Who’s to Blame for ObamaCare? Two Conservatives!

I wrote the following article for Human Events, but apparently it was too controversial and was removed after about 100 e-letters of commentary, both favorable and critical. Read here’s the original op-ed, uncensured.)

by Mark Skousen

This week the Senate grinches stole Christmas. The Obama Nation is getting Obama Care.

It’s easy to blame the sixty Democrats, as the Wall Street Journal does, for “the worse bill ever.” It solemnly declares: “These 60 Democrats are creating a future of epic increases in spending, taxes and command–and control regulation.”

True enough. But what’s the root cause of this disaster?

Sorry, friends, it’s not the Democrats, nor the American people who elected them.

The real culprits are two “conservative” Republicans who ran the show the previous eight years: George W. Bush, and his “master political strategist” Karl Rove. If it weren’t for these two fools in the White House, the Democrats wouldn’t have sixty Senators, including a professional comedian from Minnesota, to close off debate and ram down our throats a bill worse than Hillary Care.

The fact is that the Bush & Rove comedy act pushed through a litany of ruinous government policies that led to the lowest approval numbers in history:

–the undeclared and costly War in Iraq and its stepchild the unconstitutional Patriot Act.
–the monstrous No Child Left Behind Act that dramatically increased federal intervention in private education.
–the Prescription Drug Act that gave the American people another benefit-corrupted entitlement and unfunded liability.
–large and growing deficits and national debt (according to the Cato Institute, George W. Bush was the biggest spender since LBJ: http://www.cato-at-liberty.org/2009/12/19/george-w-bush-biggest-spender-since-lbj/)
–the worst financial crisis since the Great Depression, largely due to their failure to reform government-sponsored agencies Freddie Mac and Fannie Mae.

The supply-side tax cuts were probably the only major piece of economic legislation that Bush/Rove deserve credit for, but even then, they blundered in not making the tax cuts permanent. So now even if the Republicans take back Capitol Hill in the 2010 elections, all President Obama has to do is veto an extension of the Bush tax cuts, a voila, taxes will increase automatically.

In short, we are paying a heavy price for the “compassionate conservativism” of Bush/Rove.

Once Obama Care becomes law, like Medicare and other “Great Society” programs, it will never end. We will be stuck with national health care for the rest of our lives.

And how are Bush and Rove rewarded? Fortunately, we aren’t seeing much of George Bush, who is quietly in retirement in Texas.

The tragedy is Karl Rove, who has been rewarded by conservatives. He’s treated like a triumphant general on Fox News almost every night, and was signed on as a regular columnist in the prestigious Wall Street Journal.

Shame.

In liberty, AEIOU,
Mark Skousen

Start Your Own Tax Revolt — Without Getting In Trouble

From Human Events

“A virtuous and industrious people may be cheaply governed.” ~ Benjamin Franklin

“Little else is required to carry a state to the highest level of opulence but peace, easy taxes, and a tolerable administration of justice.” ~ Adam Smith

Today, on April 15 Tax Day, hundreds of thousands of citizens are protesting out of control government spending and taxes at Tea Parties across America.

Should we complain?

The good news is that marginal tax rates have gradually declined since the 1950s, when the rate on income was 90%. And taxes on long-term capital gains and dividends are now at 15%. Long live supply-side Reaganomics tax cuts.

The bad news is that prior to the 1980s, there were plenty of loopholes to escape onerous 90% tax rates. Those tax shelters are largely gone.

The good news is that Tax Freedom Day (the amount of days you have to work to pay Uncle Sam) arrived two days ago, on April 13, according to the Tax Foundation. This is eight days earlier than in 2008, and a full two weeks earlier than in 2007, due to the recession, and the large temporary tax cuts for 2009 and 2010.

The bad news is that Americans will pay more in taxes than they will spend on food, clothing and housing combined! (Source: http://mjperry.blogspot.com/)

Moreover, if you add in the federal budget deficit to total taxes collected, the real Tax Freedom Day is May 29, the worst since World War II.

But there’s more bad news: For American business, the corporate tax rate is 40% in the United States, 50% higher than the average size of other industrial countries. The average corporate tax rate in OECD countries has been falling over the past 20 years, but not in the U.S.

In addition, legislators have discovered ingenious ways to taxing its citizens — through import duties, levies, and fees of various sorts. Today the federal “excise” tax is taking its toll on gasoline, tobacco, telephone and utility bills.

And sales taxes are inevitably rising in state after state, and I know of no state that has cut sales taxes. After every recession, the governor “temporarily” raises the sales tax by a penny, but then never rescinds it. Moreover, the state legislators are always finding ways to expand the tax base. When I was in Florida recently, the state imposed its 6% sales tax on hotel parking fees!

The few sales tax exemptions left, such as out-of-state and online purchases, are gradually disappearing.

Not surprisingly, taxes at the federal, state and local level are at an all-time high as a percentage of GDP. And under President Obama’s tax increases on the wealthy and on average citizens through his “cap and trade” energy tax (which will raise substantially the price of gasoline and utility bills), the percentage is expected to reach 27%.

Now more than ever, we need a stable, sound, low tax system that individuals and businesses can depend on for long term planning. Unfortunately, we change the tax law practically every year.

Countries like Hong Kong do it right. For the past fifty years, they have not changed their tax code hardly at all. They have a flat tax of 18% on individuals and corporations, and no tax on interest, dividends and capital gains. And they live within their means. No wonder the Economic Freedom Index ranks Hong Kong #1 in the world in terms of economic freedom and economic growth. We could learn a lot from Hong Kong.

I say, it’s time for a tax revolt. I favor a flat tax like the one advocated by Steve Forbes. It’s better than the so-called “fair tax” on consumption because it will create a new bureaucracy and will inevitably result in the U.S. having both a national sales tax and income tax.

But why wait for Congress to change the rules again and again? I say, wage your own tax revolt. But remember, some methods are effective, others are downright dangerous and could land you in jail. Here’s some do’s and don’t:

1. Take advantage of all legitimate tax-advantaged strategies. The two best ones right now are (a) a Sub S corporate business, and (b) investing in real estate, including your own home. Both offer ways to minimize FICA and income taxes; both can benefit from tax credits. In fact, it’s the best “buyers” market in real estate I’ve seen in decades.

2. Do consider moving to low-tax states, including ones that don’t impose an income tax (Florida, Texas, Nevada, Tennessee, Alaska, Washington, Wyoming, and New Hampshire). You might also consider living in a border state to avoid both the income and sales tax, such as Vancouver, Washington (by living in Washington state, you are exempt from the state income tax; by shopping in Oregon, you avoid the sales tax.)

3. Do consider working abroad and taking advantage of the foreign earned income exemption for Americans. My wife and I lived and worked two years in the Bahamas in the 1980s and saved so much in taxes that we bought a second home in London.

4. Do NOT get involved in tax protest movements involving the refusal to file tax returns on Constitutional grounds, or suspicious offshore tax haven deals. You’ll end up losing money and perhaps going to jail.

5. Do NOT renounce your citizenship and move abroad. Recent tax legislation forces ex-patriates to pay taxes on the next 10 years of income. It also limits severely how much time you can spend in the United States.

Finally, do NOT make business or investment decisions solely on the basis of avoiding taxes. There’s more to life than avoiding the tax man. Protest all your want today, but don’t make foolish financial decisions.

A Year of Miracles — 1776

Personal Snapshots
Forecasts & Strategies
August 2002

“The cause of America is in great measure the cause of all mankind.”

— Tom Paine, Common Sense (1776)

A Year of Miracles

Like most Americans, I’ve always been fascinated by the events of 1776. It was a year of earth-shattering events that transformed forever the Western world.

It is, of course, the year the American colonies broke off relations with the Mother Country, declared political independence from monarchy, and established the words of Thomas Jefferson that “all men are born equal” and endowed with certain “inalienable rights.”

It is the year that Adam Smith’s monumental Wealth of Nations was published, a powerful declaration of economic independence. Smith proclaimed the establishment of a “system of natural liberty” and the “invisible hand” doctrine that private enterprise would benefit the public wealth.

It is the year the eminent British historian Edward Gibbon published the first volume of his classic history, The Decline and Fall of the Roman Empire. It was considered a scandalous book because it blamed the decline and fall of Rome after it adopted Christianity as its state religion. Through his review of the Roman world, Gibbon emphasized the principles of “liberty, virtue and courage.”

Last but not least, 1776 is the year Thomas Paine’s Common Sense was printed, and Paine, more than any other revolutionary figure, symbolized the Age of Enlightenment. Paine’s philosophy encompassed the entire compass of liberty. He was a radical who advanced democratic emancipation, individual rights, religious tolerance and competitive capitalism.

Just as Adam Smith, Thomas Jefferson, Edward Gibbon and Tom Paine were radicals of their day, so the Foundation for Economic Education and its supporters are the radicals of our day, supporting maximum political, economic and religious freedom.