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Richmans' Trade and Taxes Blog
Officially, the unemployment rate is 5.1 percent of the labor force, defined as those working or, if unemployed, actively seeking employment. Millions of Americans have given up looking for jobs, millions more are on welfare, and millions are working part-time involuntarily. The real unemployment rate is closer to 20% and the country’s malaise shows it. The BLS has just reported that the average wage actually fell in 2014. And the U.S. Bureau of the Census reported Wednesday that for the past three years the median household income stagnated following two years of declines. A dismal picture indeed.
The bankruptcy of both the Democratic and Republican Parties cannot be remedied by a single presidential candidate of either party, although the Trump candidacy for the Republican nomination offers a glimmer of Officially, the unemployment rate is 5.1 percent of the labor force, defined as those working or, if hope. The entrenched oligarchies that control both major parties are incapable of pursuing rational economic programs in the national interest as evidenced by the huge international trade deficits that converted the U.S. since 1970 from the world’s leading creditor nation to the world’s leading debtor nation. The same oligarchies seek the votes of every voting group in the country and thus are incapable of pursuing the national interest. Although the Republicans pretend to be against a big central government, when in power they failed to eliminate a single agency of government (except one—the Export-Import Bank, which they eliminated on ideological grounds. Not only did the Ex-Im Bank not cost the government a red cent but it was the only government agency that created export jobs!), supported every Democratic proposal to send government jobs overseas like the General Agreement on Tariffs and Trade, the World Trade Organization, and the TransPacific Trade Agreement, all of which caused or will cause U.S .international trade deficits and will continue to cause the movement of American factories overseas and the loss of millions of good-paying U.S. manufacturing jobs. It has nurtured the anti-global-warming movement which has caused the federal and state governments to waste hundreds of billions of dollars subsidizing crony capitalists with no, literally no, effect on climate change. Following is a program to change all that:
First, we should end our huge chronic trade deficits which have decimated our manufacturing sector and caused the loss of millions of good American manufacturing jobs. Our policy should be balanced trade which economic theory supports rather than free trade which is supported by economic theory only when countries have a common currency and free movement of capital and labor (as among the States of the United States). We should use the “Scaled Tariff” (our invention!), a single-country-variable-tariff that rises as trade deficits widen significantly, whatever the reason, and are reduced to zero as trade is brought into balance. Countries like China, Japan, Germany, Korea, and Mexico have had chronic trade surpluses at our expense. While the scaled tariff is in effect, we should realize huge tariff revenues. Current international trade rules permit countries to impose single-country tariffs to bring trade into balance. And there is no need to enquire whether or not a country is using artificial trade barriers to secure a trade surplus.
The “Scaled Tariff” will provide us with a huge amount of revenue while trade gets balanced. Of course, the price of products produced abroad will rise but that is a small price to pay to get rid of the huge damage to domestic manufacturing and the loss of millions of jobs of American workers caused by the trade deficits. The products imported from the foreign factories of American companies are foreign-made products. Foreign car manufacturers from Germany, Japan and Korea will face substantial tariffs which will favor producing cars in the U.S. And other products imported from these countries will rise in price giving a significant boost to manufacturing those products in the U.S. until trade if brought into balance.
Second, abolish the corporate income tax, the worst broad-based tax ever invented, and tax corporate earnings as the personal income of shareholders under the personal income tax. Economists know well the following defects of the corporate income tax:
Corporations as an artificial entity do not bear any of the tax burden of the corporate income tax; shareholders bear the burden and the rate is the same on billionaire shareholders, 35%, as on the poorest shareholders whose pensions, mutual funds, and IRAs are invested in corporate stock. It causes corporations to engage in such uneconomic practices as reliance on debt financing, causes them to buy back shares of their own stock instead of declaring dividends because the former results in capital gains which are taxable at lower rates under the personal income tax than dividends (until recently!) Corporations that export are disadvantaged. They face international competitors who are subject to lower corporate income tax rates.
Some who object to the high rates of the corporate tax advocate replacing it with a value-added tax (a sales tax!) forgetting that the states rely on sales tax revenues as a major source of financing and the central government to all intents and purposes has a monopoly on income taxation.
Third, abolish the federal minimum wage which was first enacted by Pres. F. Roosevelt at the request of anti-black lily-white unions in the 1930s. The minimum wage law has been lamed by economist Thomas Sowell for the high levels of unemployment and the disintegration of black families since the end of WWII. In 1930, blacks had lower levels of unemployment and fewer single-parent families than whites.
Fourth, end the ban on the export of American-produced oil. One effect of the ban has been to reduce employment in the oil-producing industry. Its ban would stimulate employment in the oil-producing industry
Fifth, repeal the Dodd-Frank bill and other foolish business regulatory legislation which has stifled private enterprise and reduced the demand for labor. History has shown that the great majority of Senators and Congressmen are economic illiterates. They have by their many foolish interventions in the private economy caused recessions and depressions and were incapable of stimulating economic growth. End the multitude of inefficient government interventions in the private economy. These range from laws requiring all government contractors to pay union wages on all federal contracts, minimum wage laws, a law barring the export of American-produced oil, and a host of regulatory bodies from those created by the Dodd-Frank bill, to the Community Investment Act of 1977 which forced banks to make sub-prime loans and led to the severity of the Great Recession.
Sixth, reduce federal government inefficiency and waste by eliminating many federal departments and agencies such as the Department of Education, the Department of Urban Housing and Development, the Environment Protection Agency etc. which have no constitutional authorization. Economists have shown that increased government expenditures cause a decrease in private investment. Reduction in government expenditures will expand private investment and expenditures and provide employment. Besides, education is a state function, and cities and local governments are creatures of the States. The EPA should be abolished and replaced by a law that prescribes environmental rules. Congress granted the executive numerous authorities which is an invitation to abuse and corruption as the EPA has so clearly demonstrated. Replace regulatory bodies by laws that specify the regulations. Congress should prescribe rules, not create authorities that make their own rules and regulations and retard private investment.
Seventh, half of the revenue from the federal income and estate taxes should be allocated by Congress to the States on the basis of population. The 16th Amendment to the Constitution authorized the federal government to levy an income tax and changed the nature of our government by giving enormous resources to the central government which it used to control state policies by grants-in-aid, transforming the U.S from a republic in which, under the 10th Amendment to the Constitution, all the powers not specifically granted to the federal government were reserved to the States or to the people. The federal government has become an all-powerful central government like all the European powers replacing the primacy of the state governments and the people as envisioned by the 10th Amendment to the Constitution.
Eighth, end the Federal Reserve’s power to control interest rates. The market should determine all interest rates except the rate that the Fed charges for its loans to the banks. The principle is that markets not governmental authorities should control prices charged in the market and the determination of prices should be in accordance with the laws of supply and demand, relying on competition to determine equilibrium prices. The so-called quantitative easing of the Fed caused asset prices to skyrocket resulting in the enrichment of billionaires and multi-millionaires and causing a mal-distribution of wealth. Stephen D. Williamson, vice president of the St. Louis Fed, concludes that quantitative easing was designed to spark good inflation but actually resulted in just the opposite and had at best a tenuous link to actual economic improvements.
These reforms would stimulate economic growth and provide good jobs to millions of American workers.
The writer is Prof. Emeritus of Public and International Affairs at the Univ. of Pittsburgh and holds a Ph.D. in economics from the University of Chicago.
Click here to read it on the American Thinker website.
Comment by Ron V, 9/24/2015:
One more important issue should be added. Its the billions of our tax dollars being wasted on climate change.
CLIMATE CHANGE-TRUTH and KNOWLEDGE
For many years, our country has been in turmoil with the notions of manmade climate change and Obama’s obsession to destroy the use of our fossil fuels! Obama, the EPA and other government agencies started the war on our most abundant, efficient and reliable energy resources. Our government, the news media and hundreds of climate change activists such as the Sierra Club are coercing us into the use of unreliable renewable energy.
When the elections take place in the very near future, if we the people choose the wrong leadership, our entire way of life will suffer more than one can even imagine, which includes many generations to follow! Many citizens today, do not even know how devastating this climate change hysteria is and how it is impacting our very fragile economy! We the taxpayers are paying billions of our taxes, for absolutely receiving nothing in return, except higher energy costs for our homes and everything associated with renewable energy such as grants and subsidies, that equates to billions of wasted tax dollars.
Statements from many members of our congress, when asked about climate change are answered as such; “ well, I’m not a scientist” or, from new presidential candidates; “well, there are issues and we have to be innovative”. Such statements are absurd! They are playing a game of self-interest ($$$/VOTES); SELF INTEREST [ 10 ] – CITIZENS of AMERICA [ 0 ].
One does not have to be a scientist to easily recognize that man-made climate change is a gross misconception of the truth! The following are a few facts that immediately raise red flags in one’s mind:
Red flag #1 > As we all know, our planet has experienced climate changes for billions of years, period!! This statement from the documented history of the climate changes on our planet, on its own merit, could have stopped a runaway train wreck that has perpetuated our country into inefficient / unreliable use of renewable energy!
Red flag #2 > Why have we not ever, had open forums or debates with our top scientists to settle and/or identify the real causes of climate change without any vengeance to those in dissent of man-made climate change?
Red flag#3 > Selling vapor. Q- What is a carbon credit? A- I can offset my carbon foot print by purchasing carbon credits and just keep on polluting the same or even more. Now that will save our planet from that evil toxic C02. The activists say that was just to force us into compliance. On the contrary, Obama’s EPA is taking care of that and we have no choice in the matter!!
Even with the closure of the Chicago Climate Exchange in December 31, 2010, it still is not the end, as the CCX’s companion institutions will keep extracting tax dollars with continued pressures from the UN and Intergovernmental Panel on Climate Change (IPCC).
Scientists now know and have identified the causes of our earth’s climatic cycles. It is the “Sun” as it has been forever. “John L Casey, former NASA scientist” and others have researched and documented the solar flares and sun spots as they increased and decreased thus creating warmer and colder cycles.
While the ink battles of climate change, proponents vs opponents rages on about manipulation of data etc., the real reasons are emerging, as many scientists are advancing to restore the credibility of science itself. Climate change is only an integral part of extracting billions of tax dollars for funding, while the real core is to transform our country politically!
Former Harvard Physicist, Dr. Lubos Molt of the Czech Republic stated: The actual goal of climatism is to liquidate democracy, freedom and the prosperity of the world!
The following are excerpts from statements of members at a previous UN Climate Summit at Rio de Janeiro, Brazil:
> Maurice Strong, who organized first UN Climate Summit; The only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?
> Timothy Wirth, (D-CO), Then Clinton-Gore administration as Undersecretary of the State for global issues; We have got to ride the global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic policy. Wirth now is in charge of the UN foundation which lobbies for hundreds of billions of U.S. taxpayer dollars to give to underdeveloped countries for climate change.
> Christine Stewart, former Canadian Minister of the Environment; No matter if the science of global warming is all phony, climate change[provides] the opportunity to bring about social justice and equality in the world.
From the aforementioned one can easily assimilate the statements as; “redistribution of wealth”, commonly known as socialism.
The next Climate Change Conference will be held in Paris, France Nov. 30 to Dec. 11, 2015. The agenda subjects will of course, concentrate on climate change for the sake of transparency, etc. in order to mask the real “grand scheme” of International carbon trading. The scheme is comprised of a legal system that will strongly bind all participants, to carbon trading practices which will hold monetary pricing values by very complex, sophisticated mathematical formulas, that will determine how much will be paid, by developed countries to emerging countries.
(simple example: a developed country has 2000 fossil fuel energy plants and an emerging country only has 200. The developed country will pay large sums of money, called carbon taxes to emerging or poor countries to balance the carbon emissions). (and there is that redistribution of wealth again), even on a larger scale than, Obama’s. However, he will play a very major part in the granddaddy of all deceptive schemes as he is preparing, with his recent Alaskan visit and pushing his climate gate agenda while extracting more funds from the U.S. taxpayers.
The worst is yet to come as our government and the news media remains silent about renewable energy that will destroy the reliable energy infrastructure in our entire nation! (note- our manufacturing industries, by the thousands, are using electrical load shedding, voluntary programs, during peak demands on our grid systems in order to avoid massive blackouts, due to the EPA stopping construction of fossil fuel generation units).
There is yet, one more slap in the face to “We the People,” as if the aforementioned were not enough, from our silent news media and our apathetic congress “that has said absolutely nothing about the following”: (the silence is deafening)
This is where the rubber meets the road”! First, one has to consider that the manufacturing of land has ceased to exist billions of years ago. Solar farms (conservatively) use 6 acres of land per megawatt of solar energy. Second, one also has to consider that these solar farms are being built on “public lands”. The majority of public lands are held in trust for the American people by the federal government and managed by the Bureau of Land Management. (BLM.) Third, A BLM Fact Sheet on Renewable Energy: Solar- Updated May, 2015 has opened programs for solar energy farms (on our, We the People) public lands. The total projects approved will be sited for approximately nineteen million acres. That is approximately 29,000 square miles of our land. That is almost the entire area of six of our American states!!! Only one half of America’s daily demand of electricity would require the use of 55,000 square miles, if converted to renewable energy! Is the hoax of climate change still no big deal? I think not!
John Kerry made this statement on the national news; we must continue the battle on climate change and what if we are wrong, what have we got to lose? Mr. Kerry, that is the most asinine statement I have ever heard from another human being in my entire life! What have we got to lose Mr. Kerry? A stronger economy, our public lands, our beautiful landscapes, future ability to sustain agriculture for an ever increasing population, room for future industrial/ economic development, lower energy costs for private and industrial entities, the use of our tax dollars for research of curing cancer and other diseases that plague the world, the ability to become an energy independent nation, electrical energy that is 60-75% efficient, government agencies that work for the people and not against the people, the trust we once had in all of our sciences, our constitutional values, instilling the importance of honesty, without greed and corruption and many more to extensive to list!
The next waves of extracting our tax dollars is for the storage of power as solar is only 25% efficient and autonomous electric vehicles! Excerpts from an article on Germany states; As Germany is in favor of solar and wind, the intermittent power from these renewables, are causing havoc in terms of blackouts, weakening voltage and causing damage to industrial equipment. In addition electrical rates are at 34 cents a kilowatt ($/kwh) compared to U.S. rates of 12/kwh. They incur surcharges for using more renewable energy and the rates are about to increase 10% and 30 to 50% in the next ten years. Over 800,000 households are no longer able to afford their energy bills. Do we really want to join them??? America is not far behind!
Where would we be today without our fossil fuels? We would still be riding horses and reading by candlelight. After 150 years since the industrial revolution, we stand in awe of what we have accomplished. We are at the crossroads, of massive attempts of deception, to transform our nation’s governmental policies, structure and heritage. If the warnings from truth and knowledge are heeded, there is hope of yet, another 150 years of prosperity and freedom, as innovations from science will in time, prevail.
America must end its love affair with the United Nations. We have no need for the UN and other international organizations dictating and/or setting policies through our government. Our congress is managing very well, to screw it up totally on their own without any outside help!
It is very evident, that the citizens of America become adamant in demanding, that any regulations, which we adhere to as laws of the land, not be issued or made into law, by unelected officials from the many departments of the federal government. We must demand that our congresses are the only lawmakers, not the administrators of our cabinets within!
The Popes recent visit and his speech on climate change and helping the poor was compelling. It is certain that Obama was ecstatic with this boost for his agenda! However, if climate change is left unchecked, soon it will make no difference, as the money dries up and our nation will not be able to help theimpoverished! The Pope should have confined his speech to the war on anti-religion in our country and across the entire globe, as this is in his realm of judgment, expertise and is indeed a major issue far greater than the weather, for all Christens in the entire world, as Christianity is indeed, the ultimate building blocks of how we all began and why we still exist!
As billions of dollars are transferred to undeveloped countries, the citizens will never see one dime or even receive electricity which is essential for sanitation, eradicating many diseases, heating to stay warm, cooling, clean drinking water and for agriculture. The leaders (TYRANTS) of the underdeveloped countries, will be the only ones to continue to live within “redistribution of wealth” as they have for thousands of years and who will ever change that? Only leaders of wisdom can and they are yet to be found!!!
Millions of people today that have lived almost a century, have experienced climate changes and have actually witnessed the weather and have seen more severe droughts, heat waves, hurricanes, tornadoes and floods in the past, and they already know, that it’s just the weather as they are indeed immune to all of the lies. As scientists have stepped forward and identified the real causes of climate change, they simply put a scientific label on what many have already suspected as the truth.
The presidential debates on 9/16/2015, gave climate change about 15 seconds and not one had the courage to stand up and address these atrocities! And everyone remains silent!
As they stifle truth and knowledge,
The world becomes their playground – 9/23/15
Response to this comment by Raymond Richman, 9/26/2015:
Real Estate Taxation
Journal of Economic Literature:
Atlantic Economic Journal: