Pocketbook Issues

     “People tend to be fairly outspoken where their pocketbooks are concerned.” – Robert C. Townsend

     “It’s the economy, stupid.” – Bill Clinton

     Ronald Reagan won his first term as President by asking the American people, “Are you better or worse off than you were four years ago?” It struck the Carter Administration at its most vulnerable. A lot of people who were conflicted over side issues, such as the proposed Equal Rights Amendment and Reagan’s supposed belligerence toward the Soviet Union, answered that question for themselves and voted for Reagan on that basis.

     There’s little need for Donald Trump to ask that question today. We all know the answer. But few of us know how much worse off we’d be under a Kamala Harris regime. The details tend to elude us.

     Take Kamala Harris’s tax proposals. Some people profess unconcern because “it would only hit corporations and the rich.” These folks are seriously deluded and need help, but I don’t think I’m the one to dispense it. I have an unfortunate tendency to lift such persons into the air by their shirtfronts and scream at them until they or I pass out.

     Happily, a couple of other analysts have given the matter some effort:

     Kamala Harris keeps changing her tax plan, but her latest proposal is to raise the corporate tax rate to 28%. She would also raise the top capital-gains tax to roughly 32%, the highest since the 1970s.
     […]
     At a 28% federal corporate tax and an average of roughly a 5% state and local tax, the government would snatch away roughly 33 cents of every dollar of profit. This leaves 67 cents to the shareholders. Those include the more than 100 million Americans who own stock directly or through pension and other retirement funds. Every percentage point that Congress and Ms. Harris raise the tax would dilute the value of the stock owned by the rest of us.
     Things get even bleaker when one factors in her plan to raise the capital-gains rate. She favors raising the rate to roughly 32% from 23.8%. Add state capital-gains taxes and the rate can easily reach 36%. This is the government taking a second bite out of the corporate apple before the rest of the country has even taken its first. Remember: The value of a share of stock is the present value discounted by the expected after-tax future earnings of the company.
     Add it all up and government would snatch at least 50% of nearly every corporation in America under the Harris tax scheme.

     What do you suppose that would do to the value of those corporations’ stocks? Do you have a 401(k) account, or an IRA account, or any mutual funds? Do you see a connection there? If you don’t, I’m not sure I can do anything for you.

     Not too long ago, the attack on Americans’ retirement savings was more direct:

     Congress has already seriously entertained the confiscation of private pension funds, IRAs and 401(k) accounts:

     Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration.
     Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.
     The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration….
     The current retirement system, Ghilarducci said, “exacerbates income and wealth inequalities” because tax breaks for voluntary retirement accounts are “skewed to the wealthy because it is easier for them to save, and because they receive bigger tax breaks when they do.”…
     All workers would have 5 percent of their annual pay deducted from their paychecks and deposited to the GRA. They would still be paying Social Security and Medicare taxes, as would the employers. The GRA contribution would be shared equally by the worker and the employee. Employers no longer would be able to write off their contributions. Any capital gains would be taxable year-on-year.

     The notion of federalizing all Americans’ retirement prospects wasn’t even new then. In the late Eighties, Jesse Jackson proposed that the federal government make a rule that a 401(k) account must have at least 25% of its holdings in government bonds… but a government bond can only be redeemed if the government agrees to do so. During a “national emergency,” all such redemptions would be suspended – and guess who gets to decide what constitutes a “national emergency!”

     The Harris tax plan is a backdoor attack on the values of the stocks in every retirement account in America. That might not be its principal aim; the State might just want the money no matter who gets hurt. But that doesn’t mean it wouldn’t happen… nor that the Harris cabal would be unhappy about it.

     Add to that the notion of taxing “unrealized gains,” which the Democrats floated some time ago. Do you really think that such a “tax” – it’s actually a method of confiscation, but that’s a subject for another time – would only apply to “corporations and the rich” in perpetuity? Where does your pocketbook stand on these issues, Gentle Reader?

4 comments

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    • Drumwaster on October 8, 2024 at 9:55 AM

    I love the “Heels-Up Harris will really get those fat cat billionaires to pay their fair share” argument, because said billionaire not only pays a higher tax against earnings as a percentage (gotta love progressive taxation), but the raw numbers are enough to equal several hundred middle-class workers, as their taxes can easily stretch into the six- or seven-figure range. “Oh, they can afford it” is the immediate rejoinder, but what always stumps them is the old question of “why is it greedy to want to keep the money you earned from your labor, but not greedy to want to steal the money from others?”

    “How much is their ‘fair share’ (and be precise)?” is another that gets a blank stare, because it’s usually followed up with, “Oh, is that all? Why are they being forced to pay more than that?”

    God only asks for 10%.

    • SWVaguy on October 8, 2024 at 12:05 PM

    What do billionaires do with their money, anyway? Could they possibly employ untold numbers of people, invest in businesses, donate substantial sums to charity? And if the corporate tax is increased, will prices of goods also increase? Or would that be price gouging?

    • Doug Piranha on October 8, 2024 at 5:54 PM

    Drumwaster. I attempted to hit the “reply”  button for your comment, but for some reason the site software would not take me there. Anyway. Unfortunately there are far too many stupid people, as well as people who “suck at life” the latter are what concern me more.

    I worked at a job around fifteen years ago and one of my fellow coworkers fell into that category. He would constantly rail about the unfairness of everything; he wasn’t paid enough, everyone was constantly trying to screw him, the boss personally can’t stand him. You get the idea. One day he got into an argument with a cop who came by to interview another employee about something unrelated. I came on halfway through the conversation, but this guy was taking the cop to task for having a better health care plan and pension than he did. He further went on to demand that the cop tell him how much he made in overtime. I was frankly floored at his gaul, but the cop kept his cool and asked him some pointed questions. One of them was if he ever took any civil service tests and the answer was no. A few more questions and I came to find out that he was precluded from taking either a police, or fire fighter job due to a criminal record. The cop then told him something along the lines of “So you’re hostile to someone like me and the living I make, not because of anything I did, but because of some poor choices you made when you were younger that prevented you from getting another job?” The truth hurts and this guy Joe only got angrier. Finally he told the cop, “That’s why I’m voting for Obama, because he’s going to take away all of your beneis (benefits).” The cop calmly replied, “What makes you think he’ll give anything to you?” and that fellow readers was when Joe’s mind kind of derailed, because that possibility had not occurred to him.
    after the cop left, I found Joe at the corner store. He was unaware that I was on line behind him and I watched in disgust as he proceeded to purchase $250.00 worth of scratch off games. He didn’t see me as he left, but when I got back in the office – for whatever reason – he comes up to my desk and proceeds to ask me for ten bucks so he can get something to eat. Then I get the “Oh come on, I know you always have a little extra on you.” when I turned him down. You should have seen the look on his face when I told him, “See this is the problem with you Joe, you should have thought about lunch before you blew all that money on those scratch offs.” to which he angry replied, “What I do with my money is none of your friggen business!” and he gets even angrier when I turn him down again, yelling about how now he’s going without lunch because I won’t help him.

    That fellow readers is a huge problem. There are far too many Joes in the country who have no self reflection and simply cannot understand when a problem is of their making, but demand everyone else take care of it. What’s worse, the number of politicians and bureaucrats who will tell worthless people like Joe, “Sure, I’ll take what that guy has and give it to you, just make sure you vote for me.” are legion. I blame that on Obama, that got made the centerpiece of his administration in his first term.

    • Bill Cox on October 9, 2024 at 5:51 AM

    Not just no, but Hell no. So some commie rodent professor at a hard left University in the Big Apple thinks we ought to take Joe Sixpack’s retirement account, hand it over to the government to dole out a guaranteed income to the hoboes on the Bowery smoking meth and the 20 million Third World riff raff who jumped the border? What the hell is wrong with these people?

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