November, 2019, Part 11, Political Class Insanity: Corrupt Mayors and Elizabeth Warren's Idiocy of A Tax Plan

It is another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

Let’s get started:

1) One would hope that those running for office and getting elected to that office were the best, the brightest, and had high levels of integrity. But all that is is an elusive hope as the vast majority of the time those elected are not bright, not the best, and have very low levels of integrity combined with serious self enrichment and greed issues. 

We have illustrated these types of low life behavior before, A Georgia Congressman actually thinks the island of Guam can physically tip over. A Texas Congresswoman thinks that the Constitution is 400 years old and wonders out loud if one of the Mars Rover vehicles will be driving past the Moon area where Armstrong landed. Just about every Illinois governor from the past few decades is in prison or was in prison. The list goes on and on.

And now, we can possibly add the former mayor of Baltimore to that list:

• According to November 20, 2019 article by Zachary Evans on the National Review website, the former mayor of Baltimore could be facing 20 years in prison for corruption.
• Former mayor Catherine Pugh was recently indicted on Federal charges including fraud and tax evasion.
• According to the article: “In March, federal authorities began investigating allegations that Pugh made $500,000 from selling her children’s book Healthy Holly to the University of Maryland Medical System (UMMS) while she was serving on the UMMS board. It was then revealed that health-insurance provider Kaiser Permanente had paid Pugh $100,000 for 20,000 copies of the book, at the same time the company was seeking a contract to insure city employees.”
• Federal agents raided her home back in April in search of evidence which led to her resignation on May 2.
• While Pugh had at first has called the investigation a witch hunt, her resignation letter kind of admitted to the fraud and corruption she put forth for the “harm that I have caused to the image of the city of Baltimore and the credibility of the office of the mayor.”

Another day another potentially corrupt American politician. No wonder that Trump and others have chastised the local politicians for letting Baltimore degenerate into a miserable place to live and work for its residents, the mayor was possibly too busy lining her own pockets to pay attention. 

2) But wait! Pugh is not the only city politician to get caught possibly breaking the law:

• Muncie, Indiana mayor Dennis Tyler was arrested early one recent morning at his home as it was raided by FBI agents.
• This raid was the result of a four year FBI investigation.
• In 2018, one of Tyler’s associates, Craig Nichols, pleaded guilty to wire fraud and money laundering.
• The investigation of Nichols led to the investigation and arrest of Tyler.
• According to the news reports, “Others charged in the probe include Nikki Grigsby, the Muncie Sanitary District administrator; Tracy Barton, another official with the Muncie Sanitary District; and local businessmen Jeffrey Burke, Tony Franklin and Rodney Barber.”

The good news is that if Tyler and Pugh are guilty, than it is great that they will face justice. The bad news is that we have no idea how many other corrupt mayors, governors, and Congress people are also as greedy and as corrupt. 

3) We have often made the case that most politicians are totally ignorant when it comes to basic math and economic principles. Democratic Presidential candidate Elizabeth Warren showed she has neither of these simple traits when she recently announced her latest tax plan to tax the rich to unheard of heights: 

• Warren obviously did not do the basic math underlying her tax the rich to death plan since with one simple example the Wall Street Journal showed that it was easily conceivable that some Americans would end up paying over 100% of their annual earnings in taxes.
• Think about this lunacy for a moment: for every dollar one earned in wages, interest, dividends, etc. you could end paying more than a dollar in Federal taxes BEFORE state and local taxes are layered on top.
• This is basically slavery, a government taking everything you worked for in any one year.
• Warren would get to this economic idiocy by raising the top Federal tax rate to 39.6%, she would impose a new 14.8% Social Security tax, she would tax an American’s individual total wealth by 6% on people worth more than a billion dollars, and she would raise the capital gains tax to match the income tax rates.
• Let’s do the math as outlined by the Wall Street Journal: let’s assume that a billionaire had a $1,000 investment that gained him or her an annual 6% return.
• That would be a $60 investment gain for them.
• But between the increased Federal income tax rate, the additional of a new Social Security tax, and an increase in capital gains tax, the Federal government under Warren would take 58.2% of that $60 gain in Federal taxes or about $35.
• But she would also hit him or her with a 6% tax on the total investment or an additional $60 in taxes.
• Thus, the total Federal tax hit on that $1000 investment and the resulting 6% return would be $95, which is an effective tax rate of 158%.
• In other words, for every $1.00 this investment made for the billionaire, they would have to pay $1.58 in Federal taxes.

How stupid is this?! Nobody is going to work, invest, and manage their assets in order to pay this high of a tax rate BEFORE paying state and local income taxes. Did nobody on her staff do this simple calculation to show how stupid this is? Or is she that stupid to think that this is actually a good idea, because it is not:

• Almost always when politicians raise taxes they get far less than what they think they will get.
• For example, when Maryland raised state income tax rates on its residents earning over a million dollars a year, very, very shortly they found that despite higher tax rates they were getting LESS total tax revenue from million dollar earners despite higher tax rates.
• When Philadelphia raised the tax on soda sold in the city, they actually ended up getting far less in soda tax despite the higher soda tax rate.
• When France jacked up the tax rates on its billionaires, those billionaires simply left the country and took their billions with them.
• The same type of disasters will happen with this idiocy. People will stop working so hard, hurting the nation’s productivity and competitiveness with the rest of the world, because it makes no sense to try and earn that extra dollar when you will pay more in taxes than that dollar. 

Billionaires have resources that most people do not. They will simply take their wealth and move out of the country where their wealth and talents will be more than welcome by just about every other country in the world. The wealth that they have and the investments and the growth in the economy that wealth produces will be lost, making us a poorer country in the process.

Even Steve Rattner, former economic advisor in the Obama administration thinks this is stupid: “I would say it’d be disastrous for the American economy.” 

And think about this reality, that usually goes unnoticed: do we really think that Warren and her cohorts in Congress will do anything good with whatever money they can bilk out of Americans with this plan? As we stated above, one current Congressman thinks that the island of Guam can actually top over in the middle of the ocean. A Congresswoman thinks the Constitution is over 400 years old. A New York Congresswoman has no concept of how the basic unemployment calculation is made and also thinks the three parts of the Federal government are the Presidency, the House,and the Senate. These are the types of people we should be giving our current taxes to, never mind giving them a lot more of our wealth.

And if you are not a billionaire and think you personally are going to get any of this wealth theft, forget about it. Washington politicians will find a way to waste while destroying the economy, driving highly productive citizens out of the country, and eventually causing ALL of his to pay higher taxes once the billionaires either move or go dry.

Again, why did not someone on her staff do the simple math and apply basic economic principles to this fallacy? Surely, if she is this ignorant on this simple stuff there is no way this country should put her in charge of anything more complicated. Raising taxes almost always results in LESS tax revenue, see Maryland and Philadelphia examples above. 

That will do it for today’s insanity: unbelievably stupid tax plans from Elizabeth Warren and two potentially corrupt and criminal mayors of U.S. cities get arrested for their possible criminal deeds.
This will also do it for this month’s political class insanity. Unfortunately, it took us 11 posts to get through just the typical stupidity, greed, corruption, and incompetence of the American political class. We did not even tap into the farce that is the impeachment proceedings and most of the other Presidential campaign idiocy. 

Gets depressing, doesn’t it? How did we get to this point where we pay more and more in taxes and get less and less integrity, intelligence, and production from the political class in this country?

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:

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Please visit the following sites for freedom:


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