Liberty Maven

Quote of the Day: “”Politicians will always spend every penny of tax raised, and whatever else they can get away with.” – Milton Friedman

Unless Congress acts, on January 1, 2011, your taxes will go up.

New Year’s Day is when the 2001 Bush tax rates expire.

The White House and Congress are negotiating a “compromise” that may involve . . .

* A temporary extension of those rates, and/or
* A tax hike on the “wealthy”

As our sample letter below shows, if no agreement is reached, and the tax cuts expire . . .

* You’ll have less money to pay your bills
* Marginal companies will be driven under by the higher taxes, increasing unemployment
* Many new ventures will NOT be attempted because of the higher tax costs
* And worst of all, your children will be worse off because the federal deficit will actually increase

Here’s the crucial thing to understand . . .

* Tax increases don’t reliably raise actual tax revenues
* Tax revenues always run about 19% of GDP, no matter what the tax rate is
* Congress always spends as much as it can get through taxes, AND as much as it can get from borrowing
* So raising taxes WON’T decrease spending or reduce the deficit

It’s a fact . . .

Congress has a spending surplus, not a tax deficit.

Please tell Congress to permanently extend the Bush tax rates and get spending under control.

You may borrow from or copy this sample letter . . . Read More »

Here’s Ron Paul, again showing his justified outrage at the TSA with Neil Cavuto earlier today. They also discussed tax cuts and public ownership of GM.

Michael Pento, Senior Economist of Euro Pacific Capital

It seems the current Chairman of the Federal Reserve is of the belief that diluting the dollar is the cure for everything from a recession to male pattern baldness. And like other snake-oil salesmen before him, Mr. Bernanke is heavy on promises and light on results. Here are five prescriptions that money printing can’t fulfill:

1. Lower the corporate tax rate. The US corporate tax rate is the second highest in the developed world, after Japan. Lowering this tax would help American businesses compete with foreign corporations and unleash the entrepreneurial spirit of our workforce. In addition, lowering taxes on capital goods purchases and retained earnings would also encourage expansion projects, new hiring, and therefore general business development.
2. Reduce crippling regulations. There isn’t a much better example of the current environment of excessive red tape than the number of “Czars” running around the White House: 28, at last count. Ronald Reagan had just one. These sub-cabinet level offices simply advise the President on how to further fetter American businesses and launch umpteen “independent probes” every time an issue comes up. But even officials not given the Imperial Russian title are busy making life hell for small- and medium-sized businesses because there is too much power in Washington.  Read More »

by Jim Babka, President, DownsizeDC.org

Quote of the Day: “If elections really changed things they would be illegal.” — Emma Goldman

I will start with a confession . . .

* I cheered in 2006 and 2008 when the voters body-slammed the Republicans
* And I will cheer again next week when the Democrats too get slammed

Both the Republicans and the Democrats have thoroughly deserved their repudiations. I think our political parties are so bad that it’s almost always appropriate for incumbents to lose, and for the majority party to revert to minority status. But that doesn’t mean that such changes really improve things.

Did things improve in 2008 when Obama’s Democrats gained control? I think the answer is no. Obama has continued, or worsened, nearly all of Bush’s policies, and with the Democratic Congress has managed to outspend the profligate  Republicans. Should we really expect the Republicans to be different this time?

If you hold out hope, prepare to have it crushed, starting here . . .

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by Peter Schiff, the president of Euro Pacific Capital, and the host of The Peter Schiff Show, streamed live Monday through Friday from 6pm – 8pm Eastern time at www.schiffradio.com.

Congressional Republicans and Democrats are engaged in a heated debate over which Americans deserve not to have their taxes raised, with both claiming that some form of tax cut will stimulate the economy. The primary point of divergence is what type of cuts will be most likely to get Americans spending, and whether the wealthy will wastefully save their extra cash or use it to create jobs. This debate is academic. If a stronger economy (rather than pre-election posturing) is really the goal, then tax cuts alone will fail.

The real impediment to economic growth is not taxes, but the government spending that makes high taxes necessary in the first place. Given the widespread, but erroneous, belief that spending is the root cause of economic growth (rather than saving and investment), it may shock many to know, especially my fellow Republicans, that of all the three means to finance government – taxation, borrowing, and money creation – taxation is the least destructive over the long term.

I will discuss this topic in depth tonight on the debut broadcast of The Peter Schiff Show, my new weekday radio show on WSTC in Norwalk, CT. Stream it over the Internet from 6pm-8pm Eastern time, every weeknight at www.schiffradio.com.

Despite the visceral sting on April 15th, taxes have the virtue of being honest, direct, and most importantly, visible. By transferring purchasing power from one group to another, taxes take a pie that has already been baked and change how it is sliced. But taxes do create dangerous disincentives if they are abused. Raise taxes high enough and society’s most productive individuals may stop working; keep raising them, and the public may riot. As a result, a government that relies primarily on taxes tends to be one that lives within its means.

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by John Browne, Senior Market Strategist at Euro Pacific Capital

Over the last two weeks, seemingly good economic news offered some shreds of optimism to a stock market that was desperate for a pick-me-up.The week before last, the National Bureau of Economic Research declared that the US recession had ended back in June 2009. At the beginning of last week, news came in that month-on-month retail sales had risen by 0.4 percent. Combined with successful government debt auctions in the eurozone, increasing expectations that Republicans will take back the House (thereby blunting the leftward drift of Washington), and hopes that a new round of quantitative easing will pump up growth, mainstream analysts are developing a feeling of near-euphoria.

Although it hard to begrudge the punch drunk for grasping at a little hope, investing is a dispassionate endeavor that calls for close and realistic analysis. In that spirit, let’s dig deeper into the recent ‘good news.’

First, the single month’s rise in retail sales was a blip on what has been a long-term downtrend. Furthermore, retail sales in August typically get a large boost from seasonal ‘back to school’ spending. This year, retail sales were boosted further by temporary tax incentives and vendor discounts.

Second, the successful auction of debt from worrisome eurozone countries, like Ireland, only served to further camouflage the ongoing risk of sovereign default by these states. None of them have committed to a comprehensive program of austerity and market liberalization – Ireland maintains a ‘too big to fail’ doctrine while Greece is on the verge of riots from its so-far modest efforts at privatization. None of the PIIGS would have had successful bond sales if Germany hadn’t been pressured into becoming a ‘sovereign of last resort’ for the whole currency area.

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Recently, Martin Heinrich, the man who purports to represent me and the rest of my New Mexico district in the House of Representatives, refused to debate his Republican challenger Jon Barela on KOAT-TV. In this case, Mr. Heinrich was trying to confine the debate to questions he could honestly answer, which these days seems to be limited to his name and age.

This is rather typical of New Mexico’s Democrat politicians and from what I read on Liberty Maven, the Internet, and in newspapers, about what you can expect of them wherever you live in our wonderful country. While adroit at stabbing us in the back with every tax and regulation they dream up, darn if you can find them whenever you want them to explain their actions.

So if your congressional representative is like Mr. Heinrich (and he or she can be of either party as I see them these days), may I proffer a few questions you might ask if you suddenly run into yours in a restaurant, an elevator, or an airport candy shop:

Why did you pass Obamacare without reading it (and if you say you read it, why did House Speaker Nancy Pelosi say “it had to be passed to see what was in it”)?

Why, under  Obamacare, after being told Americans could keep the insurance they like, are seniors being forced to switch Medicare prescription coverage because the federal government is eliminating choices for them?

Why did you lie to us about the real cost of Obamacare which changes with every CBO report?

Why did you pass a near-trillion dollar stimulus package that, instead of being used to create jobs, has been used to prop up bloated governments across the country?

Why, before the stimulus was passed, were we promised, cross-my-heart-or-hope-to-die, that unemployment would absolutely, positively stop at eight percent?

Why have U.S. tax dollars (actually, more American debt on our children’s backs) been used to rebuild Islamic mosques in foreign countries?

Why is the Justice Department being used as a political truncheon to harass and silence any state or person who disagrees with the Obama administration?

Why do you even want to consider passing job-killing cap-and-trade legislation?

And, finally, Mr. Representative-who-I-never-ever-see-in-this-state-unless-you’re-running-for-re-election, could you please explain to me how trillion dollar deficits are going to help this country?

Remember these simple queries, my friends, because running into elected officials by accident may be the only way we ever come into contact with the gods of Washington.

Quote of the Day: “The political machine triumphs because it is a united minority acting against a divided majority.” — Will Durant

Instead of asking, “Would you like paper or plastic?” the checkout clerk may soon ask, “Do you need our form W-9?”

A W-9 is the IRS’s “Request for Taxpayer Identification Number and Certification.” Because of the new healthcare law . . .

If you spend as little as $55 at the local Office Shack each month, you’ll exceed $600 for the year. That means you’ll need to file a 1099 with the IRS for Office Shack. You’ll also need to get a W-9 from Office Shack so that you can have their tax id number handy when the time comes to fill out the 1099.

It used to be that businesses only had to file 1099s for unincorporated, independent contractors (with some exceptions). But now a 1099 will be required every time a business spends more than $600 with any entity. Multiply this requirement across the entire economy and it amounts to a tsunami of hundreds of millions of additional tax form filings.

This is what happens when we let politicians pass un-read bills containing thousands of pages!

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Earlier tonight Ron Paul appeared on CNN with Anderson Cooper and boldly stated, “We live in revolutionary times”. He’s right. You can watch that appearance below. There’s been a lot of discussion lately about a fractured Republican Party following Christine O’Donnell’s win in the Delaware GOP primary over establishment moderate Mike Castle.

Jim DeMint endorsed O’Donnell and is being criticized by some for being too ideological. DeMint is having none of it. From Politico.com:

Libertarian Party press release:

WASHINGTON – Looking toward the 9/12 Tea Party events in Washington, DC, Libertarian Party executive director Wes Benedict issued the following warning to Tea Partiers: “Republicans are trying to fool you again.”

“There are two kinds of Tea Partiers,” said Benedict. “One kind is so blinded by its hatred of Obama and Democrats that it cannot see fault with Republicans. It’s the other kind the Libertarian Party is reaching out to.”

Libertarian Party staff and volunteers will participate in the Washington, DC Tea Party events on September 12. They will distribute flyers pointing out how the Top 10 Disasters of the 2009-2010 Obama administration mirror the Top 10 Disasters of the 2001-2008 Bush administration.

Benedict continued, “Libertarians have much in common with Tea Party goals of reducing government spending and taxes. While many Tea Party supporters will admit that George W. Bush’s administration grew government, Libertarians want to remind Tea Partiers about previous Republican administrations that loved big government.

“Republican Newt Gingrich and the Contract with America promised to eliminate the Departments of Education and Energy. Yet once Republicans took control of Congress, they failed even to reduce the spending on those departments.

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