Sunday, November 15, 2015

Ted Cruz, lose the VAT tax.

All presidential contenders put out tax plans. The details are virtually irrelevant. Whether Ben Carson wants Americans to tithe to their government or pay 15% doesn't matter because it will never happen. By the time any plan gets through Congress and the lobbyists, it will inevitably be so bastardized as to be unrecognizable from a candidate's proposal or party platform.

What a tax plan reveals, however, is the philosophical bent of the candidate. I like Ted Cruz because he proposes to abolish the IRS. But for some perverse reason, in doing this he proposes a VAT tax. The problem is that a VAT tax requires a huge bureaucracy to enforce it, so even if you did eliminate the IRS you would have to replace it with another monster of the same dimensions. The floating of a VAT tax as a reasonable idea should be on par with pre-Obama proposals of national health insurance. Best not to go there at all.

But first of all, what is a VAT tax?

VAT stands for "Value Added Tax." It is a consumption tax, not an income tax. That means it is assessed on what you buy, not what you earn. That is good. But the problem is, it is levied on every transaction, not just the last transaction (i.e., sale to the end-user or consumer, as in a sales tax). In practice VAT taxes are typically around 15% from my experience.

So, for example, if you make a product from scrap and sell it for $1.00, you owe 15 cents to the government. Then, if the wholesaler who bought it from you sells it for $2.00, he owes another 15 cents to the government (because $1.00 of value has been added to the product). The retailer who sells it for $12.00 owes $1.50 to the government (because $10.00 of value has been added).

That's a lot of transactions to keep up with. The example above puts VAT taxes in the simplest of terms, and I'm ignoring the typical deduction of taxes paid in each stage. But in reality there end up being a million exceptions and rules and a lot of ambiguous arguments about what is really "value added."

I had experience with a VAT tax when I had a business in Mexico. It is a pain in the neck. Every business there, no matter how small, has to have an accountant come in at least weekly just to keep up with the VAT taxes. (Yes, I know "VAT tax" is redundant, but it's clearer that way.)

Besides all the accounting, the VAT tax allows government reach into a business's pricing and marketing practices which should be confidential. It also overburdens small business which cannot afford the accounting cost more easily absorbed by large corporations. And a VAT tax is just one more way government has of control, and any way you slice it that means loss of individual freedom.


Given human nature, any tax bureaucracy is going to be corrupt because the more onerous it is, the harder people will work to skirt it, and the more likely it will be used as a political weapon as we have plainly seen in administrations from Nixon to Obama.

The only ways to tax effectively and "fairly" (meaning, collecting taxes but keeping the government out of everybody's business) are the ways we as a country started out doing it: with tariffs, fees, and sales taxes. This would eliminate the tax exemption on internet sales, for example. And states should be in charge of collecting taxes and passing on the federal portion of what they collect. In return for this power gain by the states, property taxes should be outlawed so that no level of government can confiscate property for any reason, returning America to the ideal of "life, liberty, and the pursuit of happiness." You will know that that last phrase "pursuit of happiness" was substituted for "private property" if you've learned your history well. If not, then you've just learned.

So Sen. Cruz, lose the VAT tax. Scrap your plan and start over. If you had not been in law and government all your life, you'd know better than to propose such an albatross for us here in the real world of commerce.

Otherwise, I think you're a great candidate.

Monday, November 2, 2015

Movie Review: Bridge of Spies

It's got to be a really compelling subject and a rainy Saturday to get me to go to a movie theater any more. Just that set of circumstances came into alignment this past weekend. I am happy to report that Steven Spielberg's new movie starring Tom Hanks as James Donovan, negotiator of the release of U-2 pilot Francis Gary Powers, was worth every penny of the admission price. And would have been even if you paid full-pop instead of the matinee price as I did.

Further testament: My companion is no fan of history and has to hit the ladies' room at least once an hour. But this movie is so compelling she never left her seat. And it is two and a half hours long. I almost had to go back for a second tub of popcorn, but I didn't want to leave my seat either.

I'll skip the story line here as it's well available elsewhere. But I am a big fan of history and this movie punched several of my buttons on that score. As a young liberal with a head full of mush, I was lucky to get to study some in West Germany in the late seventies -- a full decade before the Berlin Wall came down. I visited Berlin at that time and saw the wall, saw the no-man's land, the guard dogs, the soldiers in the towers with high-power rifles, and Checkpoint Charlie, all of which are depicted with stark realism in this movie. At left is one my pictures of the wall taken from West Berlin in 1979. The crosses bear the names of East German citizens killed trying to cross to the west, or "Unbekannt" which means "unknown." Note the gray buildings in the background. That is the east.

Stepping into East Berlin from the west was like Dorothy going from colorful Oz to black and white Kansas. Much of the city was still in ruins from World War II. It was dirty, gray, depressing. The citizens seemed like prison inmates. Eye contact did not happen. The stores had a pathetic selection of goods. I only wandered around for a couple of hours. I remember seeing the Soviet Embassy with the bust of Lenin out front (just as shown in the movie--my picture of it is at left). And even now, forty years later, I remember feeling relieved when I got back to the western sector.

I learned a valuable lesson about the logical conclusion of socialism / communism from that trip: For a collectivist system to prevail, it must destroy the spirit of the individual.

Coincidentally I happened to finish a re-reading of George Orwell's 1984 this weekend. This novel was inspired by the very things I witnessed in East Germany. And you don't have to make a great intellectual leap to see that the dystopia Orwell so brilliantly depicts in the book are well underway in western society now as well -- the lies from government, the draconian insistence on orthodoxy of thought and behavior (political correctness), and the trend toward absolutely no personal rights -- all for the good of the collective, of course.

"Bridge of Spies" brilliantly touches on all these themes. It is a testament to the wisdom and preciousness of the U.S. Constitution. It is a reminder that the Bill of Rights is not part of the Constitution to protect comfortable speech and "good" citizens, but to protect the rule of law and the rights of the individual, no matter how odious one might be. Even a Soviet spy passing nuclear secrets back to the motherland.

My trip to the Soviet puppet East Germany dispelled from me any notion that wealth redistribution and anti-capitalism were a better way, and "Bridge of Spies" captures that era and the conflict perfectly. But "Bridge of Spies" is by no means preachy or jingoistic. It is top-flight entertainment that happens to be based in the many-layered and complicated history of modern times. And because of that, it is not only a riveting movie, but an important message about the founding principles of our republic -- as Benjamin Franklin noted, if we can keep it. Let's hope there are James Donovans in this and the coming generations to safeguard the legacy of our founding fathers.

Sunday, October 25, 2015

BlueCross, BlueShield, BlueNopoly - Continued.

In my last post about health insurance way back in 2013 - just two short years ago, though considering the changes I'm about to reveal, it should have been two decades - I griped that my catastrophic health insurance cost me about $3,500 a year even with Obamacare's most punitive provisions on delay.

Last year, once all the Obamacare requirements kicked in, the cheapest comparable policy I could get, still with BCBS because I couldn't find another provider, saw my annual premiums shoot up to $6,600 a year.

This year, now that the penalties for not having insurance have gotten really, really punitive, what do you think? I just got the letter.

There it is. $753.10 per month. Over $9,000 per year. Obamacare kicks in and my premiums rise to 257% of what they started in just two years. For coverages I don't want or need. With no change in my health. And no claims filed. And nowhere to go to escape this rape of the American taxpayer.

Thanks, Barack Obama.

Thanks, John Roberts.

Thanks, feckless Republican majority.

Thanks, BlueCross BlueShield Tennessee.

For nothing. 257% of it.

Sunday, September 20, 2015

Back to School with Donald Trump

     I'm late to the party on a lot of stuff. Still using a flip phone, for example, and no intention of changing that. So pardon me for recommending a movie made in 1986 that I've only come to know recently. But better late than never: For a feel-good movie full of belly laughs that still holds up well, get hold of Rodney Dangerfield's "Back to School."

     It is ten times funnier than "Caddyshack" and is a tour de force for Dangerfield, who co-wrote it and stars as the crass but loving father, Thornton Melon, who tries to convince his disillusioned son to stay in college by enrolling himself. Even though he has been a huge success in business, Melon's own father had told him he was a loser if he never got an education.

     Melon comes across as a buffoon to the college administrators and has no credentials to get in, but a quick donation to the business school does the trick. In the process he becomes a big hit with the student body and a real thorn in the side to the condescending and self-important administrators and faculty. I'll leave it at that so if you watch it (you can go to the Amazon listing by clicking the graphic above) you can enjoy the whole story.

     Donald Trump is no buffoon nor does he lack education credentials. He has run circles around his adversaries in nearly every arena. His wealth generation alone should buy automatic respect from anyone and his larger than life persona should seal the deal.  But to listen to some of his opponents, he might as well be Rodney Dangerfield.

     I think Bobby Jindal is the most disappointing of all. He's smarter than that, and it's sad to see his ego get the best of him. By attacking Trump, he's put himself in the company of lesser lights like Rick Perry and Lindsey Graham. Jeb Bush and Rand Paul, too. Each time one of them characterizes Trump as a less than serious candidate, he sounds like a jilted suitor whose girl has chosen the charm of a ne'er-do-well over their solid resume. The detractors in general, not just the competing Republicans but other luminaries like Glenn Beck and Bret Stephens, sound priggish and petty. It reminds me precisely of the faculty and staff at the college in "Back to School."

     The fact is, Donald Trump will win. No matter how polished the others are, how long they've been in politics, how strong their pedigree, they don't stand a chance against the Obama legacy of lies, corruption, and exploitation they'll have to face in a general election, whether it's against Clinton, Sanders, Biden, or some candidate that will come out of the woodwork at the last minute (my bet is it's Michelle Obama!). If these guys (and Carly Fiorina) are smart, they'll get behind Donald Trump and make sure they are on the winning team.

     Because Donald Trump can do the Triple Lindy. Watch the movie. You'll know what I mean.

Wednesday, September 2, 2015

Carly Fiorina says...

...that Kentucky's Rowan County Clerk Kim Davis who refuses to grant marriage licenses to same-sex couples despite a ruling from the Supreme Court to the contrary should quit her job since she's a government employee.

I suppose that makes logical sense, and I like Ms. Fiorina for her fiery eloquence, but if she really wants my support for her presidential campaign, in the same breath she should have said that Barack Obama should quit his job as well. After all, what's good for the goose is good for the gander. He is not performing his lawful duties as chief executive either, starting with the enforcement of immigration laws among many other affronts to the Constitution and federal law.

If they can run Kim Davis out of office, then certainly Barack Obama should go at the same time.

Tuesday, September 1, 2015

McKinley never went to Alaska.

And Columbus never went to Ohio. Nor Washington to the Pacific northwest.

Why did Obama rename Mount McKinley? It had nothing to do with his spokesman's excuse that McKinley never even went to Alaska. It had nothing to do with honoring native peoples.

It has everything to do with the reason Obama had Churchill's bust removed from the White House as one of his first executive actions. The reason? Obama's a maladjusted jackass. He'll do anything he can think of to stick his thumb in the eye of America.

Monday, August 3, 2015

Who is John Galt?

     Well, at least for the time being, it seems to be Donald Trump.

    John Galt, for those unfamiliar with Ayn Rand's novel Atlas Shrugged, is the man who vowed to stop the engine of the world. In Rand's dystopian story, the world is falling apart, driven into a tailspin by self-serving politicians and trust fund babies who retain their wealth and power by exploiting the pathetic while punishing the producers of the world as enemies. That's the engine of the world that John Galt vows to stop, and when the word finally gets out, the people know he's right and go wild for his cause.

     I won't say too much more than that so as not to spoil the story for those who have not read the book. Or seen the movie. Actually, there are three movies, Part I, Part II, and Part III.

    I have just gotten a copy of Part III and enjoyed it. Like the other two, it tells the story well but lacks the high budget production values of a full-blown Hollywood feature film.

     I'm not knocking it. It doesn't matter how you experience Atlas Shrugged, it is a modern masterpiece of political insight. First published over fifty years ago, it has proved chillingly prophetic of the tyrannical, freedom-crushing government we find ourselves with today, yet serves up an inspiring story of hope with a recipe for undoing the damage.

     I don't care if Donald Trump is a bad Republican or a closet Democrat. I don't care if he disagrees with me on this policy or that policy or just about any policy. And I don't care if he's something of a jerk.

     What I care about is that Donald Trump loves America, champions free enterprise, has a proven track record of achievement, and on top of all that, especially important for this election:

     Donald Trump can win.

     And when he does, I fully expect him go to stop the engine of the world that is undoing America.