Montana Moments – Guns and Rodeos

In blue-state America, 8 year olds ride bicycles and toy guns are banned.
In Montana, at the same age, kids ride bulls in rodeos and own real guns.
Montana Moments – Guns and Rodeos
By: George Noga – August 20, 2017
     I once observed a boy riding a tricycle in his front yard with both parents hovering nearby. Even though his head was near the ground and it is hard to fall off a trike, he wore a huge helmet. I instantly knew I was not in Montana where a young boy wearing a helmet means he may be riding a bull; yes, a real wild bull – and that’s no bull.
      Every Thursday during summer there is a rodeo in a small town (population 5,000) near Whitefish. Admission is $10 and often 2,000 people (40% of the town) attend. Rodeo participants are mostly locals. The opening ceremony promptly at 7:00 PM is moving. Riders full gallop into the arena with American, Canadian and Montana flags. They make a few loops and then come to rest for the playing of our national anthem. Instantly, the arena becomes eerily quiet as everyone stands, removes hats, holds them over their hearts and sings along. The simple ceremony imparts a warm feeling.
     There are many events during the 2-hour rodeo, one is youth bull riding. Kids can compete beginning on their eighth birthday. We once were seated next to a woman who averred she was a bit nervous because her son just turned 8 and was riding a bull for the first time. There are precautions: the bulls are young; their horns are trimmed back; and the boys wear helmets. Nevertheless, the 500 pound bulls are undomesticated.
      Many preteens and teens attend rodeo. It is not uncommon to see these kids with six-inch hunting knives strapped to their waists and freely mingling with the crowd. If kids turned up at a blue-state junior high football game wearing similar knives, panic would set in; SWAT teams would fast rope in; and the stadium would be evacuated. It would lead the local news and there would be a movement to ban knives in public.
      In blue-state America toy guns are banned. In Montana, toy guns are unnecessary because kids get real guns and not BB or pellet guns. Often by age eight they are on their second rifle. An 11-year-old can get a Montana hunting license and the first one is free. Montana has hunting seasons set aside strictly for youths ages 11-15. Youth deer hunting season always is the Thursday and Friday in October immediately prior to regular deer hunting season. So many kids go hunting that Montana has been forced to close all schools statewide during the two days of youth deer hunting season.
     Infantilization of children is child abuse. It hobbles their emotional development; they experience academic problems; and they have poor social skills. They are averse to responsibility and often fail as adults. The goal of progressives is to infantilize not just children but all Americans. They want a nanny state with government as the nanny and all of us as children. It is comforting to know there still are places like Montana where decisions about children are made by parents and not by the state!

Next: watch for our special MLLG mid-week posting about sanctuary cities.

Ultra Short Medley of Pithy Tidbits

A collection of ultra short but pithy nuggets from MLLG’s treasury
Ultra Short Medley of Pithy Tidbits
By: George Noga – August 13, 2017
      This summer I am experimenting with different formats. This post presents several ultra short, but blog-worthy, tidbits that have accumulated over the past year.
Dakota Access Pipeline now open Environmental protesters left 250 truckloads of detritus spread over 50 acres. The army cleaned up the toxic sludge before it flowed into Lake Oahe, the same lake protesters said would be polluted by the pipeline. This is not just a one off story; liberal protesters never clean up after themselves.
Who’s your progenitor? In Spain, birth certificates no longer use mother or father; instead they use “progenitor A” and “progenitor B“. Marriage licenses list “spouse 1” and “spouse 2“. Chimps, apes and orangutans have been granted full human rights.
The Chavez Diet is a sure way to lose weight. Just move to Venezuela and eat all the food you can scavenge. Last year 80% of Venezuelans lost at least 20 pounds. If you go, be sure to bring your own toilet paper to this socialist workers’ paradise.
When is climate change global warming? Progressives prefer climate change; but when summer rolls around, they revert to global warming. Canny, these liberals!
Obamacare for dummies To insure the uninsured, Obamacare first must uninsure the insured and then mandate they become reinsured at higher cost. The extra premium they pay is for the original uninsured now to become insured at far below cost.
Liberal Dogma: You can kill the golden goose but continue to get golden eggs.
The difference a day makes Young lovers born a day apart break no law until the day one of them turns 18. For that one day only, sex can be rape. The next day, when both are 18, everything is again legal. Teenagers have been prosecuted for this. Government has rendered the sex offender registry meaningless because of such lunacy.
Latest liberal food paranoia Celiac disease, a serious reaction to gluten, affects 1% of Americans although only 100,000 have been diagnosed. Nonetheless, 110 million progressives avoid gluten – equal to 1,100 for each person diagnosed. To make food gluten-free, many polysyllabic chemicals are substituted. Watch what you wish for.
Circus never closes Barnum & Bailey closed but the Washington circus never ends. Circuses, carnivals and freak shows have not disappeared; they simply moved to Washington and cable news shows. They feature prestidigitation, illusion, fake news, people who talk incessantly without saying anything – even bloody severed heads.
GMOs turn 20 The first GMO was used in 1997. Since then, not one person has gotten even a bellyache. Crop yields are up over 20% while pesticide usage declined nearly 40%. Without GMOs, an additional 100,000 square miles (Ohio and Indiana) would have to be cultivated. Someone please remind me why GMOs are Frankenfood.
Obama living the high life He gets $400,000 for speeches to Wall Street firms and jets all over the world cocooned in luxury and leaving a gargantuan carbon footprint. Pocahontas, a/k/a Elizabeth Warren, said he is out of touch with most Americans. And this coming from someone who received $430,000 to teach one class at Harvard.

Montana Moments – Whitefish

Montana Moments – Observations about life in Whitefish and Montana
Montana Moments – Whitefish
By: George Noga – August 6, 2017
        I always am surprised by the ardent reader reaction whenever I write about life in the Flathead Valley of NW Montana. This reminds me of Marjorie Kinnan Rawlings, who in 1930 moved to Cross Creek, Florida – not far from my home outside Orlando. Rawlings aspired to write Edwardian novels but her letters describing life in rural Florida won her acclaim and led to The Yearling, for which she won a Pulitzer Prize. I entertain no such Pulitzer pretensions; but after writing thousands of pages of pithy analysis and commentary, it is Montana Moments that endears itself to my readers.
       I’ll share more Montana Moments with you during this, our twelfth summer here. I begin with what makes Whitefish such a special place. It is the western gateway to Glacier National Park (“GNP”), the best such park in the USA. NW Montana is remote with little lodging capacity; hence, the park is not a mob scene even during summers. The range of activities in GNP is mind boggling. It contains the only US tri-continental divide, where waters flow into three oceans – Atlantic, Pacific and Arctic. Its main artery, Going-to-the-Sun Road, has to be one of America’s most stunning drives.
     While GNP is 30 miles east of Whitefish, Big Mountain ski basin lies but 7 miles north. Ski Magazine has rated it the eleventh best ski resort in the world – yes, the world. Due again to limited lodging capacity, the slopes are uncrowded, lift lines unknown and the cost a fraction of other top resorts. During summers Big Mountain is alive with mountain biking, hiking, zip lines and huckleberry picking. Whitefish Lake, a pristine 7 mile long glaciated lake, is right in town and offers all water activities. Just 30 miles south lies Flathead Lake, the largest lake west of the Mississippi.
    Whitefish is at 3,000 feet altitude, making it cool in summer but without the difficulties associated with high elevations. Summers are arid with temperatures most days hovering in the 70s and 80s. There are 3 scenic rivers nearby, the north, middle and south forks of the Flathead River. The plethora of year-round activities is breathtaking; every conceivable outdoor sport or activity is readily available.
       Segueing from the natural to the man-made environment, Whitefish’s population is 6,400 souls and it has the look and feel of middle America decades ago. Despite its low population, it has a year-round full symphony orchestra. Its theatre and entertainment would be excellent for a town 25 times bigger. It is endowed with abundant fine dining. There are non-stop events and festivals to tempt locals and visitors alike. Within a short drive there are several excellent golf courses, including the best course in Montana. There are times it is possible to golf and ski during the same day.
      Even with its veritable cornucopia of attractions, Whitefish remains welcoming to visitors, although it took me awhile to understand “drunken Canadian” was not all one word. It is surprisingly affordable. Last year a group of us went to a local watering hole for drinks; the tab for 27 drinks was $33. Even at happy hour prices, that is incredible. For some balance, I tried to find something negative to write. All I could come up with is the occasional forest fire that wafts smoke into town, sometimes for weeks.

Taxation in America – Buffet vs. Bosanke

Taxation in America resumes by examining the progressivity of the US tax code; also, we compare Warren Buffet to his secretary, Debbie Bosanke. 
Taxation in America – Buffet vs. Bosanke
By: George Noga – July 30, 2017
     We examine liberal assertions that: (1) the US tax system favors the rich; and (2) Warren Buffet pays a lower tax rate than his secretary. When including refundable tax credits, the lowest income 60% of Americans pay less than 1% of individual income taxes. This is by far the lowest of any nation; moreover, the share of Americans not paying tax has doubled in recent decades. OECD and other studies confirm America has the most progressive tax system including federal, state, local and payroll taxes.

      Let’s turn from the bottom 60% to the top income cohorts. The highest income 10% of Americans pay 35% more of the total tax burden than in Sweden for cryin’ out loud. Data are similar for the top 1% or 5%. During the past 30 years, the US has become far more progressive relative to Sweden, Germany, France and Finland. Corporate tax rates in America also are the highest in the developed world – by a large margin.

    The liberal reflex is to blurt out, “Although income taxes are progressive, payroll taxes are steeply regressive and this makes the overall tax system regressive.” They fail to distinguish between a general purpose tax and one linked to a specific benefit to a specific taxpayer. Consider: (1) the tax base is capped, but so is the benefit; (2) higher income taxpayers receive less of a benefit as a percentage of contributions than lower income taxpayers; and (3) Social Security income is subject to highly progressive income tax rates. Independent studies, including by the Social Security Administration, conclude that both Social Security and Medicare taxes are progressive.

Warren Buffet Versus Debbie Bosanke

    Using virtually any metric, the US tax code is the world’s most progressive. Liberals trot out disingenuous comparisons for misdirection and maskirovka to try and show the system favors the wealthy. Perhaps the most bizarre liberal attempt to bamboozle and to hoodwink is the assertion Warren Buffet pays a lower tax rate than his secretary.

    MLLG once published a highly detailed tax computation showing Warren Buffet’s true tax rate; this post was one of our all-time most popular and is easily accessible on our website: www.mllg.us.  This post summarizes and updates data from the original.

     Buffet asserted he paid 17.4% in income tax and his secretary paid a much higher rate. In truth, Buffet paid close to 80% solely on that tranche of his income. Before Buffet can invest, he must first earn income subject to taxes of federal 39.6%, payroll 6.2%, Nebraska 6.8% and Obamacare 3.8%. He may then invest his after tax income in Berkshire and pay federal tax on his share of Berkshire’s income at 35% and Nebraska tax at 7.8%. When he sells stock he pays a 20% capital gains tax. At death, Buffet is subject to a federal estate tax of 40% and a Nebraska tax of 18%. Whew!

     When properly computing his tax, Buffet is subject to an overall rate of nearly 80%. The 17.4% rate he cited was cherry picked from only the capital gains phase of the complete tax cycle. Furthermore, Debbie Bosanke earns $250,000+ per year – unlike a typical secretary who earns more like $25,000 and pays little or no income tax.

      Buffet (like liberals everywhere) was cynically banking on the ignorance and class envy of the American people. His deception transcends political spin and crosses into a netherworld of duplicity and deceit. It froths with contempt for the American people. All we can do is shine the bright spotlight of truth on this sordid affair.

We now begin our summer in Montana and the next post is a surprise.

Electromagnetic Pulse Attack

North Korea, Iran or ISIS could kill 300 million Americans with one EMP weapon
Electromagnetic Pulse Attack
By: George Noga – July 23, 2017
      We’ll get to EMPs after a few words about MLLG. I am ensconced in Whitefish, Montana until October. During August and September I will continue the Taxation in America series. I have more time while in Montana and will test some new posting formats such as personal anecdotes, ultra-short posts and more frequency. I will reprise the Montana Moments posts about life in Montana which is popular with readers. Email me with suggestions for topics or anything else you would like to see.

America’s Greatest, Least Understood and Most Preventable Threat

       Several of my 2017 posts have referenced electromagnetic pulse (“EMP”) threats to America without providing details. Readers have requested an explanation for how up to 300 million Americans could die, for example, from a single EMP weapon smuggled into the US on a container ship and launched from a river barge via weather balloon. EMPs are by far the most dangerous weapons ever known to mankind.

       An EMP is a high-intensity burst of electromagnetic (gamma ray) energy. A single EMP weapon detonated high over the center of the US would kill mainly through starvation. The death toll could reach 90% of the US (and Canadian) population even though no one would die from the blast. Without getting hyper-technical, an EMP blast would knock out all power and electronics causing irreversible damage to electrical transmission lines and anything with digital or electronic components.

     Airplanes would fall from the sky. Vehicles would stop. Water and sewer lines would fail. Transportation would cease. Food would rot and run out. There would be no electricity, communications or computers. US cities have only a 3 day supply of food. Society would collapse amidst mass starvation and the rule of law would be replaced by the law of the jungle. Few Americans would even know what happened.
Read William Forstchen’s popular trilogy about an EMP attack on America. Also, NBC’s TV series “Revolution” depicted life in America 15 years after an EMP attack.

       EMP damage is permanent and can’t be repaired. Nothing works – not planes, cars, trains trucks, pipelines, gas pumps, radio or TV stations, hospitals, communications, or electricity. There is no way to get food or fuel to people; most deaths are from starvation. New equipment would have to come mostly from outside the US and could take over a year to obtain. The US would become a third world country with a population of 35 million and vulnerable to occupation by potential enemies. In Forstchen’s trilogy, Mexico attacks, reclaiming all of the American Southwest.

     Pyongyang already has an EMP weapon which makes it likely that Iran, its strategic nuclear partner, also has one; if Iran has one, it is not far fetched ISIS could get one. Some North Korean missile tests likely are rehearsals for an EMP attack. North Korea could launch an EMP attack from one of its orbiting satellites. We might never even know who was responsible for an EMP attack launched via offshore freighter, satellite, river barge, submarine or weather balloon. EMPs are quintessential asymmetric warfare as our adversaries are much less reliant on modern electronics.

     The most important role of government is protection from external threats. Aside from some military sites, nothing in America is protected. If we hardened our electrical grid and stored back up equipment wherever needed, we could recover quickly. Even more importantly, such preparedness would deter possible enemies from launching an EMP attack in the first place. The cost is manageable and it could be done quickly.

     Protecting America from EMP attack is the ultimate shovel-ready project. However, our political class chooses to dither over ephemeral issues rather than to address an eminently preventable catastrophe and an existential threat to 300 million Americans.

Next up is part III of our intermittent series: Taxation in America.

Trump Presidency at Six Months

Trump earns an A+ for being Donald Trump – and not Hillary Clinton. 
Trump Presidency at Six Months
By: George Noga – July 16, 2017
     This post is in response to many reader requests for our take on the Trump presidency. Recall that MLLG is non partisan; we don’t much care for either political party. Our lodestar is all in our name – more liberty and less government. Nonetheless, unlike liberals, we don’t live in a bubble and must deal with the world as it is.

     First off, Trump has done a phenomenal job on the singularly most important aspect of his presidency, i.e. he is not Hillary Clinton! In the end, little else matters as he gives America a respite from its progressive-led death march toward Gomorrah. Each day Trump is in office is a day Hillary is not; that alone is ample cause to celebrate.

      If Trump is judged on his actions and appointments, and not his words and tweets, there is much to like. Assessed against the more liberty, less government standard, he also earns reasonably good marks. Trump’s critics err by taking him literally but not seriously; whereas the key to understanding Donald J. Trump is to take him seriously but not literally. His accomplishments, in addition to not being Hillary, are:

1. National Security. Trump’s national security team of Tillerson, Mattis, McMaster and Pompeo is outstanding and they work together seamlessly and in sharp contrast to the internecine feuding of the Bush and Obama teams. Trump is squarely addressing the festering problems Obama kicked down the road including North Korea, Iran and ISIS. However, Trump’s proposed increase in defense spending is far too little.
2. Cabinet Appointments. Including the inspired national security team, his cabinet is arguably the strongest since George Washington. Ben Carson, Betsy DeVos, Tom Price, Scott Pruitt and Ryan Zinke round out the cabinet; don’t forget Mike Pence.
3. Judicial Appointments. His Supreme Court and lower court appointments have been as good as anyone could wish for. In four (or eight) years, he can make a difference.
4. Taxes, Regulation, Environment and Energy. Trump aces all these business related issues. He showed courage and leadership in pulling out of the Paris climate accord.
5. Health Care. Although imperfect and incomplete, Trump has done about as well as possible given the resistance from Democrats. If Hillary had won, she would have used the implosion of Obamacare to impose nationalized health care on America.

     There are also many things not to like about Trump’s first six months; the worst ones, in approximate order, are: (1) protectionist trade policy including opposition to NAFTA, TPP and China; (2) lack of discipline in keeping on message, talking and tweeting too loosely and often; (3) failure to understand the traditions and protocols of his office; and (4) law enforcement issues including continuation of the failed war on drugs, civil asset forfeiture and ignoring the need for police reform.

     To evaluate Trump, judge him on his actions and appointments, not his words and tweets. Take him seriously but not literally. Finally, rejoice each and every day that Trump is president, because that is a day when Hillary is not. Hallelujah!

Our July 23rd post describes the threat America faces from an EMP attack.

Taxation in America – The Ideal Paradigm

This post presents the theoretically correct approach to taxation in America.
It is vital to understand the ideal – even if it has no chance of becoming law. 
Taxation in America – The Ideal Paradigm
By: George Noga – July 9, 2017
       Economists often begin by defining the ideal. In that spirit, we present the ultimate plan of federal taxation. Our plan is transparent, fair, simple, pro-growth and neutral with no corporate welfare or social policy. Compliance (now $600 billion per year) is cheap, quick and easy; evasion is nigh impossible. It abolishes the IRS and the need to provide government personal financial data. It taxes the underground economy (an enormous revenue enhancer), broadens the tax base and has no exemptions or mandates. It taxes consumption and not income, savings, investment or wealth.

      The ideal tax is a tax on consumption collected from consumers at the point of sale. All other federal taxes are abolished. Individual and corporate income taxes, payroll taxes, capital gains taxes and death taxes are abolished. Every American would know each time a purchase was made that he/she was paying a tax and the amount of the tax. If government raised taxes, Americans would be painfully aware every time they bought something. The true cost of government would be manifestly transparent.

       Everyone, even the poorest, would pay the tax. However, government could make the tax burden fair to all by any one of several means such as tax rebates for the first tranche of annual consumption or by a form of UBI (universal basic income). It is the proper role of government to decide which citizens are subject to the tax and the best method to rebate money to those who are fully or partially exempt from the tax.

      The national consumption tax (“NCT”) would be progressive, as those who spend more would pay proportionately more tax. Lower income Americans would benefit enormously because an NCT would be incredibly pro growth. Without a corporate tax, jobs and investment would flood into America from abroad. Without taxes on income, savings, investment or wealth, capital would surge into new investments creating new jobs; productivity would go on steroids. Note: The NCT could be in the form of a VAT, provided the tax was collected from consumers and not embedded in products.

      Economists of all stripes agree on much, if not all, of this. There is widespread consensus to abolish corporate and business taxes as nearly every dollar of such taxes comes from higher prices paid by consumers. Since most consumers are not wealthy, corporate taxes are highly regressive, harming the poorest among us. Payroll taxes are regressive as they are imposed only on the first tranche of income. The 50% paid by employers is entirely regressive as it really is the workers’ money. All in all, the new NCT would be less regressive than all of the taxes that are abolished.

        America can enact a simple, fair tax regimen that is the envy of the world. We can create a veritable cornucopia based on sustained economic growth for all Americans. We could generate enough growth to defuse the crisis of spending, debt and deficits, buttress Social Security and Medicare and fund a robust national defense.

    Unsurprisingly, the main obstacle is the Sturm und Drang between politics and economics. Economists of all persuasions broadly agree on a plan such as presented herein. Politicians however, prefer things complex and opaque; they prefer class warfare and demagoguing about how to divide the pie rather than growing the pie. They prefer to milk the system for political contributions. Saddest of all, they prefer to see their political enemies fail far more than they wish to see America succeed.

We return to Taxation in America in a week or two, following other posts.

Special Independence Day Posting – Invading Aliens, Liberals and Muslims

This special Fourth of July posting was inspired by the movie Independence Day.
You see, invading aliens have a great deal in common with liberals and Muslims. 
Special Independence Day Posting
Invading Aliens, Liberals and Muslims
By: George Noga – July 4, 2017
       In the movie Independence Day, an alien race invaded Earth. After ravaging their home planet, they were forced to abandon it and to find another planet. The aliens planned to despoil Earth and then move on to plunder yet other planets. An alien race raping and pillaging planets, failing to learn from it and then replicating such sordid behavior on unspoiled new planets, repulsed everyone who saw the movie. Yet, something eerily similar is happening today with Muslims and liberals.

       Muslims desert their home countries en mass to emigrate to western democracies. They avidly abandon toxic Muslim countries so they can speak, vote, live and worship in liberty and secure a better life for themselves and for their children. Yet, what do they do after they arrive? They agitate to turn their new nations into replicas of the entropic, dysfunctional places they abandoned. They demand Sharia law, genital mutilation, honor killings, proscriptions against free speech and the gamut of failed policies that turned their home countries into bleak authoritarian wastelands. Their behavior parallels that of the aliens who invaded Earth on Independence Day.

       Such behavior also is mirrored by disillusioned liberals who are ditching bankrupt blue states in droves. Progressives dump foundering blue states to avoid confiscatory taxes, Draconian regulations, failed schools, mandatory unionization, rampant crime, political corruption and gun control. They are eager to escape the prevailing sense of malaise, torpor, ennui, angst, melancholy and disorder endemic in blue state America. They bolt to red states with lower taxes, better schools, fewer regulations, right to work laws, less crime and where everyday life is simpler and more humanistic.

    So, how do liberals behave after they decamp to red states? The transplanted progressives continue to vote for the same virulent, pernicious and toxic policies that will turn their new homes into the failed blue states they desperately fled. This is well underway as liberals despairingly abandon Puerto Rico for Florida, Massachusetts for New Hampshire and California for Nevada. They already changed voting patterns in those states. Recently, New Hampshire was a reliably red state, but libs fleeing Taxachusetts turned it blue. It is Independence Day deja vu. Will they ever learn?

      It is hard to draw any distinction between the rapacious aliens who invaded Earth on Independence Day and the Muslims invading Western Europe and the liberals invading, inter alia, Florida, New Hampshire and Nevada. There is one critically important difference however: the aliens invading Earth could always move on to other planets. That is not an option for us if Muslims and liberals are able to corrupt and despoil everything in their path and leave Earth a vast dystopian wasteland.

Our next post July 9th resumes the series about taxation in America.

The Russians Hacked My Email!

MLLG’s inimitable analysis and perspective on Russian election hacking 
The Russians Hacked My Email!
By: George Noga – June 29, 2017
      This special posting provides analysis and perspective about Russian hacking and is in keeping with MLLG’s goal to focus more attention on current events.
Russian meddling in US elections goes back over 50 years

       In 1968, Russia desperately sought to prevent virulent anti-communist Nixon from being elected and secretly offered to subsidize Humphrey’s campaign. Petrified about Reagan, Russia again tried desperately to prevent his nomination (1976) and election (1980 and 1984). Russia’s attempts to influence our elections proved unsuccessful, but the crafty Russians discovered they could wreak more harm by sowing distrust in our institutions and governments. Hence, Russia’s recent actions were directed mainly at undermining confidence in US institutions rather than favoring specific candidates. Russia also interferes in other countries’ elections, most recently Brexit and France.
Obama interfered in numerous foreign elections

      In 2016 Obama intervened in Great Britain by threatening trade sanctions if the UK voted for Brexit. In 2015 he tried to defeat Netanyahu in Israel by illegally funneling money to opposition groups. In 2012 he intervened financially and otherwise in Egypt in favor of Morsi. Obama meddled big time in Honduras in 2009 in favor of a Castro and Chavez puppet. While still a senator in 2006, Obama interfered in Kenya to help elect his relative, Raila Odinga. Obama also intervened in Macedonia and  Libya.
The real Russia hacking story

     Election interference is old news; so, what made it a cause celebre in 2016? In one word: Trump. The Democrats, having lost an unloseable election, couldn’t accept voter rejection of their insipid candidate and failed policies; there had to be something else and the Russia-hacked-the-election meme fit the bill. Following is the real story.
    No one, not even the diabolical Russians, believed Trump would win. If Russia attempted to harm Hillary, it was to weaken her future presidency and because she is an avowed Russophobe. Russia had zero impact on the election. Hillary lost because she and liberal elites had undisguised contempt for the deplorable, racist, homophobic, sexist, xenophobic and Islamophobic middle Americans in fly-over land.
    The idea of Trump-Russia collusion is preposterous on its face; even Democrats know it is crazy-stupid. They keep it alive only to thwart Trump in every way possible. They would rather see Trump fail than to see America succeed. If Hillary were in similar circumstances: (1) her AG never would have been recused; (2) the Deputy AG would have been a sycophant; (3) no special counsel would have been appointed; and (4) the media would be 100% okay with all that. This story will persist as the narrative morphs as necessary, from collusion to obstruction to who knows what is next.
    Preoccupation with Russian election hacking is symptomatic of our toxic political culture. While we consternate over election hacking, we ignore Russian hacking of our electrical grid that could shut down power and result in untold horror. Russia already penetrated a Vermont utility and shut down the Ukraine power grid. Nevertheless, the media have focused for an entire year on the Russia-hacked-the-election chimera.
   When it comes to the integrity of American elections, there is much more to fear from voter fraud in blue states and cities than there is from Putin and the Russians.

Our not-to-be-missed Independence Day posting is next on July 4th.

Taxation in America – First Principles

As America debates tax reform, MLLG provides the appropriate perspective.
Taxation in America – First Principles
By: George Noga – June 25, 2017
      This begins our series about taxation in America; it coincides with the debate over tax reform and Trump’s tax proposals. Our tax series consists of several parts that will run during the summer; some parts will run consecutively and some intermittently. We begin by presenting ten wholly objective and nonpolitical principles.
  1. Taxes should be simple and transparent. Citizens should demand transparency and simplicity; however, it is in the interest of government to make taxes complex and opaque. A sales tax collected from consumers at the point of sale meets these criteria as people know they are paying a tax and the amount. Conversely, a VAT, embedded in the cost of products, is opaque; consumers don’t always know they are paying a tax nor the amount. Business taxes, which are passed along to consumers as higher prices, are totally opaque. Government always goes to great lengths to maximize opacity.
  2. Only living, breathing humans pay taxes. Businesses and corporations do not pay taxes; they may remit taxes, but it is not their money. The burden of all business taxes falls on owners, employees and (95% of the time) on customers as higher prices. Business taxes are a myth propagated by government to beguile voters into believing they are not paying tax. The 50% of payroll taxes “paid” by employers is really borne by the employee – not the employer – and is simply government maskirovka.
  3. Taxes should not impede growth. The goal of taxation should be to maximize economic growth. Politicians can and should debate how to carve up the pie but never should do anything to shrink the pie as this harms all Americans. Taxes on capital (such as capital gains) are harmful to economic growth and result in locked-up capital, misallocation of resources, under-investment and loss of productivity.
  4. Taxes must be stable. Once enacted, a tax regimen should be permanent and rarely amended. Politicians can’t resist using the tax code for class warfare and political fundraising. Individuals and businesses need long-term tax stability to plan their lives and investments. Uncertainty is a mortal enemy of investment and productivity.
  5. Taxes should be neutral. Taxes should impose identical burdens on all taxpayers regardless of the nature of their businesses. Under the current tax code, businesses with substantial fixed assets are taxed much differently than service businesses.
  6. Know Hauser’s Law. Tax revenue as a percentage of GDP is constant regardless of the top marginal tax rate. From 1945 to 1963 when tax rates were 90%, tax revenue was 15%-18% of GDP. In the late 1980s when the top rate was 28%, tax revenue was 18% of GDP. Tax revenues vary according to economic conditions but not tax rates. Hauser’s Law works because taxpayers modify their behavior based on tax rates.
  7. Taxation is not for corporate welfare. Simple, transparent, neutral and low corporate taxes would eliminate most of the rationale for corporate welfare. Businesses never should be rewarded for lobbying activity more than for growing their businesses.
  8. Governments should compete on taxes. Nations and states should compete on rates. People always win with competition. Competition from much lower tax rates abroad has created tax inversions. Ultimately, this will be solved by lowering US tax rates.
  9. Taxation is not for social policy. Taxes are for raising revenue in the simplest, most efficient, transparent and economic friendly manner possible; they never should be an instrument for social policy. To the extent government has legitimate social goals, they should be addressed directly and not via the tax code. The worst abuse of this principle is the death tax, which is not about revenue but about class warfare and politics.
  10. Understand the Laffer Curve. Tax revenue maxes out at 30%-35% for individuals and 20%-25% for corporations; anything higher actually produces less total revenue.
      Keep these ten principles in mind throughout our series on taxation in America and as Congress debates tax reform this summer. The closer the final outcome conforms to these principles, the better for every American.

Don’t miss our next posting on Independence Day (July 4th); it is a real keeper!