While Obama tours the country promoting his personal donation plan, the Republican Presidential hopefuls are in a pitched battle for the nomination and arguing which tax simplification plan is best. Threatened with the possibility of rate cuts, the Media and politicians trot out the usual suspects of lies about tax hikes and tax cuts.  This is a battle Republicans must win and, to do so, they need to expose those lies.

Keep in mind that the battle between those who create wealth and those that want to redistribute it, mainly politicians, is as old as civilization itself.  We read of tax battles and even reform in every age, like Urukagina’s tax reductions in Babylonia/Sumer in 2350 BC.  Equally venerable are the constant set of demagogic lies by those against tax cuts and simplification.  It is important to note that politicians like complicated tax codes and high tax rates because they control those rates and dispense the loopholes and regulations that complicate the tax code.  Tax simplification means they lose power.  As a result, resistance to tax reform is more often the rule than reform. As for the lies, they abound, so let’s consider just a few:

Lie # 1: Tax cuts cause deficits/Tax hikes balance the budget.  The Media and the Left often say that the Reagan and Bush tax cuts led to deficits while Clinton’s tax hikes led to a balanced budget. In truth, according to the IRS, federal tax revenues rose dramatically after the overall Reagan tax cuts/reforms (98%) and the Bush tax cuts (a record $700+ billion). This is just as they did after the Harding/Coolidge cuts (61% revenue increase) and after the Kennedy/Johnson cuts (62% revenue increase).  Those are the four major income tax reductions we have had since the inception of the income tax in 1913 and every time revenues rose after they were in place – every time.

So did the tax rate cut cause a deficit? The lie, of course, is to blame the revenue gathering mechanism (tax code/rate cut) instead of the revenue spending mechanism, i.e. Congress/Presidents.  The spenders kept spending – often at an accelerated rate when they saw the new revenues.  Thus, the fault for continuing deficits lies not with tax rate cuts, which produced higher revenues, but with politicians who spent too much.

(more…)

Three times in the television era, voter anger has led to midterm losses approaching or exceeding 50 seats for the President’s Party. In 1966, 47 seats were lost, 48 seats were lost in 1974 and 52 seats were lost in 1994. In only one of those cases, however, did the Party that gained seats turn that voter anger into a long term mandate: 1994. The question this year is whether Republicans will follow the successful model of 1994 or make the same mistakes the Republicans made in 1966 and the Democrats made in 1974.

Voter Anger Equals Election Losses. In 1966, despite an economy growing at over 6% per year, Democrats and Lyndon Johnson lost 47 House seats. They managed that feat, in defiance of the “It’s the economy stupid” theory, by angering a significant portion of the voting populace with noneconomic policies on the Vietnam War, Civil Rights and the Great Society. That dynamic deflated Johnson’s approval rating to just 49%. In 1974, voter anger arose over an ethics backlash against the Republicans, i.e. Watergate, and a bad economy. Combined with Ford’s post pardon approval rating of 47%, the Republicans lost 48 seats. In 1994, despite a growing economy and 5 million new jobs dating back into the final year of the Bush Administration, Clinton’s approval rating was 46% and the Democrats lost 52 seats. Clinton gaffes and his decision to push through the largest tax increase in history – despite his promise to enact a middle class tax cut – fueled voter anger that year.

Anger Does Not Equal A Mandate. Obviously, voter anger, even with a good economy, can lead to poor Presidential approval ratings. Those Presidential approval ratings below 50% resulted in an average midterm loss of a staggering 49 seats. Even so, the combined elections of 1966, 1968, 1970 and 1972 did not bring a Republican majority in Congress. Despite big gains in 1974, the Democrats barely won the Presidency in 1976, lost seats in 1978, and lost the Presidency by a wide margin in 1980. In other words, those big election gains were not transformed into enduring mandates.

There is an obvious reason why.

(more…)

From an email to Newsweek:

“The Nobel gang just suicide bombed themselves. Gore, Carter, Obama, soon Bill Clinton. See a pattern here? They are all leftist sell-outs. George Bush liberates 50 million Muslims in Iraq, Reagan liberates hundreds of millions of Europeans and saves parts of Latin America. Any awards?… Obama gives speeches trashing his own country and for that gets a prize, which is now worth as much as whatever prizes they are putting in Cracker Jacks these days.”

“This fully exposes the illusion that is Barack Obama. It is a greater embarrassment than losing the Olympics bid. And with this ‘award’ the elites of the world are urging Obama, THE MAN OF PEACE, to not do the surge in Afghanistan, not take action against Iran and its nuclear program and to basically continue his intentions to emasculate the United States. They love a weakened, neutered U.S and this is their way of promoting that concept.  I think God has a great sense of  humor, too.” (more…)