With all this talk lately of Warren Buffet calling for “millionaires” to pay higher taxes (somehow that term includes not only the 237,000 people who actually DO make over a million dollars, but also another 3.92 million people who make more than $200K, calling the actual sneakily-used term severely into question), we should all take a step back and look at exactly what Buffet is talking about, is he telling the truth, is his proposal lucrative, and, finally, why the hell doesn’t that big mouth just cut a check to the IRS himself if he’s so damn rich and solve some of our problems???

Well, thankfully an editorial in the WSJ saves us all the legwork involved in that and has served up those answers on a nice little platter:

Barney Kilgore, the man who made the Wall Street Journal into a national publication, was once asked why so many rich people favored higher taxes. That’s easy, he replied. They already have their money.

That insight is worth recalling amid the latest political duet from President Obama and Warren Buffett demanding higher taxes on “millionaires and billionaires.” Mr. Buffett is repeating his now familiar argument this week, coinciding with Mr. Obama’s Midwestern road trip on the economy. Since the media are treating Mr. Buffett as a tax oracle, let’s take a closer look at some of the billionaire’s intellectual tax dodges.

• The double tax oversight. The Berkshire Hathaway magnate makes much of the fact that he paid only 17.4% of his income in taxes, which he considers unfair when salaried workers often pay more. But Mr. Buffett makes most of his income from his investments, in particular from dividends and capital gains that are taxed at a rate of 15%.

What he doesn’t say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall tax rate on that corporate income closer to 45%.

This onerous tax on capital is a U.S. competitive disadvantage in the global economy, which is why Congress agreed in 2003 to cut the rates on dividends and capital gains. Even as the rest of the world is cutting tax rates on corporate income, Mr. Buffett wants to raise U.S. rates in a way that would make America less attractive for investment. Under a sensible tax reform, the feds would impose either a corporate tax or a dividend and capital gains tax, but not both.

• The middle-class bait-and-switch. Like Mr. Obama, Mr. Buffett speaks about raising taxes only on the rich. But somehow he ignores that the President’s tax increase starts at $200,000 for individuals and $250,000 for couples. Mr. Obama ought to call them “thousandaires,” but that probably doesn’t poll as well.

The President needs to levy his tax increase at such a lower income level because that’s where the money is. In 2009, 237,000 taxpayers reported income above $1 million and they paid $178 billion in taxes. A mere 8,274 filers reported income above $10 million, and they paid only $54 billion in taxes.

But 3.92 million reported income above $200,000 in 2009, and they paid $434 billion in taxes. To put it another way, roughly 90% of the tax filers who would pay more under Mr. Obama’s plan aren’t millionaires, and 99.99% aren’t billionaires.

Mr. Buffett says it’s only “fair” to raise his taxes, but he’s lending his credibility to raising taxes on millions of middle-class earners for whom a few extra thousand dollars in after-tax income is a big deal. Unlike Mr. Buffett, those middle-class earners aren’t rich and may earn $250,000 for only a few years of their working lives. How is that fair?

• The charity loophole. For billionaires like Mr. Buffett, the single most important deduction in the tax code is for charitable giving. Middle-class earners can’t give nearly as much money away to reduce their overall tax burden. Yet we don’t hear Mr. Buffett calling for the elimination of that deduction in the name of fairness.

Mr. Buffett has also already sheltered the bulk of his fortune from federal taxes by putting them into a foundation that will give the money away. That’s an act of generosity, but if the government’s purposes are so vital, why doesn’t he simply give the money to the IRS?

Rebecca Quick of CNBC put that question to Mr. Buffett in 2007. His answer: “Well, that’s a choice and it’s an option . . . If I had to give it to a single individual, or make some young Buffett a multibillionaire, or give it to the government, I’d absolutely give it to the government. I think that on balance the Gates Foundation, my daughter’s foundation, my two sons’ foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government.”

Mr. Buffett is no doubt right about the relative efficiency of private donors, but should billionaire philanthropists get such a large tax preference? Another case of fairness?

Mr. Buffett is one of the great stock-pickers of his time, and we don’t begrudge him a single dollar of his wealth. We only wish that, having already made himself rich, he weren’t so intent on making it harder for others to become rich too. If he’s worried about being undertaxed, we’d suggest he simply write a big check to Uncle Sam and go back to his day job of picking investments.

Here’s a great clip of “some common sense” from your average taxpayer:

With everyone distancing themselves as quickly as possible from the miserable, vile, despicable anti-Semite, John Galliano, I was incredibly surprised today to find that Amazon.com is actually featuring his products—for children, no less—on their high-end apparel sister site, MyHabit.com.

I am absolute amazed by this association with such a rabid, drug-addicted,  frothing-at-the-mouth lunatic , and I can only hope they come to their senses quickly.

Feel free to take a moment or two to register your shock with them, using their convenient Contact Us form.

Yes, I just wrote about this last night, but after seeing more mentions of this in the news, some of which seemed to defend Cablevision, I wanted to point out a few fallacies in Cablevision’s arguments.

Cablevision is claiming that they didn’t pull the programming, News Corp did. Well, when you refuse to pay for something, then yes, it will be pulled.

Let me provide an analogy here: What would happen if a hotel didn’t pay its Cablevision bill? Cablevision would “pull” the hotel’s cable programming. Yes, it would be technically accurate at that point for the hotel management to tell the guests that Cablevision turned off the hotel’s service, not the hotel, but if the hotel wasn’t paying the bill, it’s not exactly a big surprise when their screens go dark!

Here, too, while it’s technically accurate for Cablevision to blame News Corp for “pulling the programming”, it overly simplifies the finger-pointing in an attempt to rile their subscribers up against News Corp. Which brings me to my next point…

Rather than apologize to their subscribers for their inability to negotiate in time with News Corp, instead Cablevision is focusing all their energy on pointing fingers and trying to channel their subscribers’ anger for their own advantage at the bargaining table. They are callously dragging their subscribers as pawns into their corporate war with News Corp.

I might not be so quick to come to that conclusion if it weren’t for the fact that this is already the third time this year that Cablevision has employed that tactic! First with the provider of the Food Network & HGTV channels in early 2010, then with ABC on Oscars day! Cablevision has repeatedly shown a preference for using their subscribers as bargaining tools, rather than fairly sitting down at the negotiating table with their providers.

Quite frankly, I find it reprehensible that they take their subscribers for mindless idiots who they can use as tools for their own benefit. Sure, News Corp is no angel either in this fight, but they seemed to have been able to work something out with all the other providers without this much of a problem (okay, maybe not Dish Network…). And that brings me to my final point…

There are plenty of other subscription sources out there carrying Fox: DirecTV and Verizon FIOS being two of them (and depending on your neighborhood, you maybe have even more). So, exactly how is it that those providers can work out at deal with News Corp and still offer competitive rates to their subscribers? How are they able to do this without holding their subscribers hostage in corporate wars? Obviously they are doing something right, while Cablevision is doing something wrong, and in this great capitalist society, companies like Cablevision who can’t see that quickly enough will be punished with customer defection, much to the joy of their competitors.

On a personal note, I’m one such customer who refuses to be used as a tool—a bargaining chip. I just want all my channels intact in peace. Since I can’t get it with Cablevision, and since I am highly offended at their unapologetic full frontal assault, I’m happy to have switched now to Verizon FIOS (a move, I should mention which was greeted—after being a customer for several years—with noticeable indifference by the Cablevision representative I had the misfortune of dealing with when I called yesterday first thinking about switching).

I’m departing momentarily from my usual national and world politics to just vent on a frustration of an entirely different nature: television. In particular, the dispute between Fox and Cablevision.

A quick recap for anyone not familiar with the situation: Cablevision is no longer broadcasting the Fox broadcast channel because of a dispute between the two companies. Fox wants more money for Cablevision to carry its signal, and Cablevision refuses to pay the exorbitant amount demanded by Fox. The excrement really hit the fan today when subscribers had to make alternative arrangements for their weekly dose of NFL on Fox. You just don’t mess with football.

So, that’s what brings me to this post. I want to say that I don’t give a damn who’s right and who’s wrong. As the end user and customer, I am right and they are both wrong. That’s simply how I see it. And, quite frankly, I’m happy that they’re both going to get royally screwed by this decision: Fox is going to lose a nice chunk of advertising revenue, and Cablevision is going to lose a nice chunk of their subscriber base, including me.

Yes, that’s right. I just placed my order today for Verizon FIOS. After a year or two of tossing their triple play fliers in the trash, I decided to take them up on their offer and move all my business from Cablevision to Verizon FIOS—and pay 40% less on my monthly bill, to boot.

Of course, as someone who has been loyal to Cablevision for years, I took the time to first call them (and sit on hold for a long time, of course) just to see if they had anything they could say to me to convince me to stay with them. I knew almost immediately, though, that I was making the right decision when all I got from the Cablevision representative was a bit of attitude coupled with absolutely zero effort to convince me to stay or to even express that I was a valued customer to them!

If I sensed at least some effort on their part or some appreciation for my loyalty, I might have stayed with them. But, after that dismayingly empty and virtually pointless conversation, I had no doubts about what I was doing to do. I hung up with them, and within minutes I was already placing my order for Verizon FIOS.

I just hope that there are many other unsatisfied customers out there who are expressing their dissatisfaction with their choice of patronage.

Granted, I’m sure Verizon FIOS comes with its own bundle of issues and gripes, but until I get stopped up by one of them, they’ve got my business. And when and if that does happen, let’s see if they show any more concern for their customers than Cablevision does. Chances are that if they do, then they’ll still have me as their customer despite that.

So, by the time next Sunday rolls around, I’ll be watching the NFL on Fox with my new Verizon FIOS subscription!  Goodbye, Cablevision, and good luck with your mutual mud-slinging campaign against Fox, which I’ll be happy not to have to concern myself with as I welcome Verizon FIOS into my home.

(Oh, and Cablevision, if you’re reading this: your customers don’t want to hear how greedy Fox is. They just want their channels, and if other providers are able to give it to them, then you’re doing something wrong and the other providers are doing something right. It’s that simple. As long as there is a capitalist free market out there with supply and demand, and as long as the other providers are somehow able to work out a deal with Fox and still charge competitive prices in your market, then you’re obviously doing something wrong—and doing a disservice, regardless, to your customers.)

Last Friday, James Taranto had this hilarious observation in his Best of the Web Today column of Paul Krugman arguing with his past self:

Former Enron adviser Paul Krugman takes note in his New York Times column of what he calls “the incredible gap that has opened up between the parties”:

Today, Democrats and Republicans live in different universes, both intellectually and morally.

“What Democrats believe,” he says “is what textbook economics says”:

But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position (although not joining his blockade): unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

Krugman scoffs: “To me, that’s a bizarre point of view–but then, I don’t live in Mr. Kyl’s universe.”

What does textbook economics have to say about this question? Here is a passage from a textbook called “Macroeconomics”:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.

So it turns out that what Krugman calls Sen. Kyl’s “bizarre point of view” is, in fact, textbook economics. The authors of that textbook are Paul Krugman and Robin Wells. Miss Wells is also known as Mrs. Paul Krugman.

It seems Krugman himself lives in two different universes–the universe of the academic economist and the universe of the bitter partisan columnist. Or maybe this is like that episode of “Star Trek” in which crewmen from the Enterprise switched places with their counterparts from a universe in which everyone was the same, only evil.

Like Spock, the evil Krugman is the one with the beard.

Here’s Harry Reid (D-NV) today, saying, “Today is a big day in America. Only 36,000 people lost their jobs today, which is really good.”

You just gotta see it to believe it:

Yes, I know, the title of this post sounds a bit dry, but trust me, the article written by George Gilder, entitled “Silicon Israel”, is an incredible story of how far Israel has come in such an incredibly short time, and how it is still growing by leaps and bounds.

Read it here.

A little while back, I got the following in a mass email and thought it was interesting enough to share, so enjoy!

Barnyard Economic Lesson

The little red hen asked, “Who will help me plant my wheat to bake some bread?”

“Not I,” said the cow.
“Not I,” said the duck..
“Not I,” said the pig.
“Not I,” said the goose.

“Then I will do it by myself,” said the little red hen, and so she did.

She planted her crop, and the wheat grew very tall and ripened into golden grain.

“Who will help me reap my wheat?” asked the little red hen.

“Not I,” said the duck.
“Out of my classification,” said the pig.
“I’d lose my seniority,” said the cow.
“I’d lose my unemployment compensation,” said the goose.

“Then I will do it by myself,” said the little red hen, and so she did.

At last it came time to bake the bread. “Who will help me bake the bread?” asked the little red hen.

“That would be overtime for me,” said the cow.
“I’d lose my welfare benefits,” said the duck.
“I’m a dropout and never learned how,” said the pig.
“If I’m to be the only helper, that’s discrimination,” said the goose..

“Then I will do it by myself,” said the little red hen, and so she did.

She baked five loaves and held them up for all of her neighbors to see.

They wanted some and, in fact, demanded a share.

But the little red hen said, “No, I shall eat all five loaves.”

“Excess profits!” cried the cow. (Nancy Pelosi)
“Capitalist leech!” screamed the duck. (Barbara Boxer)
“I demand equal rights!” yelled the goose. (Jesse Jackson)
The pig just grunted in disdain. (Ted Kennedy)

And they all painted ‘Unfair!’ picket signs and marched around and around
the little red hen, shouting obscenities.

Then the farmer (Obama) came. He said to the little red hen, “You must not be so greedy.”

“But I earned the bread,” said the little red hen.

“Exactly,” said Barack the farmer. “That is what makes our free enterprise
system so wonderful. Anyone in the barnyard can earn as much as he wants.
But under our modern government regulations, the productive workers must
divide the fruits of their labor with those who are lazy and idle.”

And they all lived happily ever after, including the little red hen, who
smiled and clucked, “I am grateful, for now I truly understand.”

But her neighbors became quite disappointed in her. She never again baked
bread because she joined the ‘party’ and got her bread free. And all the
Democrats smiled. “Fairness” had been established.

Individual initiative had died, but nobody noticed; perhaps no one
cared…so long as there was free bread that “the rich” were paying for.

It seems that all the air is rushing out of Obama’s quickly-deflating “Cash-For-Clunkers” balloon. Aside from the growing criticism over the waste of functional cars, and the energy/carbon cost of each car’s destruction, and the huge amounts of taxpayers’ money that Congress has been throwing at this… there is now yet another growing complaint.

KRQE is one of several that are reporting about dealers being stiffed by the federal government, having already given out numerous rebate incentives to customers after being promised by Uncle Sam that their reimbursement would arrive within 10 days. Needless to say, those checks are not in the mail.

Don Chalmers, a dealer in New Mexico, has already sold 70 cars under this program, and has this to say: “I pay my bills. If I was three weeks or four weeks late on paying my taxes I suspect that they would be in my office real quick. We just expect the same sort of courtesy and treatment from the federal government.”

At least some congressmen are getting involved, like Martin Heinrich (D-NM), who told KRQE, “You simply can’t ask businesses to front $200,000, $300,000 for any period of time. These applications are simply not being processed fast enough. So we are going to be on the phone today to the White House and to the feds in DC to try and get this moving.”

Not to belabor the obvious observation, but if the government can’t even run this little program, how do the Democrats expect it to reform the entire health care industry?

Richard H. Thaler, professor of economics and behavioral science at the Booth School of Business at the University of Chicago, wrote a piece in the Sunday Times about health care’s “public option” and how this is a red herring, distracting from the issue of real reform.

While everyone is arguing about whether or not the public option will stimulate real competition and whether or not the public option is a socialist trojan horse, no one is bothering to debate the real issue, namely, the lack of any details associated with the public option, and with the latest proposal, in general. Without such details, there is no way to ever enact anything that will bring real reform to our health care system.

PULLQUOTE:

if we stop the current debate, and instead focus on debating the details, we will inevitably eliminate the bad ideas from the plan by virtue of actually debating their practical detail

An example of one such detail going unscrutinized while everyone debates the “big picture talking points” is the fact that Obama has “promised” (hold the laughter) that the public option would be required to break even financially. Has Obama or Congress addressed how that will even happen? No. Has anyone taken them to task on that detail? Not really.

Another detail not being hashed out is whether or not the public option will be allowed to secure special deals suppliers, essentially crowding out competitors. This is a huge decision that no one in Congress seems to be addressing head on in terms of laying down the ground rules and the details for this.

In short, if we stop the current debate, which will most likely get us nowhere (other than “agree-to-disagree”), and instead focus on debating the details, we will inevitably eliminate the bad ideas from the plan by virtue of actually debating their practical details.

Thaler has some advice for everybody:

Here’s some free advice to members of Congress: While you are enjoying your August recess and town hall meetings, instead of arguing about whether to have a public option, argue about the ground rules.

To the Republicans, I say this: If you can get real assurances that the public option has to break even, and that it will get no special deals from suppliers, let the Democrats have it but ask for concessions on tort reform in return. (That could actually save some money.) The resulting public plan will be too small to notice.

To the Democrats, I say this: If you want competition in health care, you won’t get it if the public option can make deals its competitors can’t. So either give the Republicans hard assurances that the public option would have to break even and not get special treatment, or, better yet, just give it up to ensure that some useful health care reform is passed. A public option is neither necessary nor sufficient for achieving the real goals of reform, and those goals are too important to risk losing the war.

Now, it seems that Obama did just that: gave up the public option to ensure that some useful health care reform is passed. A Wall Street Journal editorial today discusses how Obama has over the weekend indicated that he has more or less given up pressing for a public option.

The interesting (and convincing) perspective presented in that piece is that Obama jettisoned this part of the proposal in hopes that ObamaCare critics will be so thrilled by this retreat, that they’ll forget about the rest of the issues. This is a reasonably clever strategy by Obama, considering how all the hype so far has been on the public option, as I discusssed already.

So, now we have to see if the public will be smart enough to still scrutinize the details of his plan, despite Obama’s tossing the public option overboard (a la Jonah) in an attempt calm the storm.

The WSJ writes:

The most dangerous outcome of this weekend’s ostensible concession would be if ObamaCare acquires a “moderate” gloss and the public comes to think the rest is innocuous. Cashiering the public option doesn’t eliminate the plan’s many other problems: The federal fisc is already a shambles because of our current health entitlements, and a new $1 trillion liability is unsustainable given the deficits and tax burden required to finance them. Democrats plan to subsidize insurance up to 300% of the poverty level, which for a family of four is about $66,000. That commitment will only grow, as do all government health programs. ObamaCare would still impose costly new mandates on individuals and businesses and dismantle even the parts of the health-care system that are working well now.

The real goal this year is to create enough of the architecture for government-run health care; eliminating the public option merely slows the march. Still, that Mr. Obama has been forced to publicly repudiate one of his main ideas shows how much he over-interpreted his 2008 mandate…

The best health-care option now is to attempt a truly bipartisan reform, likely one built on individual tax credits for private health insurance. Or drop the scheme entirely and focus on improving the economy. The Democratic walk-back on the public option is just a few steps. This fight is a long way from over.

So, ultimately, we  all have to keep things in perspective: this fight is far from over, and if we can get those involved in the debate to focus on the details, there’s a good chance we can actually do some good by putting together a few smaller-scale, higher-impact reforms, rather than a mammoth government-run program that will inefficiently lose money but unfortunately manage to stay solvent through tax subsidization.

Craig S. Karpel, author of The Retirement Myth, has written a great opinion piece in the Wall Street Journal a couple of days ago pointing out a very glaring—yet somehow overlooked—contradiction in Obama’s position regarding the economy.

Obama has said, “make no mistake: the cost of our health care is a threat to our economy,” referring to the 20% of our GDP that we spend on health care. Yet, as Karpel points out, one person’s expenditure is another person’s income and the $2.4 trillion that Americans spend each year on health care goes to pay other Americans which, to use Obama’s own logic, is an even better stimulus to the economy and to job growth than his own stimulus proposals can ever dream of accomplishing!

A little-noticed feature of the current recession is the role of the health-care industry as a resilient driver of the general economy. Health-care now accounts for 10.4% of nonfarm employment. Health-care employment grew by 19,600 jobs in July 2009, on a par with the average monthly gain for the first half of 2009, which was down from an average monthly increase of 30,000 in 2008. Remarkably, these gains occurred in a period during which total employment shrank by 6.7 million.

Furthermore, our health care industry—into which our world-leading medical and pharmaceutical research companies pour billions of dollars annually—is one of our greatest exports! Other countries license our technology, lease our equipment, buy our drugs, send their medical hopefuls to our schools and companies… all of which brings in an incredible amount of foreign currency and strengthens our economy.

And that’s to say nothing of the actual health care that we provide to “medical tourists”, people from other countries (read: socialized medicine countries), like Canada, for example, seeking better health care here in the United States and traveling here to obtain it—in the process infusing our economy with payments for their health care, their accommodations, their airfare, and everything else they (and their travel companions) do while here.

Karpel writes:

The U.S. health-care economy should be viewed not as a burden but as an engine of growth. Medical and orthopedic equipment exports increased by 65.1% from 2004 through 2008. Pharmaceutical exports were up 74.6%. The unprecedented advances expected to come out of American stem cell, nanotechnology and human genome research—which other countries’ constricted health sectors cannot support—will send these already impressive figures skyward.

A study by Deloitte LLP has found that more than 400,000 non-U.S. residents obtained medical care in the U.S. in 2008, and it forecasts an annual increase of 3%. Some 3.5% of inpatient procedures at U.S. hospitals were performed on international patients, many of them escaping from Canada’s supposedly superior health system.

How does something so obvious escape the notice of the president?  (We can already imagine how it escapes the notice of the mainstream media: they’re too busy fawning over the Great One’s glorious presence.) How is it that he can give one speech after another about how important it is to stimulate the economy and—more so—to spend tons of money to stimulate the economy, and yet when it comes to health care it suddenly becomes a bad thing to spend money—money which results in jobs and economic activity?

It can only be because of  purely political reasons, i.e., because in order to get socialized medicine, he must first demonize the system enough to rally enough people for change.

The problem, though, is that too many people are actually happy with their health care and are just not buying into this demonization.

This obvious-yet-overlooked aspect of it is yet another reason for people to stop and consider what Obama’s real motives are for fast-tracking so many of his bloated proposals through Congress.

(A tip of the ol’ fedora to my sis for spotting this great WSJ article!)