigers, made headlines last year when he announced a move to Texas because of the state’s lack of income tax. The move didn’t shelter his game checks from income taxes, but it did allow him to save taxes on other income, including for endorsements and autograph signings.
Hunter did save taxes on his $12 million salary by leaving California to sign with Detroit, where the Michigan state income tax is a flat 4.35 percent. And more and more ballplayers are taking taxes into account when signing with new teams or giving their teams permission to trade them.
High profile athletes signing a 7-year, $120 million contract with Florida or Texas teams would save almost $10 million over the length of the contract by not signing with a California team. That’s like adding a year to their contract. That isn’t a difficult decision.
Deroy Murdock nails it with this article:
Last year, a record 1,788 Americans renounced their citizenship, mainly in favor of countries with lower taxes and friendlier political rhetoric.
Golf great Phil Mickelson generated headlines this week when he suggested that high taxes might drive him from his native California or perhaps America. “There are going to be some drastic changes for me,” Mickelson said. “If you add up all the federal (levies) and you look at the disability and the unemployment and the Social Security, and the state, my tax rate’s 62, 63 percent.” Imagine keeping just 37 cents of every dollar you earn. Is that a fair share?
Travis Brown, author of “How Money Walks,” demonstrates how Americans between 1995 and 2010 shifted some $2 trillion in wealth by abandoning California, Illinois, New Jersey and other high-tax states and unpacking in low-tax states such as Florida, Nevada and Texas.
“After spending several years mapping and analyzing these data, one correlation keeps popping up: Income moves to where it is most welcome, tax-wise,” Brown writes. “Money walks because opportunity talks.”
Whethere we’re talking about high profile athletes or captains of industry, tax rates matter. States that attempt to gouge these people will hurt themselves because athletes won’t put up with their thievery.
Think about this. In every census that I’ve been alive, California gained congressional districts through reapportionment. Until this time. For the first time in California’s history, they didn’t gain districts. If they continue their failing tax-the-rich strategy, I’d bet they’ll lose seats after reapportionment in 2021.
This MPR article talks about the fight Republicans are picking with Gov. Dayton over his proposed tax increases:
Gov. Mark Dayton and Republicans in the Minnesota Legislature are sparring over the definition of a fair tax system.
A week after the governor released his plan, Republicans are zeroing in on his sales tax and property tax proposals. Republicans in the House and Senate Tax committees blasted Dayton’s budget plan Tuesday because they say it would force middle income Minnesotans to pay more in sales taxes.
That’s the worst possible fight for GOP legislators to pick. My advice to the GOP powers-that-be in the legislature is pretty straightforward. Don’t fight the fairness issue. First, that’s DFL turf. Second, it won’t change hearts or minds. Third, it doesn’t do anything to highlight how Gov. Dayton’s sales tax and cigarette tax increases hurt retailers. Fourth, it doesn’t do a thing to highlight the established fact that cigarette tax increases shrink revenues from the cigarette tax. Fifth, fighting the fairness non-issue doesn’t highlight the fact that Gov. Dayton’s tax increases don’t strengthen Minnesota’s economy or job creation.
The GOP powers-that-be should focus like a laser on the fact that Gov. Dayton’s budget and tax increase proposals will hurt Minnesota’s economy because it chases businesses and shoppers to North Dakota and Wisconsin. They should follow Rep. Leidiger’s lead. Here’s how he drives those points home:
- Does your hand-me-down car need a tune-up? Auto repairs are taxed.
- Sick? Aspirin, cold medicine, and any other over-the-counter drugs are taxed.
- Getting married? The wedding dress and hair services are taxed.
- Need to buy your kids winter coats? Any clothing item over $100 is taxed.
- Need to make a will or get tax help? Legal and accounting services are taxed.
- Do your college-aged children need to buy textbooks online? Online purchases and digital downloads are taxed.
- Smoke? The cigarette tax is increased by nearly $1 per pack.
- Own a business? Business-to-business transaction sales are taxed.
Rep. Leidiger’s list of specific tax increases should become the GOP’s response to questions about what’s awful about Gov. Dayton’s tax increase proposals. GOP legislators should repeatedly question Gov. Dayton and the DFL legislature how the middle class and working poor will pay less in taxes when all auto repairs, non-perscription drugs, cigarettes and e-books will see tax increases.
GOP legislators should repeatedly question DFL legislators and Gov. Dayton about why they think the middle class and working poor wouldn’t get hurt by these tax increases. Next, I’d tell GOP legislators to question Gov. Dayton, DFL legislators, especially Sen. Bakk, and ABM activists on why raising the cigarette tax and the sales tax won’t change people’s buying habits. Here’s what Sen. Bakk said in 2009:
Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said…higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.
Thus far, Sen. Bakk hasn’t criticized Gov. Dayton’s proposed cigarette tax increase even though it would have the same effect on retailers as the alcohol tax increase would’ve had in 2009. He deserves a ton of needling for what he hasn’t said this time. It’s time for GOP legislators to remind everyone that DFL legislators don’t own their votes, that their special interest puppeteers own their votes. Sen. Bakk isn’t saying anything because he’s expected to say what Alida Messinger and ABM tells him to say.
Finally, I’d recommend that the GOP fight Gov. Dayton’s budget, especially the tax increases, because it won’t strengthen Minnesota’s economy. GOP legislators should tell every interviewer how many jobs were created with a GOP legislature, then use that as a measuring stick against how many jobs this legislature creates.
When President Obama took office in 2009, he could legitimately say that the recession started under President Bush. That isn’t the case now that the economy shrunk in Q4 of 2012:
WASHINGTON—U.S. economic momentum screeched to a halt in the final months of 2012, as businesses pared back inventories and government spending fell sharply, while lawmakers struggled to reach a deal on tax increases and budget cuts.
The nation’s gross domestic product shrank for the first time in three and a half years during the fourth quarter, declining at an annual rate of 0.1% between October and December, the Commerce Department said Wednesday.
Conservative analysts have half-kiddingly said that the mess he inherited on Inauguration Day, 2013 is worse than the mess he inherited in 2009.
President Obama’s anti-capitalist policies have crippled several industries, including the natural gas and coal mining industries, the health care industry and community banks. President Obama’s chickens have come home to roost.
If history were to be written today would note that he was the biggest foreign policy/national security president since Jimmy Carter and the worst economic president since Herbert Hoover.
The Affordable Care Act is crippling the economy with its tax increases:
Boston Scientific said this morning that it is planning to cut more jobs, nearly doubling the restructuring it started in 2011.
The company expects the new round of cuts to range from 900 to 1,000 positions, including layoffs as well as the elimination of unfilled positions.
This is a continuation of the Affordable Care Act employment cuts. Thanks to the ACA’s onslaught of tax increases, companies like Boston Scientific are eliminating jobs to maintain profitability.
The sad part is that the Obama economic disaster continues, meaning more families will get hurt.
When KSTP Political Director Tom Hauser asked Gov. Dayton about Gov. Dayton’s tax increase proposal, Gov. Dayton reflexively regurgitated the ABM/DFL Chanting Point that the rich weren’t paying their fair share. It isn’t acceptable any more to have the fascists within the DFL and ABM to define fair share. It’s time to challenge their chanting points on this.
First, it’s insulting to think that the DFL thinks some members of the MAPE or AFSCME are paying their fair share. They’re sucking taxes from productive members of the private sector. In far too many instances, these people are political cronies of high-ranking officials at a university or department commissioner or do-nothing council. They often are put in do-nothing jobs like PR director of a tiny office that nobody’s heard of before. Sometimes they’re hired to be a “legislative liaison” in the MPCA or the BCA. Legislative liaison is a euphemism for taxpayer-funded pro-big-government lobbyist.
People in these position frequently draw salaries of $75,000-$150,000 but the DFL thinks that they’re actually contributing something meaningful to Minnesota’s taxpayers. I’m still waiting to hear the DFL’s/ABM’s explanation as to what these millstones contribute to Minnesota’s GDP or competitiveness.
Compare that with entrepreneurs. The first 5-10 years they’re in business, they frequently work from sunrise until midnight, sometimes later. They employ anywhere from 10-40 people if it’s a small business. If it’s a mid-size business like Quad Graphics, they employ 250+ people, all of whom have been offered quality health insurance. With Quad Graphics, the company pays a significant portion of the health insurance premium.
It’s easy to quantify these companies’ contributions towards a fiscally healthy Minnesota.
Next, the ABM/DFL definition of paying their fair share is based solely on the government’s take of these entrepreneurs’ profits. It’s never defined by anything other than contributing to bigger government. The entrepreneurs’ definition of paying their fair share is frequently measured by how families’ lives are improved through lower-priced goods and services, inventions and innovations that make like easier or through improving profits because they’re producing things of value.
If a pollster were to ask which is the more sensible definition of paying their fair share, there’s little question that the people would pick the entrepreneurs’ definition over the ABM/DFL definition of fair share.
Kirsten Powers’ op-ed exemplifies why she’s my favorite liberal:
In a recent interview with The New Republic, President Obama was back to his grousing about the one television news outlet in America that won’t fall in line and treat him as emperor. Discussing breaking Washington’s partisan gridlock, the president told TNR,”If a Republican member of Congress is not punished on Fox News…for working with a Democrat on a bill of common interest, then you’ll see more of them doing it.”
Alas, the president loves to whine about the media meanies at Fox News. To him, these are not people trying to do their jobs. No, they are out to get him. What other motive could a journalist have in holding a president accountable? Why oh why do Ed Henry and Chris Wallace insist on asking hard questions? Make them stop!
President Obama has gotten adulation from the Agenda Media since before he’d been elected to the Senate. Books have been written about the media’s slobbering love affair with President Obama. Still, that isn’t enough for the messiah.
Anything less than constant adoration isn’t acceptable with this administration.
Here’s a warning from Ms. Powers that liberals should pay attention to:
Whether you are liberal or conservative, libertarian, moderate or politically agnostic, everyone should be concerned when leaders of our government believe they can intentionally try to delegitimize a news organization they don’t like.
In fact, if you are a liberal, as I am, you should be the most offended, as liberalism is founded on the idea of cherishing dissent and an inviolable right to freedom of expression.
That more liberals aren’t calling out the White House for this outrageous behavior tells you something about the state of liberalism in America today.
That’s the same message being sent by FIRE President Greg Lukianoff. Mr. Lukianoff is a proud liberal who’s fought the good fight against campus censorship. Whether it’s fascists implementing ‘speech codes’ or whether it’s the fascist staff in the White House, the result is the same: censorship.
There’s no such thing as acceptable censorship.
This is particularly appalling information:
What the Obama administration is doing, and what liberals are funding at MMFA is beyond chilling – it’s a deep freeze.
On the heels of Dunn’s attack on Fox, Brock wrote a letter to progressive organizations bragging about the U.S. government trashing a news organization: “In recent days, a new level of scrutiny has been directed toward Fox News, in no small part due to statements from the White House, and from Media Matters, challenging its standing as a news organization.”Point of order: who put Media Matters in charge of determining what is and isn’t a news operation?
A Media Matters memo found its way into the public domain and if you care at all about decency and freedom of the press, it will make you throw up. If you like McCarthyism, it’s right up your alley. It details to liberal donors how they have plans to assemble opposition research on Fox News employees.
It complains of the “pervasive unwillingness among members of the media to officially kick Fox News to the curb of the press club” and outlines how they are going to change that through targeting elite media figures and turning them against Fox. They say they want to set up a legal fund to sue (harass) conservatives for any “slanderous” comments they make about progressives on air. They actually cite one of the best journalists around, Jake Tapper, as a problem because he questioned the White House about calling a news outlet “illegitimate.” Tapper can see the obvious: if the White House can call one news outlet illegitimate for asking tough questions, then guess who is next? Anyone.
Whether it’s this administration, MMFA or other hardline fascist/progressive organizations (think ABM in Minnesota or ProgressNow nationally), the goal is the same: to stop informed debate.
That’s why I’ll proudly join with Kirsten Powers and Greg Lukianoff in fighting against the tyranny of censorship.
In 2009, Rep. Ann Lenczewski, then as now the House Tax Committee Chair, introduced sweeping tax reform. Here’s what she told MPR about her proposal:
“This bill proposes the most significant tax overhaul in 20 years,” said the bill’s chief author Rep. Ann Lenczeswki, DFL-Bloomington.
In addition to the tax hikes, Lenczewski’s bill removes a variety of tax breaks for homeowners and businesses. Charitable contributions, the mortgage interest tax deduction and the property tax deduction for homeowners are eliminated and replaced with a tax credit based on income. The bill also eliminates several business tax breaks, like the Research and Development credit and parts of the governor’s JOBZ program.
Lenczewski said she wants to clean up the state’s tax code.
“Which is to sweep the tax code clean of all of the preferential treatment and subsidies and things we can’t afford anymore and instead bring a fairer, more progressive income tax to Minnesotans based on the ability to pay,” she said.
Here’s an itemized list of the tax increases included in Rep. Lenczewski’s bill:
- Cigarette Tax: $204 million tax increase
- Alcohol Taxes: $209.1 million tax increase
- Boats, ATVs & Snowmobiles: $10.5 million tax increase
- iTunes Tax: $3.17 million tax increase
- Gift Tax: $20.6 million tax increase
Compare that with Gov. Dayton’s tax proposal. Gov. Dayton is proposing a major cigarette tax increase and a major change in the sales tax system. Here’s what Sen. Bakk said about the alcohol tax increase at the time:
Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said eliminating the current mortgage interest deduction could hurt Minnesota’s high rate of home ownership and higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.
Whether we’re talking about raising the alcohol tax or the cigarette tax, the outcome is predictable. People will change their shopping habits to avoid the additional tax. That isn’t opinion. That’s verifiable fact. In state after state where the cigarette tax was increased, revenues dropped because people drove to a state where the tax was cheaper.
What’s telling is that Sen. Bakk, who thinks he represents the metro suburbs instead of the official district he was elected to, isn’t saying a thing about Gov. Dayton’s tax increases. Presumably, he knows better than to cross the ABM wing of the DFL.
Sen. Bakk was right in 2009. That’s what makes his silence this year that much more deafening.
During his interview with KSTP political director Tom Hauser, Gov. Dayton made an interesting statement that offers insight into how the DFL thinks of the tax system. Here’s what Gov. Dayton said that caught my attention:
GOV. DAYTON: Well, I campaigned on making our tax system fairer, raising taxes on the wealthiest who aren’t paying their fair share and the Republican-led legislature rejected that so we’re still back at square zero.
Hauser had questioned Gov. Dayton about his changing opinion on raising the cigarette tax, considering the fact that he’d criticized Tom Horner for proposing a change in the sales tax. Here’s what Candidate Dayton said about Horner’s proposed tax increases:
…you’re in favor of raising taxes on alcohol and cigarettes, another regressive tax. So the difference between us is I want to raise taxes on the rich, and you want to raise taxes on sportsmen and women and and middle income working families.
That’s an accurate appraisal of what Horner’s tax would do. Whether it’s a sales tax or it’s a sin tax, it’s regressive, hitting “middle income working families.”
Apparently, Gov. Dayton thinks it’s ok to raise regressive taxes that hit “middle income working families” when he proposes it. He’s only critical of others raising regressive taxes.
That isn’t logic. That’s anti-logical, which fits with Gov. Dayton’s type of thinking.
Later, Gov. Dayton had this exchange with Tom Hauser:
HAUSER: The new income tax increase is for singles making more than $150,000 a year and couples making more than $250,000. Do you consider that rich?
GOV. DAYTON: Well, it would put those individuals and couples into the top 2% of wage earners in Minnesota. Whether that’s wealthy or not, it’s up to their individual circumstances. A family with 4 children and elderly parents to take care of, those dollars are real. Everyone’s money is real.
HIGHLIGHT: It’s interesting that Gov. Dayton immediately repeated the DFL/ABM/media praetorian guard’s (pardon the repetition) chanting point of the rich not paying their fair share.
Later, when Hauser questioned him if some families making $250,000 a year weren’t rich, Gov. Dayton admitted that “a family with 4 kids and elderly parents to take care of” might fit into the DFL’s definition of middle class.
The explanation for that is simple. DFL-think is conditioned on the notion that people doing well must’ve stiffed “working families.” Only when caught in these types of situations does the DFL admit that people who make 6-figure salaries are part of the middle class. That’s the only time they’ll admit that these aren’t greedy people who won’t “pay their fair share.” That’s just their reflexive spin.
Sunday morning, I DVR’ed At Issue With Tom Hauser for the first time since the election. I’m glad I did, though not because I agreed with what I heard. The majority of the show was Hauser’s interview of Gov. Dayton on his budget.
The dishonest things that Gov. Dayton said were insulting to thinking people. About 6 minutes into the show, Gov. Dayton said that “The GOP wouldn’t tell me what spending I should cut.”
First, I highlighted here how Gov. Dayton is cutting spending by $225,000,000 but raising taxes by $3,700,000,000. It’s apparent that Gov. Dayton isn’t interested in cutting spending. Neither is the DFL legislature. They can’t afford it because they’ve got too many political allies to repay with taxpayers’ money.
Next, it’s insulting that Gov. Dayton would lie like that. The GOP legislature passed a budget complete with spending cuts and spending priorities. Gov. Dayton and the DFL didn’t like that budget, which led to Gov. Dayton’s veto of the legislature’s budget.
If Gov. Dayton said that he disagreed with the GOP budget, everyone who paid attention to the budget fight would agree. Saying that Republicans didn’t offer specific cuts in their omnibus bills is exceptionally dishonest.
Unfortunately, Gov. Dayton telling whoppers isn’t surprising. It’s disappointing but it isn’t surprising.
Later in the interview, Hauser asked Gov. Dayton how he’d reconcile his sales tax and cigarette tax proposals with what he said on the campaign trail in 2010. Here’s what Gov. Dayton said:
GOV. DAYTON: Well, if my tax proposal in 2011, which was no tax increase for sales or property or individuals, which would’ve raised taxes on the wealthiest 2% by 2 points, if that would’ve been adopted, we would have no deficit going into the next biennium. We would be able to pay off the school shift entirely.
That’s nonsense. First, Gov. Dayton’s initial tax increase proposal called for creating a top tax bracket of 10.95%, compared with the top tax bracket today of 7.85%. Next, Gov. Dayton’s initial tax increase proposal included a 3% surcharge on income over $1,000,000 a year.
Most importantly, Gov. Dayton didn’t explain why raising the sales and cigarette taxes were taxes against workers in 2010 but it’s ok to raise them now.
The truth is that Gov. Dayton, like DFL legislators, loves all tax increases. He just loves confiscatory income tax increases on “the rich” most of all.
Finally, the GOP legislature passed a bill that would’ve paid off the school shift last year. Gov. Dayton vetoed it. This year, Dr. Cassellius, his Education commissioner, admitted in testimony that Gov. Dayton’s education budget wouldn’t pay off the school shift until 2017.
I repeat. Gov. Dayton will raise the income tax and the cigarette tax while applying the sales tax to dozens of things it doesn’t apply to now but he won’t pay off the school shift until 2017. That’s several political lifetimes from now.
That’s why Gov. Dayton’s policies are totally unacceptable for Main Street Minnesota.
According to this Weekly Standard article, Dianne Feinstein’s anti-Second Amendment bill would exempt government officials:
Not everyone will have to abide by Senator Dianne Feinstein’s gun control bill. If the proposed legislation becomes law, government officials and others will be exempt.
“Mrs. Feinstein’s measure would exempt more than 2,200 types of hunting and sporting rifles; guns manually operated by bolt, pump, lever or slide action; and weapons used by government officials, law enforcement and retired law enforcement personnel,” the Washington Times reports.
In other words, the elitists have a right to protection but Main Street doesn’t have the right to self-protection. That’s typical elitist behavior. Compare that with ‘evil’ Newt Gingrich’s Contract With America:
FIRST, require all laws that apply to the rest of the country also apply equally to the Congress;
Liberal elitists villify Speaker Gingrich and sing praises to Sen. Feinstein, which is odd considering the fact that Sen. Feinstein apparently thinks elitists like her are entitled to special treatment.
Why shouldn’t Main Street Americans be entitled to self-protection with the weapons Sen. Feinstein wants to ban? Don’t Main Street Americans contribute mightily to the health of this nation? Shouldn’t they be entitled to the same protection as elitists like Sen. Feinstein?
I’d love hearing Sen. Feinstein argue against that argument.
This morning, the DC Circuit Court of Appeals ruled that a number of President Obama’s recess appointments violated the US Constitution:
In a case freighted with major constitutional implications, a federal appeals court on Friday overturned President Obama’s controversial recess appointments from last year, ruling he abused his powers and acted when the Senate was not actually in a recess.
The three-judge panel’s ruling is a major blow to Mr. Obama. The judges ruled that the appointments Mr. Obama made to the National Labor Relations Board are illegal, and the board no longer has a quorum to operate.
But the ruling has even broader constitutional significance, with the judges arguing that the president’s recess appointment powers don’t apply to “intrasession” appointments, those made when Congress has left town for a few days or weeks.
This wasn’t a split decision. It was unanimous. President Obama’s recess appointments to the NLRB aren’t legitimate, thereby depriving that board of the quorum needed to make rulings.
The question now is whether President Obama will act as defiant as he usually acts. My bet is that he’ll act defiant because he doesn’t know any other way of acting. Another question left unanswered is whether the American people will express outrage over this president’s indignation towards the US Constitution. Finally, will Democrats defend President Obama’s extraconstitutional actions in their attempt to appease Big Labor?
I’m betting that President Obama will remain defiant. I’m betting that the American people won’t express outrage that President Obama thinks that the Constitution and the laws don’t apply to him. Finally, I’m betting that Democrats will defend President Obama’s appointments because they’re afraid of incurring Big Labor’s wrath.
This is significant, too:
The judges signaled the power only applies after Congress has adjourned sine die, which is a legislative term of art that signals the end to a long work period. In modern times, it means the president could only use his powers when Congress quits business at the end of a year.
“The dearth of intrasession appointments in the years and decades following the ratification of the Constitution speaks far more impressively than the history of recent presidential exercise of a supposed power to make such appointments,” the judges wrote.
TRANSLATION: The patriots that crafted the Constitution had more respect for the Constitution than do today’s politicians. I heartily agree.