Wednesday, June 04, 2008

Time to Hit the Beach?

I was reading my recent copy of Forbes and came across some thoughts by Rich Karlgaard should Obama win the presidency:

What will happen to the U.S. economy if Barack Obama wins the presidency and he's backed by a filibuster-proof majority in the Senate?

Taxes will go up. Capital gains and dividends will bypass 20% on their way to 25% or 30%. Income taxes will go to 40% for higher earners and possibly more for the "super-rich." The ceiling on payroll taxes will rise to $150,000 or so.

Government tax receipts won't grow at all. The highest taxpayers, feeling assaulted, will flee. To where?

Some will take longer vacations. If your last earned dollar is pinched in the 60%-plus range by the feds, the state and your city, you'll envy the beach bum's life.

Some will move to smaller cities. If a $150,000 income in Des Moines, Iowa, or Spokane, Wash., buys you the same house and lifestyle as a $500,000 income in Greenwich, Conn., or Palo Alto, Calif., why not move? The tax monster will eat most of that $350,000 difference.

Some will move to entrepreneurship. If you can live with a lower income, you might as well build equity behind the tax curtain and harvest it in better times. That's what entrepreneurs did in the 1970s.

Some will switch careers, become tax lawyers and make the most money of all.


The Wall Street Journal points out that Obama is out of touch with his false notion that capital gains are mostly the province of the wealthy. "In 2005, according to IRS data, 47% of all tax returns reporting capital gains were from households with incomes below $50,000, and 79% came from households with incomes below $100,000."

Hardly wealthy, especially if these households live in New York or California or other expensive areas. With less money due to high taxes, my fear is that many people will move down to the South where it is cheaper (I like it less crowded here) but maybe many of us should flee to the beach and only work part of the year to avoid the high income taxes. Afterall, if you can't beat em, you might as well be happy. The problem with this plan, however, is that if everyone takes this attitude, where will the US be in terms of a superpower or in terms of production? Or maybe this is the plan afterall? For those in this country with anti-American sentiment, what could be better?

44 Comments:

Blogger Danny said...

I am rather disappointed this morning - to realise that Obama is indeed the Democratic nominee. If he does become the President, I bet things will be mush worse than even Jimmy Carter's Presidency. May the Good Lord save us all!!!

8:21 AM, June 04, 2008  
Blogger Papa Ray said...

I echo what Danny says, and I will add that between him and his wife and his advisors, racial payback will be a bitch. You think that there is division now, wait until you see what they have planned.

And the unspoken, the secret that most don't know is that Obama is assumed to be a Muslim hiding behind a faith change. Who believes that? Well, millions upon millions of Muslims. Why? because his father was a Muslim and under Islamic law that means that he is Muslim, even if he really isn't.

So...the Muslims of the world have two choices: To believe he is a secret Muslim or that he rejected Islam for Christanity. They right now believe the first. If they come to believe the second, he must be killed. It is the law, the law of the Kor'an.

But like said everywhere on the web, Obama's real danger to our Republic, is his far left socialist beliefs. He wants "his" government to take care of all of our needs, no matter if we want or need it. This will bankrupt America, make us weak and make our economy now look like the best of times.

I just hope that all of the pissed off supporters of Clinton vote for McCain, otherwise we are screwed.

Yes, I call for divine intervention. We are going to need all of the help we can muster to defeat this false second saviour.

Papa Ray

8:48 AM, June 04, 2008  
Blogger MikeT said...

This is easy to explain. When you look at who supports the Democrats, it's either the very wealthy or those who are on or may end up on the government teat at some point (I say this as someone who isn't a Republican either). The very people that Obama is willing to screw here are primarily the sort of lower and middle, middle class families that make up a lot of the Republican base. At the end of the day, he's a politician, and doesn't really care about those who didn't vote for him; they're not his constituents in his mind.

Obama will end up losing if he goes up against McCain because a lot of Democrats won't vote for him. That's one thing I don't think we'll have much to worry about in this election. We've got more reason to worry about McCain and Clinton.

9:43 AM, June 04, 2008  
Blogger Jeff said...

When Republicans controlled the Congress, they had a chance to decapitate the tyrannical administrative state. They fed and trained the mad beast, instead.

The fiscal and economic policy differences between Obama and McCain are so small as to be practically irrelevant. Both nominees will advance ruinous policies.

The only significant difference will be in foreign policy.

The Wall Street Journal is shilling for big financial businesses. Since the Republican Party favors government intervention for big businesses against small businesses, this kind of article works to rouse Republicans. Since the Democratic Party favors big labor, and big labor is inextricably linked to the fortunes of big business, the article rouses Democrats, too.

Whatever.

10:01 AM, June 04, 2008  
Blogger Peregrine John said...

Fleeing California to go to the South where living is more possible... it's a reverse of the Great Okie Migration! Bizarre.

I'm not sure what the writer means by "behind the tax curtain" though. Sounds intriguing.

10:07 AM, June 04, 2008  
Blogger Larry J said...

Since the Republican Party favors government intervention for big businesses against small businesses, this kind of article works to rouse Republicans.

This is a stereotype that isn't borne out by history. Congresscritters from both parties have worked to bail out big businesses.

Examples: Chryslet in 1979 (Democrats ran both houses of Congress and Carter was the president) and the Savings & Loan bail out of 1988 (Democrats controlled Congress that year while Reagan was President). I also recall certain politically connected favorites being bailed out during the Clinton Administration (6 of those years had Republican control of Congress).

10:28 AM, June 04, 2008  
Blogger serket said...

What I find most disturbing is the possibility of these two on the same ticket, it might be unbeatable. I think the article has a good analysis on taxes, but also needs to include gas prices and spending. Also consider the threat to our national security from terrorism and illegal immigration. This will be a repeat of President Carter's term, only I fear the danger is much worse today.

2:17 PM, June 04, 2008  
Blogger Brad said...

He is someone to fear. Things that he has said (all from memory):
"A more fair distribution of opportunities and resources..." (translates to redistributive economics)
"A more realistic military budget..." (translates to a major reduction in the standing military and tech development)
"Healing wounds from the past..." (?)

If the third one includes any mention of monetary "healing" by pres obama, the level of "potential violence" (similar to potential energy in science) will skyrocket.

2:26 PM, June 04, 2008  
Blogger JohnJ said...

Time to reread Atlas Shrugged!

3:04 PM, June 04, 2008  
Blogger Mark said...

"I'm not sure what the writer means by "behind the tax curtain" though. Sounds intriguing."

I believe he means both the write offs for expenses as you're establishing the business, thus not generating income and that you don't generate cap gains until you sell. Thereby establishing value and holding during the temporary insanity of punitive cap gains rates, then selling after cooler heads have prevailed, you play both sides of the ever changing coin.

5:30 PM, June 04, 2008  
Blogger Jeff said...

larryj wrote, This is a stereotype that isn't borne out by history. Congresscritters from both parties have worked to bail out big businesses.

Yes it is. Bear Stearns comes immediately to mind.

And you left out the next sentence I wrote: "Since the Democratic Party favors big labor, and big labor is inextricably linked to the fortunes of big business, the article rouses Democrats, too."

I'm not claiming that Republican are unique in their governmental excess, but rather that they are unexceptional. Both parties us the force of government to favor big business. Thus, both parties are anti-free-market.

The Republican attempt to cloak their party (my former party for twenty-five years) in the flag of economic liberty --- it's a joke.

6:17 PM, June 04, 2008  
Blogger Trust said...

"When you look at who supports the Democrats, it's either the very wealthy or those who are on or may end up on the government teat at some point"

Many are ignorant of a simple fact when they want to "make the rich pay their fair share." There is a difference between wealth and income. Weath is not taxed, income is. That's why many "super rich" aren't bothered by high taxes, because they inherited wealth and didn't have to try to accumulate it while the government took over half of it.

When they say "tax the rich," they aren't taxing wealth, they are taxing what people work for. I'm not saying they should tax wealth, but I'm saying they need to re-take grade school economics and realize that they aren't taxing the wealthy, they are taxing those who produce. They may be the same, but they should grasp the difference before they create a disincentive to achieve (then they'll have the bad economy they created to campaign on).

7:25 PM, June 04, 2008  
Blogger Heather said...

This comment has been removed by the author.

8:36 PM, June 04, 2008  
Blogger Bugs said...

Make it south of Northern Virginia. This place is already full of Yankees.

8:48 PM, June 04, 2008  
Blogger Heather said...

I'm looking at India myself.

Btw. Please don't move to NC. We really have enough New Yorkers claiming that our taxes aren't high enough.

10:30 PM, June 04, 2008  
Blogger Jonathan said...

I agree that Obama and a Democratic Congress would pursue bad economic policies. However, it remains to be seen if they could get away with it. Nowadays, due to increased globalization of business and increased competitiveness of many non-US economies, any imposition of Demo/socialist policies at home would quickly and visibly hurt so many different American business sectors that there might be great political pressure to reverse the bad policies. I hope so, anyway.

10:32 PM, June 04, 2008  
Blogger Thor's Dad said...

I'm just wondering when the media will kick in with the "gravitas" narrative for Obama (he asks tongue firmly in cheek) as he seeks a VP. This was all the rave with Bush picking Cheney. The media used it as if Bush needed someone to function as a set of brass ones for him. In essence someone to think for him and control him like a puppet. If anyone needs someone to think for him it's Obama, especially on economic matters and for that matter foreign policy - of course that's about everything important isn't it.

11:27 PM, June 04, 2008  
Blogger Maxine Weiss said...

I think it's time for everybody to learn about Art Laffer and Milton Friedman.

The "Laffer Curve" says that if you decrease tax rates; sales tax revenues will increase.

Milton Friedman's groundbreaking discoveries about the free market are available to everyone. Friedman's 'Free To Choose' seminars are up on YouTube---all six volumes ! It's like a complete course in macroeconomics taught by the very best economists !!!

1:20 AM, June 05, 2008  
Blogger br549 said...

Truthfully, who are these people who would have Obama OR Hillary as president? What are they thinking?
What is it that they really want? For their interests do not lie in the health and well being of our nation. Outside of "we're here, we're queer, get used to it", "and gimme mine and I'll take yours", as well as Bush bashing that even they are getting tired of, they have nothing to say, nothing to offer.
I still remember when George H.W. Bush began bad mouthing lawyers early in his campaign against Clinton. He headed south real fast, immediately.

Anyone I have ever asked why they wanted to become a lawyer never stated in any kind of a "high road"
answer. It was always about the money. There are always going to be a few who help the poor, etc. But they just piss off the rest of them, and aren't capable anyway, of doing the high profile stuff with the big bucks attached.

Anyone attempting to defend himself in a court of law has an idiot for a lawyer. They have made sure of that.

6:24 AM, June 05, 2008  
Blogger Larry J said...

Many are ignorant of a simple fact when they want to "make the rich pay their fair share." There is a difference between wealth and income. Weath is not taxed, income is. That's why many "super rich" aren't bothered by high taxes, because they inherited wealth and didn't have to try to accumulate it while the government took over half of it.

Your point about the difference between income and wealth is spot on. However, only a small percentage of the wealthy inherited their money (the "old money" crowd). Most of the wealthy had to earn it. The "old money" crowd often has their money invested in things like tax-free municipal bonds so they don't have to pay a lot of taxes. Basically, they're at the top of the ladder and are trying to prevent anyone else from getting there.

8:27 AM, June 05, 2008  
Blogger Papa Ray said...

"With less money due to high taxes, my fear is that many people will move down to the South where it is cheaper..."

I forgot to comment on this. Mainly because the thought of Obama (who stands for nothing, but wants your money for his "change and hope", had me so riled I just missed your comment on Yankees moving down south.

I have a revelation for you! There has been a FLOOD of Yankees and Californuts hitting the Texas border for the last ten years, increasing each and every year.

Austin is the capital of Texas and also the capital of the liberal, progressive invasion of Texas.

Their invasion is only slightly less than the invasion of the latinos from the southern countries, which are the result of no family planning and illegals looking to escape the hellholes they were born in and come to the promised land.

So...with all my heart, I hope that nothing encourages more Yankees to come to Texas.

We have plenty of room left, Texas is a big state, but we prefer that it not be the last haven of humanity.

Tell everyone you know that it is too hot and too wild for civilized people down here.

As if that would help.

Papa Ray

8:31 AM, June 05, 2008  
Blogger Helen said...

Papa Ray,

I have been wondering why all of a sudden so many cities and towns have started leaning left and now I know. First, the liberal policies ruin the bigger cities and everyone flees and tries to make the same failed policies work in the new town they are in. It's becoming an epidemic. Pretty soon, there will be no place left to go for those of us who just want to be left alone to make our own decisions.

10:35 AM, June 05, 2008  
Blogger TMink said...

Helen, that reminds me of things I would hear in Denver. The locals would complain about the Cali transplants. They left Cali because of the high taxes and intrusive regulations and they were trying to bring their penchant for higher taxes and intrusive regulation along with them.

Trey

11:18 AM, June 05, 2008  
Blogger # 56 said...

Jeff,
Bear was a bailout? 10,000 layoffs, stock down from 170 to 10,with senior employee losses ranging from 9 figures to a billion. The financial system was bailed out, not a company. Nobody knows what would have happen had they declared bankruptcy, and few wanted to.

12:01 PM, June 05, 2008  
Blogger SGT Ted said...

I have been wondering why all of a sudden so many cities and towns have started leaning left and now I know. First, the liberal policies ruin the bigger cities and everyone flees and tries to make the same failed policies work in the new town they are in. It's becoming an epidemic. Pretty soon, there will be no place left to go for those of us who just want to be left alone to make our own decisions.

This is what happened to California. Now the crazies are exporting themselves to other states to inflict misery upon you all, equally, now that they've screwed this state up royally. I hope they all move out soon.

1:53 PM, June 05, 2008  
Blogger knoxwhirled said...

where will the US be in terms of a superpower or in terms of production? Or maybe this is the plan afterall? For those in this country with anti-American sentiment, what could be better?

Cynical as it sounds, it's hard to believe otherwise. For example, I'm convinced the purpose of "environmentalism" is solely to knock America down a notch or two by crippling our economy through onerous energy restrictions/expenses. There's no other explanation for the blatant hypocrisy of its proponents. It's similarly difficult to account for the pursuit of failed economic policies in Obama's case.

4:02 PM, June 05, 2008  
Blogger serket said...

Jonathan: any imposition of Demo/socialist policies at home would quickly and visibly hurt so many different American business sectors that there might be great political pressure to reverse the bad policies. I hope so, anyway.

I also hope that people come to realize that Marxist ideas are bad for the economy, liberty and our culture. There is always the possibility that his past is not indicative of his future and our country will do okay. Given that he seems to surround himself with people who hate America, the Jews and are racists, I like that he seems like a decent guy.

BR549: Anyone I have ever asked why they wanted to become a lawyer never stated in any kind of a "high road" answer.

I think it would be cool to be a constitutional lawyer.

4:08 PM, June 05, 2008  
Blogger Larry J said...

I have been wondering why all of a sudden so many cities and towns have started leaning left and now I know. First, the liberal policies ruin the bigger cities and everyone flees and tries to make the same failed policies work in the new town they are in. It's becoming an epidemic. Pretty soon, there will be no place left to go for those of us who just want to be left alone to make our own decisions.

It used to be fairly common to see a bumber sticker reading "Don't Californicate Colorado!" Long ago, I quickly learned that you don't have to go overseas to be an "Ugly American." The California transplants moved here only to belittle Colorado for not having all the stuff they had in California (and that drove their taxes to the point of extinction). If California was so great, why did they leave?

Today, about the only satisfaction comes from going to the Continential Divide and urinating, knowing both California and Texas are downstream. (Actually, I like Texas so perhaps I need to stand a few feet further west.)

4:09 PM, June 05, 2008  
Blogger Jeff said...

br549 wrote, Bear was a bailout? 10,000 layoffs, stock down from 170 to 10,with senior employee losses ranging from 9 figures to a billion. The financial system was bailed out, not a company. Nobody knows what would have happen had they declared bankruptcy, and few wanted to.

Yes it was a bailout. Layoffs, stock losses, and loss of bonuses for senior management are to be expected when a company is mismanaged.

I know what would have happened of BS wasn't underwritten by the government. A business would have failed, and other business stupid enough to depend on them would have failed. It's called a free market There are losers in free markets. That's a good thing because it encourages sound economic behavior for public companies.

Economic decision-making by big financial firms is distorted by the surety of government bailouts.

br549, you want socialism for big business and "free markets" for the rest of us. Hypocrite.

5:18 PM, June 05, 2008  
Blogger # 56 said...

"A business would have failed, and other business stupid enough to depend on them would have failed."
Not that simple, Jeffy. Any idea who BSC's counter parties were/are? Try half the municipalities and pension funds in the USA, and that's just domestic. The dollars involved? BSC was tied into over a trillion dollars worth of contracts. You have no concept of the industry wide dominoes that would have fallen. The Fed attempted to split the difference, dictating the initial 2$ price.
Re "Economic decision-making by big financial firms is distorted by the surety of government bailouts."
Agreed, and it is a very bad thing. The price the industry will pay for not policing itself will be a tidal wave of new Govt Regs. A shame, but the Street did it to itself.
You can call it a Wall Street bailout, or financial market bailout, dubbing the intervention a Bear bailout simply puts your ignorance on display.

9:17 PM, June 05, 2008  
Blogger br549 said...

jeff, re-read. I did not write that. But I'm writing this: fuck you.

6:48 AM, June 06, 2008  
Blogger a psychiatrist who learned from veterans said...

You folks just don't understand; you have to turn to the epistle of Diane Rhein to the Listening: And NPR said Bush was psychotic and lo ther arose a clamor and he and Bush 3 were deposed, And Obama recalling BLT (with or w/o mayo) said: let there be jobs and millions of the brothers and sisters found jobs collecting SSI and drinking juleps as the white devil had done. And then Obama said let there be an undivided Jerusalem and Iran spread from the Tigris to the Mediterranean.

11:36 PM, June 06, 2008  
Blogger br549 said...

papa ray:
Please look into all the eminent domain bullshit that is going on in Texas, mysteriously along the corridor Interstate 35 will take from Mexico through to Oklahoma.

By the way, Rudy Giuliani's law firm is handling that.

9:03 AM, June 07, 2008  
Blogger montag said...

I wish Bush could serve another term. I happen to like Wars, Out of control Government spending, and an executive who refuses to enforce laws passed by the Congress.

8:39 PM, June 08, 2008  
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