Democrats Propose Spending Cuts!?!

Although not generally known for being in favor of limiting the size of the federal government, to their credit liberal Democratic lawmakers are becoming increasingly boisterous about reducing the Pentagon's budget.

"A growing number of centrist Democrats say they’re open to trimming Pentagon spending in the face of record budget deficits and mounting public debt.

Liberal Democrats for years have called for cuts to the massive defense budget to no avail. Even after Democrats regained control of Congress in 2007, their few attempts at reining in defense spending have proven futile, partly because of opposition from centrist Democrats hawkish on defense issues.

Now that opposition is softening amid rising concern about the nation's fiscal future and the fact that defense makes up more than half the country’s discretionary spending.

“We are going to have to adopt the philosophy that nothing can be off the table,” said Rep. Walt Minnick (D-Idaho), one of the first members of the class of 2008 to be admitted into the Blue Dog Coalition. “And that is increasingly becoming the dominant view of the Blue Dogs.”

I fully support a massive decrease to our defense budget (off the top of my head, a 75% cut sounds about right), and believe these lawmakers have it at least half right (although I'm sure if pressed they would admit a preference to taking the "savings" and spending it on yet another social program that would unfortunately create a host of unintended and unhelpful consequences, just like most of them).

What exactly are our troops doing in 150 countries, other than just our own? We all know what they're doing - they are propping up failed regimes, training local governments in the latest counter-insurgency techniques, inexplicably lingering around decades after World War II and the Korean War ended, and generally wasting US taxpayer money.

US troops should all be based here in the US, providing for our own national defense.

If all of tin-pot dictators around the world want to use US firepower and know-how to protect their own rear-ends, then let them hire Blackwater or some other private outfit and pay the going rate, and not rely on the US taxpayer to pay the bills for them.

Senator Kerry: Tea Partiers are Hypocrites

In a nonesensical statement by a man who has made a career out of the same, Senator John Kerry (D-MA) recently remarked that Americans that are angry at Washington are being hypocritical.

"But he said that the D.C.-directed attacks are hypocritical, since many of those attacking Washington spending presumably want to keep their Social Security and Medicare and want Washington to play a big role in the Gulf Oil cleanup. "There's a huge contradiction on a daily basis," he said."

So because Tea Partiers believe that politicians in Washington are overspending in a multitude of areas, it's hypocritical for some of them to support any type of spending that is undertaken from Washington?

I think the essential issue here is that Mr. Kerry does not understand the Tea Party, does not understand why it has sprung into existence and does not understand the issues that its supporters believe are important.

Many Tea Partiers (myself included) would support making Social Security and Medicare contributions voluntary and not mandatory (of course, that would mean we were not able to receive those benefits either, to the extent we did not "contribute"). Any many Tea Partiers believe that regulators in Washington or at the state level in Louisiana should oversee the clean-up efforts being undertaken by BP (which at least has access to cutting edge technology, and is not bogged down in red tape like government bureaucrats would be) but not play a "big role" (which in his definition presumably means taking over the clean-up process).

The fact is, Senator Kerry and the Democrats ignore and mock the Tea Party at their own peril, and risk a devastating defeat in November.

As for why the Tea Party has just now come to life, it was one thing for the overspending to be approved by previous Administrations (i.e., Reagan, Bush 2) that were pro-growth and kept taxes somewhat low, which created the hope that once we got spending under control we could grow our way out of the mess. It's quite another for the Obama Administration to overspend, have no pro-growth policies and talk of massive tax hikes (e.g., repeal of Bush tax cuts, European-style VAT, etc.) as a means to fulfill their statist agenda.

Jobs Bill Won't Lead to Many New Jobs

Congress recently passed a bill designed to increase hiring of unemployed workers.

"Today, U.S. Senator Charles E. Schumer announced that his bipartisan “Hire Now Tax Cut” proposal to provide businesses that hire unemployed workers with a tax cut has cleared final passage in Congress and will now go to the President’s desk for signature.

The businesses will avoid paying the employer’s share of Social Security taxes on that worker for the duration of 2010.

The more a business pays a worker (up to the maximum Social Security wage of $106,800), and the longer a business has a worker on its payroll, the greater the tax benefit – so there is an incentive to hire people sooner, and pay them more."

Basically, this bill will enable an employer to save perhaps a total of 5% of the total compensation that it pays a given employee in 2010.

Given such a modest savings, it is extremely unlikely that the bill will make a meaningful dent in today's unemployment picture. Employers remain concerned about demand, so having slightly cheaper workers with which to produce more goods or provide more services does not alleviate that overriding concern.

More importantly, what's the principle here? Is it that tax cuts hopefully facilitate more economic activity (hiring, demand, etc.)? If that's the case, let's have more of it, and less spending and confiscation by the government.

Loans are Income? Writer Thinks So

Influential former New York Times tax reporter David Cay Johnston is back at it again, trying to stir up outrage at the thought of Los Angeles Dodger owner Frank McCourt apparently paying little or no federal or state tax over the past few years.

"The breakup of Frank and Jamie McCourt's marriage is making headlines because the couple, who own the Los Angeles Dodgers, lived an exceptionally lavish lifestyle. But what their divorce proceedings also reveal is how the official reports on incomes and tax burdens disguise reality (subscription required to read full article).

In six years the McCourts spent $ 108.9 million without incurring any federal or California income taxes, her lawyers said in court papers. The only levies that may have been paid were payroll taxes on Mrs. McCourt's salary as the nominal head of the Dodgers, and even that is not clear from the court filings.

"The parties have not paid any federal or California income taxes since they moved to California in 2004," her lawyers wrote in a filing seeking nearly a million dollars a month of maintenance pending the completion of the divorce."

Sounds egregious enough. Who doesn't think people should pay the tax that they owe?

But wait, what's this? The McCourt's actually didn't have any income during those years that the government could tax?

"We simply do not know how many people show a tiny AGI but in reality live lavish lives because they have income that escapes taxation or because, like the McCourts, they borrow against their assets."

It's difficult to grasp the full effect of Johnston's point. Is he saying that people who borrow should somehow be taxed on those borrowings? It seems that way. That would be news to the millions of homeowners who borrowed to purchase their houses.

Alternatively, is he perhaps a proponent of a national wealth or asset tax? Unfortunately the 16th Amendment doesn't appear to currently allow that, and in any event is in no sense the current law of the land with which to indict Frank McCourt.

Johnston attempts the common tactic of diverting attention from the real issue, exploding federal and state spending, and tries to focus the reader's attention on a phantom issue, which is the fact that some people legally and lawfully organize their own affairs to pay as little tax as possible.