Hedgehog Party

Cato Sees Part of the Picture

Cato summarizes flat tax progress in Europe.  Then mistakenly concludes that it is a left/right issue.  It is really about equity, and the flat tax doesn't get there by itself.  But it is a large part of the solution.  Read some of the articles in the right column of this blog.

http://www.cato-at-liberty.org/2007/08/29/world-socialists-whine-about-flat-tax-revolution/

Progress report - Flat Tax in Eastern Europe

It looks like the flat tax continues to appeal to folks in Eastern Europe.  Note a couple of points in this article: 

"There's a common misconception that all forms of flat tax place undue burdens on the poor," said den Haan, a professor at the University of Amsterdam. "In many cases, only incomes above a certain threshold are taxed, which can make the system quite progressive," he added.

"Taxpayers [in Western European countries] also like the idea of exemptions and the feeling of getting money back from the government, den Haan said, adding that people can see how specific exemptions benefit them and don't want to lose those benefits." 

This last point is made clearly in The Rats are in the Cheese.  Politicians have addicted many voters to the tax code by loading it up with special benefits and deductions.  Now, when any tax reform is proposed, many taxpayers reject it out of hand, fearing they might lose their particular "tax goodie."  We need some 'taxpayer methadone' to help alleviate this addiction. 

Warren Buffett depends on the estate tax

Here's an interesting look at how Warren Buffett relied in part on the estate tax as he built his business empire and fortune.  It seems clear that at least some of his success would not have been possible without it. 

The reason for providing a link to this article is not to pick on Mr. Buffett.  Rather, it is to point out that the wealthy and well-connected can take advantage of the tax code's complexity in ways that normal people simply cannot.  If we had a tax code that could not be manipulated (and shaped) by these individuals, it would go a long way to restoring fairness and equity. 

http://www.humanevents.com/article.php?print=yes&id=15951

Response to the Bartlett Column

Neal Boortz, one of the principal Fair Tax supporters, responds to the anti-Fair Tax article by Bruce Bartlett.  This is a blog address...you may have to scroll down to find the comment.

http://boortz.com/nuze/200708/08272007.html#fairtax

Selective Taxation

David Cay Johnston continues his assault on the rich taxpayers.  Hedge shares the idea that the rich have advantges over the average taxpayer.  But the Hedgehog Tax is intended to end class warfare over taxes...not intensify it.  Focus on income taxes misses the point of tax reform...raise revenue fairly...encourage the hardworking and productive...end the corruption of the tax code.  Most of all, organize tax and spend so that voters can rationally vote on tax and spend.  Read the attached article, but take care about the conclusions you reach.

http://www.nytimes.com/2007/08/21/business/21tax.html?ei=5090&en=1f9f154a5d72668c&ex=1345348800&partner=rssuserland&emc=rss&pagewanted=print

Bartlett Slams Fair Tax

Bartlett points out many of the shortcomings of Fair Tax...not least the difficult voter psychology of gaining support for passage.  He also leaves out the potential strengths such as an improved balance of trade.

http://www.opinionjournal.com/extra/?id=110010523

Warren Buffett Gets a Tax Break

In a campaign stop, Warren Buffett revealed that he paid a 17.7% tax rate...less than the 30% rate that his assistant paid.  A closer reading of this article also reveals he has very little (relatively speaking) taxable income of any kind.  This is a typical circumstance for the very wealthy.   They don't create taxable income transactions...because they don't need the income.

http://www.washingtonpost.com/wp-dyn/content/article/2007/06/27/AR2007062700097.html

Bankers and Brokers!

These rats have been exploiting the easy money in the mortgage and derivative markets for several years.  And they learned to finesse the risk to the investment public.  Us fellow rats have been their chief enablers.  We urged our legislators to make loans easier for everybody.  We purchased second homes for speculation.  We became very smart investors...making lots of real and paper profits.  Now the bill has come due.

Rick Rule, a canny resource investment manager has a good quote.

“The brokers and investment bankers are increasingly ‘fee whores’ rather than gate keepers, and the level of professionalism among many of the large and small institutional investors would be laughable had it not become tragic.”

Our corrput and antequated tax system is also a big driver of this phenomenon.

Wonk

Fair Tax Notes

This article summarizes Fair Tax activity and names a number of backers.  The author writes from a point of view that is apparently opposed to the Fair Tax.  But he exposes the political weakness of the Fair Tax.  It does not garner the necessary "across the political spectrum" support needed for passage.

http://online.wsj.com/public/article/SB118756724732002330.html?mod=blog

Risk Free...Just for the Well-Connected

This article is a review of the latest Fed Bailout of the well connected rats.

These institutions should pay a price to the taxpayers...forking over equity a la the Chrysler bailout decades ago is a good idea.  Maybe they will reconsider their lending standards and employee compensation before they create the next debacle.

http://money.cnn.com/2007/08/17/commentary/sloan_enablers.fortune/index.htm?postversion=2007081709