Raising Taxes Will Not Make a Lick Of Difference

This is a chart I did not make myself, rather I pulled it from an MSN article that was trying to make a case saying that the American tax payer has had it easy for a long time.  The author simply cannot, or just will not, see that we have a spending problem.  Though I will be fair and give the author credit for admitted that Al Gore also promised to cut taxes, however, when both candidates of two different parties are promising to do essentially the same thing, only differing in the matter of degree, is that not indicative of something larger?*

Moreover, the author is missing something entirely. He can believe that the American tax payer has had it easy, receiving more 'benefits' from the government than what they have been willing to pay, but that is ignoring that at one point marginal tax rates on the rich were far higher than they are now. This chart does not go back that far stopping at 1990 because by going back any farther it would disapprove the authors attempted point, that we need to raise taxes in order to goose government revenue.  Here is the chart the author should have posted if he were to be intellectually honest.

 

 

As you can see government revenue as a percentage of GDP has stayed very constant, never exceeding 20% of GDP and never going under 15%.  This has been the case for over 60 years regardless of the nominal tax rate.  In 1945 to around Kennedy's tax reforms in 1962 the top marginal tax rate was 91%, far higher than they are now, yet revenue is hardly any different.  In fact, even just eyeballing the chart you will see that revenue dips roughly correspond to economic recession that occurred in the United States.

 

 

 

It should be no wonder then that tax revenue has fallen recently, and it should be equally clear that raising marginal rates will make no difference on how much revenue we receive.  The rich are people like everyone else, save that they have more options available to them, and if they think they are getting fleeced then they will hall up and move.  This has long been a tenant of free market theory, and has been proven empirically, just look at Great Britain.

 

It is then, with this new knowledge and awareness, that we see by looking at the original chart posted by the MSN author, that it clearly shows a spending problem.  Never in our 60 year history has tax revenue ever exceeded 20% of GDP, regardless of marginal tax rates, yet spending has consistently exceeded this mark. . If real world empirical evidence shows this, and it does, then only a wilfully foolish individual would contend the opposite.  But that is how propaganda works, contend that something is right and true whether or not reality reflects this.  The Soviets were able to do so for over 70 years, but in the end Communism was shown to be the broken house that it was. It will not be too much longer until democratic socialism is shown to be just as broken.

 

Finally, this is what angers me most, is that whether or not you believe the rich should pay more of their income in taxes, you should still be tempered by reality, and not the reality of one's own choosing but as it actually exists. And reality here clearly shows that we will not receive more than 20% of our revenue in GDP, we have 60 years of data to back up this statement. Barring any fundamental change towards Americans attitudes towards paying taxes this will not change. So any effort to try and do so is a waste of time and resources that would be better spent elsewhere.  Imagine all the brain, monetary, and legal power that is wasted towards pursuing an end that cannot be achieved, and what would happen, if it instead, all that energy was directed towards more more attainable and productive ends.

 

 

*Lastly, without going into my rant on how the surplus never really existed, the first chart should point out something all too clear. That the surplus was temporary, and that if we were to maintain an actual surplus then spending has to remain below the 50 year trend line.

The 5 Nations Of America

As I have said in my blog post, and in numerous other posts in other blogger's blogs, I would expect the partition of the United States to be a disaster for a variety of reasons; none the least being that the real divide in America currently is rural versus urban, but I am digressing.

Here interesting article by Joel Koetkin were he writes about the '5 nations' of America.  Now these nations aren't based on any racial cultural demographics, and really aren't multiple nations like there are say in the United Kingdom, and we should probably add a few more nations for the increasingly Latino southwest and mix raced Hawaii if we added a demographic view to it, rather they are based on geographic, economic, and political guidelines.

The nations, while mostly ignoring racial, religious, and urban versus rural make ups, are generally split into who they voted for in 2008 and their economic prospects.  Joel Koetkins essentially makes these points:

1. Given that both parties can reliably count on the two nations, each one is generally seeing larger and larger control of their respective regions, the rust belt becomes the fulcrum point on how national elections, and from there policy, will turn.
2. The conservative nations are seeing far stronger economic and population growth relative to the liberal nations. Kotkin has said that despite short term set backs for republicans the long term state population growth demographics favor republicans; someone like Vox would disagree.
3. Depending on what the president does on fracking, which heavily affects the rust belt states, it could evaporate democrats gains in this region of the country.

Now it is very apparent that Joel doesn't ascribe to the racial demographic outlook wherea someone like Vox does. I myself am on the fence, like I have said before, I have never been what you call a race realist, but I am a cultural one. Certain cultures are superior to others and human societal evoluition is proof of this, and no amount of verbosity by those who find those ideas distasteful will change my mind. And as much as I hate to admit it, at times, Vox, and others like him, make some salient points. I don't think having a multiracial America is a negative, it isn't inherently positive either.  Whether immigration is a fountainhead of our power or a deluge that will drown America is up to America as a society.  However that is also another discussion, back to the issue at hand.

The larger than normal growth for the red states may simply be conservative and libertarian leaning individuals leaving the states that they tolerated only because of economic incentives.  Liberals are also leaving for the red nations, but I am willing to wager that they generally have been moving to states that have always leaned somewhat less right than others.  If the growth of the red states is predominately a shifting of individuals with differing political opinions, then this could possibly change the divide from an urban and rural one to an actual geopgraphic one; which would make Vox's prediction more likely.

On the other hand, if it is simply a migration of individuals, regardless of political creed, to better performing areas, then the divide that currently exists doesn't change. Moreover, what happens to blue states as their population drops? Will they remain blue, or will they undergo a metamorphosis? I think it would be a mistake to assume, as so many do, that once a state goes blue, it remains blue.  Once again, I will stress that this discounts certain demographic trends due to immigration and individuals varying beliefs on immigration, but the other point that needs to be taken into account, and which Joel Kotkin has pointed out before, is that conservatives are out breeding liberals.

It is entirely possible, however improbable it may appear, that even if red states start to blue we could see a general reddening of the country. Demographics is destiny, it is why China is in deep trouble, Why the Russia 100 years from now may not look like Russia today, why Japans civilization itself is threatened, and why the American progressive agenda might not survive the 21st century in America.

Now whether that means that America by virtue of demographics returns to a more constitutionally oriented society, assuming that either republican assumptions about the social conservativeness of Latinos are correct, or that if they are wrong and Latino immigration rates fall, or increased civil strife, like Vox predicts, remains to be seen. But one thing stands clear in my mind, the future of the United States, as a nation, as a society, and a civilization, depends on who is right about the effects immigration and immigrants; and what we as a nation do depending on who is right.

What Happens When You Destroy A Culture

You want to see what happens to  a society when its cultural roots are torn asunder and replaced with the morass that tries to pass itself off as culture today?  Just look at Japan, a society that was once the epitome of manly virtue reduced to this pathetic state. Where a women who married a man, probably a former otaku, forced him to 'murder' his virtual girlfriend.  This just symbolizes what is wrong in that nation today, and in many ways this anchorless society we live in today.

1. That a man would be so committed to a virtual person, scratch that just a collection of programmed responses for a game, to invite it to a wedding. Shows the result when you completely emasculate male culture.
2. That a women would be so insecure to force her new husband to destroy his video game.
3. That the man reportedly shed tears when he committed the act. Need I remind you that this is not a sentient being but just a collection of pre-programmed responses.
4. That they photographed, probably at the brides insistence, the event for posterity. Yes lets keep records of your husbands pathetic attachment to a video game character for posterity. I can just imagine this being used as fodder to emasculates him further.

Japan at least has the excuse of undergoing a two terrible nuclear bombings that fundamentally shook their culture to the core and an occupying nation that simply sought to replace the Bushido culture with an amalgamation of pseudo-democracy and capitalism. Frankly, I don't blame America, you start wars and you run the risks of having something like this happening. America put a system in place to benefit her against her fight against the Soviets, and frankly they handled the occupation far better than any of Japans neighbors would have. But that is another discussion.

Japan managed to muddle along, focusing its energies into becoming an economic super power. The salaryman work ethic replaced the Bushido code in Japanese society. What Japan had was a culture, neither anchored in the fundamental values of the west, nor the value of the east; rather, I would say it is the closet approximation of the cultural point that certain powers are trying to push America towards today. And when the sole remaining reason for being and anchor of this culture dissipated, their drive to become an economic power equal to that of the US, their culture went into a rapid nose dive.  Sad, sad, state of affairs it is to go from warrior society to nihilistic pantywaist.

 

Mises: Answering Old Arguments About Sound Money

Let the knowledge floweth!

British Millionaires 'Disappearing'

As the Captain always says, this is a feature, not a bug, of socialism