Conservative Donnybrook

A few weeks ago, House Resolution 5800 was introduced on the House floor by its sole sponsor Paul Kanjorski (D-Pa). The bill would amend the tax code by inserting a tax on windfall profits on oil and natural gas companies. What constitutes windfall profits? Well, that would be decided by the newly formed Reasonable Profits Board - a board of three persons, appointed by the president, whose job it would be to determine when a company has surpassed a reasonable level of profits and has entered windfall territory.

For the legions of Conservative Donnybrook readers in Pennsylvania, we would simply remind you that Paul Kanjorski is up for reelection this year. Don’t send this guy back to Washington.

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The old saying is: “Yeah, but what does that have to do with the price of bananas?”

Well, when it comes to oil, a lot. OPEC’s president says oil could hit $200 per barrel. The problem, of course, is that the price of everything which is shipped (which is pretty much everything other than online services) is affected by the price of oil. I recently reported on a trucker revolt in downtown Indy. Those revolts have been spreading throughout the country. When trucking companies are hit with high oil prices, does anyone think they absorb the cost? Of course, they don’t. That cost gets priced into the goods we buy.

Last year, we hit $100 per barrel for oil and, at that time, the price of unleaded gasoline was nearly $3 per gallon. When (note I did not say if) the price of oil hits $200 per barrel, gas prices will likely be $6 per gallon. I drive a fuel efficient import (made in Marysville, Ohio before anyone gets all kooky and talking about how they bought a Ford, which was built in either Canada or Mexico, tells how I should support American cars) and the other day my 12 gallon tank cost me over $40 to fill up, with $50 bills not far off. Those sorts of bills used to be reserved for the SUV driving populace. Forty dollars used to be my entire budget for gasoline for an entire month. Consider this: semi trucks typically have 300 (some have 325) gallon tanks.  At $4.16 for a gallon of diesel, which is a decent price right now, it would cost the average trucker nearly $1,250.00 to fill ‘er up.

I used to work at the fuel desk at a truck stop (third shift - drank tons of coffee), and it was a gigantic sale when someone spent $300 to fuel their truck. Now that would get them about two truck stops down the road. I understand their angst and realize that if nothing is done, we’ll soon feel their pain.

Diverting grain to be used to create fuel is not the answer. First, it is extremely expensive to accomplish - more than to drill for oil, or buy from the Middle East. And, second, it drives up the cost of almost every food item, which of course impacts poor people, who spend more as a percentage of their income on food, disproportionately.

Surprisingly, Barack Obama, who seems to be clueless whenever he begins to talk about actual policies as opposed to grand ideas like change, is somehow opposed to relieving the consumer from the burden of government taxes on fuel. Hillary, at least, gets it. McCain has been out front on this issue. But even McCain’s plan is a stopgap measure. First, a hiatus on the gas tax would eventually impact our roads, which the tragedy in Minneapolis teaches us are in a deplorable state. But, second, that sort of relief, while welcome, is temporary. The real problem is that demand has far outstripped supply and OPEC refuses to pump more oil.

Continue Reading »

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Make that “Feeways.”  The MTA in Los Angeles has voted to take make several lanes on our local freeways toll lanes.  While this is not new to many parts of the nation, we here in southern California cherish our freeway system.  We already pay tax on gasoline to fund freeway improvements and maintenance.  Toll lanes will simply increase traffic in the non-toll lanes (while they still exist) and give higher income drivers the benefit of a quicker commute at the expense of the middle and lower classes.

Please, write Mayor Villaraigosa and let him know that this is a horrible plan and should not be implemented. 

Mayor Antonio Villaraigosa 
200 North Spring St.
Los Angeles, CA 90012
Fax at (213) 978-0655

mayor@lacity.org

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Owner operators and fleet managers staged a protest against the high price of fuel today in the streets of Indianapolis. Around 60 drivers left the Cloverdale Auto Truck Plaza ( a truckstop I once worked for about 40 miles west of Indy) and proceeded in a convoy toward the Statehouse in Indianapolis. Fuel prices have soared in Indiana with the price of diesel averaging $4.16 per gallon as of this writing.

Unfortunately, only about a dozen drivers veered off of I-70 to parade around the Statehouse an hour or so before lunch. While they were loud, honking their horns and waving to the crowds of smokers arrayed around the government buildings, lawmakers did not meet with the drivers.

On the other hand, the truck drivers may have a friend in John McCain who has offered to suspend the gas tax from Memorial Day to Labor Day, during the peak driving months. While the call for suspension smacks of populist pandering, it may well help to bring truck drivers around to the McCain camp. Granted, some of the drivers may well have already been in the camp, but any accretion to McCain’s numbers will be an added benefit.

Aside from the fact that dead-heading from Cloverdale to Indianapolis is a somewhat ironic gesture, since it probably cost these drivers about $40 - $50 a piece, while they hauled no load (weren’t getting paid), the sheer amount of noise they generated was impressive. At $4.16 per gallon , it now takes over $1,250 to fill the tanks of a big rig. It will be interesting to see whether law makers respond since eliminating the petroleum tax would work to eliminate the funds to maintain roads. However, since those taxes are proportional to the price of fuel and were enacted while fuel prices were much lower, the amount of tax that needs to be collected in order to maintain roads today is a much smaller percentage of the price of fuel than when the tax was enacted. It will be interesting to see whether lawmakers will lower the tax to keep it neutral and to give truck driver (and the ultimate consumers of every product that is shipped) a break.

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As of the publication of this post, you have two hours to file your taxes. Of course, if we had the Fair Tax, you wouldn’t have to worry about it. Just a thought…

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Perhaps I have grown overly cynical, but I saw this Fox News report and my first thought was, “Well, sure, lower the drinking age, and you’ll increase the tax base.” Especially if, as awb writes, states increase the alcohol tax significantly.

Apparently, seven states are considering lowering the drinking age to 18. Kentucky, Wisconsin, and South Carolina would lower the drinking age for persons in the military. I really have no problem with this idea, especially if the drinking is confined to military installations. If we can ask these young men and women to fight and possibly die for their country, they should be able to purchase a beer. If you have an M-16, you should be able to have a Budweiser. Nonetheless, they would probably have a bit of a legal battle on their hands if they were to pass legislation, which on its face, discriminates against others in the same age group based upon their military service. South Dakota, Missouri, Vermont and Minnesota, sidestep this problem by lowering the drinking age for all children.

I suppose its a sign that I’m too old (you can’t trust me; I’m over thirty), but I hate to think of what would happen to the music at my favorite watering holes if youngsters were allowed to control the jukebox. For that reason, I oppose extending drinking privileges to children.

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The good folks over at Citizens Against Government Waste released the 2008 edition of their annual Pig Book.

Hillary Clinton loves pork! In 2007, she took 281 earmarks totaling an astounding $296.2 million.

Barack took 53 earmarks totaling $97.4 million. At least we can put to rest the notion that Barack Hussein Obama is a secret Muslim.

On the other hand, John McCain, in 22 years in the Senate, has NEVER taken an earmark. The difference in this year’s election is stark. We may not agree with everything McCain stands for, but on this issue, he is as conservative as they come.

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I thought I would share a local story because it is stunning in its depiction of the ineptness of local government and in its illustration of why local government is much more important to the lives of people than, say, a presidential election. And, frankly, because I need to vent.

A story this morning in the Indianapolis Star revealed that county and township assessors underassessed property values for business and commercial property in Indiana by $3.86 billion. In Marion County, Indianapolis’ county, commercial property was undervalued by 30.1%.

Last summer residential property taxes were increased for most homeowners. Some of the increases were on the scale of 300%. My personal increase was 62%. Marion County residents took to the streets in a massive protest in downtown Indianapolis and voiced their displeasure, marching on the Statehouse (of course, they marched on a Sunday and nobody was there, but it was still symbolic and garnered news coverage). During the last county election, the mayor was thrown out of office (the first time an incumbent mayor had lost a reelection bid in 40 years) in favor of a Republican candidate that the local party declined to support and almost every incumbent on the city-council was defeated (turning it over to Republican hands). Continue Reading »

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I (personally, not Conservative Donnybrook, as I am only a cog in the wheel) have previously endorsed the Fair Tax. Unfortunately, in attempting to keep things simple, the examples I used were inaccurate. Therefore, I shall try again, but keep in mind that this will necessarily be more complicated than the previous attempt.

Let me begin by reintroducing the players. We have Bob. Bob is the sort of guy who always wants to be first on his block to get the latest toy. And then we have Margaret. Margaret has no such compulsion and buys used goods all the time. Bob and Margaret both earn $74,000 a year in wages. They each rent a nice apartment in the same complex in Las Vegas (Clark County sales tax = 7.25%). Bob and Margaret are both healthy, stingy (they make no charitable contributions), and neither runs a business - in short, they do not have any deductions other than the standard deduction. They are both single. (We are trying to keep this as simple as possible, while still maintaining some semblance of realism.) And, just for the ease of doing the math, let us suppose they each get paid annually (one pay check per year). Let us follow them down to the car lot where they will each be purchasing a car. Of course, in order to really do this right, we have to follow them down to the car lot twice. Once prior to any changes in the tax system, and once again after the Fair Tax is adopted. Continue Reading »

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We are approaching the point of no return for democracy in America. That point occurs when a majority of the citizens no longer pay for governmental services and rely upon a minority of citizens to provide for their delivery. Today, the bottom 50% of wage earners pay 3% of the federal income taxes in 2005. We are two steps away from that point of no return I mentioned.

First, if that number should ever reach the point where the bottom 50% of wage earners (a voting majority of the country) were to reach 0% of the taxes, we would no longer have the votes to roll back the ever increasing burden on the top wage earners. Indeed, we may already have reached that point. Second, if those who are the bottom half of wage earners ever realize that they are not paying taxes, but rather are recipients of the public largesse, they will be lost as a source of reform. I think at present many of those who in reality receive more than they pay still believe that they are paying taxes and rankle at that notion. This is the only reason I still have hope. Alexis de Tocqueville noted in Democracy in America (highly paraphrased): “Once the majority of Americans realize that they can vote themselves all sorts of goodies and get their neighbors to pay for it, all bets are off. But, generally, I think the Americans are on to something.” Or words to that effect. Continue Reading »

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Supply-sider Bruce Bartlett has written a pretty detailed takedown (pdf) of the FairTax proposal. (I hate having to use focus-grouped marketingspeak. Will there be a competing tax proposal called the Howdy Duty and another called TaxHappy?) A shorter Bartlett OpinionJournal piece from back in August is here. Ilya Soman at Volokhs piles on.

This gives me some pause regarding Huckabee’s judgment about policy–but what do I know about tax policy? Maybe the Pro-FairTaxers will come out with a devastating counter-counter argument to the Bartlett types. But it also makes me question Huck’s vaunted political instincts. Is anyone really clamoring for this? Is there a large constituency that will be energized by this plan? Perhaps he should simply adopt the WillmoreWay, a.k.a. tax simplification and lower marginal rates.

Regardless of all this, I might have to support Huck anyway because his name is Huck. Does it get any more American than that?

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The real story here is not that Huckabee supports a national sales tax.  No, the real story is that the Los Angeles Times calls “Mike Huckabee, one of the most conservative Republicans in the 2008 presidential race….”

Now, my laughter aside, I would like to give a Conservative Donnybrook Christmas present to our readers, let’s make this post a sounding board for you!  In that vain, Karl and I had this discussion about a month ago; should the income tax be repealed in favor of a national sales tax?   This is the question I offer all of you!  Please, give me your answer and a good reason why you think we should/should not.  I am NOT looking for lengthily prose on why we should not have any tax at all or why it is unconstitutional.  The debate should be focused on income versus slaes and why. 

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Here’s the scoop, straight from Paul’s website: $6.04 million in one day. One. Day. Over $18,000,000 this quarter. This. Quarter. One-day first-time donations: over 25,000.

I hope Obama trounces Hillary early then gets savaged. I hope Edwards comes out late and rallies the hard-core left for the nomination.

Huckabee has changed rhetoric on immigration, is confusing on foreign policy and I don’t trust him. I thought hiring Ed Rollins was crafty, but I forgot about his Todd-Whitman baggage. Yech. Romney is disingenuous and sunk. Giuliani hasn’t a clue what’s about to befall his campaign. McCain is dastardly and wrong on so many counts it’s pathetic.

I so hope Paul stages an independent run. Plurality has a wonderful ring to it. 

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Is the shut down of government imminent?  According a report by The Hill, Republicans are holding fast against Democrat attempts to raise taxes under the Pay-Go rules in the House.  The Issue: alternative minimum tax (AMT) relief.

At worst, taxes are raised to offset an estimated loss of $50 billion as a result of increasing the AMT exemption.  At best the AMT is repealed or the exemption is heavily increased without an increase in taxes else where.  Between these two options lies another possibility: the shut down of the Federal government.  Naturally, I would prefer an AMT patch without an offsetting rise in taxes, but by no means will I complain about a shut down of government in the alternative!

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We are now racking up, as a nation, $1 million per minute in debt. Let me write that out for you: $1,000,000 per minute; $16, 667 per second; $60,000,000 per hour;  $1,440,000,000 per day (that’s in the billions folks!). Staggering, I know. And yet, we persist in thinking that a national drug plan is a good idea. Even Republicans (link requires a subscription to National Review, which really, you ought to have anyway) according to Ramesh Ponnuru.

Ramesh makes the point that Americans generally believe that they believe in smaller government when asked, but mention a specific program and you get the whole, “well, I’m not sure about that program” routine. The facts speak for themselves. Democrats own the organ of spending (Congress), spending shoots up. Republicans take over the organ of spending (on a program of fiscal restraint ironically enough), spending shoots up. Unfortunately, folks, we’ve run out of parties unless the Libertarians ever gain traction. The moral of this story is unlimber your wallets, because the ride could get bumpy from here on out.

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In a recent article, Robert Novak summed up the credentials of Mike Huckabee in 10 words “…[H]e is a high-tax, protectionist advocate of big government….”   

Besides, do we really want another Arkansas governor ruling our nation?

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Seriously.

Update: The link should work now.

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It seems Warren Buffett thinks you should pay MORE in estate taxes.  He says:

“Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy.”

Interesting how Mr. Buffett is giving 85% of his Berkshire shares to family foundations…many controlled by his family.  Seems as if Mr. Buffett himself is attempting to avoid the very estate tax he would have the American taxpayer shoulder. 

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I have a friend. Let us call him Nick. (Since it is unlikely that he will ever read this blog -  unless we first convert it to a video blog and then air it on the USA Network between Mannix and The Rockford Files - I feel confident I can use his real name.) Nick is the sort of person who becomes quite alarmed at the slightest hint of government interference in his personal life, but inconsistently so. For instance, he steadfastly refuses to own a vehicle that contains the OnStar system because he’s pretty sure the government uses it to track the whereabouts of citizens and, in particular, him. Yet, he carries a cell phone everywhere he goes.

I met Nick in 1990 at the “Smoker’s Corner” outside the engineering building at Purdue’s Indianapolis campus. There were quite a few of us who would huddle outside the door and smoke cigarettes. Nick was the guy that every single one of us would have sworn would be the last guy on earth to quit smoking. In fact, we used to joke that someone needed to be with him at all times so that when he died, we could pry the smoldering cigarette out of his fingers, lest he burn the house down around his corpse. He always said he would quit smoking when the government had taxed them to the point where they cost $2 per pack (they were just over a dollar then).  “Yeah, yeah, Nick,” we would say not believing a word of it. Cigarettes hit $2, Nick is now a non-smoker. We were all stunned.

When the government passed the seatbelt laws but exempted trucks, Nick traded in his Cougar for an Explorer. When cigarettes hit $3 a pack, Nick warned me that they would be going after alcohol next. <Shudder>. Apparently, he had judged that argument as being the most likely thing to scare the bejeezus out of me and maybe cause me to start taking this whole threat seriously.

I tell this shaggy dog story for the sole purpose of introducing this excellent piece in Reason Magazine.

I would just like to publicly acknowledge that Nick was right and I was wrong. The government does want to ride around in my back pocket, keeping me safe from myself. And I don’t like it!

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New York Democratic Congressman Charlie Rangel, that is.  The Chairman of the House Ways and Means Committee wants to impose a 4% surtax on single incomes above $150k and heterosexual unions above $200k, while reducing the ceiling on corporate tax from 35% to 30.5%.  It is estimated that this new tax will rob nearly 25 million taxpayers of close to $50 billion in 2006.  Rangel, who refuses to go gently into that good night, proved his incompetency earlier this year when he introduced the Universal National Service Act, which would require “all persons in the United States between the ages of 18 and 42 to perform national service, either as a member of the uniformed services or in civilian service in furtherance of the national defense and homeland security.”  The 2007 version of this bill (there were two others, believe it or not) has two sponsors in Congress, neither of which is Ron Paul.

Who knew he was such a big Beatles fan?  He always seemed like more of a Paul Anka guy to me.

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