Letter From America (About French Wealth Taxes)

France Shows That Taxing Wealth Has Devastating Consequences

Daniel Hannan

British Conservative MEP

Washington Examiner

January 5, 2015

I was living in Brussels when François Hollande, the President of France, introduced his 75 percent top rate tax in 2012. Immediately, my quartier began to fill with French exiles, who could commute to Paris in just over an hour. One of the few Belgians left in my street, a stern local matriarch, stopped me as I left the house one morning. “You’re in politics, Monsieur le Député, maybe you can tell me something. What kind of hell must these poor souls be fleeing if they see Belgium as a tax haven?”

Three years on, President Hollande is shame-facedly scrapping the 75 percent rate, having forcibly re-learned an ancient truth: Wealth taxes don’t redistribute wealth; they redistribute people. Thousands of well-off Frenchmen made the easy journey north, including the country’s richest man, Bernard Arnault.
Others decided that if you’re going to flee punitive taxation, you can do better than the land of moules frites and speculoos biscuits. Gérard Depardieu, France’s greatest actor — in every sense — went to Russia, where, whatever their other problems, they have a flat rate tax on income of 13 percent (9 percent for dividends).

Not since the expulsion of France’s Protestants in 1685 has there been such an exodus of entrepreneurs to the Anglosphere; and this wave, like that one, has been a transfusion of talent, leaving the English-speaking world more energetic and France more anemic.

Hollande’s tax, levied on incomes above one million euros, has been a miserable failure. Over its lifespan, it raised around $500 million, a tiny fraction of the original projections. Why? Well, the Paris bureaucrats who made those projections overlooked something rather important. Rich people don’t sit around waiting to be taxed. They have all sorts of ways of beating the system, not necessarily involving accountants. The two most straightforward forms of legal tax avoidance are earlier retirement and emigration, and wealthy Frenchmen have made ample use of both.

Parts of Kensington, an expensive district of West London, are now largely Francophone. London is, on some measures, the sixth-largest French city in the world. It pullulates with French financiers and French footballers and French management consultants and French pastry chefs. They have just two things in common. First, all had the get-up-and-go needed to start a career in a new language and a new country. Second, all are paying their taxes to the British Exchequer instead of the French treasury. Merci, mes amis.

Not since the expulsion of France’s Protestants in 1685 has there been such an exodus of entrepreneurs to the Anglosphere; and this wave, like that one, has been a transfusion of talent, leaving the English-speaking world more energetic and France more anemic. Nicolas Sarkozy, well understanding where the relatively small free-market-minded section of his population could be found, launched his presidential election campaign in London.

When rich people emigrate, they leave others to pick up their share of the tax bill. Even in 1685, the loss of revenue hit the French state badly, setting it up for a series of defeats in the wars with the English-speaking peoples that were to follow over the next century. These days, friendlier tax jurisdictions are a Gulfstream flight away, and financiers can often open their businesses abroad simply by opening their laptops.

A lot of politicians don’t want to hear this. Instead of accepting international competition, they legislate against it — by, for example, imposing international rules on tax harmonization. The new president of the European Commission, Jean-Claude Juncker, has campaigned all his life for European fiscal integration, including financial transaction taxes, debt pooling and a common EU finance ministry. Amusingly, though, it now emerges that while he was mouthing these platitudes, he was, as prime minister of Luxembourg, wooing multi-nationals with secret tax exemptions.

If there is an American who understands the tax code in its entirety, I have yet to meet him.

The best way to maximize your tax revenue, though, involves neither harmonization nor secrecy. On the contrary, it involves lower, flatter, simpler taxes.  The complexity of a tax system is every bit as damaging to competitiveness as the overall tax rate, yet we take it almost for granted. If there is an American who understands the tax code in its entirety, I have yet to meet him.

The super-rich, who can afford ingenious tax advisers and high upfront fees, turn complexity to their advantage, sheltering their assets in various pockets unintentionally created by government schemes. Again, the rest of us then have to cough up to cover their portion.

One way to think of the tax system is as a massive Swiss cheese. Each hole is an exemption created by a legislator in pursuit of good headlines — a hole waiting to be filled by the clever accountants.  If we were to compress the cheese, collapsing all the holes, its overall height would fall substantially. In other words, scrap all the special incentives, rebates and waivers, and you can cut the basic rate. Time spent on legal avoidance would instead be spent productively. Revenues would increase. It works every time.

Between 1980 and 2007, the US cut taxes at all income levels. Result? The wealthiest one percent — those chaps that the Occupy crowd keeps banging on about — went from paying 19.5 percent of all taxes to 40 percent. In Britain, after the top rate of income tax was lowered in stages from an eye-watering 98 percent in the late 1970s to 40 percent by 1988, the share of income tax collected from the wealthiest percentile rose from 14 to 27 percent.

In other words, flat taxes don’t just make avoidance pointless; they don’t just boost the economy; they also ensure that the rich pay more. If President Hollande were to embrace them, he might edge even France out of its nosedive.

Dan Hannan is a British Conservative member of the European Parliament. 

Following An Inglorious Example

Not a Slow Learner

We confess we could not resist the belly-laughter when we came across a piece in the NZ Herald about Australia’s version of the Gunpowder Plot.  Islamic cadres have apparently been plotting to attack the heart of Australia, which, as every Australian knows, is Canberra, the home of the federal gummint. 

Congratulations and thanks need to go to the Australian authorities, the espionage agencies, and the police for sniffing out the plots in advance and being able to take preventative action.  It must be a relief to every Aussie–Australian Islamists excepted.

Security at Parliament House in Canberra is being ramped up amid reports of a planned terrorist attack.  Senior intelligence sources confirmed to News Corp Australia that spy, police and counter-terrorism agencies had intercepted information regarding a possible attack on Parliament House, and there are concerns the prime minister and other senior officials could be targeted.  The news report said there were fears the building had been “scoped out” for a “Mumbai-style” attack using automatic weapons.

But the article went on to consider more general issues.  Apparently, Western governments are perplexed that they can no-longer effectively curtail the ability of ISIS to raise money to fund its operations.  Al Qaeda relied upon donations.  Once donors had been identified, it was relatively easy for Western governments to target them and neutralise them.  But ISIS represents a very different fund-raising strategy.

Western governments are facing an uphill battle trying to squeeze the finances of Islamic State jihadists, as the extremists operate like a “mafia” in territory under their control in Syria and Iraq, experts say.  Unlike the al-Qaeda network, which has relied almost exclusively on private donations, Isis holds a large area in Syria and Iraq that allows it to generate cash from extortion, kidnapping and smuggling of both oil and antiquities, analysts say. As a result, the group’s funding presents a much more difficult target for Western sanctions compared to al-Qaeda’s finances, said Evan Jendruck, an analyst at IHS Jane’s consultancy.

Even conservative estimates portray Isis as the world’s richest extremist organisation, raking in at least a million dollars a day.  The group is “merciless in shaking down local businesses for cash and routinely forces drivers on roads under its control to pay a tax”, a US intelligence official said. “Its cash-raising activities resemble those of a mafia-like organisation.”

Sounds remarkably like the activities of a modern, rapacious Western government, taxing the life-blood out of its citizens to fund its nefarious predatory activities.  Whatever ISIS might be, it is certainly not a slow learner.  Doubtless many in the West will see the more sophisticated fiscal activities of ISIS as a sign it is becoming more Westernised in its ideology and outlook.

Douglas Wilson’s Letter From Moscow

Sure. Let’s Call It a Contribution.

Friday, September 12, 2014

Douglas Wilson

Blog and Mablog

So I have distinguished the payment of taxes that are owed, and the payment of taxes that is rendered out of a principled prudence. In the former instance, paying taxes is a matter of conscience and in the latter it is a matter of intelligence. When I give my wallet to the mugger, I am not granting him authority over my wallet, and still less am I giving him authority over any future wallets that I might come to possess. I am simply doing a cost benefit analysis, and his gun trumps my five dollars.

Now some want to argue that all taxes whatever are illegitimate. While this makes life simple on the conscience front, making every decision of whether to pay taxes or not a prudential one, the simplicity is, ironically, too easy. A good example of such an approach to the argument can be found here. While Joel and I would agree on a great deal on this general subject, we do differ at this particular point. It is an important point, so let me deal with it briefly.

In my argument for this position, I cited Romans 13, which tells us to pay taxes to those to whom taxes are due, and Joel reads this as simply as entirely circumstantial and prudential, telling us to pay taxes to whom taxes are — and please note the scare quotes — “due.” Since the one levying taxes always has the power to coerce, this reading is always possible and sometimes likely. He has the gun, so not only do I give him the five dollars, I also go along with calling it “my contribution.”

So the real test would be those instances when a godly ruler requires taxes (or the equivalent) be paid. Remember that I have no problem granting that the power to tax is routinely abused. All we are looking for are cases where it is not abused, establishing that as a possibility.

Take Joseph in Egypt (Gen. 47:13-26). He was a godly ruler who saved the lives of the people, but at the same time he was not exactly an instrument who introduced a libertarian paradise. To head off commenters, I am aware that Joseph presents a problem to my ten percent rule outlined earlier, which I hope to get to. The issue here is whether there were any level of legitimate taxation occurring. I am not here talking about Joseph selling the grain to the Egyptians in exchange for their land, but rather to the collection of a fifth of the harvest in the plentiful years (Gen. 41:34).

Here is another example.

“And when they were come to Capernaum, they that received tribute money came to Peter, and said, Doth not your master pay tribute? He saith, Yes. And when he was come into the house, Jesus prevented him, saying, What thinkest thou, Simon? of whom do the kings of the earth take custom or tribute? of their own children, or of strangers? Peter saith unto him, Of strangers. Jesus saith unto him, Then are the children free. Notwithstanding, lest we should offend them, go thou to the sea, and cast an hook, and take up the fish that first cometh up; and when thou hast opened his mouth, thou shalt find a piece of money: that take, and give unto them for me and thee” (Matt. 17:24–27).

Now Jesus is making an implicit distinction here between tribute money illegitimately collected (where most of our discussion centers), but He is also assuming that the collection of tribute from strangers is legitimate. He has Peter pay the tribute for prudential reasons (so as to not give offense, distracting them from their main mission), even though the tribute is not owed by them because they are “children.” But what happens to the Lord’s argument if tribute were illegitimate when collected from strangers also? His argument would simply collapse. This means there is a type of taxation that would be legitimate to levy, and therefore which would create a moral obligation to pay.

If there is such a thing as lawful taxation (as I believe) and if there is something which goes by the name of taxation which is rank theft (as I also believe), we have to do the hard work of determining where the line between the two categories might be. We also have to determine who makes the call, and what standard they must appeal to.

Douglas Wilson’s Letter From Moscow

What Became of the Witty Pirate Then

Douglas Wilson

Blog and Mablog

September 6, 2014

Because taxes can be a form of theft, and because taxes need not be theft at all, a reasonable question to ask is how we can tell the difference.

The baseline, the starting point, is that property belongs to the individual. He is the one that Thou shalt not steal applies to. He is the one with the house, the vineyard, the lawn mower, the wallet, the smart phone, and so on. Whenever the Bible talks about property, it always talks about it two categories. The first is God’s absolute ownership of all things (Dt. 10:14), and the second is the relative ownership that you and your neighbor enjoy (Dt. 8:18). When we talk about the state possessing things, this possession is derivative. The state extracts value from the taxpayer, the appointed steward of God’s wealth, and this extraction can also be divided into two categories. This value can be extracted lawfully, or the state can play the role of the thief. So how are we to tell the difference?

We know that taxation can be done right because the Bible talks about paying taxes to the one to whom it is due (Rom. 13:7). These are taxes that we owe, and are not to be considered theft at all. We should no more chafe at paying our legitimate taxes than we do paying our bill for satellite television. There are taxes we do not owe, but ought to pay anyway, having more important things to do. This is the meaning of what Jesus teaches Peter — we don’t owe it, but go ahead and pay it (Matt. 17:24-27). And then there are other circumstances where the illegitimate taxes have become so onerous, and the justification for them so outlandish, and tax courts have beclowned themselves to such an extent, that the Lord raises up a left-handed means for the children of Israel to pay their tribute (Judges 3:15-19).

Now I am not issuing any kind of call to action, other than the action of understanding what the heck occurreth. It is long past time for us to be sons of Issachar, understanding the times and knowing what Israel should do (1 Chron. 12:32). In our circumstance, deliverance would be ours if most of us came to the simple recognition that our ruling elites are governing unlawfully. They are illegitimate.

So this brings us back to the question raised at the top. How do we tell what kind of taxation is challenging the law of God as opposed to the taxation that is in line with the law of God? There are three basic criteria.

First, the level of taxation must not rival God (1 Sam. 8:15). God claims a tithe, and if that is all God needs, and if God is a jealous God, then we ought to see any attempt on the part of civil government to go past ten percent as an aspiration to Deity. This is the perennial temptation for fallen man (Gen. 3:5), particularly for rulers of all kinds (Is. 14:13), and so that temptation must not be funded. Cutting off the government at 9% is like refusing a third Scotch to a wobbly tavern-goer at 1 am. Shouldn’t be controversial.

Second, the taxes need to be levied, in the main, so that the rulers can perform the functions that God requires them to perform. Coercion is a big deal, and so the government must only be allowed to exercise it when they have express warrant for what they are doing. If they have express warrant to hunt down murderers, and they do, then they have express warrant to collect money to pay for the men to do this. They are God’s deacon of justice, and the deacon of justice needs to be paid just like the rest of us (Rom. 13:4). They are not allowed to collect fees to pay for activities that are prohibited to them. If they are not allowed to do it in the first place, they are not allowed to tax us to pay for it. To do so would be theft.

Third, the taxes must be lawful and in accordance with the established constitution of the people. Arbitary and capricious government, when the constitution outlaws arbitrary and capricous government is hypocritical. It sits in judgment upon us in points of law, and contrary to the law commands us to be struck. Since I have no particular person in mind, I may feel free to echo Paul’s sentiment about this without overstepping any personal boundaries — the men who do this are a whited wall (Acts 23:3).

If a tax bill originates in the Senate, nobody needs to pay it. If a resident of North Dakota receives a tax bill from the state of Maryland, he may feel free to round file it, and to do so with a serene conscience. If a man is taxed by a body in which he has no representation, then it is an illegal tax, and it doesn’t really matter how many judges or congressmen were complicit in the illegality.

So then, in summary, taxes are theft when the government is aspiring to be god in the lives of its subjects, when the government is refusing to do what the real God requires of them and is doing something else instead, usually something very expensive, and when the government is not obeying its own legitimate processes for levying taxes.

Last point. Note that I am not arguing for any action other than the simple action of recognition. Our government is a thief, but the government is a thief that cares deeply and profoundly about respectability. They not only want to pillage with immunity, they want to do it with legitimacy. Sorry. It is not as though there is a certain number of pirate ships that magically reach the quorum of a nation state.

When you get lots of pirate ships, what do you have? This is not a trick question. You have a pirate fleet. You have lots of pirates.

Augustine records a time when a pirate was captured and brought before Alexander the Great. The pirate asked why he was styled a pirate for doing to ships what Alexander was doing to countries, and, despite this, Alexander was styled a great emperor.

History is silent as to what became of the witty pirate then, but his question did have a certain resonance. Secular man, with covetous loins, hands and brains, has not yet been able to answer it. There is,  however, a stiff fine for raising it in inappropriate ways.

Roiling in the Belly

Labour’s Capital Gains Tax To Strike the Elderly–Hard

New Zealand is a socialist country without socialism’s formal doctrines.  Its fundamental unstated doctrine, however, is the omni-competence of the state to be as god to the people.  All political parties reflect this basic commitment to one degree or other.  Consequently, each can be categorized as to whether they are more or less Baalist.

The one saving grace–for which we can claim no merit whatsoever–is that we are a small nation.  This necessarily limits the attendant evils of statism.  News about rorts, corruption, exorbitant taxes, government overreach, and state incompetence tends to get disseminated quickly and the electorate reacts. National politicians are just a phone call or e-mail away.  De Tocqueville was right when he observed that small states are “naturally” protected from the creeping evils of soft-despotism.   But the spiritual and philosophical principles at play remain evil, nonetheless.

In this vein we do not doubt that the latest proposal by the Labour Party not to tax capital gains on residential houses until the owners die is going to be an absolute clanger with the electorate.
  Labour, of course, is still a hidebound cloth-cap socialist party, dominated by state subsidised and protected trade unions.  Thus, redistribution of private property to its favoured groups is its categorical imperative.  Tax-and-spend-and-borrow is its mode.  Labour does not just disregard the divine commandments that forbid stealing and coveting the property of others, it has never heard of them. 

But the home is still one’s castle.  Now Labour plans to tax the capital gain on a residential house when its owners die, according to Kiwiblog.  We expect this will roil the bowels of the electorate like few other things would. 

Something that many people have not realised is that the so called exemption on the family home for Labour’s Capital Gains Tax is temporary. Almost all family homes will be taxed on their capital gain, when you die, if not placed on the market immediately.

Most people now die in their late 70s or 80s. Their kids will tend to be in their 40s or 50s and hence have homes of their own. So when you die, it is very unlikely a child will move into the home. They already have one. Plus few people want to live in the home their deceased parents lived in. So the home gets sold. And guess what? Labour will tax any capital gain on that sale.

It’s almost a de facto death duty – you get taxed for dying!

UPDATE: You can avoid the death duty if you decide to sell the home with 30 days of your parents dying. Charming. At a time you are mourning, you will be forced into rushing the home onto the market to avoid the death duty.

The pernicious effects are immediately apparent.  Many elderly folk sell their homes to fund their purchases in retirement villages.  Many are buying apartments, cottages, and town-houses in such complexes in exchange for graduated care.  Now, when when they make that transaction or they die, the government will tax the capital gain, leaving less money for the retirement village complexes and the heirs.  The upshot–it will be far more expensive to access retirement care.  Striking at the elderly and the most vulnerable is likely to cause the electorate to burn with anger.

Secondly, the policy will afflict the family.  The death of elderly parents is often a difficult time.  Sorting out their affairs and working through their effects often takes a great deal of discussion and time for the family.  Being rushed to sell the family home will be the worst thing imaginable at a very difficult time.

Thirdly, the market will know all about forced sales of homes of the elderly.  It will demand a lower price because of the state imposed time limit.  Often times the family home is the only asset parents have left to pass on to their children and grandchildren.  Now the Labour Party proposes robbing them.  We believe this will cause anger and resentment like few other things would.

No wonder the disingenuous cloth-cap socialists have been really quiet about that particular piece of fine print in their capital gains tax policy.      

Burger King’s Smart Move

The Capital Express Is On the Move

“Progressive”  ideology is generally anti-business, anti-profit , pro-taxes and pro-redistribution of property.   But in our modern world, “time” has moved on; capital and labour are now more global and international than ever before. Because trade is increasingly global, pay rates in China affect trading conditions in New Zealand.  Capital and labour are more mobile than ever and can move relatively freely around the world. 

In the face of this growing internationalism (theoretically favoured by progressive ideology) progressives have actually become more and more regressive, wanting to drive national economies back to a more autarkic past with higher taxes and more government interventions to control wages, prices, and business activity.  One manifestation of this retrogression is the complaint of governments that “business” is evading tax by setting up in lower foreign tax jurisdictions, channelling their profits through the lower tax regime and maximising returns thereby to their shareholders.  President Obama has moaned about this tax leakage in terms which suggest he regards the practice as unpatriotic, if not corrupt.  Left-wing politicians in New Zealand have chanted the same mantra with respect to multi-nationals doing business in New Zealand.

Naturally the most easy and straightforward solution to a shrinking corporate tax base is to lower corporate tax rates.  If taxes are lower, businesses are encouraged to stay put; international businesses are encouraged to set up shop if the tax rate is competitive.  But since progressive ideology calls for an ever vaster government, lowering taxes is a hard trick to perform.   Meanwhile, business is driven by economic rationality and the globalisation of business requires that one must remain competitive world-wide or eventually be driven under.

The most recent high-profile example is international conglomerate, Burger King which is moving its business headquarters out of the United States to Canada, where its tax burden will be less.
  The technique is known as “tax inversion” and involves a US company buying a company in a lower tax jurisdiction, and then moving its corporate headquarters to the new company, thus paying lower taxes.  This, from Breitbart:

Burger King says it struck a deal to buy Tim Hortons Inc. for about $11 billion, a move that would give the fast-food company a stronger foothold in the coffee and breakfast market. The corporate headquarters of the new company will be in Canada, which stands to help lower Burger King’s taxes. Such tax inversions have been criticized by President Barack Obama and Congress because they mean a loss of tax revenue for the U.S. government. Burger King and Tim Hortons said the chains will continue to be run independently and that Burger King will still operate out of Miami.

This has caused a brouhaha amongst the progressive chattering classes, with some talking heads proclaiming that they will never buy another hamburger from Burger King because they are “cheating” on their taxes.  The President himself has sniffed, “You know some people are calling these companies ‘corporate deserters.’” Warren Buffett, one of the world’s most successful investors and progressive Democratic Party stalwart, has said he wants to pay more taxes, and believes that tax inversion is immoral.  Nevertheless, Buffett financed the Burger King deal, which reveals just how compelling the business case must be.

News of Buffett’s investment in Burger King has sparked American ire and charges of hypocrisy, as the “Oracle of Omaha” was a strong backer of President Barack Obama and a vocal critic blasting citizens for not paying their “fair share” in taxes.

Business is now global.  Capital is mobile.  The best defence for the tax base of the state is to ensure that  tax rates are competitive with those in other countries.  The best defence against the problem of mobile capital eroding the tax base is to have lower corporate taxes than other countries.  Then capital will migrate into the country and the overall tax base will rise.  But such a rational move is likely impossible when progressive ideology is in charge.  Smaller government, requiring less tax to fund it, would be Apocalypse Now to the Progressive/regressive mindset. 

Spitballing

Serious For All Of Twenty-Four Hours

Apparently Labour revenue guru, David Clark was just making things up as he went along when he pronounced that a Labour government would ban the country from using Facebook, unless it paid more tax in New Zealand.  It took only twenty-four hours for the Labour leader to put out that particular fire.  Labour and Cunliffe (who did not rule it out for twenty-four hours) and Clark now have more scorched earth on their collective face than burns from a P-lab explosion. 

This from 3News:

Banning Facebook was an extreme suggestion from Labour Party MP David Clark – and it took party leader David Cunliffe just 24 hours to shut it down.  Mr Cunliffe has now ruled it out completely, but ridicule from the Government still came hard and fast.

But here is the point.  Banning Facebook was not an extreme suggestion, at least not to the statist mindset of the New Zealand’s left.  Impractical and impossible to implement to be sure.  Covered with envious bile, naturally.  But the lust to control the lives of citizens is as natural and reasonable to the statist mindset as breathing the fecund air of their back room cabals. 

Here is another example of the genre–this time from David Parker, Labour’s shadow finance minister, via Hansard:

Hon DAVID PARKER: … Neither do we think it is fair that some of the multinationals plunder the New Zealand economy—like Google, like Apple, like Facebook—take hundreds of millions of dollars out of the New Zealand economy, compete with New Zealand – based companies, and pay virtually no tax. 

Note the emotive rubbish here.  We poor sooks in New Zealand are sitting like primitive idiots, powerless, whilst Google, et al.  plunder us.  That’s theft with menace, folks.  Look at all those poor countrymen whipped into line outside the Apple shop, being forced to by smart phones, lest Apple shoot their mothers and children. 

And these companies are said to be actually competing with New Zealand.  Parker, who hails from the deep, deep South must know of a secret, hillbilly silicon valley high up somewhere up in the Mackenzie Basin, bustling with high tech companies competing with Google and Apple. To be sure, no-one north of the Bombay Hill has ever heard of it.  But there you go. 

Mr Parker goes on to tell us that big international money is not going to impress him.  This chap is not for turning.

We in the Labour Party are willing to move on that, but the Government is not because once again it is preferring the interests of the wealthy. It is not willing to take on the multinationals, despite the fact that there is a glaring unfairness there, that they should pay their fair share of tax too, which they do not, and that there are mechanisms that could be used.

Oh, let’s go whole hog.  What about Toyota and Mitsubishi and Hyundai?  They take mega-millions out of New Zealand (that is, they sell lots of vehicles here) and they are not paying nearly enough tax.  But here is an idea, Mr Parker.  Why not slap tariffs on these goods and services on all these furrin companies?  That will do the trick.  We are sure that will be one of the “mechanisms” that you have in mind.

But here the deceit and the legerdemain becomes evident.  This harrumping about filthy rich, multi-national companies might play to the visceral ruminations of socialists.  But what is really under attack here is the ordinary kiwi, the despised rube, who will end up paying more for goods and services, and thereby forced into a lower standard of living, as a result of Labour’s ante-diluvian proposals.  Welcome to the world of visceral ignorant socialist envy, feeding off the lives of oppressed, downtrodden citizens.  The real workers’ paradise of the socialist.

Hat Tip: Kiwiblog

Bye, Bye Facebook

The Big Bad Ban is Coming

The ban is coming back.  It is a long favoured tool of centralist authoritarian governments; it was well favoured by the previous Labour regime.  The most recent Labour leader, Helen Clark tried to ban incandescent light bulbs, long showers, and human kindness.  The present aspiring Labour regime is promising to bring out the big ban all over again.  But bans associated with global warming are so passe.  Now the ban is going to go after the really big fish.  Labour is talking about banning the internet.

Normally one associates such draconian controls with totalitarian countries, such as China, North Korea, or Saudi Arabia.  Labour wants New Zealand to join these esteemed ranks.  This, from 3News:

The Labour Party has put forward a possible solution to force multi-national corporations to pay more tax – ban them from the internet.  It says the Government should first talk with companies like Facebook, but if that doesn’t work it is important to have a backup, something Labour is describing as a credible threat. Facebook is the world’s largest social network by far, but pays little tax here in New Zealand.  “The Government should always have in its back pocket the ability to ban websites,” says Labour revenue spokesman David Clark.

Let’s unpack this a bit.  Labour is claiming that banning websites should be a stock-in-trade power of government.  It should keep such power in its back pocket all the time.  Then, let’s consider Facebook (since it is named).  Millions of kiwis have Facebook accounts.  Since Facebook is an international conglomeration, what is really being proposed is that kiwis will have their Facebook accounts blocked by the government, not that Facebook will be banned from the internet.   New Zealanders will be banned from using Facebook. 

That would not be an attack upon Facebook; it would be an attack upon the liberties of New Zealand citizens. 

Secondly, Labour’s revenue spokesman, David Clark has a justification for such drastic totalitarian controls and abuse of power: he says paedophile sites are banned regularly:

“Paedophile websites are banned the world around,” says Mr Clark.

So, companies engaged in lawful business are guilty of crimes equivalent to paedophilia.  What subterranean world do these people inhabit, one wonders.  But no paying enough tax–that’s a crime is it not.  Well, if the government says so–but it has to say so subject to law. There are tax laws in New Zealand last time we checked.  There are also international tax treaties where nations agree how income earned across borders shall be treated and taxed. 

So either Facebook is subjected to such treaties, or it is not.  If not, then it can be legally prosecuted by any number of governments in countries where it operates.  If it is subject to such international tax agreements and it is still not paying “enough” then ordinarily countries will sit down and attempt to renegotiate the respective tax treaties.  That’s the lawful way things are done. 

Why the big brouhaha over Faceboo?.  Well financial guru, David Clark says that Facebook “made” $790,000 in New Zealand in 2012.  But, after expenses it made a loss.  So it only paid $28,000 in tax.  And the problem is . . . ?  Can our dear Mr Clark be confusing revenue and gross income with profit.  Is he really suggesting that New Zealand companies should be made to pay tax even when they are losing money and making no profits?  That’s what he is implying.  For if the principle be just with respect to Facebook, it must be equally just for the corner dairy.

Naturally, Labour’s political opponents wound up their mockery meters at this startling disemboguement from Labour’s revenue spokesman, who by any measure must be a few sandwiches short of a picnic:

But Finance Minister Bill English says “frankly, that sounds nuts”.

“Fine print, he’s going to close down Facebook,” says Prime Minister John Key. “That’ll be interesting.”

Indeed. 

Of course this silly notion will be swatted away by lunchtime.  But it reveals a familiar mindset in Labour–the same mindset that led them to want to ban sugar, fatty foods, tobacco, light bulbs and bad breath.  Americans call it Bloombergism.  We call it Clarkism.  If Labour is elected it will soon show that it has plans–for all of us–and its most favoured tool will be “the ban”. 

Letter From America (About Wisconsin’s "Earth Shattering" News)

The ‘Earth-Shattering’ News Rush Limbaugh Says the Media Ignored, but You Need to Know

Jan. 24, 2014 4:45pm 
Jason Howerton
TheBlaze

Conservative radio host Rush Limbaugh expressed disgust, though not shock, that the mainstream media ignored an “earth-shattering” story out of Wisconsin that “should have caused a political earthquake.”

The state of Wisconsin’s unemployment rate is “rapidly falling” and the government’s budget ended the year with a $912 million surplus, Limbaugh explained. He says the dramatic turnaround is due in large part to the conservative policies of Gov. Scott Walker.

What’s even more amazing, he continued, is the fact that Walker is going to “rebate the money in the form of tax cuts to the people, who he said own the money.”

Limbaugh says the news is “earth-shattering” because, in one of the bluest states, Walker was targeted for removal twice but continued to implement conservative policies that he was confident would help his state — and his strategy appears to be working.

“They did everything they could to gin up hate, anger, tried to destroy his reputation, his career, and his life,” he said. “He hung in there. The state of Wisconsin instituted his policy reforms, de-emphasizing the role of unions in the state.”

Wisconsin Gov. Scott Walker, a member of the executive committee of the National Governors Association, speaks to the media after meeting with President Barack Obama at the White House Tuesday, Jan. 14, 2014, in Washington. (AP Photo/Jacquelyn Martin)

“He’s going to cut income taxes and property taxes, and he made the point that it’s not just a gimmick of budgeting or accounting. It’s the result of serious, significant policy changes,” Limbaugh argued.

“Now, folks, what I just told you was not reported once anywhere in what you would consider mainstream media. It was not reported on one cable network, much less all of them. It was not reported in the New York Times, the Washington Post, or the LA Times,” he added. “It was reported in Wisconsin. There was an AP story on it, maybe some local papers picked it up, but just as a filler.”

“And to me, for us as conservatives, Wisconsin and Governor Walker, I mean, everything that we want to happen, happened there,” the radio host concluded.

Letter From America (About Accountants)

The Autocrat Accountants

Once government is ensnared in every aspect of life, a bureaucracy grows increasingly capricious.

By Mark Steyn

National Review Online
May 17, 2013 5:00 PM

Speaking at Ohio State University earlier this month, Barack Obama urged students to pay no attention to those paranoid types who “incessantly warn of government as nothing more than some separate, sinister entity.” Oddly enough, in recent days the most compelling testimony for this view of government has come from the president himself, who insists with a straight face that he had no idea that the Internal Revenue Service had spent two years targeting his political enemies until he “learned about it from the same news reports that I think most people learned about this.” Like you, all he knows is what he reads in the papers. 

Which is odd, because his Justice Department is bugging those same papers, so you’d think he’d at least get a bit of a heads-up.
But no doubt the fact that he’s wiretapping the Associated Press was also entirely unknown to him until he read about it in the Associated Press. There is a “president of the United States” and a “government of the United States,” but, despite a certain superficial similarity in their names, they are entirely unrelated, like Beyoncé Knowles and Admiral Sir Charles Knowles. One golfs, reads the prompter, parties with Jay-Z, and guests on the Pimp with a Limp show, and the other audits you, bugs your telephone line, and leaks your confidential tax records. But they’re two completely separate sinister entities. So it’s preposterous to describe Obama as Nixonian: Beyoncé wouldn’t have given Nixon the time of day.

If you believe this, there’s a shovel-ready infrastructure project in Brooklyn I’d like to sell you. In April last year, the Obama campaign identified by name eight Romney donors as “a group of wealthy individuals with less than reputable records. Quite a few have been on the wrong side of the law, others have made profits at the expense of so many Americans, and still others are donating to help ensure Romney puts beneficial policies in place for them.” That week, Kimberley Strassel began her Wall Street Journal column thus:

Try this thought experiment: You decide to donate money to Mitt Romney. You want change in the Oval Office, so you engage in your democratic right to send a check.
Several days later, President Barack Obama, the most powerful man on the planet, singles you out by name. . . . The message from the man who controls the Justice Department (which can indict you), the SEC (which can fine you), and the IRS (which can audit you), is clear: You made a mistake donating that money.

Miss Strassel wrote that on April 26, 2012. Five weeks later, one of the named individuals, Frank VanderSloot, was informed by the IRS that he and his wife were being audited. In July, he was told by the Department of Labor of an additional audit over the guest workers on his cattle ranch in Idaho. In September, he was notified that one of his other businesses was to be audited. Mr. VanderSloot, who had never previously been audited, attracted three in the four months after being publicly named by el Presidente. More to the point he attracted that triple audit even though Miss Strassel explicitly predicted in America’s biggest-selling newspaper that this was exactly what the Obama enforcers were going to do. The “separate, sinister entity” of the government of the United States went ahead anyway. What do they care? If some lippy broad in the papers won’t quit her yapping about it, they can always audit her, too — as they did to Miss Strassel’s sometime colleague Anne Hendershott, a sociology professor who got rather too interested in Obamacare and wrote about it in the Journal and various small Catholic publications. The IRS summoned Professor Hendershott to account for herself, and forbade her husband from accompanying her, even though they filed jointly. She ceased her political writing.

A year after he was named to the Obama Dishonor Roll, the feds have found nothing on Mr. VanderSloot, but they have caused him to rack up 80 grand in legal bills. This is what IRS defenders (of whom there are more than there ought to be) mean when they assure us that the system worked: Yes, some rich guy had to blow through the best part of six figures fending off the bureaucrats, but it’s not like his body was found in a trunk at the airport or anything, if you know what I mean, Kimmy baby. 

Mr. VanderSloot is big enough, just about, to see off the most powerful government on the planet. Most of those who’ve caught the eye of the IRS share nothing in common with him other than his political preferences. They’re nobodies — ordinary American citizens guilty of no crime except that of disagreeing with the ruling party. Yet they were asked, under “penalty of perjury,” to disclose the names of books they were reading and provide the names and addresses of relatives who might be planning to run for public office — a kind of pre-enemies list. Is that banana-republic enough for you yet? Not apparently for Juan Williams, fired from NPR for thought crime a couple of years ago, but who was nevertheless energetically defending the IRS exertions on Fox News on Thursday evening.

 Left-wing groups had their 501(c)(4) applications approved in weeks, right-wing groups were delayed for months and years and ordered to cough up everything from donor lists to Facebook posts, and those right-wing groups that were approved had their IRS files leaked to left-wing groups like ProPublica. The agency’s commissioner, a slippery weasel called Steven Miller, conceded before Congress that this was “horrible customer service” — which it was in the sense that your call is important to him and may be monitored by George Soros for quality control.

A civil “civil service” requires small government. Once government is ensnared in every aspect of life a bureaucracy grows increasingly capricious. The U.S. tax code ought to be an abomination to any free society, but the American people have become reconciled to it because of a complex web of so-called exemptions that massively empower the vast shadow state of the permanent bureaucracy. Under a simple tax system, your income is a legitimate tax issue. Under the IRS, everything is a legitimate tax issue: The books you read, the friends you recommend them to. There are no correct answers, only approved answers. Drew Ryun applied for permanent non-profit status for a group called “Media Trackers” in July 2011. Fifteen months later, he’d heard nothing. So he applied again under the eco-friendly name of “Greenhouse Solutions,” and was approved in three weeks.

The president and the IRS commissioner are unable to name any individual who took the decision to target only conservative groups. It just kinda sorta happened, and, once it had, it growed like Topsy. But the lady who headed that office, Sarah Hall Ingram, is now in charge of the IRS office for Obamacare. Many countries around the world have introduced government health systems since 1945, but, as I wrote here last year, “only in America does ‘health’ ‘care’ ‘reform’ begin with the hiring of 16,500 new IRS agents tasked with determining whether your insurance policy merits a fine.” So now not only are your books and Facebook posts legitimate tax issues but so is your hernia, and your prostate, and your erectile dysfunction.

Next time round, the IRS will be able to leak your incontinence pads to George Soros.

Big Government is erecting a panopticon state — one that sees everything, and regulates everything. It’s great “customer service,” except that you can never get out of the store.

— Mark Steyn, a National Review columnist, is the author of After America: Get Ready for Armageddon. © 2013 Mark Steyn

Letter From America (About Allegations Now Proven True)

Seeing No Evil 

It was Daniel Webster who declared, the power to tax is the power to destroy.  Instinctively we know this to be an axiomatic adage.  Taxation is the compulsory expropriation of income and property of citizens by government.  Not all taxation is immoral or bad.  Government is a God-ordained institution, serving a vital, albeit particular purpose.  That purpose can only continue if government is funded.  Expropriation of private property to fund legitimate government activity is lawful, holy, just, and good.

But implicit in the power to tax is the power to destroy citizens.  In particular, governments can declare fiscal war upon those citizens, or races, or groups, or classes it dislikes–not for the purposes of revenue, but for the purposes of destruction and control.  The road to tyranny is readily paved by targeted taxation–and the road is short.

It now appears that the Obama administration has embarked down that road.  Some would call it traditional Chicago politics applied at the Federal Government level.  The Internal Revenue Service (“IRS”) has admitted targeting Obama’s political opponents during the last election in an attempt to suppress their opposition to the President and his administration.
  For months now, conservative groups have been complaining about IRS targeting them, threatening, intimidating, and using standover tactics in an attempt to destroy Obama’s political opponents.  Now it has been confirmed that this was indeed the case.

Here is The Blaze‘s Glenn Beck on the illegality and the corruption and the exercise of destructive tyrannical power in the United States:

‘Submit!’: Beck’s Passionate Break Down of the IRS ‘Inquisition’ of Conservative Groups — and What’s Coming Next in the Case

May. 13, 2013 1:33pm Erica Ritz

Glenn Beck opened his radio program Monday morning bristling with indignation over the IRS’ admission that it targeted conservative groups around the 2012 election.  “We have to talk about the IRS inquisition, and I think that’s exactly what it is, and I think that’s what it needs to be called from here on out,” Beck began.  “What was the inquisition? ‘Submit! Submit! Answer these questions and submit!’”

Beck continued, saying the federal government has employed intimidation methods for years against private groups and the press alike.  “…At the same time that they were denying that were leading an attack on me when I was over at Fox [News]…there were five, five boycotts orchestrated by this White House to discredit, smear, and force advertisers off the air.  It had nothing to do with what I said; it had everything to do with fear and intimidation because I stood against the White House,” Beck said.  “And at the same time they were denying that, and saying it was a conspiracy that they were targeting the 9/12 Project, anything with ‘patriot’ in the name, anything with ‘Tea Party’ in the name.”

Beck then unveiled some of the new information surrounding the scandal: “They were also targeting anyone who taught the Constitution and — I love this one — anybody who said [‘America can be a better place.’]  That’s incredible…”

Beck proceeded with a chilling reminder: “So you know, America, if you don’t pay attention to what they did with the IRS and Benghazi, next year your healthcare goes to the IRS.  Next year, this administration’s universal health care employs the IRS, so now you have to turn over all your medical records to the IRS.  If you don’t think they won’t use that to sort people and to intimidate — and to take away your guns, quite honestly — why?  …What have they done that has proven them trustworthy?  And I don’t say this just about the President of the United States, but about the Republicans as well.”

 “They also targeted Jewish groups,” Beck said, explaining exactly why “inquisition” is a fitting description for the IRS’ actions.

Later in the program, Beck spoke with Jay Sekulow, Chief Counsel at the American Center for Law and Justice (ACLJ), whose organization has represented 27 Tea Party groups from 18 states in the issue.

Some of the groups have simply thrown up their hands and said it’s not worth it, having spent years battling the IRS, Sekulow said.  For others, the ACLJ has hit back and pointed out all the reasons the IRS is not entitled to the wildly personal information it was improperly demanding.

“I used to work for that office, Chief Counsel of the IRS, [and] the tax exempt group is specially trained, these are not low-level bureaucrats,” Sekulow said, warning against adopting the narrative that the IRS has put out.  Putting the issue in context, he added: “This is worse [than under President Nixon] because this isn’t only tax information and selective prosecution, this is going after the people who supported these organizations by going after their donor lists.  It’s more than Nixon did by a long stretch.”

Sekulow said they are drafting complaints against the federal government and the agents involved “right now, today.”

But two things need to happen immediately, he said.  Pending groups that have been battling the IRS at their own expense need to get recognition, and those responsible to be held accountable.  “Congress needs to have extensive hearings, and we’re looking right now at federal court action against the individuals involved in this,” he said.  “I think heads are going to roll..but the question is what the White House knew and when they knew it…”

The Treasury Department’s inspector general for tax administration is expected to release the results of a nearly yearlong investigation sometime in the coming week, a draft of which obtained by the Associated Press indicates that a number of senior IRS officials knew about the “targeting” as early as 2011.

ABC News, meanwhile, has obtained documents indicating the IRS began targeting conservative groups as far back as 2010, “and that senior IRS officials in Washington have known about it for almost two years.”  During a Monday morning press conference, President Obama said he learned about the issue when the public did several days ago, adding that he will not “tolerate” such corruption.

No wonder folk believe Obama is channelling President Nixon.   “I know nothing about those Watergate break-ins, I tell you.  Those involved should be convicted and punished, but it all happened without my knowledge.”  Yeah, yeah, yeah.

Ben Carson for President!

Two Big Un-PC Ideas

Further to our recent post on Dr Ben Carson speaking at the National Prayer Breakfast, a columnist in the Wall Street Journal is calling out a new slogan: “Ben Carson for President”.

The Johns Hopkins neurosurgeon has two big ideas for America.

The Wall Street Journal 
REVIEW & OUTLOOK
February 8, 2013, 6:03 p.m. ET

Whether this weekend finds you blowing two feet of snow off the driveway or counting the hours until “Downton Abbey,” make time to watch the video of Dr. Ben Carson speaking to the White House prayer breakfast this week.

Seated in view to his right are Senator Jeff Sessions and President Obama. One doesn’t look happy. You know something’s coming when Dr. Carson says, “It’s not my intention to offend anyone. But it’s hard not to. The PC police are out in force everywhere.”

Dr. Carson tossed over the PC police years ago.
Raised by a single mother in inner-city Detroit, he was as he tells it “a horrible student with a horrible temper.” Today he’s director of pediatric neurosurgery at Johns Hopkins and probably the most renowned specialist in his field.

Late in his talk he dropped two very un-PC ideas. The first is an unusual case for a flat tax: “What we need to do is come up with something simple. And when I pick up my Bible, you know what I see? I see the fairest individual in the universe, God, and he’s given us a system. It’s called a tithe.

“We don’t necessarily have to do 10% but it’s the principle. He didn’t say if your crops fail, don’t give me any tithe or if you have a bumper crop, give me triple tithe. So there must be something inherently fair about proportionality. You make $10 billion, you put in a billion. You make $10 you put in one. Of course you’ve got to get rid of the loopholes. Some people say, ‘Well that’s not fair because it doesn’t hurt the guy who made $10 billion as much as the guy who made 10.’ Where does it say you’ve got to hurt the guy? He just put a billion dollars in the pot. We don’t need to hurt him. It’s that kind of thinking that has resulted in 602 banks in the Cayman Islands. That money needs to be back here building our infrastructure and creating jobs.”

Not surprisingly, a practicing physician has un-PC thoughts on health care:

“Here’s my solution: When a person is born, give him a birth certificate, an electronic medical record, and a health savings account to which money can be contributed—pretax—from the time you’re born ’til the time you die. If you die, you can pass it on to your family members, and there’s nobody talking about death panels. We can make contributions for people who are indigent. Instead of sending all this money to some bureaucracy, let’s put it in their HSAs. Now they have some control over their own health care. And very quickly they’re gong to learn how to be responsible.”

The Johns Hopkins neurosurgeon may not be politically correct, but he’s closer to correct than we’ve heard in years.

The "Invisible Hand" At Work

 Vlad the Impaler Whacks France

Providence has a way of trammelling the avarice and humbling the hubris of  the New Model Man.  Believing he answers to no-one but himself, the Great Humanist Man steps forth to create, as if ex-nihilo, the perfected human society.  His key tool is law–the laws of command and control. 

At that point, all of creation seems to conspire against our pathetic Hero, making nugatory his grand designs and utopian schemes.  We call this the work of Providence–or what Adam Smith termed the Invisible Hand.  Christians know and believe it to be the Hand of the Living God, governing the world to secure His purposes, not those of our pathetic Hero.

Taxing the rich more has become fashionable again in the envy-dripping drawing rooms of our modern Don Quixotes.
  Let’s extract more money off the rich so that we can fund our utopian plans. From Obama to David Cameron to Francois Hollande–glistening avatars all of the New Model Man–the envy wealth tax has been applied.  But a counter conspiracy begins, as if by magic.  The rich move.  They decamp to more clement places. 

The latest example is French actor, Gerard Depardieu who has decamped to live in Belgium, and, in one of the most delicious ironies of the year, has been granted Russian citizenship by Vlad the Impaler.  This from Stuff:

Depardieu has waged a battle against a proposed super tax on millionaires in his native country. French President Francois Hollande plans to raise the tax on earned income above €1 million (NZ$1.58 million) to 75 percent from the current 41 percent, while Russia has a flat 13-percent tax rate. . . . As Depardieu’s criticism of the proposed tax roiled his country, French Prime Minister Jean-Marc Ayrault called him “pathetic.”Depardieu responded angrily in an open letter. “I have never killed anyone, I don’t think I’ve been unworthy, I’ve paid €145 million in taxes over 45 years,” the 64-year-old actor wrote. “I will neither complain nor brag, but I refuse to be called ‘pathetic’.”

Depardieu said in the letter that he would surrender his passport and French social security card. In October, the mayor of a small Belgian border town announced that Depardieu had bought a house and set up legal residence there, a move that was slammed by Hollande’s newly-elected Socialist government.

Overnight, the French government’s tax base shrinks.  Put taxes up upon the wealthy and less wealthy people pay in tax.  Funny that.  The law of opposite unintended consequences at work.  The New Model Man is consigned to shouting insults and shaking clenched fists.  And for Depardieu, to be aided and abetted by Vlad the Impaler adds bitter insult to cruel injury.

The Kremlin statement gave no information on why Putin made the citizenship grant, but the Russian president had expressed sympathy with the actor in December, days after Depardieu reportedly said he was considering Russian citizenship. “As we say, artists are easily offended and therefore I understand the feelings of Mr. Depardieu,” Putin said.

Who would have thought that Vlad was such a tender hearted, sensitive guy?

But this is not just a French phenomenon.  In Maryland, US the state government deliberately targeted the wealthy in an envy tax to plug its deficit hole as its reckless spending on creating the New Model Man and the perfected human society yawned into a chasm.  The results were perfectly predictable:

A new study finds Maryland’s attempt to raise tax revenue by hiking taxes on “the rich” has backfired, as the state’s wealthy job creators simply packed up and moved.

“The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a ‘millionaire’s tax’ pushed through by Gov. Martin O’Malley,” CNBC reports. “The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.  “In total, Maryland has added 24 new taxes or fees in recent years, Change Maryland says. Florida, which has no income-tax, has been a large recipient of Maryland’s exiled wealthy.”

Maryland is worse off than ever before.  Its utopian pretensions are crumbling into dystopian folly.   They have just been whacked by the Invisible Hand of the Lord.  And it’s not just Maryland:

Maryland isn’t alone.  As California raises taxes on that state’s productive citizens, many have fled to Nevada and Texas in record numbers.

All in all, states with lower taxes, especially lower taxes on the rich, are finding job growth grow at twice the national rate.

The Great Humanist Man steps forth proudly to cast off the shackles of the Son of Man.  He, Who sits enthroned in the heavens, laughs at their folly.  His providential law of opposite unintended consequences once again smacks down the arrogant and the proud. 

This, of course, is not to say the rich are righteous.  Far from it in many, many cases.  The difficulty of a rich man entering the Kingdom of Heaven remains a timeless reality, as does the extreme difficulty of a camel passing through the eye of a needle.  But it is to say the confabulations and conspiracies of  the New Model Man to create the perfect world are as condemned as any secular Unbelieving rich person’s arrogance.  That the two should work against each other, frustrating their respective dreams and pretensions, is as ironic as Vlad extending the sensitive hand of compassion to a wealthy man.  Usually he imprisons plutocrats, then steals all their property.  For the good of Russia, naturally. 

Douglas Wilson’s Letter From America

Our Little Piggy Hearts 

Money, Love, Desire – The Good of Affluence
Written by Douglas Wilson
Wednesday, 05 December 2012

As we are now in the midst of farcical fiscal cliff negotiations, with the Republicans being lame and the Democrats being eeeevil, I thought I should handle this as a teachable moment. We should take these teachable moments whenever they arise, for there will be fewer and fewer of them as the clouds of economic lunacy settle in.

The president insists on raising the tax rates on the richest among us, saying that they can afford to “pay a little more.” This is objectionable, on the surface, in two ways. Let me just mention those briefly, and then move on to a third place where it is doing real damage.
First, it is stealing. Taxing money simply because it is there is offensive to God. The language of “fair share” notwithstanding, the top five percent already pay 57% of the tax load. Here is a question without guile — when will the wealthy finally get around to paying their “fair share”?

Second, if all the rich people and their accountants were ultra-cooperative, raising taxes on the wealthy with the proposed rates would fund the federal government for about ten days. But as the process of taxation shows itself more and more envy-ridden and irrational, we have reason to believe the rich will become less and less cooperative. They have lawyers and accountants to help them move their money out of range, as I would encourage all of them to do. But — you may be assured — “out of range” will not include the kind of investment opportunities that will create jobs.

So let’s get to the real damage. While I object to all attempts at stealing, I am not spending a lot of time lamenting the sad lot of the rich, because I think they have the wherewithal to limit the damages of this attempted larceny. People are trying to rob their big house on the hill, but they can usually afford a security system.

The real problem is created for the thieves — Obama, the Democratic Party, everybody who voted for them, everyone in Washington who opposes them in such a lamesauce fashion, and everyone who supports them. If someone attempts to steal something from me, but fails, then I am none the worse. But for the aspiring thief, he gets all the guilt credits for having made such an attempt, and none of the booty. He has the worst of both worlds. He tried to steal two stools and he then fell between them.

And this is the position the American people are now in. We have thieves in Congress and in the White House because we have thievery in our hearts. Because we have larceny in our hearts, wanting to pay off 2012 debts with 2022 money, we put up with Bernake’s monkeyshines at the Fed. Because we have larceny in our hearts, we hear a politician say that the rich should pay their “fair share” and we reflexively say yeah! — in the name of justice. Thus we call rank injustice justice (Is. 5:20), and we do it because there is larceny in our little piggy hearts. Because we have larceny in our hearts, we call it greed when someone wants to keep the money he made, and we don’t call it greed when we want to take it away from him. But we are the ones with sticky fingers — and we have sticky fingers because of our sticky hearts.

Because we have larceny in our hearts, we cannot follow any economic arguments that have square shoulders, an upright posture, and an honest face. Who do they think they are anyway?

By the way, and I simply make this point in passing, it will do no good to get off this charge by appealing to our cultural memories of Robin Hood. He was not robbing the rich to give to the poor. He was robbing the tax collectors in order to get the money back to the people who had earned it in the first place. The Sherwood Forest hideout had a Gadsden flag flying over it.

Exposing the Hypocrisy Beneath

“You First” Tax

We at Contra Celsum are proposing a new kind of tax.  We realise it’s a bit different, but we believe it’s way past time.

It is called the “You First” tax.  The radical component is that the You First tax will not just be targeted at legal persons– whether corporations, groups, or individuals.  The principle of individually targeted tax law is well established.  Penalty taxes, for example, are applied only to those people who are late in paying their dues.

The radical and refreshing aspect of the new tax is that it focuses only upon those people advocating redistribution of income and wealth.

How will it work?  Whenever anyone advocates the redistribution of wealth and property for the “common good”, the You First tax will be applied to that person so as to reduce their income and property to the minimum income and property band.

Take Elle Macpherson as an apt illustration of how the You First law would apply.  The “supermodel” has candidly pronounced herself a socialist–thereby endorsing government redistribution of income and property: 

Supermodel Elle Macpherson told shock jock Howard Stern Tuesday that she’s pulling for Barack Obama to be reelected.  “I’m living in London and I’m socialist,” she told her host. “What do you expect?”

The You First tax law would strip Macpherson of all her assets, including those which have been sequestered in trusts and other protective mechanisms, and all her personal and corporate income, so that she is earning no more than the minimum wage (say, $20,000 per annum) and owning no more than those living well below the poverty line. 

It goes without saying that under You First tax laws, the expropriations would go into General Funds, but that is OK because this would mean 80% of it would be redistributed into public Health, Education, and Welfare services. 

Just the sort of thing Elle loves and advocates as righteous.

  

A Taxing Problem

It’s Not Your Money, Its Ours

The “underground” economy has been around a long, long time.  It’s probably the oldest economic system in the world.  It is the in-kind commercial exchange system–the “I will fix your leaky spouting if you repair my car” economy.  No money exchanging hands.  No bank accounts.  No tax (except GST, of course, if you have to purchase parts and materials).

This in-kind system, however, is very, very inefficient.  Money is required to make the exchanges easy, efficient, and equitable.  But the underground economy has a monetized solution.  Pay cash.  The benefit–no tax.  And that is the biggie. 

Yesterday The Dominion Post reported that the “shadow economy” is costing the Government more than $7 billion a year in lost tax. The figure equates to 44 per cent of New Zealand’s health budget. An international survey estimated that New Zealand’s shadow economy was worth more than $20 billion, making up 12.4 per cent of gross domestic product.

Now, we have no way of knowing just how credible those estimates are.  But they have to be pretty credible to work out that it is 12.4 percent of the economy that is underground.  After all, the 12.4 percent gives a scintilla of scientific rigour, non?  But, let’s just round it down to a good old ten percent.  It is still a significant number.  And that does not surprise us at all.

Times are tough.  Business compliance costs for one or, two, or three man businesses are through the roof.  Faced with a choice of a cash job or an above-ground transaction, which would you prefer?  The cash job every time.  No GST return, no tax, no form filling, no paperwork–just cold hard cash in the pocket.  And virtually untraceable, provided no-one whistle blows.  And since everyone has skin in the game, there are very, very few whistle blowers.  Moreover, the costs of tax recovery are much much greater than the amounts to be got.   Even the IRD is forced to turn the Nelsonian eye to the problem.  So, it’s a no-brainer.

Enter Kevin Milne, a man who lives and breathes in a room of high moral dudgeon.  Spluttering into his morning coffee, Milne expostulates that people working in the cash economy have committed the ultimate act of national betrayal, of sedition, and of blasphemy.  Their crime:

The biggest contributor to the shadow economy is thought to be tradespeople doing work in return for cash, a practice overdue for change, according to Milne. “This is something that’s been around New Zealand for many, many decades.

“I have indulged in it, like every other Kiwi. I make no excuses for that … it’s not until you’re confronted by the figures … that you realise you’ve just got to stop doing that. “What they’re doing really is forcing the Government (sic) to make cuts in areas that are vital to us.” People who offered cash jobs seemed to have a mentality of “keeping the Government (sic) out of it”.

Keeping the government out of it. Yup.  You hit the nail on the head right there, Kevin.  How astute.  Then comes the two-liner to beat all:

“It’s them saying, `Let’s stop them from getting their hands on our money’. Well, it’s just so stupid – it’s not their money, it’s the country’s money. I think it’s corrupt, I think it’s irresponsible.”

It’s not their money.  It’s the country’s money.  There, he came out and said it.  Scratch a bleeding heart liberal, and underneath you will find deeply crimson socialist blood.  The first and ultimate owner of everything is “society”–that’s socialism in a nutshell.  Or to put it less more delicately: “It’s not their money, it’s our money.”  Or, less delicately still: “It’s not their money, it’s my money.”

There are two effective ways to combat this problem of the Underground Economy, without resorting either to socialism or libertarianism for one’s warrant.  The first is simply pragmatic.  Reduce tax rates and simplify compliance costs and the Underground economy shrinks.  It has been demonstrated repeatedly.  Flat taxes are the most simple and easily understandable.  Reducing using employer and business people as unpaid revenue collectors for the government, operating increasingly complex regimes and facilities on behalf of the IRD would also help a great deal.

Secondly, were the government to cut its spending relentlessly on frivolities and luxuries and fripperies its moral standing would rise.  Every time the police turn up to nab the crim, the public gets an object lesson in why civil government is a necessary good.  But when the state spends taxpayer money on the domestic purposes benefit, its moral legitimacy reduces.  The intrusive, do-good, soft-despotic state ultimately lacks legitimacy in the eyes of its own citizens.  They will take every opportunity to participate in the Underground Economy.

Restrict the government to the essential responsibilities delegated to it by the King of all kings, and reduce and simplify the tax system.  These two fronts would win the “war” on the Underground Economy.  But, unless you are prepared to do that, Kevin we fear you had better come to terms with the beast, because it’s only going to get bigger and stronger. 

We recall that in the final decades of the Soviet Union, it was only the black market which enabled people to survive.  Couldn’t happen here?  Really. 

Hat Tip: Andrei: NZ Conservative

De-Throning The Christ

Pulpits Banned From the Public Square

We published recently on freedom’s ossification in the West (here, and here.)  The same issues are present in the United States.  One such skirmish point is the Federal Government trying to control and restrain what churches declare from the pulpit.  Here is Douglas Wilson’s take on that intolerable situtation.

Pulpit Freedom Sunday

Liturgy and Worship – Exhortation
Written by Douglas Wilson
Saturday, October 01, 2011

For many churches, this Sunday is “Pulpit Freedom Sunday.” Because many churches are 501c3 tax exempt entities, and because the IRS has stiff restrictions on what such entities may do in the realm of partisan politics, many churches have drawn back from making their prophetic voice heard when it comes to the pressing moral issues of our day. This is a tragedy.

In response, some concerned Christians have designated this Sunday as a day on which pastors of such churches give their congregations an explicit political charge, from a biblical perspective. They then notify the IRS of what they have done, and they do it all together. Today is that day.

Because our church is an association, not a corporation, and is tax immune, not tax exempt, this does not really apply to us. But it is important to note our sympathy with anyone who wants the church to be able to speak freely. In order for the nation to be free, the churches must be free. If the churches are gagged, then it won’t be long before the process of gagging moves into high gear.

We have made a point of keeping partisan politics out of this pulpit—partisan politics of the “vote for Murphy” variety—but we believe that this is the judgment call of our session to make, and no business whatever of the federal government. We reserve the right to urge you to vote for a particular candidate if the circumstances demanded it.

The demands of the gospel are inescapably political. Jesus is a king, and moreover He is the king of kings, not the king of an irrelevant spiritual place in the heavenlies. He is the Lord of lords, the President of presidents. Remember that “Jesus is Lord” is the fundamental Christian confession. This has direct ramifications for issues like the outrage of abortion, the travesty of homosexual marriage, the balloon juice of American exceptionalism, and the bizarre belief that if the victim has to fill out a form, taking his stuff somehow isn’t theft.

It is understandable that many men would want the church to shut up about this, but it is also important to us to realize that they are not honest men.

Fiduciary Failures

Lords Over Serfs

One of the most offensive odiousnesses of modern politics is the way politicians morph into believing they are “to the manor born”.  This can take many forms, such as what is now termed “troughing”–using extortions from the public via taxation to pay for personal expenses.    Another maddening form is extracting taxes to fund a grand gesture.

It’s Fair, I Tell You!

Boasting in Curses

New Zealand lies under a curse.  Just how powerful a curse is made evident from time to time.  Here is the latest indication:  the current Minister of Finance boasting in Parliament about how few people in this country pay tax, and how steeply redistributive our taxation system has become.  This boasting comes from a leader in the so-called conservative, centre-right government! 

>Is Taxation Lawful?

>Like Pirates on the Beach

Political Dualism – Mere Christendom
Written by Douglas Wilson
Monday, March 07, 2011

I received a question from a reader who agreed with my general thinking about government robberies, but wondered if I believed that any taxation whatever amounted to theft. And if I thought that some taxation was, and some was not, then how to tell the difference? Is it simply done on the basis of what I think is prudent?
So there are basically three questions. The first concerns whether or not there is such a thing as taxation which is not theft. And the answer is yes — there is such a thing as lawful taxation (Num. 3:47; Rom. 13:7). It does exist. To maintain that all taxation is theft by definition is to take a hard libertarian/anarchist view of civil government which is not warranted in Scripture.

The second question is whether, given the lawfulness of taxation as a general question, it is possible for a government to steal. If taxation is can be lawful, it is possible for a government to steal? And again, the answer is yes. If Ahab had gotten Naboth’s vineyard by means of “land reform,” or “zoning adjustments,” or “eminent domain,” it would not have made it any less stealing. Or if Ahab had just applied property taxes to the vineyard (total, 5,000 dollars) with the entire vineyard (worth five million) being the collateral for the tax liability, then that would have been another form of stealing.

So some taxes are simply legalized stealing. Jesus tells us that the sons are exempt from taxes, and yet He has Peter pay a tax voluntarily to prevent the giving of offense (Matt. 17:25-26). The principle that can be gathered here is that a government entity claimed that a tax was owed, and Jesus said that it was not really owed. In such a circumstance, if the government takes that amount by force, the only way we could define it would be by the word “stealing.”

Take this another way. If a throne can be “unrighteous” in general (Prov. 25:5), then a throne can be unrighteous in the specifics. God’s law provides us with the very definition of unrighteousness, and this means that governments can steal.

So the third question is, how do we tell the difference? Before answering, we should note that every Christian who grants that a government can steal is obligated to tell us where he thinks the dividing line is. The only alternative would be to maintain that the civil government has an absolute claim on all property, and that while it might let the peons “use” some of it some of the time, this is just because they are being nice.

If you believe (as I do) that it could be possible for a man to rape his wife, then you have the obligation to be able to distinguish lawful intercourse from unlawful. No human authority is absolute. If you believe (as I do) that governments can (and do) steal, then you have to be able to state where and why you think that.

Boondoggles and redistribution of wealth are clear symptoms that something has gone wrong, just as a drunken band of pirates divvying up the booty around a bonfire on the beach is a similar indication. But the act of piracy occurred earlier. Waste, fraud, and abuse are also symptomatic. That is what happens when pirates spend the money. What is the heart of the thievery? Where is the point when pirates get the money?

I would suggest that Samuel tells us. When he is warning the people of Israel about the coming predations of a king, there are numerous aspects to that warning, but one of them has to do with taxation. Samuel says that if they take a king “like the other nations,” then it is conceivable that the tax rate might actually get up to ten percent (1 Sam. 8:15-17). We are so far gone in our folly that we would give anything to get back to ten percent.

And so here is where I would draw the line. Ten percent is significant because that is what Almighty God claims. The tithe of God is a prerogative of God. I don’t believe that it is possible for a king, or a congress, or a parliament, or a president, to claim that much or more without setting itself up as a rival to God, which is exactly what our governments have done.

So, in sum, I would be happy with an 8% flat tax. The government may want more than that, for governments always do. But they certainly don’t need more than that.