Democrats ‘Will Sink’ Supercommittee to Help Obama

Posted by DBOLLC, Thur 17 Nov, 2011 07:09 EST

 

Finally, Grover Norquist has come out with an article posted on Newsmax.com which states what those of us that watch these things have known for awhile. The “Supercommittee” was a bad idea from its inception, and unfortunately for our countries future, the Democrats on the Supercommitte are purposely going to sabotage the process for their own political motives.

Norquist: Democrats Sabotaging Supercommittee to Help Obama
Wednesday, 16 Nov 2011 07:45 PM
By Paul Scicchitano and Kathleen Walter

[box] Conservative activist Grover Norquist, who invented the “anti-tax increase” tax pledge embraced by Republicans, tells Newsmax that he is convinced Democrats are planning to torpedo any possible deal in the supercommittee to further the re-election plans of President Barack Obama. “His (Obama’s campaign) narrative has got to be the Republican Congress is the problem,” said Norquist in an exclusive interview on Wednesday. “Therefore, I believe the Democrats will sink the supercommittee in order to say that the Republicans were unreasonable.” Pressure is mounting for both parties to come together on a plan by the end of the week so the committee can vote by its Nov. 23 deadline. Failure to enact a debt-cutting plan of at least $1.2 trillion this year would force $1.2 trillion in automatic spending cuts beginning in 2013. Democrats are opposing reductions in entitlement programs such as Medicare, as sought by Republicans, unless Republicans agree to large increases in tax revenue. Democrats on the supercommittee are weighing whether to reduce to about $800 billion their demand for new tax revenue, a Democratic aide told Bloomberg News this week. Last week, Democrats proposed a plan that would include $1 trillion in new revenue, $1 trillion in spending cuts and $300 billion from interest savings. A second Democratic aide told Bloomberg the spending cuts in any new proposal also would be smaller, without giving an amount. Some lawmakers had hailed Republicans’ offer last week for $300 billion in tax increases as a breakthrough demonstrating new support in the party for higher taxes. After Democrats rejected the plan, talks stalled. Norquist, the Harvard-educated president of Americans for Tax Reform (ATR), says that America’s difficult economic situation has only worsened under Obama’s leadership. “So he (Obama) can’t with a straight face say everything was going fine until Republicans took over and stopped letting him do what he wanted to do,” Norquist said. “Everything was going to Hades up until the Republicans took over and they’ve improved a little bit since then actually.” Norquist started soliciting signers to the no-tax-increase pledge from state capitols to Capitol Hill in 1986 with the passage of the landmark Tax Reform Act. ATR currently has signatures from 238 House representatives, 41 Senators, 13 governors, and all of the GOP presidential candidates except former Utah Governor Jon Huntsman. Even as the national debt hit an all-time high of $15 trillion and continued rising this afternoon, most Americans also were skeptical that the congressional supercommittee could reach a deficit reduction agreement by its Thanksgiving eve deadline. “The Republicans could dance around naked and throw flowers out at them (Democrats) — and promise them their first born — and they would still reject it and vote no,” says Norquist of supercommittee Democrats. Senate Majority Leader Harry Reid blames the no-tax hike pledge for stymying progress in the supercommittee, something which does not sit well with Norquist. “Harry Reid wants to raise taxes rather than reduce spending,” Norquist declares. “The taxpayer protection pledge that most members of the House of Representatives have signed, and 40 Republican senators have signed, is a commitment by the congressmen and the senators to their voters that they won’t raise taxes. It’s an important commitment and Harry Reid finds that commitment to voters to get in the way of his plans to trick the Republicans into raising taxes rather than cutting spending.” A failure of the 12-member supercommittee to reach an agreement by Nov. 23 would trigger an automatic $1.2 trillion in across-the-board spending cuts starting in 2013, evenly divided between defense and non-defense spending. To the average American, the $1.2 trillion in across-the-board cuts would have little or no impact, but would be the equivalent of $60 billion per year in reductions over 10 years. “It is a fraction of a fraction,” says Norquist of total government spending. “Now, are there more elegant ways to cut spending then simply across the board? Absolutely, but I’d rather cut spending $1.2 trillion across the board than not cut it at all. I’d certainly rather do that then raise taxes.” While some Republicans have made overtures to suggest that they would be willing to extend an olive branch to Democrats in the form of targeting certain tax breaks for millionaires and considering new net tax revenues, Norquist fully expects Republicans to keep their no-tax pledge. “These are public promises not private promises,” Norquist insists. “I think it would be difficult to imagine a Republican House of Representatives voting to enact a tax, not just voting for a tax increase. Every dollar of tax increase would be enacted in order to avoid reducing spending so you would have to actively say, ‘let me undermine the effort to reduce spending’ in order to increase taxes. I don’t know how many votes there are for that.” He says that Republicans have been “showing a little ankle on taxes in order to get radical tax reform” but such overtures have been soundly rejected by Democrats, who want to raise takes by $1 trillion, increase spending and count the expected savings from pulling U.S. troops out of Iraq in their total. “Now present plans by the government are not to occupy Iraq for the next decade so that’s hardly a real reduction in spending,” counters Norquist. “Since the Democrats’ position is so radically out of line with anything that Republicans could support, I don’t think we’re going to have an agreement.” Norquist also says that he would not support any deal to make the Bush-era tax cuts permanent if it provides a net increase in taxes. While some Republicans may have seemed “unreasonably open” to a tax increase, he says that Republicans ultimately must know that their Democratic colleagues are not truly open to reaching consensus within the supercommittee. “I find it a little hard to get in my heart mad at the Republicans for showing a little ankle when they know that this is a Kabuki operation because the Democrats plan to run out of the room screaming that they were mistreated,” he says. “You could make them tea and they’d run out of the room saying that you were beating them to death.” Norquist also broke ranks with Oklahoma Republican Sen. Tom Coburn on the issue of a possible new form of alternative minimum tax for taxpayers earning more than $1 million per year. “Coburn’s plan is one for dramatic tax increases indefinitely into the future even though he would tell you, ‘I’m just going to kill this fly with the dynamite. It won’t affect anybody else in the building.’”

Read more on Newsmax.com: Norquist: Democrats Sabotaging Supercommittee to Help Obama

It really makes you wonder if this country can survive.
It is our opinion that under our current President Obama and Democratic controlled Senate, the country cannot survive – at least in the form we know.
Your job as a small business owner is to just try and survive until the 2012 election and hope for the best outcome.

Jobs Created By The Stroke Of A Pen

Published by DBOLLC: Nov 9, 2011  12:18 PM EDT

Here is an article posted at TownHall.com by Bill Tatro, who we think is a very astute financial writer and radio show host. Tatro is a contrarian as we are, meaning he does not just follow the herd. Many times he spots things that you will not find on the mainstream media outlets.

Tatro  digs deep to find things that the government and financial markets would rather you not know. He has the ability to pull all the pieces together into an understandable picture thereby providing the ability to stay ahead of the game.

Jobs Created by the Stroke of a Pen

By Bill Tatro (Nov 08, 2011)

When it comes to jobs, it all comes down to this: For years, we all thought it was small business that was the heart and soul of the U.S. economy. Most people understood that it was the private sector that created the real jobs – sustainable jobs that were the building blocks for people’s lives, and consequently, the foundation for our country’s solid future. Then, along comes Barack Obama, who firmly, and I am ardently convinced, believes the public sector is the real job creator. Everything from shovel ready to green energy has been tried by this administration in order to change the path of rising unemployment, to no avail. Now, however, the truth can be told. The real job creator is neither the public nor the private sector. Rather, the real job creator is a single bean-counter who works in a small room with a green eyeshade pulled over his head at the Bureau of Labor Statistics (BLS). He’s the person who overlays the Birth/Death (B/D) statistics on all monthly jobs reports. Most people think the B/D is simply a measurement of how many workers lived or died during the month. In reality, the B/D is the approximate number of new businesses created with new employees netted against the businesses that closed and the people who lost their jobs. This statistic is overlaid against the actual number of workers either hired or fired. During prior administrations, this B/D number was plus-or-minus a few thousand. The Obama administration has taken the B/D to an entirely new art form, with the plus-or-minus becoming hundreds of thousands. It seems they thought nobody would notice, and guess what? They were right. The latest monthly jobs report shows 80,000 new jobs created. The Birth/Death overlay was plus 103,000, which means the country actually lost 23,000 jobs. But have no fear, with a phantom jobs report nobody really noticed, least of all the mainstream media. Thus, when books are written about this chapter in American history, recognition for job creation will not be given to the small or large business entrepreneurs, nor the President or his political cronies. Rather, all the praise will be given to that diligent, ever-present bureaucrat, who, with a wave of his magic pencil created 42% of all jobs reported in 2011. Hallelujah! Thank goodness for the BLS and the Birth/Death model.

Tatro points out exactly what we have suspected since the Obama Administration came into power. You can’t trust the data put out – and you can expect it to be tweaked to the benefit of the administration.

Tax Hiks Could Trigger A 2011 Economic Collapse

By DBOLLC | June 24, 2010 at 07:38 AM EDT

 

 

 

Welcome to the inaugural posting of the DBOLLC Blog 

As of the date of this posting (June 23, 2010) most small business surveys indicate a general “state of paralysis” in the small business community. 

There are so many uncertainties about the coming year that most small business owners are just on hold until after the November election and the first of the year. No one knows for sure what will happen with the Bush Tax Cuts, and perhaps not even those in Congress and the Administration. 

It is a certainty that the Bush Tax Cuts will automatically expire at the end of the year (unless extended) and on January 1, 2011 the highest federal personal income tax rate will go to 39.6% from 35% – highest federal dividend tax rate goes to 39.6% from 15% – capital gains tax rate goes to 20% from 15% – and estate tax rate goes to 55% form zero just to list the major changes.

State and local tax rates are also going up almost everywhere in 2011. 

We came across a very interesting article written by Art Laffer – Wall Street Journal Opinion June 6, 2010. Laffer points out that many businesses are shifting production and income out of 2011 and into this year. As a result, income this year has been inflated and will be deflated next year. Laffer makes the point that this shift in income to this year is the major reason that the economy in 2010 appears as strong as it is. Laffer says that for this reason an economic pull back will occur in 2011, thereby causing a severe “double dip” recession. Laffer backs up his theory with a look back in history to the Reagan Economic Recovery Tax Act (ERTA) starting in 1981. 

We find this to be credible and a link to the article follows: (your comments are welcome)

Tax Hicks Could Trigger a 2011 Economic Collapse

By ARTHUR LAFFER
Sunday, June 6, 2010 As of 12:00 AM
The Wall Street Journal
Opinion

People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.

It shouldn’t surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

John Fund of WSJ’s Political Diary breaks down Tuesday’s most interesting primary contests. Also, WSJ Columnist Mary Anastasia O’Grady translates the latest economic signals from Washington.

Likewise, who is gobsmacked when they are told that the two wealthiest Americans?Bill Gates and Warren Buffett?hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it’s also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.

People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, “high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992?over $15 billion?in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994.”

Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn’t rocket surgery, as the Ivy League professor said.

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush’s tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there’s always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.
[laffer]

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe “double dip” recession.

In 1981, Ronald Reagan?with bipartisan support?began the first phase in a series of tax cuts passed under the Economic Recovery Tax Act (ERTA), whereby the bulk of the tax cuts didn’t take effect until Jan. 1, 1983. Reagan’s delayed tax cuts were the mirror image of President Barack Obama’s delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10%.

But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don’t work until they take effect. Mr. Obama’s experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Consider corporate profits as a share of GDP. Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy. These high profits reflect the shift in income into 2010 from 2011. These profits will tumble in 2011, preceded most likely by the stock market.

In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what’s going to happen to tax rates, this conversion seems like a no-brainer.

The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain’t seen nothing yet.