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It is quite obvious the one course University of California students protesting against tuition hikes have not taken but desperately need is Economics 101. The UC system-wide protests highlight the financial crisis facing California, a state verging on being forced into federal receivership because every effort to resolve the its financial problems has failed.

Taxes are sky high and getting higher. Revenues are falling off. Unemployment is over 12%. Taxpayers and businesses are leaving in growing numbers. Union compensation and pensions have reached unsustainable levels and are still climbing. Is it any wonder California has become a financial basket case? How can the students of the UC system expect the state to be able to fund the system when they don't have the money to do so? Do they really believe that just by making demands and throwing mass temper tantrums the state will somehow find a source of funding they haven't already taxed to death? Obviously they do. And by doing so they have displayed their economic ignorance. They don't understand: Their politicians have sold them a bill of goods and the time to 'settle up' has finally come.

We need you for the tax base in order to provide services that disproportionately go to people "of color." Whites are good for one color it seems, though. The same as Michigan State. I like the new darker green.

The story is here, about a community outside Philadelphia trying to stem "white flight."

HT: Am Ren

I have to admit to feeling frustration with the "tax-'em-'til-they-bleed/leave" bunch. It has become quite apparent they lack two things: an understanding of economics and history.

It is this lack that drives the Obama Administration and a good portion of Congress. With history making budget deficits and plans to raise taxes to economy draining levels, it's quite clear they have unrealistic expectations of the revenues they'll collect, which in turn will drive them to raise taxes even higher, causing a further drop in revenues.

Whether it is a revolt of the kulaks, or mere tax avoidance, there is economic distortion from high rates of taxation.

The British are seeing this effect in their current budget, as wealthy Brits engage in tax avoidance (structuring their financial lives so as to legally avoid taxes) in anticipation of a rise from a 40% to a 50% rate.

Obviously the Brits are on a path to return to the bad old days of their 1970's economic malaise, when confiscatory tax rates drove the wealthy (and their wealth) out of the UK. The result was a moribund economy, high unemployment, falling tax revenues, and the failure of a number of long-standing British corporate icons (British Leyland, MG, and British Steel, just to name a few).

Two things to remember when it comes to taxes and government (from the comments):

The raising of T(axes) has the effect of decreasing I(nvestment) which in turn has the effect of decreasing Employment (N).

The larger the share of G(overnment) as a part of GDP, the worse off..the economy in the long run.

Turning this into an equation, we get the following: T=1/Ix → G=1/GPDy
(x and y are multipliers used to generate the correct ratio between the left and right side of the equation.)

But as we've already seen, those pushing for the ever higher taxes don't really understand math.

I have to say the opening statements of the President's State of the Union address were on target, talking about the problems that we, as a nation and as individuals, are facing. But once he started addressing the main issue we face - the economy - he lost me.

He talked about tax cuts, but only the temporary tax cuts. The somewhat more long term cuts, the Bush tax cuts, expire next year, meaning everyone will see a tax increase once they're gone.

On the stimulus bill - blah blah blah blah blah blah. (At least that's what I heard.)

As much as I agree that jobs are an issue, I have to disagree with the president that somehow it's up to the government to stimulate them with our money. Better that government get the heck out of the way. We don't need it to take $30 billion of the repaid TARP funds and spend it again.

I agree with Obama that we need to upgrade our infrastructure to help American businesses compete in the global marketplace. But what do high-speed trains have to do with that? Better that electrical systems and broadband communications networks be built, which will do far more to support American businesses than trains.

And while the president says he "won't accept second place for America", he's been doing what he can to make sure that's where we'll end up, if not third or fourth place.

After that I started nodding off as he started mouthing the same old platitudes but in different wrappers. (Make energy less expensive by taxing the hell out of it. Punish all the banks for the actions of a few. Spend billions more on education even though study after study after study shows more money doesn't equate to better education. Destroy our health care system in order to save it. And so on and so on.)

I. GOT. BORED.

ZZZZZZZzzzzzzzzzzz........

UPDATE 1/28/10: Going back and watching the address again, I saw that as time passed he shifted more and more blame for all our troubles on to others. He laid all the blame for the failure of health care reform and cap-and-tax squarely on the Republicans, saying they now owned the blame. Senator John Kyl rebutted that allegation today on NPR, stating the Senate Republicans were following the will of their constituents, blocking bad legislation that would do little more than cost the American people untold hundreds of billions of dollars with nothing to show for it.

I have to agree with Eric the Viking on this one: Who's writing Nancy Pelosi's material these days?

"The American people have an anger about the growth of the deficit because they're not getting anything for it. ... If somebody has the idea that the percentage of GDP of what our national debt is will go up a bit, but they will now -- and their neighbors and their children -- will have jobs, I think they could absorb that, and then we ride it out and bring money in," she said.

She's kidding, right? (Unfortunately, she's not.)

This statement and the others in Eric's post and link shows me three things about our Speaker of the House:

a) She really has little understanding of economics.

b) She really has no idea what motivates average Americans, particularly when it comes to matters economic.

c) She really doesn't care because she knows better than everyone else in the nation, including the very folks she claims she wants to 'help'.

The angry American taxpayers don't want Congress to spend even more money we don't have on more stimulus, health care reform that will reform nothing, or any other dubious and expensive government programs.

Sucking over $1.4 trillion out of the economy (the present budget deficit figure) is not helping the economy in any way, shape, or form. Pulling even more out of the economy with higher deficits and higher taxes in a second effort to 'stimulate' the economy will only make the recession worse. This is something Pelosi, as well as Reid and Obama, do not understand. I find that difficult to believe considering there's plenty of history to show previous attempts to do just that have failed miserably and, in fact, made things worse.

Watching what's happening to our economy today it's easy to forget that this isn't the first time we've been through this, with government trying to spend its way out of a recession. The effort back in the 1930's failed miserably, extending the Great Depression for years, as did the 'stimulus' of 1962, which prompted Ayn Rand to comment on the error on the part of government in thinking such spending would do anything but have negative effect, that our economic IQ was sadly deficient. From her column in the L.A Times back in 1962:

Since "economic growth" is today's great problem, and our present Administration is promising to "stimulate" it--to achieve general prosperity by ever wider government controls, while spending an unproduced wealth--I wonder how many people know the origin of the term laissez-faire?

France, in the seventeenth century, was an absolute monarchy. Her system has been described as "absolutism limited by chaos." The king held total power over everyone's life, work, and property--and only the corruption of government officials gave people an unofficial margin of freedom.

Louis XIV was an archetypical despot: a pretentious mediocrity with grandiose ambitions. His reign is regarded as one of the brilliant periods of French history: he provided the country with a "national goal," in the form of long and successful wars; he established France as the leading power and the cultural center of Europe. But "national goals" cost money. The fiscal policies of his government led to a chronic state of crisis, solved by the immemorial expedient of draining the country through ever-increasing taxation.

Colbert, chief adviser of Louis XIV, was one of the early modern statists. He believed that government regulations can create national prosperity and that higher tax revenues can be obtained only from the country's "economic growth"; so he devoted himself to seeking "a general increase in wealth by the encouragement of industry." The encouragement consisted of imposing countless government controls and minute regulations that choked business activity; the result was dismal failure.

Colbert was not an enemy of business; no more than is our present Administration. Colbert was eager to help fatten the sacrificial victims--and on one historic occasion, he asked a group of manufacturers what he could do for industry. A manufacturer named Legendre answered: "Laissez-nous faire!" ("Let us alone!")

Apparently, the French businessmen of the seventeenth century had more courage than their American counterparts of the twentieth, and a better understanding of economics. They knew that government "help" to business is just as disastrous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.

Regardless of the purpose for which one intends to use it, wealth must first be produced. As far as economics is concerned, there is no difference between the motives of Colbert and of President Johnson. Both wanted to achieve national prosperity. Whether the wealth extorted by taxation is drained for the unearned benefit of Louis XIV or for the unearned benefit of the "underprivileged" makes no difference to the economic productivity of a nation. Whether one is chained for a "noble" purpose or an ignoble one, for the benefit of the poor or the rich, for the sake of somebody's "need" or somebody's "greed"--when one is chained, one cannot produce.

There is no difference in the ultimate fate of all chained economies, regardless of any alleged justifications for the chains.

It seems that we still haven't learned that lesson four decades or four centuries later. As the late Ronald Reagan said more than once, "Government isn't the answer. Government is the problem." It was true back during Louis XIV's reign and it's true today. Our government is bent on controlling more businesses, either through direct take over like GM, Chrysler, the banks, and health care, or through onerous regulation and taxation, all in the name of 'stimulus' and 'fairness'.

Apparently our leaders have learned nothing from past attempts to tighten control over economies and businesses that their attempts won't work, won't create the results they want, and won't lead to anything but more poverty, less business, and a weaker economy than if they'd just left everything alone. But government is incapable of not fiddling about with things they really don't understand. And that's our biggest problem today.

As John Stossel writes, it's not the taxes that are the problem, it's the spending.

Last week on "The O'Reilly Factor", we talked about California's and New York's enormous budget deficits and planned tax increases. Those states would have big surpluses had they just grown their governments in pace with inflation. But of course they didn't. Now the politicians act like their current deficits are something imposed on them by the recession.

But that's nonsense. They created the problem with their reckless spending.

--snip--

O'Reilly told me that America is ready for a tax revolt. I hope he's right. But I don't think it will happen until more people see the ruling elite for what it is: a gang of arrogant bullies that has the audacity to believe that they know how to direct our lives better than we do.

That's why, bad as the taxes are, I'm more upset about ObamaCare, Medicare, the "stimulus," the auto bailout, the bank bailouts, the Fannie/Freddie bailouts, the trillions in guarantees, and on and on.

The need for all those extra taxes would be reduced if government at state and federal level could get their spending under control. For the most part that's not going to happen because far too many of those in power like to "bring home the bacon" regardless of the actual costs to their constituents. Only those states forced to address their spending issues, like California, New York, New Jersey, and Michigan, to name a few, will actually have the opportunity to trim spending by billions of dollars. They won't have a choice because if they don't cut spending higher taxes won't fill the empty coffers and the states will face bankruptcy. They simply don't have the money to pay for all those really 'neat things' everyone thought they could afford during the good times. But the good times are gone and with them, the revenues the states had gotten used to having.

To paraphrase James Carville, "It's the spending, stupid!"

It appears the budget deficit is going to be bigger than either the White House or the Congressional Budget Office had predicted.

That's not surprising considering federal revenues were 18% below projections. At least it didn't surprise me considering Congress and the White House ignored the Law of Diminishing Returns: Once you raise taxes and fees above a certain point the amount of revenue you collect will fall. It's a perfect example of the Laffer Curve in action.

On the other hand government spending hasn't dropped off nearly enough (only about 3%) to make up for the revenue shortfall. I have no doubt Congress will act to correct the problem...by raising more taxes and fees. This will have the effect of causing an even greater falloff in revenue. Congress shouldn't be raising taxes during a deep recession. They also shouldn't be spending money we don't have, either. But I don't expect Congress or the White House to do the necessary things to stem this flood of red ink.

Here in New Hampshire the state is seeing a similar falloff in revenues, being short about $38 million so far. A number of people within the New Hampshire legislature warned that revenue projections were unrealistic, particularly in light of the hefty increase in taxes and fees. This is the second budget cycle where the Democrat dominated legislature overestimated revenues and used those projected revenue figures to increase state spending by amounts that far exceeded the inflation rate. Over four years state spending has increased by 30%, but revenues haven't come anywhere near to covering the larger expenditures.

The state ended it's last budget cycle (New Hampshire has a two-year budget) over $100 million in the red. The legislature still has that budget gap to fill and has been trying to do so by raiding $110 million in surplus insurance premiums being held by the state chartered Joint Underwriting Association, a private organization created by the state to ensure doctors, medical practices, hospitals, and other medical facilities and personnel could get malpractice insurance. So far the state has failed in its attempts to confiscate those funds. A Belknap County judge ruled in a suit filed by the JUA that the state had no rights to those funds because the law that set up the Association states surplus funds must be returned to the policy holders, past and present. The judge also ruled the state had no other claims to the funds because the JUA is a private entity, particularly in light of the fact that no state funds or state personnel are used to administer the Association. The state disagreed and has taken the case to the New Hampshire Supreme Court.

You know it's getting bad when the state legislature figures it can raid private funds to plug a budget gap. I believe that's called theft. Of course the Democrats in the legislature see it as monies being withheld from them by greedy doctors when the state can make far better use of that money. Never mind that state law says otherwise. Never mind that the money isn't theirs to begin with.

It's going to be interesting (in the old Chinese curse definition) to see how the financial situation at the federal and state level will play out.

Update: A number of states are looking at growing revenue shortfalls, with some heading towards bankruptcy because of pension funding obligations and state union contracts that leave them with little wiggle room.

Something to remember come the 2010 elections.



From Bruce.

It appears there are still some common sense jurists still presiding in the People's Republic of Taxachusetts.

Earlier today the Massachusetts Supreme Judicial Court ruled the Commonwealth could not force New Hampshire retailers to collect Massachusetts sales tax on tires sold in New Hampshire to Massachusetts residents.

The court's decision was another shot fired in a long standing 'feud' between the two states, one specifically dealing with sales taxes. Massachusetts has a 6.25% sales tax while New Hampshire has none. The recently raised sales tax (from 5% to 6.25%) has goaded even more Bay Staters to cross the border into New Hampshire when they make purchases of higher priced goods to avoid paying the tax.

The Massachusetts Department of Revenue filed suit against Town Fair Tire, demanding the new Hampshire outlets collect Massachusetts sales tax on all sales to Massachusetts residents. Both Town Fair Tire and the State of New Hampshire responded, with the state legislature passing legislation making it illegal for other states to force New Hampshire retailers to collect taxes on sales to their residents.

The Massachusetts Department of Revenue's argument before the court used as evidence 313 sales invoices from the 'offending' Town Fair Tire outlets as proof of tax liability. But the court, in its wisdom, said the invoices "weren't enough under state law to presume the tires were used in Massachusetts."

The text of the court's decision, minus footnotes and case citations, can be seen below the fold.

Do you want a preview of what's coming in California, New York, New Jersey, Massachusetts, and quite possibly the nation? Then all one need do is look at the mess that is Michigan.

Writes native Michigander Michael Barone:

Things are pretty bad in my native state of Michigan, which has the nation's highest unemployment rate and is the headquarters of government- and union-owned General Motors and Chrysler. Conditions are so bad that they seen to have sent some Michiganians (we used to say Michiganders when I was growing up) over the bend.

Case in point: Democratic State Chairman Mark Brewer. Ordinarily a pretty savvy political operator, Brewer is now suggesting five ballot propositions for the 2010 ballot. Their aim apparently is to improve the lot of Michigan citizens. But the result, as anyone with an iota of sense can see, would be to inflict horrifying damage on an already staggering state economy. They include:

● Mandating all employers to provide affordable health care for all their employees and dependents or pay a penalty.

● Raising the minimum wage from $7.40 per hour to $10 per hour and covering all workers with no exceptions.

● Increasing unemployment benefits by $100 a week, making all workers eligible and adding six months to the time one can receive benefits.

●Cutting utility rates by 20%.

● Imposing a one-year moratorium on home foreclosures.

[O]verall this is a program to pillage the private sector and drive it out of Michigan.

It sounds almost like Directive 10-289 from Atlas Shrugged. It certainly contains some of the elements of the directive.

The state government seems totally disconnected from the facts of the economy. All their efforts have done nothing more than make things worse. It's as if no one in the legislature or the governor's office has ever taken an economics and/or sociology course. The proposed ballot initiatives are based on nothing more than the need to "Do something!" even if that something is wrong. It may make then feel better to propose it, but they clearly haven't thought out the consequences of those initiatives should they ever see the light of day.

Residents and businesses have been leaving Michigan at an increasing rate. The number of people leaving is greater than the number of people moving into the state. Cities like Detroit and Flint are emptying out. In the case of Flint, entire neighborhoods are being torn down and returned "to the wild" because no one lives there. It's not too often city populations shrink at the high rates being seen in Detroit, Flint, Pontiac, and a number of other cities and towns in Michigan.

If California, New York, New Jersey, Massachusetts, and a handful of other states don't get their fiscal houses in order by slashing all but necessary spending, get the nice-to-have social programs under control or even eliminated, and roll back confiscatory taxes and fees, they will suffer the same fate as Michigan. And should the federal government fail to do the same, the entire country could end up looking like Michigan.

(H/T Maggie's Farm)

It's ironic that Governor John Lynch is touting New Hampshire to other states as an example of fiscal responsibility. Ironic because it isn't true.

In the face of a deep national recession, New Hampshire stands as an example for other states in crafting a budget that makes tough cuts and lowers spending, while protecting essential services and avoiding major new taxes.

Instead, the Legislature raised existing taxes and fees, in some cases adversely affecting 45,000 small businesses in the state at a time when they could least afford it. (Hey, there's a recession on and business is way down, meaning income is down.)

The state did not lower spending...unless you call over $1.2 billion (~13%) in additional spending compared to the previous budget "lowering" spending.

We produced a budget that makes cuts by making changes to just about every area of state government and sets state government on a path to greater reform. Overall, state spending is down about 1 percent.

"Down 1 percent"? Maybe compared to the original proposed budget (an increase of 13% instead of 14%), but not when compared to the previous budget.

The governor and the legislature had more than enough opportunities to truly trim the budget and minimize the burden to the taxpayers in New Hampshire. They had more than enough time to look at the projected revenues and to craft a budget that fit within the constraints of those revenues. Instead they reversed the order, putting together a budget and only then looking to see if there would be enough money to pay for it. When it became apparent the revenues wouldn't come close to being able to fund the proposed spending, the legislature raised taxes and fees that hit the taxpayers at a time when they could least afford it.

Both the governor and the legislature failed the people of New Hampshire. We expected an austere budget, even if it meant laying off state employees and a reduction in services. What we got instead was a crap sandwich that we were expected to swallow whole and then say "Please, sir, may we have another?"

Is it a surprise to anyone that federal tax revenues are down, seeing the biggest drop since the Great Depression?

I guess Congress and the President still haven't learned that there is such a thing as too many taxes. Maybe they need to take an economics course. Then again all they really need to do is listen to Arthur Laffer as he explains his curve.

We already know the present Congress is incapable of actually reducing spending (hence the $1.2+ trillion deficit for the coming fiscal year), so we should expect nothing but more taxes to be laid upon the rich (newly redefined as "anyone with a job").

In all 50 states revenues are down as well. In New Hampshire, where the Weekend Pundit team resides, state revenues in July were down compared to July last year. Somehow I doubt the Democrat majority in the state legislature planned for that, figuring with all the tax and fee increases revenues would rise.

The question is what will they do if revenues continue to come in under projections? I'd like to think they'd finally get around to making some tough decisions and start trimming the state budget. I'd really like to think that. Even 10 years ago that might have happened. But today, they'll merely decide that they need to raise even more taxes and fees or, even worse, institute a broad-based tax (income or sales tax) and drive the final nail into the coffin of the New Hampshire Advantage. Then we'd be no different from any other state in the Northeast, with poor economic outlook, a crushing tax burden, and nothing to show for it but empty store fronts and factories and higher unemployment.

I was a bit lazy tonight, so I'm going to borrow some words of wisdom from people far more wise and foresighted than I. These came from someone commenting on a WSJ piece about Pelosi's Health-Care Payroll Tax.

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship" --Alexander Tyler

"Our democracy will cease to exist when you take away from those who are willing to work and give to those who would not" -- Thomas Jefferson

"The problem with socialism is that you eventually run out of other people's money" -- Margaret Thatcher

"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle" -- Winston Churchill

Much what we have been warned about by these great people is coming to pass. The Congress and the President denigrate and disparage the people actually making the money, creating the wealth and the jobs that go with it, pandering to the Have-Nots, many whom Congress and the President have created, and they expect the producers of the wealth to take it silently, in other words to "pay up and shut up."

Should they succeed, then we will be living in the hell that is Ayn Rand's Atlas Shrugged, a hell of our own making because we voted these glad-handing looters into office based upon their promises to 'stick it to the rich'. But these same thieving elite never bother to let us know that they define the rich as anyone with a job. They may not tax us today. They may not tax us tomorrow. But they sure as hell will tax us to the point of bankruptcy and tell us it's for our own good.

We've been fortunate, my family and I, being able to weather the downturn in the economy without too much discomfort, for the most part. But it hasn't been easy.

Back in March every employee of the company I work for, from the CEO on down, took a 10% pay cut. We all saw that as being far better than being laid off. As things turned around a bit, our pay was restored. However we were all told that until further notice there would be no pay raises, again something that did not surprise us.

The small business my wife and I own (my wife is the CEO and I'm the handyman and IT guy) has felt the effects of the economic downturn, with business falling off about 40% from a year ago. Deb took on more hours to keep the payroll low and carefully managed what income was generated and what was spent to support the business. Even with the fall off in business we've been able to pay the bills and pay the loan we took to purchase the business. Then the legislature of the state of New Hampshire decided that in these tough times they needed to increase the state budget by over $1 billion, a 13% increase over the previous budget. The legislators and the governor claimed they had actually cut the budget, though I can't figure out how a $1 billion+ increase can in any way, shape, or form be described as a budget cut. To pay for such a generous budget increase the legislators and the governor decided it was quite alright to tax the bejeezus out of small businesses in the state to pay for all these "invisible" budget cuts, hitting over 45,000 small businesses in the pocket book at a time when many of them are struggling to survive. It certainly has hit us hard.

Starting on August 1st my wife stops taking a salary from the business. She had earlier cut her own pay to make sure we maintained a cushion to keep the business in the black. With the additional taxes imposed by our state she has had to cut her pay to zero. Without the cut we would be in trouble, unable to pay all the bills, the rent, franchise fees, payroll, loan payments, or any of the other dozens of expenses running a business entails.

If this is how the Democrat majority in the New Hampshire Legislature think they're helping us, then they are deluded. All they've managed to do is put the squeeze on the very businesses they're relying on to help turn the economy around. How stupid can they possibly be?

Over the past few month sit has become apparent to anyone really paying attention to the machinations of Congress and the Obama Administration that one of two scenarios are playing themselves out.

The first one - Congress and Obama really haven't a clue about how an economy really works, where the money comes from, and who it is that creates real jobs, meaning jobs that actually add to the Gross Domestic Product. (There are a few exceptions to this, such as police, fire, and other vital municipal services that keep our towns and cities running). To the Dems running the show, the money just appears as if by magic, or they take it away from the wealthy.

The second one - Congress and Obama really do understand all of the above, but they don't care because they have socialist agenda they're going to push even if they have to destroy the greatest nation on Earth to in order to achieve it.

A philosopher (which one, I don't recall at present) once said something along the lines of "Do not ascribe to malice that which can be explained by stupidity." Therefore, I am leaning more towards the first scenario rather than the second, though the roots of the second could easily be the cause of the first.

A perfect example of this is the so-called health reform legislation being pushed by the White House and slavishly written by the Democrats in Congress. As the WSJ called it, it is reckless of Congress to do it.

Say this about the 1,018-page health-care bill that House Democrats unveiled this week and that President Obama heartily endorsed: It finally reveals at least some of the price of the reckless ambitions of our current government. With huge majorities and a President in a rush to outrun the declining popularity of his agenda, Democrats are bidding to impose an unrepealable European-style welfare state in a matter of weeks.

They are setting us down a path that Europe has followed, one that hasn't worked, is still a drag on the EU economy and they are doing it as quickly as they can they know that there will be a backlash by the American people once they see what all of these programs will cost and how it will negatively affect their lives. The Democrats have forgotten that one does not create prosperity by impoverishing the people, particularly those who actually create the jobs. (Of course I am assuming they knew it to begin with, a bad assumption, I admit.)

Opposition to the spending spree and destruction of the health care system is growing, even among Democrats. While wholesale defections haven't happened, with a little more time to digest what the health care reform bill really says and what it will cost, more than a few Congressional Democrats may balk at supporting something that will more than likely get them voted out of office.

Even staunch liberals are horrified at what they see and are blanching at the costs of Obamacare.

It's pretty bad for the Democrats hoping to cram through a massive reform of the entire health insurance industry in just a few weeks when they lose a die-hard Democrat like Susan Estrich. But she's extremely skeptical of this whole health care fantasy that her pals in Washington are trying to peddle to the country.

The idea that somehow you're going to tax the "rich" enough to pay for quality health care for every American who doesn't have it, can't afford it or stands to lose it, not to mention for all of the undocumented aliens who receive it for free now and presumably will continue to in Obama health land, is almost laughable. It's one of those things candidates say in campaigns, ignoring the fact that it doesn't add up. But in a bill that might pass? Add a 5 percent surtax on every small business in the country that makes $250,000 or more? This is going to create jobs? What am I missing?

We're being promised pie in the sky - health care that won't change for all those who like their plans and low-cost health care for everyone, including those who are uninsured now. And no taxes on anyone except for those despicable rich people who should pony up as their patriotic duty. It's a fairy tale and one that won't end with everyone living happily every after.

It's obvious no one bothered looking at the real numbers for what all of this will really cost, ignoring the other tax hikes to pay for all of the other Hopey-Changey programs and cash giveaways Obama's been trying to sell to the American people since before he took office. Neither he or the Democrats in Congress seem to understand that the piggy bank is empty and that the rest of us aren't going to bankrupt ourselves in order to pour even more of our hard earned money into that bottomless pit. There's no way they'll be able to spin this as being good for anyone but them.

I recall that at one point it was estimated that if the government took all of the income from the rich to pay for all of these wonderful 'free' programs the IRS would collect about $400 billion. As compared to what Obama wants to spend that's a drop in the bucket. (We could also count on the amount the IRS collected the second year from the rich would come to, oh, let's see...umm...carry the 1...to about $0. The rich would either be poor and have no more money to take or they would have fled with their wealth and taken their businesses to friendlier tax climes. I certainly wouldn't blame them.)

Never mind that health care reform will neither reform nor provide adequate health care unless one defines such reform as "destruction of a very good health care system that is by no means perfect, and replacing it with system that is very poor at providing health care and cuts costs by denying care to those most needing it." I guess we should also ignore another side effect of such reform : stifling medical innovation and research. That has certainly happened in every other nation that has imposed this kind of health care system upon its populace. Most of the medical advances now come heavily from the US. It is moribund in the UK, Canada, France, and most other nations in the EU.

That is the fate of the American health care system if Obama and his Democrat lemmings in Congress get their way.

At least one state is acting to head off a cross-border tax grab.

New Hampshire Gov. John Lynch has signed a bill intending to protect retailers from becoming tax collectors for other states.

New Hampshire doesn't have a general sales tax, a selling point it uses to attract out-of-state retail dollars.

The bill was filed in response to action Massachusetts took against a Connecticut-based tire store chain. Massachusetts attempted to collect $108,000 in "use" taxes from Town Fair Tire for sales it made to Massachusetts customers at its New Hampshire stores.

Many years in the past the Massachusetts Department of Revenue sent agents across the border into New Hampshire to watch and record the license plate numbers of cars from Massachusetts purchasing goods in New Hampshire and then having them stopped once they crossed back into Massachusetts in order to assess the use tax. Then-governor Meldrim Thomson had the New Hampshire State Police arrest the revenue agents and escort them back over the border, telling them they had no jurisdiction in New Hampshire and warned them not to return.

The lack of a sales tax in New Hampshire has peeved the powers-that-be in Taxachusetts (the Pay State) for years. With the recent increase in the Massachusetts sales tax from 5% to 6.25% even more Massachusetts resident are expected to cross the border to save money.

Can you blame them?

As if we need any more proof that some states are trying very hard to drive away the people paying a good majority of the taxes, there's this cautionary tale from Maryland.

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

The only thing that surprises me about this is that they were surprised at the results of their 'soak the rich' experiment.

Skip over at Granite Grok does a pretty good job deconstructing the Waxman/Markey plan for the so-called cap-and-trade of carbon emissions.

As Skip puts it "Congressmen Henry Waxman (D-CA) & Ed Markey (D-MA), under the guise of saving the planet, are about to unleash the most sweeping curtailing of our liberties and thinning out of our wallets by taxes ever seen in the history of the US."

Henry Waxman, the most feared man in Congress, has decided we should fear him too. So he and his Massachusetts cohort, Ed Markey, have decided it would be a great idea to cripple the US economy , heavily burden the American taxpayer with higher energy costs, more taxes, and greater government control of our lives.

Somehow this does not surprise me. Waxman has already shown on more than one occasion that he has little if any respect for the American public. All he wants is power over them and this is one way he can do it without the need to run for President. Despite protestations to the contrary, Mr. Waxman does not have our best interests at heart. He wants to tie our hands because of the badly thought out and ever more discredited theory of Anthropogenic Global Warming. He doesn't appear to care if it's true or not. All he knows is that it gives him more control over every aspect of American lives. He wants us to live the way he decides we should (not that I expect him to do likewise). It will be yet another example of a watermelon environmentalist telling us "Do as I say, not as I do," just like AlGore.

Is California (financially) toast? If voter opinion is any indication, the answer is yes.

It's one thing if California's fiscal problems were something unforeseen, occurring overnight due to some calamity. But this is something everyone saw coming. The state assembly did nothing to stop it. They have allowed state worker unions to dictate what would and would not be done, kowtowed to other special interests, and basically told the taxpayers they would be on the hook because members of the assembly were incapable of saying 'no'. They failed to revamp state spending, cut out "nice-to-have" programs, or cut confiscatory income and sales taxes. This problem is of their own making. It is not up to the rest of us in the other states to help them make ends meet by giving them our money (which they will waste). If we do this once, we'll have to keep doing it because they have shown they are incapable of making the necessary choices to bring their financial house into order.

(H/T Instapundit)