Showing posts with label arnault. Show all posts
Showing posts with label arnault. Show all posts

Monday, April 8, 2024

April, 2024, By The Numbers: Taxing The Rich Is Still Stupid, High Taxes Mean Higher Unemployment, and Biden Kills The American Dream of Home Ownership

 On a periodic basis we do some posts that fall under the theme of “by the numbers.” Rather than trust what the American politician tells us about reality, we like to examine the real numbers and the real reality in the world to understand what is actually going on. Relying on politicians, and their cohorts in the media, to tell us what is reality is always a sucker bet. They have their own agendas and goals, usually centering around their needs and self-enrichment. So we need to look at the reality of the numbers to determine what is really going on.


Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post this month where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us. 


1)While  our country may be able to survive bad Presidents, bad Congress people, and a biased and corrupted free press, one thing that it may not survive is the mountains of debt that American politicians have piled up at all levels of government. At some point, the $34,000,000,000,000 worth of Federal government  national debt, a number that grows every second of every day, will crash our economy and our freedoms.


But those in Washington only occasionally pay attention to this ticking time bomb number and never do anything about it. Consider a set of numbers that shows how out of control the debt burden is and how stupid ideas like “taxing the rich” are just that, stupid ideas:


  • According to the latest analysis by Forbes, the combined wealth of every billionaire in the world is about $14.2 trillion.

  • To show you how out of control our national debt is, if we could somehow liquidate every asset of every billionaire in the world and magically apply the proceeds to our national debt, we would only be able to pay off about 41% of the Federal government’s debt.

  • But they would not give up their wealth freely so let’s say we only took 10% a year as a tax on wealth.

  • Then we would only pay off about 4% of our national debt.

  • But that number includes every billionaire and I doubt that billionaires in China and  England and elsewhere would hand over their billions of dollars in wealth to help pay down our national debt so that 41% number is way too high.

  • About 40% of the world’s billionaires, according to Forbes, live in this country so that 41% number would really be about 16% of the national  debt if all of America’s billionaires had all of their assets confiscated and applied to Washington's debt.

  • And we only took 10% then you are looking at paying down only about 1.6% of the  national debt.

  • In fact the  richest billionaire in the world is not an American, but Frenchman, Bernard Arnault, whose family conglomerate is worth $233 billion, or about .7% of our national debt.

  • Elon Musk is worth about $193 billion so confiscating his entire fortune would pay off less than the .7% that Arnault and his family would pay off.

  • Amazon founder, Jeff Bezos is worth about the same as Musk so taking all of his wealth would also pay off less than 1% of the national debt.


You get the idea: Washington politicians have  piled up so  much debt that even if you confiscated every asset of the billionaires living in the world, or in this country, you would not come close to paying off the debt. And thus, the reason why taxing the rich continues to be a stupid saying and strategy. 


The reality is that Americans are not taxed too lightly: politicians simply spend and waste too much.


2)Speaking of high taxes, it has always been our position that the higher the tax burden any government places on their citizens, the worse off the economy is of that government entity. Politicians and government bureaucrats never spend wealth more efficiently or more effectively than private citizens and companies.


Consider more proof our theory:


  • The latest state level unemployment rates are out.

  • We have often pointed out that some of the highest taxed states include California, New York, Illinois, and New Jersey, states that we believe are likely to be the most likely states to declare bankruptcy in the relatively near future.

  • And it turns out that these states have some of the highest state unemployment rates in the country with California (50th ranked worst unemployment rate), New Jersey (48th), Illinois (47th), and New York (43rd) following close behind with unemployment rates at their state level  being 4.4% or higher.

  • These are the same states that continue to lose population year over year as their citizens flee to other areas and states where the tax burden is not so onerous.


Bottom line: have high taxes, have high unemployment, have high taxes, lose citizens.


3)It is a fact that the cost of living has skyrocketed under the Biden Presidency. His economic policies have allowed inflation to run rampant, causing prices to rise on  just about everything we buy for our lives including eggs, gasoline, clothing, etc. And somehow his economic policies have been so bad that the following numbers are just mind blowing that he could screw up an aspect of our economy this badly  in such a short time:


  • When Biden took office in 2021, in six states a family needed over $100,000  a year in income to afford a middle class, median priced home.

  •  Just three years later, Biden’s failed economic policies have driven that number up to 22 states where a family needs an annual of over $100,000 to afford a middle class home.

  • This is an almost four fold increase in just over three years.

  • This analysis by Bankrate starts in January 2020, and takes it to January 2024.

  • And while their analysis time frame covers the last year of the Trump administration, most of the increase is no doubt occurring as a result of the Biden administration.

  • Their analysis estimated that a family needed to earn an annual  income of $110,871 to afford that median priced house today, up a whopping 46% since 2020.

  • When Biden took office in January, 2021, the average interest rate on a 30 year fixed mortgage was 2.5%.

  • As of March, 2024, Bankrate estimates that the average interest for that same type of mortgages was 7.07%, an almost threefold increase.


Biden has proposed some window dressing programs to address this situation but providing a two year, $5,000 tax credit to home buyers and other such token moves will do nothing when the mortgage rate has increased almost threefold under his Presidency.  His proposed tax credit programs show, again, that he and Washington have no idea on how to fix what they broke in three short years.


That will do it for today’s Numbers: Biden broke the home ownership dreams of millions and millions of Americans, have high taxes get high unemployment, and taxing the rich still makes no sense as long as Washington politicians have no  restraint when it comes to overspending their tax revenue stream.


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If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:


https://www.change.org/p/deseat-congress-reset-freedom



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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:


Tuesday, January 13, 2015

Lower Tax RATES Result in Higher Tax REVENUE..And A Freer and Happier Country

Today is a discussion about taxation and what that does to human behavior. It seems that over the years, the American political class has somehow convinced itself that raising taxes does not have negative ramifications across the economy and people’s lives. A percentage point here, a percentage point here, a small new tax there, it is just a little more in taxation, always for a good cause.

But over time, these taxes and their gradual increases add up. We have shown any number of times in this blog how we have possibly moved from a taxation country into a repression country. Our tax freedom day gets farther and farther out every year, with most Americans working well into the spring months just to pay their annual tax bill to all levels of government. 

The more wealth that goes to government taxes is less wealth that an American family can spend on better housing, better education options for their kids, less money that is available to possibly start a new business, less money available to enjoy the pleasures they find in life, etc. And more globally, by restricting life choices as a result of high taxation, politicians deny freedom and liberty for people to enjoy the fruits of their labor.

And adding insult to injury, the taxes that are supposed to be used for wonderful goals and projects never materialize. The five decade war on poverty has estimated to cost taxpayers over $20 TRILLION but we are at the same poverty levels today as we were fifty years ago. 

The war on drugs has also cost TRILLIONS of dollars and has done nothing to treat addiction problems in this country but it has created and enriched violent drug cartels around the world.

Our Social Security taxes were supposed to ensure that Americans had an income stream for retirement years but that program is rapidly heading for insolvency.

The failed programs that our high taxes went to have almost failed miserably in delivering value. And still politicians insist on getting more and more wealth from us, promising great things but failing miserably to deliver. Obama Care introduced many, many new taxes which have depressed economic growth and business expansion. Its medical device tax, for example, has resulted in tens of thousands of jobs disappearing or being shipped overseas. 

Several years ago Maryland state politicians raised taxes on the wealthy with the promise that overall tax revenues would go up. A few years afterwards, tax revenues from high income groups actually decreased overall despite the higher rate. Why? People are not stupid. Those high earning Maryland residents just moved to preserve their wealth, knowing that paying more in Maryland state taxes was not going to make their lives any better so why put up with it.

Which gets us to today’s examples of taxation futility. Below is a set of demographic and economic trends that show when taxation goes down, life and citizens are much better off and citizens will take rational, sane steps to ensure that their wealth and family’s welfare comes first, not the welfare and greed of politicians.

1) I was born and raised in New Jersey. Went to school in New Jersey, raised a family in New Jersey, had a corporate career in New Jersey, and started and operated a small business in New Jersey. However, I have lived and been very happy in Florida for the past nine years.

Why leave my home and heritage behind? Simple, overbearing taxes. Nine years ago my New Jersey property taxes were just over $4.00 per square foot of our home. I am sure that cost has gone up substantially in those nine years.Nine years later, my Florida property taxes are less than $2.00 per square foot of my home. I probably save over $10,000 a year just in property taxes by living in Florida.

Oh, by the way, I pay no state income taxes in Florida compared to a pretty hefty state income tax bill in New Jersey. And I am not the only one who has seen the light. According to recent research from the largest mover of households in the country, nearly two thirds of families making an interstate move of their household involving New Jersey in 2014 were leaving New Jersey, the highest moving out rate in the country. New Jersey has been number one in this dubious category for four of the past five years.

Long term you cannot operate a vibrant financially state, or state government, if far more people are moving out than moving in. But other high tax states are suffering the same fate with New York, Pennsylvania, Connecticutt, and Pennsylvania also in the top ten states losing more movers than gaining.

People want to be free, according to an old Rascals song. And that includes not only political freedom but also financial freedom. Higher and higher taxes for less and less quality and quantity of government services in return makes for an unhappy, and mobile citizenry. And lower and lower tax revenue for state and local governments.

2) In a related subject, consider some recent information from the Census Bureau. Florida recently passed the state of New York to become the third most populous state in the union. Could it be that high property taxes, state income taxes, and local income taxes had something to do with New York losing and Florida gaining?

People will optimize their happiness and many of them are maximizing their happiness by leaving New York and New Jersey. Those that are left behind will find it much harder to pay for the promises and commitments that the state politicians have made since the tax base will continue to both shrink andbe less affluent. This will result in even higher tax rates resulting in even more financially able citizens to continue to leave further reducing tax revenue. etc., a death spiral of dwindling tax revenue and shrinking government services.

Meanwhile, low tax states will see growth in both population and tax revenue creating more economic opportunities and growth that actually increases tax revenue without increasing tax rates.

3) But it is not just Florida that is seeing the merits of respecting citizens’ wealth and keeping taxes low. According to the Washington Examiner, the state of Texas, a state with lower taxes and no state income tax and no corporate tax, has seen more job growth since 2007 than the rest of the other 49 states COMBINED:













Since the so-called Great Recession began in December 2007, 1.2 million incremental  jobs have been created in Texas. Only 700,000 incremental  jobs in total have been created in the other 49 states. Total non-farm employment has grown by 11.5 percent in Texas since December 2007. Employment in the rest of the United States has grown only 0.6 percent. Until September 2014, total employment growth in the rest of the United States since December 2007 was still negative.


California, a state with high and numerous taxes and Texas’ biggest economic rival, has created 985,600 fewer net jobs during the same period. California’s 1.5 percent job growth is a whopping ten percentage points lower than Texas’ percent job growth

4) But it is not just Americans who “get it”: consider the disasterous impact of high taxation has had in France. In 2012, the French central government raised the top income tax rate to a mind boggling 75%. Less than three years later, the government is dumping the 75% rate.

Why the quick reversal? Wealthy Frenchman made an easy move out of France into Belgium and elsewhere to get out from under the repressive 75% rate. Those that moved included the country’s richest man, Bernard Arnault, and greatest actor, Gérard Depardieu, who actually moved to Russia of all places

Over its lifespan, the 75% tax rate raised a tiny fraction of the original forecast. Rich, and sane,  people don’t sit around waiting to be taxed. They have all sorts of ways of beating the system, with emigration not being a problem for those of means. So not only did the French government not get what they expected from their wealthier residents, they got far less when those wealthier residents took ALL of their potential tax dollars elsewhere. Those who were left behind now have to pay more taxes to make up for the loss and the financial death spiral begins

What is the lesson to be learned from all of this reality? As paradoxical as it seems, raising tax rates almost always REDUCES the total amount of tax revenue a government receives. This has been proven over and over, in Maryland and in France and is likely behind the growing migration from high tax states to lower tax states. A state being sapped of its wealthier population loses tax revenue, forcing its remaining, less wealthy citizens to shoulder the burden of that tax revenue shortfall, which means the state has to raise taxes on those who least can afford a tax increase.

Thus, ironically, raising taxes on the wealthy usually results in the middle class and  poor paying more in taxes. That is why Step 1 from our book, “Love My Country, Loathe My Government,” is so important. Step 1 proposed that the Federal government reduce its operating budget by 10% a year for five years. This would get its revenue stream inline with its expenses and would funnel some tax relief back to taxpayers.

Wealthier taxpayers make for more robust economic growth which increases tax revenue without increasing tax rates. History proves it is that simple. According to the Washington Examiner article that researched the French tax screw up we discussed above: “Between and 2007, the US cut taxes at all income levels. Result? The wealthiest one percent — those chaps that the Occupy crowd keeps banging on about — went from paying 19.5 percent of all taxes to 40 percent. In Britain, after the top rate of income tax was lowered in stages from an eye-watering 98 percent in the late 1970s to 40 percent by 1988, the share of income tax collected from the wealthiest percentile rose from 14 to 27 percent. In other words, flat taxes don’t just make avoidance pointless; they don’t just boost the economy; they also ensure that the rich pay more. If President Hollande were to embrace them, he might edge even France out of its nosedive.

Lower taxes equals happier citizens equals higher economic growth equals more tax revenue. It is that simple but apparently still too complex for the American political class.

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

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

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