May, 2015, Part 1, By The Numbers: Tax Numbers Stink, Economic Numbers Stink, Welfare Cheat Numbers Stink

On a semi-regular basis we revisit the theme "by the numbers" just to check in on the state of the country and political class using actual realities and their underlying numbers, not the spin or lies from our politicians. You see, politicians usually have nothing to gain by looking at reality and the numbers since they are more than likely to have screwed up reality and our lives in the first place.

That is why they would rather lie and deceive than tell the truth. But that approach can be destroyed by looking at the hard numbers behind the mess they have created. I once worked for a boss whose favorite saying was: "There is nothing more devastating to an opinion than the right number.” And that is what we try to do with this theme, devastate politicians’ opinions by looking at the right numbers.

So let’s take a look at the numbers that have recently cropped up and again prove that the political class in America continues to be one of the worst set of people to ever hold office, given the state of the country, the many ways they screw up our wealth and government functions, and their inability or non-desire to step up and tell the truth.

1) We have often talked about how insane the nation’s tax code is. Physically it runs about 70,000 pages. We once cited the example that the GE annual Federal tax return would have been 56,000 pages long if it had been printed out. American households spend billions of dollars a year preparing their taxes since it is such a complicated exercise, billions that would have been better spent growing the economy.

But nowhere is the tax code idiocy more on display when it comes to major corporations and their overseas operations. Since the U.S. has the second highest top business tax rate, 35%, in the world, it makes better financial sense for corporations to keep their profits offshore rather than bringing them back to this country where they might actually help grow the economy and improve the employment opportunities of all Americans.

Think about it: why bring billions of dollars back to the U.S. just to pay a whopping 35% income tax on those profits when they can be kept far away and invested in other countries at a much lower tax rate? 

How bad is the problem? Consider an analysis that was recently published in Businessweek that showed how much the Federal government would reap in taxes if those large corporations actually brought their profits home and what entities of the Federal government could be funded with those taxes:

• Microsoft has $92.9 billion of profits sitting offshore, which results in $29.6 billion in lost taxes which could be used to annually fund the Department of Justice and half of the Commerce Department.
• Apple has $69.7 billion of profits sitting offshore, which results in $23.3 billion in lost taxes which could be used to annually fund all but $500 million of the Department of Agriculture’s discretionary budget.
• Oracle has $39.3 billion of profits sitting offshore, which results in $12.2 billion in lost taxes which could be used to annually fund the Treasury Department.
• Citigroup has $43.8 billion of profits sitting offshore, which results in $11.6 billion in lost taxes which could be used to annually the National Nuclear Security Administration.

The list goes on and on but you get the idea: tens of billions of dollars in lost tax dollars due to the second highest business tax rate in the world. What if the corporate tax rate was 10%? The Federal government would then get $9.29 billion in taxes if that rate was low enough to get Microsoft to bring those profits back to the U.S. vs. getting $0 at 35%? And how much more research jobs, sales jobs, and programming jobs would be created in the U.S. if Microsoft did bring that $92.9 billion back to the U.S.?

The numbers are a no brainer: drop the tax rate, the Feds get billions of dollars vs. nothing today, the economy gets a big boost by the infusion of billions and billions of dollars, and companies can focus on growing their business rather than sheltering profits. Everybody wins this numbers game….which means it will never happen if the current set of politicians stay in control.

2) The government released the first quarter GDP growth estimate and it was an anemic .2%. That is right, not 2%, .2%, two one tenths of a percent. A very bad number.

Even worse, the population was up .8% so the GDP per person was actually negative in the first quarter, not a very inspiring number. But less than inspiring economic numbers is to be expected from this administration and this set of Washington politicians. According to a recent comparison of economic recoveries between the Obama administration and the Reagan administration done by the Heritage Foundation:

• 23 quarters after the last recession ended, the annualized GDP growth rate under the Obama administration is a meager 2.24%.
• This places the Obama recovery dead last compared to the six other post recession recoveries since 1960.
• Those recoveries averaged 3.97% after 23 quarters. 
• This difference between the Obama recovery and the average of the other six recoveries translates into nearly $1.7 trillion (in constant 2009 dollars) in missing economic growth.
• But Reagan’s economic recovery’s was a whopping 4.8% annualized growth through 23 quarters.
• That was more than double the Obama economic recovery. 
• If Obama’s recovery had been as robust as Reagan’s the country’s annual GDP number would be $2.48 trillion larger than it is today.

A $2.48 trillion larger economy would have provided a lot of job opportunities for Americans that are finding it difficult to find jobs. But the reasons for the anemic economic numbers is not to hard to discern:

• The Obama administration has added, on average, nine new Federal regulations every day, burdening businesses and business growth with unnecessary government interference.
• The higher taxes on the wealthy has restricted discretionary spending and economic development by the very people that actually have discretionary income.
• The out of control EPA has shut down in the energy industry in this country with no coherent reasons for such overpowering interference and regulation of that industry.
• Obama Care has added taxes and bureaucracies to the whole economy, reducing economic growth and employment opportunities.
• If a no brainer like building the Keystone pipeline and the creation of the thousands of jobs associated with that effort was blocked by this President,chances for other economic opportunities are gong to be far and few between.

The numbers stink, the reasons they stink are obvious, and that is why politicians should never play with economics.

3) Michele Hickford, writing on April 28, 2015 for the Allen West website, put together some very interesting numbers. She showed how easy it was to earn almost $70,000 a year by milking the Federal government’s welfare processes and doing no work and not being employed in the process. 

Her analysis has some validity. According to recent Bureau Of Labor Statistics in 2014 19.9% of American families had no one in the household that had a job. Amazing number, one out of every five households had no one earning wages or a salary last year. Which says either the economy is in terrible shape with unemployment around 20% or many Americans are ripping off the welfare system.

Given that the unemployment rate, no matter how you measure it, is nowhere close to 20%, the following numbers show that there is a good case to be made that ripping off the Federal taxpayer is now a full time job for many Americans. According to Ms. Hickford, this is the easy way to earn almost $70,000 a year:

1. If you’re a man, don’t get married
2. Have a couple kids
3. Use your mom’s address for your mail
4. Buy a house
5. Rent your house to your girlfriend and your two kids
6. Section 8 will pay $900 a month for the rent on the 3 bedroom home
7. Have your girlfriend sign up for Obamacare
8. Your girlfriend gets to go to college free as a single mother
9. She also gets $400 a month form food stamps. 
10. She gets a free cell phone. 
11. She also gets a cash grant to help pay for heating costs
12. Move into your house with her, but keep your mom’s address for your mail
13. Each of you can claim one child on your taxes so now you both get to claim head of household credit ($1295)
14. Have your girlfriend get a permanent disability for “marked difficulties maintaining concentration” or having a “back pain.”

This is all perfectly legal, and is likely being done by millions of people. Adding all the numbers up:

$22,800 disability + $10,800 housing benefit +$4,800 food stamps + $3,300 Obamacare subsidy + $900 utilities grant + $5,645 Pell Grant  + $12,000 annual college tuition grant + $8,000 single mother tax benefit  + $1,295 head of household credit…- Almost $70,000

Okay, the economic numbers stink, the welfare abuse numbers stink, and the tax numbers stink, regardless of Washington’s politicians tell us. Remember, there is nothing more devastating to an opinion than the right numbers and we will devastate more 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

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.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w