Wednesday, January 27, 2010


We tax all the others and pass the revenue on to you

I've read plenty of Soviet history but I was never clear on just what a kulak was.  I knew that kulaks were singled out for confiscation of their property but what the heck was a kulak. I asked my retired Russian MVD colonel buddy that question.  "A successful farmer" he replied.  Nahhh, couldn't be.  Could it?  Yes, it could.  Wiki has a good article HERE.

But why demonize, marginalize and murder successful farmers?  As a class, weren't they the ones who were feeding hungry Soviet mouths and creating jobs and building industries?  Didn't matter.  No truth mattered and no one was safe if the gummint decided it wanted your stuff.   Grigori Zinoviev was Lenin's party theoretician.  He said "We are fond of describing any peasant who has enough to eat as a kulak."  It was all for the greater good, don'cha know.  It was them vs. us, a pogrom to cleanse newly identified enemies of the state for the benefit of... the state.

A neo-kulak is simply a kulak in today's society.  If they have good stuff and the gummint wants it, all it needs to do is identify and marginalize and demonize them:  fat cat bankers, corporations and especially people who earn or have more than you do.  Having done all that, the gummint must be sure to tell you that the kulaks are Someone Who Isn't You.  After all, if they really are someone like you then you might feel a little creepy about taking all their stuff and killing them.  There, there, don't you worry your little head.

Today Oregonians officially recognized two neo-kulak classes: people earning more than $125K and all corporations.  Neo-kulaks, of course, must pay some penalty for their successes, something more than you and I pay for our successes.  Why should they reap the rewards of hard work or good luck or just being from a good family?  The government has to create some means of transferring their stuff to us.  For individual neo-kulaks the penalty is a higher income tax bracket.  For corporate neo-kulaks, new and higher taxes.  Not income taxes, mind you, but taxes on their very existence and taxes on gross receipts regardless of profits or income.

Disclaimer:  My wife and I run a charity incorporated in Oregon.  We take neither pay nor expense reimbursement and, of course, our charity makes no profit.  Regardless, we are caught in the neo-kulak hysteria.  Our state minimum tax is going from $10 to $150.  Why?  Because someone thought we have too much money and it needed to be spread around.   No other reason than that.  We get nothing in return and the money comes directly out of the mouths of the disadvantaged children we're helping.

Our charity, CCRFund, is a victim of kulakization (a real word).  We're so small that we're on the very low end of the new corporate taxes.  We'll make it somehow, I suppose.  150 bucks isn't the end of the world for us, but it is maybe 150 lunches that won't be delivered to poor kids, or some blankets or books or... you get the idea.  Our "rich" donors (would that they were rich, those kind souls who donate for children whom they'll never see) are going to have to cut back somewhere to pay the cost of their kulakization.  Will it come out of charity donations?  Some will, most likely.

When I wrote to the Portland Oregonian about this one commenter responded "It's only $140 a month.  Get over it."  That's sort of what Zinoviev said.  If you set the bar low enough, the gummint can take everything from everyone... for the good of the state.

Today CCRFund lost and lots of people are happy about that, people who think that neo-kulaks can be fleeced forever for the good of those doing the fleecing.  But that isn't true.  You know it in your hearts that there must be a law of diminishing returns, a point beyond which there is nothing left to take.  When that day comes the gummint will have to ID some new kulaks.  It won't be us or people making more than $125K.  There won't be any of those left.

Look around.  Maybe you won't have to pay more under Oregon's Measures 66 and 67.  Of course, that would require you to believe that no one ever passes costs along or structures income to minimize tax or fires employees to decrease overhead to offset new costs.  Or you might believe that the market economy has no relevance, that gummint can fix anything in any way it wants, including taking your stuff and giving it to others.

Look around again and ask yourself, will I be the next kulak?  You already know the answer and you already know your turn is coming.  Zinoviev told you.

"We are fond of describing any peasant who has enough to eat as a kulak."

* * * * *

First they came for the communists, and I did not speak out - because I was not a communist;

Then they came for the trade unionists, and I did not speak out - because I was not a trade unionist;

Then they came for the Jews, and I did not speak out - because I was not a Jew;

Then they came for me - and there was no one left to speak out.

Martin Niemoller

Monday, January 18, 2010

Saving Health Care... From Us

We tax all the others and pass the revenue on to you

It took extraordinary bribes and payoffs to get 100% of our DemSens to pass a health care... make that a health insurance reform... bill in the face of 100% RepubSens opposition  Way different version than the House version but that's what conferences are supposed to fix so that the versions are compatible. 

Up jumps the devil, in the form of the Mass. special senate election tomorrow, Martha Coakley vs. Scott Brown.  Looks like Coakley might lose, which is throwing Congress into a tizzy. 

DemSens are making extraordinary efforts to pass something, anything, before Brown is seated, if he actually does win.  This, despite the fact that polls show that the measure is wildly unpopular unless you ask the question without mentioning how much it costs and who' going to have to pay the price.

They might not ram the health care/insurance bill through without that 60th vote, the one that makes it veto- and filibuster-proof.  The prez and everyone else of any Dem import are campaigning relentlessly for MarthaC.  Not much of that on the other side because Repubs are afraid of losing even more 2010/2012 cred if they are seen as backing a loser.  ScottB is pretty much on his own unless he wins, then lots of people who aren't him will be taking credit. 

MarthaC was ahead by 15 or so points a couple of short weeks ago.  Now ScottB is ahead in most polls by anywhere from 5-9%.  That's an almost unfathomable sea change (note the neat double nautical references). Even John Kerry resorted to a sports metaphor, just in case us plebs don't get it:  "This race is a jump ball."  And thanks for that, John.  That translates to "How the heck are we going to spin this disaster?"  Fox has a good story HERE.

No matter who wins, the losing side will spin it is not meaning all that much, being just a special election and all.  Except for that health bill thing.

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A politician thinks of the next election.  A statesman, of the next generation. -- James Freeman Clarke


Monday, January 11, 2010

Someone Who Isn't You

We tax all the others and pass the revenue on to you

It makes some people feel good when taxes are imposed or raised on corporations.  People like the prez think taxes aren't about revenue, they're about fairness.  We addressed that quirky notion last year.  These are the same people who support Oregon's Props. 66 and 67 on tomorrow's ballot.  Their idea of raising revenue is "We'll just take it from someone who isn't us."

Corporations don't pay taxes.  Corporate taxes are added to the cost of goods sold and figured into prices.  That means buyers pay those taxes, not the corporations themselves.  Buyers = you.

If that's too hard to understand, let me illustrate it another way.  The WSJ reports that the Obama administration is contemplating new bank fees.  This is, of course, the same administration that recently excoriated the banking industry for the high fees it was charging customers.  Do they have no sense of irony or shame?

The prez wants to use the money to help repay some $170 bil that has been lost in TARP bailouts, money that they already know isn't going to be repaid.  This is no more than a trial balloon for increased fees but it's one to keep an eye on.  The underlying message is that someone who isn't us is going to pay for the government's bailouts.  That'll make it all OK, won't it?

The TARP bailout, in case you have already forgotten, was an outgoing Bush administration/incoming Obama administration program to purchase or insure non-performing real estate loans.  We bought bad loans in order to bail out the previous purchasers of those loans.  If you think about it for even a moment you'll know that was probably a bad idea.

The idea was so bad, in fact, that we (you, me and the rest of America) have already lost $170 bil or so from just that one bad idea.  That's more than $14 bil in losses a month.  To put that in another perspective, it's 8-1/2 times California's projected deficit.  We bailed out the RE loans and we're gonna bail out CA pretty soon and CA looks like the more attractive choice!  We shouldn't bail out anyone (except me, of course) but do you doubt that's the way things are headed?  But I digress.

You should be asking some questions about the proposed bank fees.  "How much is it going to cost bank customers?" is one good question.  The answer is, the entire fee plus admin costs plus a mark-up.  You'll pay it in higher bank fees of your own (disregarding prior remonstrations about those high fees), lower interest earned and higher borrowing costs.  Did you think the bank was going to pay it out of bonus money or retained earnings?  Not likely.

The banking industry is healthier today than it was a year ago and that may be partly due to TARP.  I have trouble imagining lending institutions not doing well if they get free money to lend and are absolved of their bad debt.  Check out the latest stories about bank bonuses before you disagree.

The banks that are left today, including the ones that have paid back their TARP bailout money, are going to get stuck for the money that other banks aren't going to repay.  Does that make sense to you?  Should you get stuck with the part of your neighbor's mortgage that he didn't repay?  If you did, he could correctly say "Someone who isn't me is going to pay my bills."  Same thing.

You're going to hear a lot of ideas about how our TARP bailouts should/must be repaid, mostly from the people who shouldn't have made TARP investments in the first place.  They are scrambling to find neo-kulaks to demonize, marginalize and rob.  Rich guys are such easy targets, too.  If we make rich and evil and criminal synonymous then it feels more like our duty to fleece them to help ourselves.  It's a lot easier on our consciences, too.

Do you recall (this goes all the way back to yesterday) our prediction that CA would imposing more arbitrary revenue-generating measures that wouldn't be called taxes... but are?  How could I have omitted predicting that this would happen on the federal level too?

Someone who isn't you isn't going to oppose these methods of paying for bad decisions.  Someone who isn't you isn't going to demand that your governments stop their reckless spending.  Nope, sorry, it's going to be up to you to do it... and someone who isn't you is going to fight you every step of the way.

* * * * *

If you owe the bank $100, that's your problem.  If you them $100 million, that's the bank's problem.
J. Paul Getty

Sunday, January 10, 2010

2010 Predictions

We tax all the others and pass the revenue on to you

I made some bold predictions in the first half of '09.  Even got some of 'em right in the face of some skepticism and even derision.  I didn't do much prognosticating in the second half and I wish I had.

Here are some of the things I think we'll see in 2010, in no particular order:

  • California will become an even bigger financial mess, requiring massive bailouts of its bloated entitlement economy.  There won't be a corresponding reduction in those entitlements because that would cost too many CA pols their legislative sinecures.

  • As a predictable result, CA will suffer more arbitrary revenue-generating measures that won't be called taxes... but are.  There will be cut-backs in programs that they have come to take for granted, and increases in programs you've never heard of.

  • Oregon will more and more resemble California.

  • There won't be a significant overhaul of the Tax Code.  It's not much of a vote-getter these days and Congress won't have time or political courage for the hearings.

  • The IRS will receive massive new funding in support of health care but there won't be a corresponding increase in revenue.

  • We'll hear more about mileage taxes to supplement, not replace, gas taxes.

  • There won't be any major Wall Street reforms.

  • Iraq will end in a whimper, spun as a victory.  It will cost nearly as much to prop up their government as when the war was being waged.

  • Afghanistan will suffer at least one major disaster, prompting the prez to convene a committee to "re-think our overall strategy and the price of our commitment."  The phrase "open-ended" will be repeated ad nauseum

  • There will be more than one significant terror attack on American soil.  We will be unprepared and have no meaningful response.

  • Iran will succeed in its nuclear arms development program.  We will not have a cogent response nor will we be able to convene an international one.

  • Russia will resume its role as world bully and we won't push back. [See Ukraine and Georgia.]

  • We will ignore China's offenses to mankind's sensibilities on the grounds that, well, we owe 'em too much money.

  • When unemployment goes back to single digits it will be hailed as a vindication of the administration's economic plans.  The prez's promise that it wouldn't exceed 8% if Congress passed the stimulus bill we be ignored.

  • There will be another stimulus package, even though it might be named something else.  It won't work, either.

  • GM/GMAC and Chrysler will continue to be suppurating sores on the American body.

  • The mid-term elections will be claimed as victories by both parties.  Only the American citizenry will lose.

  • Hugo Chavez succeeds in delivering a death blow to whatever residual freedom still exists in Venezuela.

  • Cap-and-trade will fizzle.  Same for climate change.

  • Oregon goes to the Rose Bowl for the second straight year... and wins this time.

Got any predictions of your own?  Share 'em here

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Prediction is very difficult, especially if it's about the future.
Neils Bohr

Oregon Props 66 & 67

We tax all the others and pass the revenue on to you

Here in Oregon we're about to have a special tax election.  Props 66 and 67 would increase taxes on all corporations and on individuals in the very highest income brackets.  The most commonly cited reason for the increases is "Hey, they won't apply to you anyway, so why not."  Three straight pro editorials in the Eugene fishwrap. 

This is the real life version of my opening tag line.

I admit to one dog in this fight.  I help run a corporate charity from which I derive neither payment nor reimbursement.  Our corp tax will increase from $10 to at least $150.  That's $140 that won't be going to help disadvantaged children.  It will go to public service pensions, stuff like that, and none of it will return to us in the form of services that the corporation or children need.  Our tax will go up simply because we're an easy target.

I don't have a dog in the individual income tax fight.  Not nearly enough income.  Am I the only one who thinks we all lose if we marginalize selected groups of us for some nebulous political concept of the common good?  Must we invent neo-kulaks so that we can isolate them and steal what they earned and still feel good about ourselves?

We tax all the others and pass the revenue on to you.  Until it's your turn.  Like our charity, you're an easy target too.  Feel the cross-hairs yet?  You will.

* * * * *

Remember the proposal for taxing Wall St. transactions?  They are entirely untaxed now.  Didn't fly, that proposal for a 1/4 of 1% transaction tax.  Too oppressive.  How does that reconcile with Wall Street's massive bonuses?  Oops, pardon my impudence.

Another non-starter:  Repatriating untaxed overseas money. 

And how is it that tax cheat CharlieR hasn't been impeached?  Simple.  He gets special treatment.

* * * * *

What at first was plunder assumed the softer name of revenue.
Thomas Paine