The End of Welfare Reform As We Know It

[_Droopy]

ROFL!

Of course, we already knew Droopy has no evidence for any of the crap he spouts.

I've never been able to get any of these Obama haters to name specific legislation which he is responsible for, and which has also caused our current economic plight. They refuse to do the necessary research because of what they're afraid they'll find.

As far as worth his time, that's just hilarious. Droopy spends more time here ranting than anyone, especially when it is clear no one is paying attention to him. Now that he finally has someone willing to hear him out, by asking specific questions, suddenly Droopy loses his voice and has no time. That's because he only responds with scripts provided to him by his favorite think tanks. Until they speak on a specific matter, Droopy has no opinion of his own other than "you're too stupid to understand anyway, so I won't waste my time."

I'm not particularly interested in suffering either fools, the stupid, or the mad anymore.

You know, Graham, you're so poorly educated and poorly read that you are quite capable of making a nearly inconceivable clown of yourself on a daily basis without the slightest conscious awareness of how pathetically uninformed you appear or the precipitous degree to which you lack critical thinking ability.

You, yourself, just in recent posts, have said things so breathtakingly, mind-wrenchingly imbecilic and logically baffling that they defy clear description.

But that's alright. I understand its all theatrics, and when the lights go down and the curtain falls, there's nothing left but the empty stage.

[_Droopy]

We're not in a recession and haven't been for some time, but the current pace of recovery is primarily a function of the ripple effects of tightening of credit that occurred because of the collapse of financial institutions.

I see no indication of that here:

http://www.forbes.com/sites/sageworks/2 ... es-hiring/

Or here:

http://articles.businessinsider.com/201 ... l-business

or here:

http://www.gallup.com/poll/152654/healt ... iring.aspx

And this gives us a serious praxeological look at the reality:

http://www.ncpa.org/pdfs/Jobs-NCPA-Brief.pdf

And another quick overview of actual reality:

http://www.americanthinker.com/blog/201 ... iring.html

And on, and on, and on, and on, and on, and...

Government, and its buffoonish, blundering attempts to control and manipulate the economy is the reason business is not hiring. Period, end of the never ending story.

Rogue, out of control, invasive, intrusive, power drunken government has, once again, so corrupted and distorted market signals and human, future-oriented economic calculation that the inevitable result, as with the same meddling that took place during the 1930s, will be a virtual permanent state of anemic growth only a step away from stagnation and further recession cycles.

The answer is, of course, economic liberty.

But we can't have that now, can we?

That wouldn't be "fair.'

[_Analytics]

We're not in a recession and haven't been for some time, but the current pace of recovery is primarily a function of the ripple effects of tightening of credit that occurred because of the collapse of financial institutions.

I see no indication of that here:.

Dude. If you want to pretend you are an expert on the economy, at least learn what the word "recession" means and use it correctly.

http://www.nber.org/cycles/sept2010.html

[Anonymous]

...Government, and its buffoonish, blundering attempts to control and manipulate the economy is the reason business is not hiring. Period, end of the never ending story.

Rogue, out of control, invasive, intrusive, power drunken government has, once again, so corrupted and distorted market signals and human, future-oriented economic calculation that the inevitable result, as with the same meddling that took place during the 1930s, will be a virtual permanent state of anemic growth only a step away from stagnation and further recession cycles.

The answer is, of course, economic liberty....

What I find so ironic about your view is the low esteem in which you hold businesses. On the one hand, you see American businessmen as being petty and vindictive—if the government doesn't coddle them with low taxes and freedom to harm the environment with impunity, they'll scale back their businesses (or close their doors) out of spite. And you also see them as being riskfactorphobiacs—you think the risk of their after-tax profits going down by 4.6% puts them into a state of paralysis so severe that they wouldn't be able expand their business to make an extra $100,000 out of fear that they might have to pay an extra $4,600 in taxes.

[_krose]

Okay, I'll bite. Please name these policies, as well as the dates the bills were passed and implemented.

Since you're not being serious, and apparently have no intention of doing so, I'm not going to waste my time researching what is common knowledge to most 3rd graders for an intellectual poseur and comic shill for the cult of state power you worship. Its simply not worth my time.

I was going to say, "Nice dodge." But in reality it's pathetic, a laughable attempt to hide the fact that you have nothing but meaningless bluster to back up a ridiculous claim.

[_krose]

This really should be in the thread where we were discussing the topic, but hey, I'll do it here instead.

(And while you're at it, I'm still waiting for the IRS instructions that require new employees to be paid with after-tax profits.)

What IRS regulations have to do with it, I have no idea.

I see. I'll try to keep it simple and use small enough words so you don't get too lost.

This is how the US system of taxation works: Congress makes rules that tell us what we have to pay taxes on, and how much. The IRS enforces these rules and collects the taxes. So they give us forms to fill out, with instructions that tell us what to include on the forms. Therefore, if we want to know if an expense is deductible (meaning it's not taxed), we read the IRS instructions for the form we use to determine the tax we pay. Clear so far?

New hiring and expansion of business must come from net profit, after all business overhead including taxes, are met...

You can keep repeating this nonsense until your fingers fall off, but unless you can show where, on the IRS form, a new employee's wages are not deductible, it's no truer than fan-fiction fantasies about your favorite cartoon characters.

The FACT is that Line 8 on the corporate tax form, in the Deductions section, simply says "Salaries and wages." So unless you can show me the IRS instructions that say I cannot include new employee salaries on that line, I have to conclude that new-hire salaries ARE to be subtracted from total income, before figuring taxes.

What if your marginal tax rate is 99%, Krose?

Stupid question, because employee wages are deducted BEFORE taxes are figured.

It doesn't matter what the tax rate is, as far as employee expenses go. The rate can be 99% or it can be 1%. It doesn't affect how much is available to pay in salaries.

It's just like claiming that you can't afford to contribute to an IRA because your tax rate is too high. That would be stupid, because your IRA contribution is subtracted before taxes are figured.

[_Analytics]

I’m just taking a wild guess here, but I’d wager krose has more actual experience filling out tax forms that Droopy.

Anyway, a numerical example might help illustrate the point. Last week I was listening to Fox radio, and a caller said he was a small business owner. He said that if Obama’s tax plan was implemented, his tax bill would go up by $20,000 a year. He said that if that happened, he’d be forced to lay off an employee in order to pay the $20,000. That seems to be Droopy’s angle here. Let’s deconstruct this a bit.

Based upon the $20,000 figure, this guy is implying he pays taxes on about $700,000 a year in profit. He pays about $200,000 in tax, leaving $500,000 after-tax (poor guy). If Obama’s plan was put into play, his after-tax income would decrease to about $480,000 (the injustice!).

So he considers laying off a guy to cover the $20,000 reduction. Remember that this employee contributes more value to the firm that what he is paid (if he didn’t, he’d be let go regardless of the tax rate). So let’s say for purposes of this example that he contributes $30,000 of value to the firm in exchange for his $20,000 salary.

So, if he were to lay off this employee, he’d save $20,000 in expenses, but lose $30,000 in sales. His taxable earnings would drop from $700,000 to $690,000, and his after-tax profit would drop from $480,000 to $474,000.

Why would he do that? There are only a couple of possibilities. Maybe he doesn’t hire employees for the benefit they bring to the firm, but rather as charity cases (that’s the only way he could lay off employees without hurting his gross profit). Or maybe he hates the government so much that he’d lower his productivity (and his income) out of pure spite.

[_Droopy]

I was going to say, "Nice dodge." But in reality it's pathetic, a laughable attempt to hide the fact that you have nothing but meaningless bluster to back up a ridiculous claim.

No, I'm just not going to lower myself to actually engaging the fantastic reality-distorting claims of witless, non-educated, intelligence insulting, delusional ideologues like you and Kevin Graham. I do not suffer fools, knaves, or mind rape well.

Ever hear of "Google?" Ever hear of "doing your homework?" Is your reading comprehension level above that of a watermelon rind? Good. In that case, the empirical facts you require to understand how the policies of Barack Obama and his filibuster-proof majorities in congress have been the primary culprits behind the present economic debacle (both supporting and maintaining on previous policy and massively exacerbating and expanding upon it) are at your fingertips.

As a hint, its virtually every single policy he's put in place since waltzing into office on the basis of the color of his skin and the cult of personality he and his drooling toadies in the media and academia encouraged and wallowed openly in during his election campaign.

Each and every initiative that has come from this president and his administration has been calculated to overburden, overwhelm, and finally crush the American financial sector, the solvency of the national government, the welfare system, credit markets, and the hated private sector.

The food stamp President aspires to be the General Secretary of the Supreme Day Care Center. Little quasi-totalitarian flaks like you and Mr. Graham, who would love nothing better than to live out your fantasies of the control and management of the lives of others according to your own envies, bigotries, and hatreds vicariously through the likes of Barack Obama, who, both due to skin color and ideology represent for you the embodiment of you own sense of moral grandiosity and purity of ideology, cannot, indeed, do not dare to be intellectually serious or honest with facts, history, or evidence.

Leftism is a war against reality. That's the essence of its very nature, and always has been.

The lying, the scheming, the furtiveness about true motives and beliefs, as well as the assault of free speech, property rights, free market economics, individualism, individual unalienable natural rights; achievement, excellence, morality, family, religion, and the camps and firing squads, are all, in the end, of a piece.

Stop playing so bloody dumb, and you might at least be able to salvage something from your attempts to rehabilitate the Great Destroyer and his gangster government.

[_Droopy]

I’m just taking a wild guess here, but I’d wager krose has more actual experience filling out tax forms that Droopy.

I'm quite dissapointed, Analytics, to see you descend to dirtbag level with Graham, Krose, Scratch, et al here, and accept Scratch's actionable defamation of me regarding my entire life history, of which neither he nor you know a damn thing.

I thought better of you, despite our strong disagreements, but it appears that nothing in this place can be taken at face value, at least, not for long.

Anyway, a numerical example might help illustrate the point. Last week I was listening to Fox radio, and a caller said he was a small business owner. He said that if Obama’s tax plan was implemented, his tax bill would go up by $20,000 a year. He said that if that happened, he’d be forced to lay off an employee in order to pay the $20,000. That seems to be Droopy’s angle here. Let’s deconstruct this a bit.

Based upon the $20,000 figure, this guy is implying he pays taxes on about $700,000 a year in profit. He pays about $200,000 in tax, leaving $500,000 after-tax (poor guy). If Obama’s plan was put into play, his after-tax income would decrease to about $480,000 (the injustice!).

So he considers laying off a guy to cover the $20,000 reduction. Remember that this employee contributes more value to the firm that what he is paid (if he didn’t, he’d be let go regardless of the tax rate). So let’s say for purposes of this example that he contributes $30,000 of value to the firm in exchange for his $20,000 salary.

You'd better call this guy up and ask him for the details, because its clear that your argument here is nothing but pure conjecture and guesswork. You have no idea what he does, what the financial dynamics of his business is, or what his real liabilities are.

What is clear is that expanding and hiring imply large costs, and at any given time, those are fixed. That means he can calculate, foresee, plan, and weigh relative incentives and consequences of expansion or hiring based on tax and regulatory costs.

Corporations are people, and corporations, as with small businesses, pay a plethora of multilayered taxes on the same dollars, over and over again. The corporate income tax is only one of those layers. Once one plows through the corporate income tax, personal income tax, dividend tax (for shareholders/investors), capital gains tax (if a shareholder re-invests his earnings in further productive economic activity), the estate tax, unemployment taxes, state and local taxes, healthcare subsidies, pension costs (for heavily unionized industries) etc., the tax "rate" on corporations and the human beings to invest in and made economic decisions relative to incentives and perceived risks, is much more complex than your cartoon caricature makes it appear.

Keep the following in mind as well. All of these officially designated taxes are only the tip of the government overhead iceberg. All business regulation, or whatever kind, is a tax, requiring outlays out of net profit that otherwise would be free to use for expansion and reinvestment. The compliance costs of complying with IRS rules and regulations regarding the calculating and paying of taxes are a tax ($265.1 billion of otherwise productive capital lost to tax compliance, minimization, and avoidance behavior, or a 22.2-cent tax compliance surcharge for every dollar collected by the IRS).

And finally, one of the most insidious taxes of all, inflation.

Billions are also lost each year by companies in legal and lobbying efforts to minimize, avoid, and evade as many of the above taxes as possible. That's also otherwise productive capital lost to artificially induced, government generated tax avoidance behavior that must be added to the actual tax burden itself.

Why would he do that? There are only a couple of possibilities. Maybe he doesn’t hire employees for the benefit they bring to the firm, but rather as charity cases (that’s the only way he could lay off employees without hurting his gross profit). Or maybe he hates the government so much that he’d lower his productivity (and his income) out of pure spite.

Yeah...uh...right.

[_Analytics]

I’m just taking a wild guess here, but I’d wager krose has more actual experience filling out tax forms that Droopy.

I'm quite dissapointed, Analytics, to see you descend to dirtbag level with Graham, Krose, Scratch, et al here, and accept Scratch's actionable defamation of me regarding my entire life history, of which neither he nor you know a damn thing.

What I meant to imply by that comment is that Krose talks about tax forms the way a tax professional would. I appologise if there was any confusion.

You'd better call this guy up and ask him for the details, because its clear that your argument here is nothing but pure conjecture and guesswork. You have no idea what he does, what the financial dynamics of his business is, or what his real liabilities are.

What is clear is that expanding and hiring imply large costs, and at any given time, those are fixed. That means he can calculate, foresee, plan, and weigh relative incentives and consequences of expansion or hiring based on tax and regulatory costs....

Be the particular details as they may, the overriding principle is that laying off a worker to cover the tax bill associated with a small change in the marginal tax rate doesn't make sense as a tax strategy. If he said he was going to change the ownership structure of his business, relocate, do something to defer profits, do something to increase his tax deductions (such as hiring more workers--say for R&D), etc., then he would have been talking about valid tax strategies. But having an employee when the marginal rate is 35% but not having him when it's 39.6%? That makes as much sense as punting on first down from the 50-yard line. There is never a valid reason to do that.

Regarding the rest of your post, I agree that the tax system is much too complicated and I'm in favor of greatly simplifying it.

The law sees personhood in corporations, but it shouldn't. Corporations are an effective ownership structure and are often needed, but only entities with a conscience and a soul ought to be considered persons.

And inflation isn't a tax. Inflation can transfer wealth from lenders to borrowers, but that is the risk they took when they decided to enter the usery business.