And there will be a lot of smoke to cut through in these posts. Always believe the numbers before you believe our politicians, numbers do not lie but politicians do.
1) We have often shown that when politicians raise taxes in order to get more tax revenue, the overall level of tax revenue received usually drops. For instance, we once reported how the state government of Maryland raised the state income tax level on millionaires residing in Maryland. Within a short amount of time, the total amount of tax revenue collected from state millionaires actually dropped even though the tax rate was higher. The details of this insanity can be seen at:
The reason for this apparently wrong reality is that people are not stupid. They want to keep as much of their wealth as possible. Thus, when the state of Maryland raised taxes on rich people those rich people simply moved away, resulting in fewer Maryland millionaires and less tax revenue from state millionaires. It is that simple.
And cigarette smokers are not stupid either. Put too much tax on their cigarette purchases and overall tax revenue goes down rather than up, as a recent Daily Caller article by Guy Bentley shows. According to Bentley:
- New York lost $400 million in taxes from cigarettes after imposing the highest cigarette tax in the nation on sales of packs in the state.
- The tax resulted in an average cost of $10.66 per pack of cigarettes in the state.
- Cigarette taxes in the state are up 190% in the past decade or so.
- Despite the 190% increase in taxes, the New York State Comptroller Thomas DiNapoli estimates that the state government has lost $400 million in cigarette revenue over the past five years.
- A separate study by the National Academies of Sciences, Engineering and Medicine estimates that the state lost far more in tax revenue, namely $1.3 billion each YEAR, because smokers switched to less expensive alternatives.
- These cheaper alternatives included turning to black market and organized crime criminal enterprises to buy cigarettes, crossing state lines to buy them, or buying less expensive brands of cigarettes from Native American outlets.
- The number of cigarette packs bought paying the full tax has also dropped by 62%.
- And as always, increased taxation always hits the poorest in our society the hardest with smoker households earning less than $30,000 a year spending a whopping 23.6% of their annual household income on cigarettes in 2010-2011, up from only 11.6% in 2003-2004, according to the New York State Department of Health.
- Smoker households earning over $60,000 spend on average 2.2% of their annual income on cigarettes.
As with most government actions, the numbers prove again that their action never resolves the original problem (in this case stopping people from smoking since they just go to other sources for their nicotine), raising taxes results in LESS government revenue, and criminal enterprises are given an opportunity to make obscene profits.
2) According to a January 5, 2016 article on the Political Outcast website, a recent Gallup poll shows that only 2% of Americans think that gun control is the major issue in their lives despite the fact that Obama and his administration are fixated on imposing illegal and un-Constitutional gun controls on the nation. The most important problems facing the country today according to the Gallup study is:
- Politics/Congress/Government - 16%
- Economy in general - 13%
- Jobs/employment - 8%
- Immigration - 8%
- Healthcare - 6%
- Ethics/Moral decline - 5%
- Race Relations/Racism - 5%
- Terrorism - 5%
- Federal budget deficit/national debt - 5%
- Education - 3%
- Poverty/homelessness/hunger - 3%
- National Security - 3%
- Gap between rich and poor - 3%
- Crime/violence - 3%
- Foreign aid/focus on overseas - 3%
- Situation on Iraq/ISIS - 3%
- Seven other issues tied with 2% including gun control
What I find particularly ironic is that the number one issue in Americans’ ranking the major issues is government and politicians. So, Obama is trying to fix a problem that is minor in Americans’ eyes even though he is part of the largest perceived issue of our times.
3) CNBC recently reported that mortgage applications have dropped a whopping 27% during the past two weeks after the Fed’s first rate hike in almost ten years, a further indication that the economy is on the verge of a slowdown.
4) In another number indicating an economic slowdown, the cost of a barrel of oil recently hit $35, the lowest price in the past 11 years. The price dipped 6% in just one day recently because of any number of world wide factors.
5) Throughout the life of this blog we have lamented the reality that the Washington political class has no ability or intention to get the nation’s runaway national debt under control. The debt level is now over $18.3 TRILLION with an amazing and depressing $8 TRILLION of that debt coming during the Obama administration. This comes out to about $160,000 per U.S. family.
According to a recent MoneyNews article, the U.S. Federal government will have to refinance about $3.5 TRILLION in 2016 to pay off expiring debt. This is equivalent to every American family writing a check for about $30,000 just to tread water with current debt. As these numbers make it so clear, at some point the debt burden in this country will crush the economy, our democracy, and our futures.
Oh, and by the way, if you had $18.3 TRILLION single dollar bills and laid them end to end, they would circle the earth about 70,000 times. If you laid them end to end and pointed them to the moon, you would have over 7,000 strings of dollar bills hitting the moon. That is a lot of debt.
That will do it for today's by the numbers. Today we learned that raising taxes actually can reduce tax revenue, that gun control is way down the list of Americans’ concerns, the economy might be tanking if we measure it by falling mortgage volumes and falling oil prices, and our debt load is still stifling. The numbers are in and the numbers are not good, as we have shown over the past three days. Term limits anyone:
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