Subject: The Straw
Back on September 17th, during his weekly radio address,
President Obama proclaimed that Americans must finally start paying
their "fair share" in order to reduce the federal deficit. Of
course this is all just verbal misdirection used to hide the fact
that what he is actually talking about is merely another run at one
of the most important goals of his administration —
wealth redistribution — from those who have earned
it to those that covet it, with the ruling government class taking
their usual handling fee in the process.
And who is it that is not paying their fair share? Of course
it is certainly not the virtuous bottom 50% of wage-earners who
contribute little to nothing in income and payroll tax. (The bottom
47% pay no income tax at all, and that is precisely what makes them
virtuous!) No, according to Obama, it's the greedy, cheating, wealthy
households and businesses — the now famous 1% — that have
been holding out on the rest of us, and justice demands that they must
finally be forced to pay up.
And how are the top 1% fleecing us? By currently carrying only 40% of
the total income and payroll tax burden (up from 18% in 1980). And if
you increase that pool to the top 1.5% of households, representing the
magic $250,000 income number, then that group pays roughly half the
total. (For more details, see this article.)
So one is forced to ask, in Obama's mind just what level of tax burden
does he deem to be fair to impose upon that small minority of
Americans? Is it sixty percent? Seventy percent? More? He never
tells us, because there is no hard and fast answer. For Obama, merely
earning more than someone else is all the evidence required to condemn
that person and justify the use of government force to confiscate their
ill gotten "surplus."
Billionaire businessman Warren Buffett seems to agree with Obama's
egalitarian philosophy, and famously issued his call to
"Stop Coddling the Super-Rich",
demanding that the government raise taxes on him and other wealthy
people. Taking up the cause, a group of twenty-four "Patriotic
Millionaires" descended upon the Capitol to demand that Congress
raise taxes on the wealthy in order to deal with the serious federal
budget deficits and growing national debt. And just how serious were
they? When confronted by reporter Michelle Fields of The Daily Caller
(video below) and offered the opportunity to use their great wealth
to make a voluntary debt reduction contribution to the Treasury
Department, they all refused. And neither can I recall Buffett
volunteering some or all of his fortune towards that end. It does
make one wonder whether these patriots are truly concerned
about the debt. Or instead, is it possible that their actual motives
are not quite so altruistic, having more to do with seeing the chains
restricting the freedom and property rights of others pulled ever
tighter, even if it ends up impacting them as well?
"Patriotic Millionaires?"
In 1957, the author and philosopher Ayn Rand published the novel
Atlas
Shrugged, depicting the consequences that inevitably result
from government intervention in the realm of economics. As that story
unfolds, we see the government exerting more and more control over
business activities. However, instead of achieving the promised
improvement, we observe conditions continuing to deteriorate at an
ever accelerating pace. As government policies tie the hands of
competent business leaders, making it increasingly difficult for them
to act on their independent judgment and in service of their own goals,
we do not find them running to the politicians and begging to be
altruistically sacrificed on the pyre of subjugation as we witnessed
with our patriotic millionaires. No. Possessing far too much
integrity to abase themselves in that way, these men and women decide
to go on strike by simply disappearing and leaving the problems of
managing economic production to those who condemn them for their
ability to successfully do so.
Over the past few years more and more people have been shocked to
see in how many ways Atlas Shrugged has proved to be prophetic
in anticipating the specifics actions and consequences that have
resulted from bad political actions driven by an underlying evil
philosophy. And the idea that men of ability, when pressed too far
would choose to strike, is one literary device that has dramatically
presaged today's reality. As Rand put it in a conversation between
her characters, Francisco d'Anconia and Hank Rearden:
"If you saw Atlas, the giant who holds the world on his
shoulders, if you saw that he stood, blood running down his
chest, his knees buckling, his arms trembling but still
trying to hold the world aloft with the last of his strength,
and the greater his effort the heavier the world bore down
upon his shoulders-what would you tell him to do?"
"I . . . don't know. What . . . could he do? What would you
tell him?"
"To shrug."
Here are some examples of real-life strikers in action:
Stealing from the rich isn't an idea original to Obama; people have
been trying it ever since Ogg caught his first wild boar and Yuup
decided that he would like his "fair share" of that. But
hiring a group of thugs, called "politicians", and getting them to do
all the hard work for you was certainly a civilizing advancement! In
2008, the Maryland "Yuups" identified their "Oggs", and they were
called millionaires. Here's what happened, as reported in the
Wall
Street Journal:
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.
Push too hard on your victims, and just like Keyser Söze, "Poof,
they're gone!"
On occasion, a few of these individuals will make public the reasons
for their departure, similar to the radio address delivered by
John Galt towards
the end of Atlas Shrugged. Here are excerpts from two such
letters:
Good
Bye and Good Luck, by former Illinois state senator, Roger
Keats.
As we leave Illinois for good, I wanted to say goodbye to my
friends and wish all of you well. I am a lifelong son of the
heartland and proud of it. After 60 years, I leave Illinois
with a heavy heart. BUT enough is enough! The leaders of
Illinois refuse to see we can't continue going in the direction
we are and expect people who have options to stay here. I
remember when Illinois had 25 congressmen. In 2012 we will
have 18. Compared to the rest of the country we have lost
1/4rd [sic] of our population. ...
We live in the most corrupt big city, in the most corrupt big
county in the most corrupt state in America. I am sick and
tired of subsidizing crooks. A day rarely passes without an
article about the corruption and incompetence. Chicago even
got caught rigging the tests to hire police and fire! Our
Crook County CORPORATE property tax system is intentionally
corrupt. The Democrat State Chairman who is also the Speaker
of the Illinois House and the most senior alderman in Chicago
each make well over a million dollars a year putting the fix
in for their client's tax assessments. ...
Our home value is down 40%, our property taxes are up 20% and
our local schools have still another referendum on the ballot
to increase taxes over 20% in one year. I could go on, but
enough is enough. I feel as if we are standing on the deck of
the Titanic and I can see the icebergs right in front of us.
I will miss our friends a great deal. I have called Illinois
home for essentially my entire life. But it is time to go
where there is honest, competent and cost effective government.
We have chosen to vote with our feet and our wallets. My best
to all of you and Good luck!
Why
I'm Leaving New York, by Tom Golisano, Chairman of the
Board of Paychex, Inc.
I love New York. But how much should it cost to call New York
home? Decades of out-of-control budgets, spending increases
and relentless borrowing have made New York simply too
expensive.
Politicians like to talk about incentives — incentives
for businesses to relocate, incentives to buy local and
incentives to make smart decisions. After reviewing the 2009
budget, I have identified the most compelling incentive of all:
a major tax break immediately available to all New Yorkers. To
be eligible, you need only do one thing: move out of New York
state.
Last week I spent 90 minutes doing a couple simple things:
registering to vote, changing my driver's license, filling out
a domicile certificate and signing a homestead certificate
— in Florida. Combined with spending 184 days a year
outside New York, these simple procedures will save me over
$5 million in New York taxes annually.
That savings doesn't include that Florida has a 6 percent sales
tax, compared to New York's 8 percent or more. Florida has
lower utility taxes and lower gasoline taxes. The Florida
homestead certificate guarantees my property taxes will not
grow more than 3 percent. ...
It's not an easy decision, but I'm being forced away from my
family and friends, a pain shared by too many parents and
grandparents in this state.
I'm leaving. And by domiciling in Florida, I will personally
save $13,800 every single day. That's a pretty strong
incentive.
Like I said, I love New York, but I'm not going to pay New York
more for the waste, corruption and inefficiency that is New
York state government.
The same story has played out over and over again in
New Jersey,
New York,
Rhode Island,
Illinois
and elsewhere. And it's not just wealthy individuals, but entire
businesses which also look to relocate when the burden becomes too
great. As reported in CNN Money:
Buffeted by high taxes, strict regulations and uncertain state
budgets, a growing number of California companies are seeking
friendlier business environments outside of the Golden State.
And governors around the country, smelling blood in the water,
have stepped up their courtship of California companies.
Officials in states like Florida, Texas, Arizona and Utah are
telling California firms how business-friendly they are in
comparison.
Companies are "disinvesting" in California at a rate five
times greater than just two years ago, said Joseph Vranich, a
business relocation expert based in Irvine. This includes
leaving altogether, establishing divisions elsewhere or opting
not to set up shop in California.
Late Tuesday night, Democrats in the Illinois house and senate
rammed through Governor Pat Quinn's 67% hike in the state
income tax and a nearly 50% jump in the state corporate tax.
The increase will add $1,400 to the average family's tax bill,
and we doubt it will help job creation in a state that has lost
374,000 jobs since 2008.
New Wisconsin Governor Scott Walker immediately rolled out a
press release inviting Illinois businesses to decamp to the
Badger State, contrasting his agenda to reduce taxes and
welcome business with the Illinois increase. Indiana Governor
Mitch Daniels added: "We already had an edge on Illinois in
terms of the cost of doing business, and this is going to make
it significantly wider."
Contrary to what progressive state politicians repeatedly try to
tell themselves,
so long as alternatives are available, intelligent individuals and
businesses will not merely sit back and "take it", but will
continue to pursue what is in their best interest. When one state acts
abusively, there are 49 other possibilities to explore in order to
locate a healthier environment. However, when the federal government
gets involved in imposing its punitive taxes and regulation across the
entire country, then options become much more limited, difficult and
costly. For certain large scale industries and very wealthy
individuals, there may be the possibility of moving business or
investments offshore. But in many other cases, the problems created
by political intervention simply outweight all of the alternatives.
The tipping point is finally reached, and the most sensible path is to
simply call it quits — a phenomenon that has been accelerating
in recent years and has come to be known as "Going Galt".
In the Tri-City Herald
we here the story of Bob Bertsch:
It took Bob Bertsch 25 years to build his construction business
and just a day for it all to go away.
Bertsch, 65, said he is down-sizing because the tax burden got
too expensive to stay in business.
"I am tired of carrying all the tax load," Bertsch said. "I
renew 13 licenses here every year just so I can spend money in
this city."
Bertsch makes no attempt to conceal his frustration with the
costs government imposes on small businesses like his.
"Government is killing small business. We used to have 24
employees at our peak. Now, all of those people who used to
work here are in unemployment lines," he said.
On David McElroy's
Blog, he recounts the words of Alabama coal mine operator Ronnie
Bryant who, after having listened to two hours of business-bashing
by the public, environmentalists and politicians, had this to say:
My name's Ronnie Bryant, and I'm a mine operator. I've been
issued a [state] permit in the recent past for [waste water]
discharge, and after standing in this room today listening to
the comments being made by the people ... [pause]
Nearly every day without fail — I have a different
perspective — men stream to these [mining] operations
looking for work in Walker County. They can't pay their
mortgage. They can't pay their car note. They can't feed
their families. They don't have health insurance. And as I
stand here today, I just ... you know ... what's the use?
I got a permit to open up an underground coal mine that would
employ probably 125 people. They'd be paid wages from $50,000
to $150,000 a year. We would consume probably $50 million to
$60 million in consumables a year, putting more men to work.
And my only idea today is to go home. What's the use? I don't
know.
I mean, I see these guys — I see them with tears in
their eyes — looking for work. And if there's so much
opposition to these guys making a living, I feel like there's
no need in me putting out the effort to provide work for them.
So as I stood against the wall here today, basically what I've
decided is not to open the mine. I'm just quitting. Thank you.
Zero Hedge
posted the letter that hedge fund manager Ann Barnhardt sent to
clients, announcing the closure of her business. Excerpts follow:
Dear Clients, Industry Colleagues and Friends of Barnhardt
Capital Management,
It is with regret and unflinching moral certainty that I
announce that Barnhardt Capital Management has ceased
operations. After six years of operating as an independent
introducing brokerage, and eight years of employment as a
broker before that, I found myself, this morning, for the
first time since I was 20 years old, watching the futures and
options markets open not as a participant, but as a mere
spectator.
The reason for my decision to pull the plug was excruciatingly
simple: I could no longer tell my clients that their monies and
positions were safe in the futures and options markets —
because they are not. And this goes not just for my clients,
but for every futures and options account in the United States.
The entire system has been utterly destroyed by the MF Global
collapse. Given this sad reality, I could not in good
conscience take one more step as a commodity broker, soliciting
trades that I knew were unsafe or holding funds that I knew to
be in jeopardy. ...
Everything changed just a few short weeks ago. A firm, led by
a crony of the Obama regime, stole all of the non-margined cash
held by customers of his firm. ... What was a surprise was the
reaction of the exchanges and regulators. Their reaction has
been to take a bad situation and make it orders of magnitude
worse. Specifically, they froze customers out of their
accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even
allow them to liquidate. This is unfathomable. The risk
exposure precedent that has been set is completely intolerable
and has destroyed the entire industry paradigm. ...
I will not, under any circumstance, consider reforming and
re-opening Barnhardt Capital Management, or any other iteration
of a brokerage business, until Barack Obama has been removed
from office AND the government of the United States has been
sufficiently reformed and repopulated so as to engender my
total and complete confidence in the government, its adherence
to and enforcement of the rule of law, and in its competent and
just regulatory oversight of any commodities markets that may
reform.
The Hazleton, PA Standard Speaker
reports that Dr. Frank C. Polidora, an orthopedic surgeon, quits:
A Hazleton doctor is resigning from the medical staff of St.
Luke's Miners' Memorial Hospital, Coaldale.
Dr. Frank C. Polidora, a longtime Hazleton orthopedic surgeon,
blames the passage of the Patient Protection and Affordable
Care Act in March for his decision. He has been on the
hospital's staff since 2003.
"The Democrats' 'passage' of OBAMACARE on March 21, 2010, was
the final straw," Polidora wrote in his resignation letter to
William Crossin, chief executive officer of St. Luke's-Miners.
The resignation is effective Saturday.
Contacted Thursday, Polidora said his decision to leave had
nothing to do with the hospital, a facility he praised.
Rather, it was about following his own principles. ...
"To be a true physician, one must be moral. To be moral
requires freedom, both political and economic. The freedom of
the physician has been lost by degrees over the last 45 years,"
he wrote in his letter. "OBAMACARE has totally destroyed this
freedom, especially as it applies to a hospital practice." ...
"I fear for the future of the hospital as those in power in our
country are seeking to replace the practice of medicine, the
profession of healing, with an industry that produces health,
but who will, intentionally or not, create a process that
removes the unhealthy," Polidora said in his resignation letter.
The Wall Street Journal
discusses Thomas Depping's decision to close Main Street Bank:
Main Street Bank lends most of its money to small businesses
and is earning decent profits. But the Kingwood, Texas, bank
is about to get out of the banking business.
In an extreme example of the frustration felt by many bankers
as regulators toughen their oversight of the nation's financial
institutions, Main Street's chairman, Thomas Depping, is
expected to announce Wednesday that the 27-year-old bank will
surrender its banking charter and sell its four branches to a
nearby bank.
Mr. Depping plans to set up a new lender that will operate
beyond the reach of banking regulators — and the
deposit-insurance safety net. ... "The regulatory environment
makes it very difficult to do what we do," says Mr. Depping.
...
Bankers have long complained about their overseers, but it is
rare for a bank to basically close its doors aside from an
acquisition or failure. Mr. Depping blames the move on a
tightening regulatory noose.
In the beginning it was a dream. I would own a restaurant in
East Hampton. It would be a warm, beautiful place with great
food and wonderful service. It would become one of the most
popular restaurants in the Hamptons. ...
So why am I selling one of the most successful restaurants in
East Hampton? In 2008 I watched Barack Obama run over Hillary
Clinton to become our President. From the very first "Yes We
Can" and "Change You Can Believe In," I decided that this
country was falling in love with an attractive,
great-speechmaking hustler/socialist who, if he got into
office, was going to pursue his agenda to destroy the best
health care in the world and re-distribute wealth. Yours and
mine. I told my friends that from that moment on everything
I owned — my houses, my advertising business, my
newspaper and my restaurant — was for sale. ...
Why does this so go against my grain? Maybe it's because of
where I've come from to get to where I am. I've been broke,
so broke with a wife and kids and no job that I had to borrow
money from my parents, who didn't have it for themselves but
always managed to come up with it for me.
I got lucky and worked day and night and built a great
advertising agency. I have employed thousands of people in
my lifetime. I've been good to them and they have been good
to me.
I'm just not ready to have my wealth redistributed. I'm not
ready to pay more tax money than the next guy because I provide
jobs and because I work a 60-hour week and I earn more than
$250,000 a year.
So why am I dropping out? Read a brilliant book by Ayn Rand
called Atlas Shrugged, and you'll know.
For every newsworthy story of an individual or business that decides
to throw in the towel, there are untold others that go unreported.
Many businesses — and sometimes entire industries — are
destroyed by a burden of taxes and regulations that simply cannot be
borne in a market-driven economy. This much is at least clear to
some.
But what gets little discussion is the psychological toll that all
of this government intervention takes. What few seem to understand
is that for the small minority who are prepared to accept full
responsibility for themselves — living by their own thought,
judgment, goals and actions — each unreasonable tax is not
merely a burden, but is seen to be a gross injustice; every new
piece of legislation is another set of circus hoops through which
one is forced to jump; regulations are a leash, and every regulator
a self-appointed master with a whip in hand. For the independent man
or woman, government intervention attempts to reduce them from their
stature as fully human, to some form of caged beast under the constant
control of others.
Government intervention is the supreme demotivator!
It hammers away at passion. It undermines creativity. It erodes
drive and the will to succeed. It destroys the joy found in action
and the pride realized through success.
To put it simply, it drains the fun out of life.
In an attempt to place a monetary price tag on our economic losses,
enormous energy is invested by bureaucrats, analysts, pundits and the
media in calculating debt ratios, unemployment levels, energy costs,
borrowing fluidity, and any number of other metrics. All the while
the real price being paid — the total loss of human motive
willpower — dwarfs all of those calculations, but goes
unacknowledged. Go back and reread the stories above and look for
what they all have in common. These once productive individuals, all
of them wealth and job creators, have pulled the plug on their
endeavors. And why? Because, thanks to government intervention, they
can no longer find the joy that their work once brought them. The
rewards of hard work have been lowered while the costs have increased,
to a point where further effort is no longer justified — at
which point, it's time to shrug.
If you see the issue in this light, then you can understand why, when
Ayn Rand spoke of the struggle for our future, she did not describe it
principally in economic or political terms, but instead framed it as
something much more important: a moral battle — a fight for the
true nature and soul of mankind. At its most fundamental level, each
person must strive for their passion — their joy — their
happiness. And they must oppose anything that stands in the path of
those pursuits.
Today, the greatest obstacle standing in our way is a government that
has escaped its constitutional straitjacket and become an oppressive
monster, injecting itself into every crevice of our lives. If we are
to move forward along a path to where we once again can assert
ourselves as individuals, in full control over our own destines, then
it is imperative that each political action we take be directed
squarely at that goal. Half-hearted stop-gap measures will not solve
this problem, and are in fact, partly responsible for what led us to
this moment. It is time to apply the ultimate litmus test to every
statement uttered by every person aspiring for political office:
Does this candidate articulate a consistent set of well defined
policies that support my personal independence? If he accomplishes
the things he is proposing, will this maximize the opportunity to
pursue my life passionately, allowing me to set my own goals in
service of my own definition of happiness?
I suggest that if you cannot respond with an unreserved "Yes!",
then this is not a candidate worthy of your support. Reject him or
her and seek out another who has earned the right to represent you
by demonstrating that they fully understand and respect the right to
your personal independence.
Never compromise when extending your political support, for doing so
is simply an indirect way of compromising on your own life, your
values, and ultimately your joy. Always consider just what you
demand of yourself when pursuing your goals, and then be sure to never
settle for anything less from those in whom you are prepared to vest
with political power as your representative. This is the only strategy
that has any long range hope of correcting our current situation.
Anything less is a recipe for our continued cultural descent.
P.S. 01-06-12:
Here is a link to an article by Hungarian entrepreneur Andor Jakab,
who explains in detail precisely why he's not even considering
getting started building up a new business. The final straw can
break some before they even get out of the gate!
This
Is Why I Don't Give You A Job
Please add me to the list to be notified of updates to this site.
