1) The first piece of insanity if both as good news and bad news story. Good news in that the Washington political class has finally gotten around to terminating a number of stupid, special interest tax breaks and credits. The bad news is twofold: why were these tax breaks ever created in the first place and why were they allowed to go on so long?
The following idiotic, wasteful spending examples that have finally expired come from the January 5, 2013 issue of the Tampa Bay Times:
- At an annual taxpayer cost of $50 million, the first tax break, labeled the NASCAR loophole, allowed anyone who builds a racetrack to receive a tax benefit through accelerated depreciation. Supposedly it was put into place to give NASCAR a better chance of competing with theme parks. But why should NASCAR get a tax break and theme parks not get the benefit at the expense of the American taxpayer? Stupid, narrow, and unneeded tax stupidity, given the billions and billions of dollars NASCAR generates by itself.
- At an annual taxpayer cost of $75 million, Hollywood studios will longer be able to deduct up to a whopping $15 million of their movie production if more than 75% of the movie’s production work took place in the United States. They could get 80% of they produced the film in low income communities.
- At an annual cost of $9 billion, large banks and other financial giants will longer be able to take advantage of a tax break called the “Active Financing Exception To Subpart F.” This tax break, in effect since 1997, allowed companies to defer taxes on overseas income when they use special types of financing. Critics of the tax break probably are correct when they point out that this tax break actually encouraged U.S. companies to invest overseas rather than domestically. Still, the banking and financial giants are howling about losing the tax break, claiming it allowed them to better compete overseas. As an American taxpayer, I would suggest they take that tax break money form their shareholders, the ones that truly benefit form competing overseas, not the American taxpayer.. At $9 billion a year over 17 years, we are probably looking at a ghastly $150 billion that the American taxpayers used to subsidize companies like JP Morgan, General Electric, and others.
- At an annual taxpayer cost of $240 million, American rum drinkers will no longer have to pay for the $13.50 Federal tax per gallon that was levied on all rum made in or imported into the country. That tax money was then given to the rum companies in Puerto Rico and Virgin Islands to support their competitiveness. This tax has been hassling rum drinkers since 1917, meaning that it probably cost American citizens billions of dollars in corporate welfare over the past 97 years it was in effect.
Unfortunately, there are probably thousands of other such corporate welfare programs and tax breaks that still exist, mostly as a result of campaign donations to incumbent politicians.
2) We already have reported that the Federal government has spent upwards of a billions on a substandard website for Obama Care. We have already reported that well over 90% of large Federal government information systems efforts over the past few years have either collapsed under their own failure or came nowhere close to fulfilling their initial objectives.
Thus, given this heritage of massive spending for minimal results as it relates to data systems management and development, it should come as no surprise that the Department of Justice is about to spend well over half a million dollars to enhance its brand image and positioning on the Linkedin business networking system. This outrageous expense was reported on January 2, 3014 by the Washington Free Beacon.
And this expense is not even for the whole Justice Department, if for only the criminal division which has less than one thousand employees. Supposedly this expense will help the division recruit highly talented professionals and interns.
The actual development cost of the Linkedin presence is $544,388 but there is also an monthly, ongoing cost of $719.95 a month. Doing some math, over the first five years, the cost of the presence would be about $587,000. If the division hired 100 people over that timeframe, not unreasonable since the Federal government sees very little turnover in their employee base, each one of those hire would have cost at least $58,700 each just to cover the Linkedin expense. Does not seem like a very efficient way to get candidates for a very small division within the Federal government.
And given the history of Federal government systems management, want to bet those costs go much higher before all is said and done? Remembers, user access to Linkedin is free, why the government has to spend hundreds of thousands of dollars to access a free site is certainly questionable.
3) An interesting economic study was recently reported by Dean Stansel, a professor at Florida Gulf Coast University, and Fred McMahon of the Fraser Institute. They conducted an analysis where they measured a variety of components to determine economic freedom levels by North American jurisdiction.
These components included the size of government, discriminatory taxation, regulation, the legal system and property rights, sound money policy, and freedom to trade internationally. They found via their methodology that the province of Alberta, Canada, ranks highest for economic freedom, followed by the province of Saskatchewan iin North America. The state of Delaware is third, followed by Texas and Nevada. Other U.S. states in the top 10 states and provinces are Wyoming, South Dakota, and Colorado.
New Mexico was determined to be least economically free entity, followed by West Virginia. Other U.S states in the bottom 10 are Mississippi, Vermont, Maine, Kentucky, Montana, Arkansas, Hawaii, and Rhode Island.
But what is really the big news from their study is that these ten states, the ones with the lowest economic freedom, have an average per-capita GDP of $40,014. That GDP measure is nearly $10,000 less than the other 40 states: $40,014 compared to $49,355. Imagine how much lower it would be if compared just to the top states that are the most economically free such as Delaware, Texas, Nevada, etc. The GDP gap would be much wider.
Conclusion: the less taxes, the fewer regulations, the least government interference in citizens' economic freedom results in greater prosperity for those citizens. However, the Washington political class seem to think and act just the opposite, especially those within the Obama White House since their actions lead to more taxation, more regulations, more interference and as we have seen, less and less prosperity for all Americans. Insanity.
4) There was great hope for world peace when President Obama took office. He had a sky high approval rating both domestically and across the world. He gave a hopeful, peace themed speech to university students in Cairo. His brand was “hope and change.” He won a Nobel Peace prize for simply breathing. He was going to be the breakout world leader who settled things down and brought peace in our time.
Five years later, not so much. Maybe it was his inability to wind down the Afghanistan war. Maybe it was his indiscriminate killing of civilians, adults and children with drone attacks in Pakistan, Yemen and elsewhere. Maybe it was his assertion that he could assassinate American citizens without putting them on trial first. Maybe it was his dangerous and stupid intervention in the Libyan civil war. Maybe it was his threat to send armed forces into Syria as a result of a purported chemical attack by government forces. Maybe it was his alleged assertion that he “was very good at killing people.” Maybe it was his stationing of U.S. Marines in Australia.
Whatever the reasons or reasons, a recent survey by pollster Win/Gallup International across 65 nations found that the United States was viewed as the most dangerous nation the face of the earth. Not China, not Russia, not Iran, not North Korea, the United States. Detailed results from the survey include the following depressing findings:
- The U.S. topped the list of the most dangerous country in the world with an aggregate of 24% of respondents.
- The runner-up threat country, Pakistan, was way behind at eight percent, one third the perceived threat as the U.S., China was third at six percent, followed by North Korea, Iran and Israel at five percent each.
- In Russia, 54% of respondents said the U.S. was the greatest threat to peace and in China 49% of respondents said the U.S. was the greatest threat to peace.
- But our allies were not quite happy with us either since NATO partners Greece and Turkey (45% each), and Pakistan (44%), which is also a top recipient of U.S. aid were also sure that we were the top threat to world peace.
- In Latin America, Argentina (46%), Mexico (37%), Brazil (26 percent) and Peru (24%) also viewed the U.S. as the top threat to world peace.
So much for hope and change on the international front from this version of the Washington political class. Maybe the fact that we have hundreds of thousands of troops stationed around the world and spend more on military forces than the rest of the world combined might also have a bearing on the hostility towards us.
Whatever the reason, certainly a failure of leadership from Washington in general and the White Hose specifically.
Failure on the world stage, failure to rein in stupid tax breaks, failure to efficiently spend information systems dollars, and failure to understand economic freedom concepts. Sounds about right for this set of political class members. More buffoonery tomorrow.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
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Please visit the following sites for freedom:
Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w
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