Category Archives: Taxes

Dumas: “Spending…not the cause of …deficits…it is…tax cuts”(Real Cause of Deficit Pt 1)

March 10, 2011 – 8:47 am

Brian Riedl of Heritage on Averting National Bankruptcy.wmv

This whole series shows that rising entitlement spending will bankrupt us and the Bush Tax Cuts are not to blame.

Ernest Dumas in his article “What accounts for the revolutionary spending binge in Washington and state capitals?,” (Arkansas Times, Feb 16, 2011) asserted:

Runaway government spending on social programs or even on banks and General Motors is not the cause of the federal or state deficits. Mainly, it is a dramatic decline in government revenues, owing to tax cuts and the deepest, longest recession in 70 years engendered by these conservatives.

We have heard the liberals say for years that Bush put us into this horrible position of deficits because of his tax cuts of 2001 and 2003. However, if Bush was responsible for taking the 236 billion surplus he inherited in 2000 and turning everything downward because of the tax cuts, then why did we only have a budget deficit of 161 billion in 2007?

Brian Riedl is the author of the article “The Three Biggest Myths About Tax Cuts and the Budget Deficit,” (Heritage Foundation, June 21, 2010), and the next few days I will be sharing portions of his article

Brian Riedl is The Heritage Foundation’s lead budget analyst and has built a solid reputation for interpreting, explaining and reforming the often arcane realm of federal budget policy.

Indeed, much of the current backlash against runaway federal spending can be attributed to Riedl’s work. As far back as 2002 and 2003, his writings exposed the beginnings of a federal spending spree that was pushing real federal spending to more than $20,000 per household for the first time since World War II.

Abstract: The annual federal budget deficit is projected to reach 8.3 percent of gross domestic product (GDP) by 2020—more than three times the historical average of 2.3 percent. This dramatic increase in the federal deficit will be exclusively the result of increasing spending, not declining revenues (or the 2001 and 2003 tax cuts). Rapid growth in Social Security, Medicare, and Medicaid costs and interest payments on the national debt will cause virtually all of this new spending. Any sustainable fix must therefore address the source of the problem—rapidly rising entitlement spending.

By Everette Hatcher III | Comments (0)

Brantley: Proponents of Social Security Privatization know they are dooming system (Social Security Part 6)

January 31, 2011 – 7:53 am

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In 2003 José Piñera, President of the International Center for Pension Reform and Distinguished Senior Fellow of the Cato Institute, gave this conference warning the upcoming crisis of the west. For more information about José Piñera’s ideas and Pension Reform visit http://www.josepinera.com or http://www.pensionreform.org

Social Security Series Part 6

Max Brantley on his Arkansas Times blog on Sept 3, 2010 wrote concerning Social Security privatization efforts, “Allowing such individual investment decisions would be the doom of the system as we know it and those who favor the approach know it full well.”

I would counter Mr. Brantley with two pieces of information. First, the path we are on is unsustainable. The video clip rightly points out that the unfunded liabilities of “pay as you go state run pension systems are enormous” and they are “a time bomb” as  José Piñera notes in the above video in 2003. He said of Europe: “I am astonished that the political leadership of Europe does not understand the seriousness of this threat. It is a time bomb. The unfunded liabilities of the pay as you go state run pension systems are enormous.”

Basically the USA will be where PIIGGS is today. Portugal, Ireland, Italy, Greece, Great Britain, and Spain are guilty of following down the path of socialism that we are going down. The only difference is that we are about 10 years behind them. Similar results can be expected in the USA that they have now. This forecast of José Piñera was given in 2003.

Second, Proponents of Social Security privatization can cite examples of other countries all over the world privatizing their social security systems and can report much success.

Dan Mitchell of the Cato Institute has observed:

Australia began to implement personal accounts back in the mid-1980s, and the results have been remarkable. The government’s finances are stronger. National saving has increased. But most important, people now can look forward to a safer and more secure retirement. Another great example is Chile, which set up personal accounts in the early 1980s. This interview with Jose Pinera, who designed the Chilean system, is a great summary of why personal accounts are necessary. All told, about 30 nations around the world have set up some form of personal accounts. Even  Sweden, which the left usually wants to mimic,  has partially privatized its Social Security system.

José Piñera in 2003 part 2


By Everette Hatcher III | Also posted in Social Security | Comments (0)

Brummett: Social Security Privatization “very ruination of this vital contract.”(Social Security Series Part 5)

January 28, 2011 – 11:51 am

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George Bush discusses his plans to privatize Social Security.

Social Security Series Part 5

John Brummett in his article “Boozman: Superman or Superficial?” (Arkansas Times, Sept 30, 2010) asserted, “that to take money out of Social Security and let individuals risk blowing it with bad investments would invite the very ruination of this vital contract.”

Personal accounts are safer than the current system.

What is the solution to the Social Security problem for young people? Ron Paul addresses this in his Dec 27, 2010 radio address:

Notice that neither political party proposes letting people opt out of Social Security, which exposes the lie that your contributions are set aside and saved. After all, if your contributions are really set aside for your retirement, the money is there earning interest, right? If your money is in your account, what difference would it make if your neighbor chooses not to participate in the program?

The truth of course is that your contributions are not put aside. Social Security is a simple tax. Like all taxes, the money collected is spent immediately as general revenue to fund the federal government. But no administration will admit that Social Security is nothing more than an accounting ledger with no money. You will collect benefits only if future tax revenues remain high. The money you paid into the system is long gone.

My hope is that at least some members of the new Congress will cut through the distortions to see Social Security as it really is. The best way to fix the impending Social Security crisis is also the simplest: Allow younger individuals to opt out of the program and use their tax savings to invest privately as they see fit. This is the true private solution. Your money has never been safe in the government’s hands and it never will be.

Ron Paul has rightly noted that basically Social Security needs to be seen for what it really is. Dan Mitchell of the Cato Institute has rightly noted that Social Security is a “tax and transfer entitlement scheme.”

Below are some figures from a 1995 article by William Shipman of the Cato Institute:

Monthly Benefit Comparison of Social Security and the Capital Markets by Date of Birth, Income, and Age of Retirement (1995 Dollars)

[Bar graph omitted. Tabular presentation given.]

Year of Birth:  1930

               Retirement Age 62           Normal Retirement Age
            Low Wage      High Wage        Low Wage     High Wage
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Social
 Security     $439          $929             $551         $1,200

Bonds         $380        $1,341             $574         $2,072

Stocks        $864        $2,614           $1,301         $3,999

Year of Birth:  1950

               Retirement Age 62           Normal Retirement Age
            Low Wage      High Wage        Low Wage     High Wage
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Social
 Security     $468        $1,144              $631        $1,562 

Bonds         $749        $3,194            $1,069        $4,585

Stocks      $1,599        $6,380            $2,490        $9,972

Year of Birth:  1970

               Retirement Age 62           Normal Retirement Age
            Low Wage      High Wage        Low Wage     High Wage
___________________________________________________________________

Social
 Security      $529       $1,315              $769        $1,908

Bonds          $676       $3,268            $1,085        $5,243

Stocks       $1,363       $6,610            $2,419       $11,729

Source: Author’s calculations based on figures in Social Security Administration, Social Security Bulletin, Annual Statistical Supplement, 1994 (Washington: Government Printing Office, 1994); Stocks, Bonds, Bills and Inflation (Chicago: Ibbotson Associates, 1995); and “IFC Investible Index,” International Finance Corporation, Washington, 1995.

By Everette Hatcher III | Also posted in Cato Institute, Social Security | Comments (0)

Social Security is a bad deal for young workers today (Social Security Series Part 4)

January 27, 2011 – 7:36 pm

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Ron Paul’s radio address Dec 27, 2010 on Social Security

Social Security Series Part 4

Ron Paul in his radio address of Dec 27, 2010 noted:

But millions of Americans now realize that the status quo is an illusion that will not last even another 10 or 20 years. The federal government cannot continue to spend a trillion dollars more than it collects in revenue each year because we are running out of creditors. Fiscal reality is setting in and the consequences may be grim, even if Congress finds the courage to take decisive action now.

Courage begins with a commitment to see things as they are, rather than how we wish they were. When it comes to Social Security we must understand that the system does not represent an old age pension, an insurance program or even a forced savings program. It simply represents an enormous transfer of payment with younger workers paying taxes to benefit the other beneficiaries. There is no Social Security trust fund and you don’t have an account. Whether you win or lose the Social Security lottery is a function of when you happen to be born and how long you live to collect benefits. Of course young people today have every reason to believe they will never collect those benefits.

Social Security is a bad deal for young workers today and they are voicing their opinions.

What do you think of the nation’s Social Security system? Do you think that by the time you retire there will be enough money in the system to pay you the benefits you are entitled to, or do you think there will not be enough money left to pay you benefits?

Responses by Age Group:
  18-30 31-44 45-60 61+ All
Yes, will be enough 18% 23% 44% 61% 36%
No, will not be enough 80% 74% 52% 29% 60%
(VOL) Not covered by Social Security 0% 0% 1% 2% 1%
DK/No opinion 2% 3% 4% 7% 4%
Source: A Washington Post-ABC News poll conducted by telephone January 12 – 16, 2005 among 1,007 randomly selected adults nationwide. Margin of sampling error for overall results is plus or minus three percentage points. Fieldwork by TNS of Horsham, PA.

Another idea to help keep the Social Security system funded would let workers put some of their Social Security savings into stocks or bonds if they wanted to. That could produce higher or lower benefits depending on how the investments perform. Would you support or oppose this stock-market option for Social Security?

Responses by Age Group:
  18-30 31-44 45-60 61+ All
Support 71% 65% 47% 35% 55%
Oppose 26% 32% 50% 58% 41%
DK/No opinion 2% 4% 3% 7% 4%
Source: A Washington Post-ABC News poll conducted by telephone January 12 – 16, 2005 among 1,007 randomly selected adults nationwide. Margin of sampling error for overall results is plus or minus three percentage points. Fieldwork by TNS of Horsham, PA.  
By Everette Hatcher III | Also posted in Social Security | Comments (0)

Brummett: Estate tax is okay because it affects few people

January 27, 2011 – 3:09 am

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Series on Estate Tax Part 6

Milton Friedman clears up misconceptions about wealth redistribution, in general,

and inheritance tax, in particular. He shows that this tax does hurt families and

our society. The questioner suggests a 100% inheritance tax but that would

destroy a society. Likewise Brummett below tries to downplay the harmful

effects of the tax by saying it is alright since less than 1% of the USA will be

affected, so lets stick it to them despite the harm it causes to family businesses.



In this series on the Estate Tax I will be quoting portions of the article “The Economic Case Against the Death Tax,”(Heritage Foundation, July 20, 2010) by Curtis S. Dubay. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Number of Estates Paying Death Tax Not the Issue. A common argument in favor of the death tax is that it only affects a small number of estates and as such has a small impact on the economy. By that logic, a tax that only one taxpayer paid would be an ideal tax, even if that tax ground the economy to a halt. The number of taxpayers that pay a particular tax is economically irrelevant. What matters is the impact the tax has on the economy. By this more accurate metric the death tax is a poor tax because it is a large weight dragging down economic growth.


The number of estates subject to the death tax has declined steadily since passage of the 2001 tax relief. That package steadily phased out the death tax by reducing its rate and increasing the portion of estates exempt from the death tax from $1 million to $3.5 million, before doing away with the death tax entirely in 2010. In 2000, before the tax relief packages began, 52,000 estates paid the death tax. As a result of the increased exemption level, by 2008 (the latest year of available data) just over 17,000 estates paid the death tax.


Fewer estates paying the death tax has reduced the economic cost it imposes, but as long as the death tax remains in place it will continue to slow economic growth, destroy jobs, and lower wages. It is little consolation to workers that remain unemployed or see their pay stagnate because of the death tax that the impact of the tax has been slightly lessened.

Current proposals to resuscitate the death tax and set its exemption level between $3.5 million ($7 million for married couples) and $5 million ($10 million for married couples) would still subject estates that support the most jobs and generate the most economic activity to the death tax. Even though these estates are the most able to afford expensive planning measures to lower their death tax liability substantially, they often cannot escape the tax entirely and therefore still pay large tax bills. These large estates support more economic activity, generate more income, and support more jobs than the estates that would continue to fall below the threshold.


According to data from the Internal Revenue Service “smaller estates (under $3.5 million) make up the bulk of filers—more than 60 percent between 2002 and 2007. Large estates (over $10 million), however, contributed between 18 percent and 30 percent of the total revenue in the same time frame, indicating a disproportionate distribution of tax liability.” Subjecting these estates to the death tax again would continue to put a large number of workers at risk of seeing their wages idle or their jobs destroyed.

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By Everette Hatcher III | Also posted in Milton Friedman | Comments (0)

Social Security taxes have risen rapidly (Social Security Series Part 3)

January 26, 2011 – 12:57 pm

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Debate on should the cap be raised on Social Security Payroll Taxes on Fox News.

Social Security Series Part 3

Basically the social security system in the USA has been in such bad shape because of this pay as you go system that there is no way to raise taxes enough to pay all the promised benefits over the next 40 years. Is the problem that we have not raised taxes fast enough in the past. Take a look.

Pat Fleck on his blog noted:

The tax was implemented in 1937 at 1.0% of the first $3,000 of wages. It stands today at 6.20% on the first $106,800 of wages. Inflation between 1937 and 2010 was 3.76% annually, whereas the wage limit has risen at 4.95%. Hence, even if the original 1.0% tax had remained constant, the amount collected on the limit would have increased substantially more than the rate of inflation due to the more rapidly increasing wage limit. However, with increases in both the limit and the rate, the tax in dollar terms has increased on the wage limit from $30 to $6,622, a 7.57% annual increase, which is double the rate of inflation between 1937 and 2010.

The main point I want you to take away from this post is: Social Security Payroll Taxes are two high now. Raising them further kills investment in the economy. Liberals have suggested raising the payroll taxes by 50% but that still would not take care of all the future promises that Social Security has made.

Glenn Beck has observed:

In less than six years, the federal government will be paying out more in Social Security benefits than the taxes that it takes in to fund it. Our Social Security Administration is getting $788 billion in fiscal year 2011. That breaks out to $6,500 per U.S. household.

You write a check for that? Can you write a check for that? ‘Cause that’s what we’re doing

By Everette Hatcher III | Also posted in Social Security | Comments (0)

Lynch:”Zealous newcomers” in St Govt should be cautious about tax cuts

January 18, 2011 – 1:35 am

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Series Part 1 :State Income Tax stifles Arkansas

Economist Art Laffer testified in favor of Missouri HJR 56/ SJR 29. Laffer explains his research supporting the elimination of State Income Tax and discusses the harmful effects of Missouri’s income tax. To achieve the most economic growth and job creation, Missouri should eliminate its state income tax and move to a sales tax. Missouri should pursue a tax structure that does the least amount of harm while collecting the revenues we need. Replacing Missouri’s income tax with a sales tax will accomplish that aim.

Pat Lynch in his weekly column in the Arkansas Democrat-Gazette (Legislative Overview, Jan 17, 2011), tells the new Republicans that they should be cautious. He went on to note, “We should all be hoping that, when zealous newcomers decide to cut taxes, they also propose corresponding cuts in spending.”

That sounds reasonable at first, but have you ever considered the possibility that there is a lot of fat in the State government? Maybe the Republicans should be radical and cut taxes a lot and cut spending even more. These “zealous newcomers” Pat Lynch is talking about are almost all Republicans. I believe that our government collects taxes in such a way that stifles growth compared to other states around us like Texas and Tennessee.

The number one way we stifle our economy is through the state income tax. Take a look below at our income tax rate compared to other states. It is a sad picture.(Below are the top tax brackets for the top earners.)

  • Alabama: 5% on income over  $3,000
  • Alaska: No income tax
  • Arizona: 4.54% on income over $150,000
  • Arkansas: 7% on income over  $32,600
  • California:10.55% on income over $1 million
  • Colorado: flat 4.63% of federal taxable income
  • Connecticut: 6.5% on income over $500,000
  • District of Columbia: 8.5% on income over $40,000
  • Delaware: 6.95% on income over $60,000
  • Florida: No income tax
  • Georgia: 6% on income over $7,000
  • Hawaii: 11% on income over $200,000
  • Idaho: 7.8% on income over $26,418
  • Illinois: flat 3% of federal AGI with modifications
  • Indiana: flat 3.4% of federal AGI with modifications
  • Iowa: 8.98% on income over $63,315
  • Kansas: 6.45% on income over $30,000
  • Kentucky: 6% on income over $75,000
  • Louisiana: 6% on income over $50,000
  • Maine: 8.5% on income over $20,150
  • Maryland: 6.25% on income over $1 millio
  • Massachusetts: flat 5.3% on all income
  • Michigan: flat 4.35% of federal AGI with modifications
  • Minnesota: 7.85% on income over $74,780
  • Mississippi: 5% on income over $10,000
  • Missouri: 6% on income over $9,000
  • Montana: 6.9% on income over $15,400
  • Nebraska: 6.84% on income over $27,000
  • Nevada: no income tax
  • New Hampshire: 5% on interest and dividend income.  Wages are not taxed.
  • New Jersey: 8.97% on income over $500,000
  • New Mexico: 4.9% on income over $16,000
  • New York: 8.97% on income over $500,000
  • North Carolina: 7.75% on income over $60,000
  • North Dakota: 4.86% on income over $373,650
  • Ohio: 5.925% on income over $200,000
  • Oklahoma: 5.5% on income over $8,700
  • Oregon: 11% on income over $250,000
  • Pennsylvania: flat 3.07% on all income
  • Rhode Island: 9.9% on income over $373,650
  • South Carolina: 7% on income over $13,700
  • South Dakota: no income tax
  • Tennessee: 6% on interest and dividend income.  Wages are not taxed.
  • Texas: no income tax
  • Utah: flat 5% on all income
  • Vermont: 8.95% on income over $373,650
  • Virginia: 5.75% on income over $17,000
  • Washington: no income tax
  • West Virginia: 6.5% on income over $60,000
  • Wisconsin: 7.75% on income over $225,000
  • Wyoming: no income tax

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Today I have a profile from Ballotpedia of St lawmaker Robert Dale.

Robert Dale

From Ballotpedia

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Robert Dale
Arkansas House of Representatives District 70
Incumbent
Assumed office
2009
Current term ends
2010
Political party Republican
Profession Banker
Website House site

Robert Dale is a Republican member of the Arkansas House of Representatives, representing the 70th District since 2009.

Issue positions

Dale did not provide answers to the Arkansas State Legislative Election 2008 Political Courage Test. The test provides voters with how a candidate would vote on the issues if elected.[1]

Committee assignments

Sponsored legislation

Dale’s sponsored legislation includes:

For a full listing of sponsored bills, see the House site.

Elections

2010

See also: Arkansas House of Representatives elections, 2010

Dale won re-election to the 70th district seat in 2010. He faced no opposition.[2]

2008

On November 4, 2008, Dale won election to the 70th District Seat in the Arkansas House of Representatives, defeating opponents J. Patrick Bewley (D), Jeff Hall (Ind), and Marjorie LeClair (Ind).[3]

By Everette Hatcher III | Comments (0)

Good intentions of Government officials not enough

January 16, 2011 – 4:02 am

 

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Series on Estate Tax Part 5
Many times government will be filled with “do-gooders” and they will have the best intentions. However, the end results of their plans do not help the people they want to help. Milton Friedman also points out that their are many private companies that want the trade policies of the government altered to “help the little guy in the street,” but they really want to help themselves.

There are few people that benefit from the estate tax, but insurance companies and lawyers probably are on the top of the list. Many times results of government actions do not match the original intentions of the lawmakers. This is the case with the estate tax.
Milton Friedman noted:

“One of the great mistakes is to judge policies and programs by their intentions rather than their results…Almost all government programs are started with good intentions, but when you look at what they actually achieve, there is a general rule. Almost every such program has results that are the opposite of the intentions of the well-meaning people who originally backed it.”

In this series on the Estate Tax I will be quoting portions of the article “The Economic Case Against the Death Tax,”(Heritage Foundation, July 20, 2010) by Curtis S. Dubay. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Who Benefits from the Death Tax?

Despite its devastating impact on the economy, jobs, and wages, the death tax has persisted for more than 90 years in its modern form and could well survive this year’s moratorium unless Congress acts soon. An entrenched group of special interests that benefit from the death tax and hold large sway with Congress are the reason for the resilience of the death tax:

  • · Estate tax lawyers and planners. Even though they face large death tax bills, estates from wealthy families pay considerably lower taxes than they otherwise would—because of estate tax lawyers and planners. Wealthy families hire expensive estate lawyers to arrange their affairs in a legal manner to minimize the impact of the death tax on their estates, or in some cases escape liability all together. Estate tax lawyers and planners have an obvious vested interest in seeing the death tax remain in place. As long as it does, they can continue to collect lucrative fees for arranging estates to minimize death tax liability. The fees paid by families to minimize their death tax liability are a drag on economic growth. The families could invest the resources they use to protect their estates so businesses and entrepreneurs could create new jobs; instead the money is diverted to protect the estate from the death tax.
  • · Life insurance companies. As long as the death tax remains in place, life insurance companies will continue to collect premiums from family businesses that cannot afford estate lawyers and planners but want to protect their businesses. In order to protect their assets from being liquidated when they die, these families purchase life insurance policies that will pay the living members of the family enough to cover the death tax liability when a family member passes away. The life insurance policies are expensive, but not as expensive as estate tax lawyers and planners. The life insurance companies enjoy increased profitability while they continue to collect premiums for policies to protect against the death tax year after year. The premiums families pay to insurance companies siphon off limited resources that the families could use to expand their businesses and add new workers.
  • · Large businesses. The death tax is an impediment for family-owned businesses that could expand to compete with larger businesses because it creates a large disincentive for the family businesses to expand. If a family-owned business grows large enough, it will push the value of the family’s estate over the death tax’s exemption level and the family will owe a hefty amount when the current owner dies. Faced with endangering the life of the business because of the death tax, many families choose to keep their businesses smaller than they otherwise would have. This prevents them from competing more forcefully against larger businesses that are not family-owned and do not have to worry about the death tax.Large businesses also benefit from the death tax in another more direct way. Even though some family businesses choose to remain small to keep the death tax at bay, others take the risk and grow as large as possible. When a family member passes away these family-owned businesses often lack the necessary cash to pay the death tax, as explained above. If the family cannot raise the cash necessary to pay the death tax from selling certain assets, it is forced to sell the entire business. Larger businesses can then buy these competitors and acquire a larger share of the market in the process. These transactions sometimes occur before a death occurs so the family does not have to go through a difficult and complicated transaction during a period of mourning.
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Today I am profiling St lawmaker Cecile Bledsoe.

 

Cecile Bledsoe

Wed, Jan 7, 2009

Legislators, Senators

cecile-bledsoeR-Rogers

 

Senate District 8
Three terms in the House, 1999 to 2005
Committees: Public Health; City, County and Local; Joint Legislative Audit; Joint Performance Review.
Special connections: Her husband, Jim, is a surgeon who retired from private practice and now works for a firm that assigns him to other hospitals out-of-state on an as-needed basis. Has two sons who are doctors but they practice in other states. “If I’m sponsoring medical-related legislation, I want people to know that I have no family members with a practice in Arkansas,” she said.
How to reach her: Home phone: 479-636-2115. “I check my home phone.” Legislative e-mail also works, but please “put your town. Otherwise I can’t tell if someone’s writing me from Denver or from Rogers.” E-mail: bledsoec@arkleg.state.ar.us.
What you should know: Was unopposed in her bid for a vacant Senate seat. Was been active in her community, local causes and in Republican campaigns long before running for office.
Her priority: Public health in general and setting up both a trauma center system statewide and a satellite medical school in Fayetteville in particular. Also interested in mental health issues. Wants more accountability in school spending.
Firmest prediction for the session: Organizing a system for the state lottery will take a lot of lawmakers’ attention.

 

 

 

By Everette Hatcher III | Also posted in Milton Friedman | Comments (0)

Entrepreneurship should be Encouraged by Government

January 15, 2011 – 4:23 am

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Series on Estate Tax Part 4

Did you know that Fed Ex started in Little Rock? Entrepreneurs like Fred Smith need to be encouraged, not discouraged by government. Here is a funny Fed Ex Commercial from the 1980’s.



On July 3, 1981, I was in Prague, Czechoslovakia in the middle of a 20 country student tour. Our group of 48 American students had the opportunity to speak to a Communist government official for over an hour. We asked him several questions. My questions were quite direct and I share some of them at a later time.

However, I did want to share one question that I asked. I told the official about an entrepreneur from Memphis named Fred Smith. Back in the early 1970’s we heard about how Smith had this crazy idea about delivering overnight packages from LA to San Francisco via Memphis. Sounded like it would not work, but Smith was able to invest all his money and eventually it paid off. His idea was successful.

I asked the simple question: Could something like this happen here in Communist Czechoslovakia? He responded, “No. That is because no private citizen is allowed to own that much capital. The government must do things like that.”

There was no chance for entrepreneurs to exist in communist countries. I was simply pointing out that economic freedom allows an environment for entrepreneurs. Why would someone put the time and energy in putting together a grand plan like Fed Ex when the benefit and reward would just go to a communist government? Entrepreneurship should be encouraged, but many times today in the USA we find that our lawmakers pass laws that discourage entrepreneurs.

 

In this series on the Estate Tax I will be quoting portions of the article “The Economic Case Against the Death Tax,”(Heritage Foundation, July 20, 2010) by Curtis S. Dubay. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

 


Stifling Entrepreneurship

Entrepreneurship is vital to economic growth. Entrepreneurs who start businesses create new jobs that help expand the economy. The death tax stands in the way of entrepreneurs. When a person weighs the risk of a new business venture, he takes into account all the costs he will face in order to determine the final return he will earn. He then weighs whether the return he could earn is worth the risk of losing all he invests in the enterprise. The death tax raises the costs an entrepreneur will pay because it promises to confiscate a portion of his business upon his death. The prospect of their children or other family members being forced to pay a hefty tax in order to keep the business they have rightly inherited causes many entrepreneurs to refrain from starting a business. That means fewer jobs are created and economic growth is slower than it would have been in the absence of the death tax.

Successful entrepreneurs who create the most jobs pay high marginal income tax rates throughout their working years. When the top federal income tax rate is combined with the average federal rate and federal payroll taxes, those who take the risk to start a business often pay marginal tax rates of close to 50 percent. The death tax is yet another tax an entrepreneur must pay if he uses the disposable income left over after paying taxes to grow the business and increase its value
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Did you know this detail about Arkansas?

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Today I am profiling St lawmaker Josh Johnston.
About Josh Johnston

I am Josh Johnston, and I am a Republican candidate for State Representative of the Arkansas 59 th District. I would like to share who I am, and why I want to be your State Representative.
 

I was born and raised right here in Cleburne County. I am married to Jennifer Wildman Johnston, and we have two children. Our son Jacob is 10 years old, and our daughter Jenna is 2 years old. My family and I attend Clearview Baptist Church in Heber Springs, where I serve as a Deacon and Jennifer teaches elementary students in the Christian school.

In 2003, I started my first business, Quality Rock. We now currently employ 25 people with operations in Hopewell, Letona, and Jerusalem. We plan to open another operation in Drasco in the near future.

I believe this country was founded as a Christian nation, and to this day, still is a Christian nation. The growth, prosperity and protection of this country comes only from God. I cannot stand by any longer to see our heritage, and rights of freedom of religious expression, being disassembled under the guises of political correctness.

I believe that in order for our government to properly function, our governing bodies must realign with the foundations set forth in our Constitution. I also believe that the people elected to these governing bodies be accountable to only one entity, their constituents. I believe in a government that is “of the people, by the people, for the people”. In our current day, we are watching the Federal government overstep its boundaries, and infringe upon statesʼ rights.

I believe that small business is the catalyst that drives our stateʼs economy. All levels of government must work to become more understanding of small business, and work to meet the needs of small businessmen and women. Burdensome regulations and over-taxation must cease for small businesses in Arkansas in order for them to survive and flourish.

Lastly, I want to talk about our military and veterans. I am a proud supporter of those that have served, and are currently serving in the military. It is the sacrifice of our military men and women, as well as their families, that upholds the foundation and freedoms of our great country. As your representative, the military members, and their families, will have my voice and support to meet their needs.

I believe this is a time that we truly need change in our governing. The change that needs to occur if our government is going to get back on track, starts here, in Cleburne County. I look forward to meeting you and sharing with you my ideas.

Josh Johnston

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By Everette Hatcher III | Comments (0)

Estate Tax undermines Job Creation

January 14, 2011 – 3:11 am
Series on Estate Tax:  Part 3

American Family Business Institute’s Dick Patten argues the estate tax will hurt jobs because of its impact on family farms and family-owned businesses. It will cost a million jobs.


The estate tax encourages people to spend their money instead of investing it in the economy and trying to make a profit.  This is simple economics and people acting in their own best self interest.
In this series on the Estate Tax I will be quoting portions of the article “The Economic Case Against the Death Tax,”(Heritage Foundation, July 20, 2010) by Curtis S. Dubay. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
Undermines job creation. Because the death tax discourages saving and investing, it also undermines job creation. Resources that otherwise would have been available for businesses to use to expand their operations and add new workers are consumed by people who deem it wiser to spend the money now than invest it knowing their inheritors will have to pay the death tax later. Furthermore, resources that businesses otherwise would have used to add jobs are diverted to protect families from the death tax.
Suppresses wages and productivity.Since the death tax lowers saving and investing, there are fewer resources available for businesses to purchase additional tools and equipment or replace old and worn-out pieces with new ones. That means less capital their workers can use, and therefore the workers’ productivity does not increase as much as it would have in the absence of the death tax. If the business cannot replace worn-out capital, the productivity of its workers declines. Wages are a function of a worker’s productivity, growing more slowly when productivity slows, and declining when productivity decreases.
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Today I am profiling the St lawmaker Brian King.

Bryan King

Wed, Jan 7, 2009

Legislators, Representative

mug-bryan-kingR-Berryville
House District 91
Serving his second term
Committees: Transportation; Agriculture
Special connections: House Minority leader
How to reach him: E-mail: kingb@arkleg.state.ar.us. On weekends, call his office at 870-438-4565. Messages are checked.
What you should know: Represents one of the most diverse districts in the state, with Eureka Springs in the middle surrounded by conservative countryside. Interests include helping tourism. Has become strong opponent of ethanol subsidies. Favors more research on biodiesel.
His priority: “Fighting for tax relief, including the reduction in the grocery tax and tax relief for manufacturers. The biggest crisis people face is losing their job.”
Firmest prediction: “A lot of people are going to get fenced off from what they want because money will be hard to get.”

By Everette Hatcher III | Comments (0)