American Elephants

There Are Scads of Lessons Yet to be Learned from Solyndra! by The Elephant's Child

The company and it’s brand new, state-of-the-art manufacturing facility have cost the taxpayers at least half a billion dollars. Solyndra, as everyone tried to tell the government, was not a viable enterprise.  It is bankrupt, under investigation and it’s 1.100 workers are unemployed.

So they are applying for retraining for, um, something other than “green jobs,” under the federal government’s Trade Adjustment Assistance program, the Labor Department has confirmed.  If their appeal is approved they will be eligible for another federal program for aid that the Labor Department estimates will cost $13,000 a year per employee.

The request was made by a representative just 2 days after the company filed for bankruptcy, and covers all of the former employees. The company’s failure, they claim, was based in part on competition from China . which has been able to produce the panels at a far lower cost than U.S. manufacturers.

The TAA program offers help to domestic workers who have lost their jobs due to the trade practices of foreign countries.  The assistance includes job retraining, allowances for job searching, health benefits and up to 130 weeks of income support.

The White House,  once again acting on the concerns of Big Labor, has demanded that a $575 million extension to the program be included in the trade deals with South Korea, Panama and Columbia that has been sitting on the president’s desk since he was inaugurated, waiting for his signature.  The trade deals would have created many jobs, but have been held hostage to union demands.

Somebody at Solyndra knows how to take advantage of government programs.


Budget Chairman Paul Ryan on the Tax Code by The Elephant's Child
September 19, 2011, 7:50 pm
Filed under: Capitalism, Economy, Freedom, Law, Taxes | Tags: , ,

Fortunately we do have some people in Congress who are good at math, brimming with common sense, and disinclined to panic.  Paul Ryan is terrific.  We can fix the economy, and there are serious people trying to do so.


$1.5 Trillion in New Taxes? Desperate or Delusional? by The Elephant's Child

President Obama announced his latest plan for reducing the deficit, which amounts to the same old plan we’ve heard before..  Raise taxes and keep on spending. It is not a serious plan, but only an assurance to his base that he is faithful to leftist rules.

The tax hikes are designed to pay for more stimulus— the $447 billion American Jobs Act— but the taxes are levied on the very folks that create the jobs. The National Association of Manufacturers points out that 70% of manufacturing concerns in the U.S. have owners whose business is taxed at the individual rate.

President Obama calls it a matter of “fairness,” and wants to require that everyone with an income of over $1 million pay the same effective tax rate (the percentage of taxable income paid in taxes) as “middle-income taxpayers.”

People with seven-and eight-figure incomes from wages pay 35 percent on most of that income, the highest marginal rate. It is dividends and capital gains that bring down their effective tax rate, but dividends are paid out of corporate profits that have already been taxed at 35 percent. A large portion of capital gains come from corporate income that has already been taxed.

The intelligentsia of the Democratic Party is growing increasingly enthusiastic over raising the highest federal income tax rates to 70% or more, or having several brackets on incomes above $1 million, and tax capital gains and dividends at those same high rates.

Revenue from taxes is down, way down. Democrat response — we’re not taxing people enough.  We need to raise taxes. Republican response — you’ve got 9.1 percent of the people unemployed and actively looking for work, and almost double that if you add all the folks who have stopped looking, or are working part-time or temporary jobs.  Many businesses have closed.  Of course you have less revenue. Economist Alan Reynolds has pointed out that the income tax brought in less revenue when the highest rate was 70% to 90% than it did when the highest rate was 28%.

Think about what happens when tax rates are low.  A business can invest more in hiring good people, invest more in expanding the business, invest more in taking risks on new ideas.  The same thing goes for individuals. Contrast that with Nancy Pelosi’s strange claim that the best way to increase jobs is more unemployment benefits.

The left has many misunderstandings.  Is low math comprehension a membership qualification? Their most recent claim is that the U.S. has the lowest tax rate as a percentage of GDP since the 1960s. Obama claimed that “we’ve been on an experiment of low tax rates for the last decade, and growth has been anemic. So surely there’s room to raise taxes. Doesn’t anyone check claims against reality?

The OECD has stated that the United States has the most progressive taxes in the industrial world.  We have the highest tax rates for the richest people.

There are apparently no adults in the White House. I don’t know if Obama just has terrible speech writers or if he writes his own. He talks about “scouring the budget for every dime of wast and inefficiency,” yet refuses to cut spending — that means slashing education, surrendering the research necessary to keep America’s technological edge in the 21st century, and allowing our critical public assets like highways and bridges and airports to get worse.  It would cripple our competitiveness and our ability to win the jobs of the future. And it would also mean asking sacrifice of seniors and the middle class and the poor while asking nothing of the wealthiest Americans and biggest corporations.

Read that carefully.  “Slashing” to Obama, doesn’t mean cutting back government, which to him is quite impossible.  “Slashing education” refers to denying him the new stimulus money that he wants to direct to the teacher’s unions.  “America’s technological edge” means he wants to spend more on advanced battery factories and wind power and solar energy— also referred to as “winning the jobs of the future.” And those crumbling highways and bridges and airports — that’s more payback to the unions. There is nothing there for ordinary people who need a job, it’s all payback to democrat constituencies who raise money for Obama.

This is a tax plan that will not pass, that wouldn’t begin to pay for the new stimulus program the American Jobs Program, and that won’t create any jobs.  An example: Obama wants to offer a $4,000 tax credit to employers who hire a new employee who has been out of work.  To the businessman, hiring a new employee at an average of $45,000 a year, with, say half that amount in new costs for benefits and health care, an expense that continues each year.  $4,000 as a tax credit is supposed to be a big incentive to take the risk that the economy will improve, the flow of regulation from the government will ease off, people will have more income to spend.  Doesn’t pass the smell test.

You don’t recover from a recession by raising taxes.  You don’t recover from a recession by increasing spending.  Our current malaise is not a result of too little revenue, it is a result of uncontrolled spending, irresponsible, foolish spending on fantasies, dumb fantasies.  This is demagoguery, sheer demagoguery.

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