American Elephants


Tax Hungry States Are Going After Internet Retailers by The Elephant's Child

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The rise of internet retailers is changing the world of retailing. There are still lots of customers who want to see the product in person, or in the case of clothing—try it on. For clothing and shoes, buying on the internet gets pretty iffy unless you reliably fit a standard size. But for the states, sales and use taxes are a very big deal,

The Commerce Clause “gives Congress the power to regulate trade “among the several States.”

The state of Alabama is openly defying the U.S. Supreme Court in an effort to squeeze millions of dollars of tax revenue from businesses beyond its borders. Tax officials in Montgomery are insisting that out-of-state firms must, effective Jan. 1, collect and remit sales and use taxes if they annually sell over $250,000 in tangible goods to Alabamans.

This unconstitutional tax grab cuts to the heart of the Commerce Clause, which gives Congress the power to regulate trade “among the several States.” Alabama’s regulation directly contravenes the Supreme Court’s 1992 ruling in Quill v. North Dakota. In that case, the court held that North Dakota could not require an out-of-state office-supply company to collect sales taxes because the firm had no offices or employees there.

To get around that, Alabama’s revenue commissioner, Julie Magee, is putting forward an untested and suspect legal theory: The state claims that if its residents buy more than $250,000 a year from a remote business, then the seller has an “economic presence” and should be treated the same as a brick-and-mortar shop in Mobile or Birmingham.

That will be headed back to court. Online retailers, or catalog retailers have three options— they can assume that since the new regulation from Alabama violates Quill they can disregard it, in which case they would face tax assessments and audits from Montgomery. They can comply with the regulation and start collecting Alabama’s taxes, or they can simply quit selling their products in Alabama.

I have worked in the head office of a major retailer who sends out millions of catalogs and has stores in most states, and simply pays taxes in every state, for if they don’t have a store there they probably will soon. In the current climate, many chains are closing unprofitable stores, including Walmart, the nation’s largest employer.

Lots of catalog companies have gone out of business, as have many retailers who do maintain a physical presence. Retail business changes with the economy. But proposals like Alabama’s hit small online retailers particularly hard. Rep. Bob Goodlatte (R-VA) proposes focusing tax collection on the seller’s location. A small online retailer would pay taxes only from the state where it actually operates.

Congress needs to legislate, or tax-hungry states will attempt to overturn the Supreme Court Quill decision by regulatory fiat even if it circumvents the legislative process. It’s complicated, but a very big deal for online retailers. Amazon is working hard on the delivery issue, trying to cut down the time it takes to get a package to a consumer, in order to make ordering online more attractive. And not just delivery by drones. There is plenty of room for a cooperative effort to be fair to everybody, including the customers and the states.

I order from small online retailers who do not have a physical presence in my state. I’ve seen way too many of my favorite small retail shops go out of business. Successful retailing is hard, and not many businesses thrive for a very long time, especially in a climate of heavy governmental regulation. It’s easier to find something new to tax, or a new tax to impose, than it is to be a very good manager of changing economic conditions in your own state.

The battle between government and business has gone on since time immemorial, but everyone is better off when governments recognize that economic growth doesn’t happen in the government sector. A good business climate benefits everyone.



The Ugly Side of the Environmental Movement, And it’s Deplorable Actions by The Elephant's Child

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Aubrey McClendon, former CEO of Chesapeake Energy, “died March 2 in a car wreck the day after being indicted for conspiracy to rig bids on oil and natural gas leases. He will likely be remembered for two things: being a pioneer of the shale gas boom and a possible criminal who, in death, may have eluded a prison sentence. But McClendon may have had one other lasting legacy: he helped hasten the collapse of the coal industry in the United States.”

Between 2007 and 2012, McClendon and his associates contributed around $26 million to the Sierra Club to oppose the building of new coal-fired power plants. McClendon’s motivations were hardly pure; he knew that preventing new coal plants meant more demand for his company’s product, natural gas. And the contributions led to a scandal for the environmental group, whose well-funded “Beyond Coal” campaign has been instrumental in not only preventing new plants, but also shutting down aging ones.

Executive director Michael Brune had a simple explanation for accepting money from a big gas company that was drilling hundreds of wells using hydraulic fracturing: the enemy of our enemy is our friend. “The Sierra Club board of directors … determined that natural gas, while far from ideal as a fuel source, might play a necessary role in helping us reach the clean energy future our children deserve,” Brune wrote in <aref=”http://sierraclub.typepad.com/michaelbrune/2012/02/the-sierra-club-and-natural-gas.html”>a 2012 blog post. “The idea was that we shared at least one common purpose [with Chesapeake]—to move our country away from dirty coal.”

The Sierra Club turned down further contributions from McClendon and his Chesapeake colleagues as it began to worry about the boom in natural gas fracking. That didn’t affect the outcome: McClendon’s philanthropy helped make it very unlikely that any new coal plants will be built in the U.S.—and helped push coal, the backbone of America’s power sector for more than a century, into a sudden and dramatic twilight.

Here’s another excellent example of the rot in the Green movement. If you can get rid of coal as a resource for power generation by claiming that it is the cause of anthropogenic global warming, what’s the big deal if you cause thousands of coal miners to lose their jobs, if you can force the country to depend on your natural gas for their electric power, and make your company and yourself rich by so doing?

The Sierra Club was once a nice organization with the goal of protecting the Sierra Mountains. They sponsored catered pack trips through the Sierras, and publicized Ansel Adams beautiful photography of the Sierras and Yosemite National Park. But at some point they became a leftist political agency under the cover of being a nice environmental club.

But then the coal industry once supplied nearly half of America’s power needs, and kept the cost of power low for American homes and businesses, enabling the prosperous industrial country we live in.  Mr. McClendon is hardly the only person who has been trying to enrich himself and his business by using the fear of a crisis of global warming that has been pushed by so many environmental organizations.

The cheap and affordable energy that coal-fired plants produce cannot be replaced by renewables, no matter how much investors hope it to become fact instead of wishful thinking. Wind is highly intermittent — we had a minor wind storm today that deposited bushels of fir cones and branches on the roof and on the streets (and on the driveway I laboriously swept yesterday) yet there were long periods with no wind at all, and even some blue sky.

Wind energy proponents talk about optimum performance — what a wind farm could produce if all the turbines were turning at the speed that would be produced by a perfect flow of wind. But Mother Nature doesn’t work that way.Wind is intermittent at best, and even shuts down for long periods. When it isn’t blowing at the perfect speed, then the power has to come from somewhere else. Hopes for battery walls ignore the availability and expense of the rare earths required which largely come from China, who has cornered the market and can raise prices as they choose.

President Obama’s Clean Power Plan will prevent 0.03 degrees of warming by 2100.

Christiana Figueres, executive secretary of the United Nation’s Framework Convention on Climate Change, admitted that the goal of environmental activists is not to save the world from ecological calamity — but to destroy capitalism.

“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution,” she said.



Donald Trump is the Ultimate Insider by The Elephant's Child

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Matthew Continetti, writing at the Washington Free Beacon today, said “Donald Trump has become the Republican frontrunner because GOP primary voters want an outsider who is angry at the condition of the country and the party establishment.” this really struck me — because it is just dead wrong. I don’t know whether Continetti is correct or not, but if GOP primary voters assume that Donald Trump is an outsider, they are mistaken. Mr. Trump is the ultimate insider.

He has told us so repeatedly. Trump explains that he donates to both parties because he is in business, and that’s just what you do. Of course. He donates because he is buying access. If he gives a significant sum to a politician, whether a national candidate, a state candidate or someone in city administration, they will see him when he calls. They will look with favor, if they are able, to his requests, favor at least partly, his side of the latest ‘deal.’ That is by nature — an insider. That’s how you make deals.

Forgive me, but the party “establishment,” whoever that is:  Party Chairman Reince Priebus? Senate Majority Leader Mitch McConnell? House Speaker Paul Ryan? Who precisely are you angry at and why? The Republican “establishment” did not pass ObamaCare, but have voted to repeal it in full six times, and in part over 50 times.

Those changes that you resent so much are a direct result of President Obama having a House and a Senate with Democrats in charge, and Republicans couldn’t do a thing about it. Even when the voters revolted and gave control of the House and the Senate to Republicans, there was little that they could do beyond putting a bill on the president’s desk, which he promptly vetoed, as he has. Shut down the government? That only frightens voters who fear that they won’t get their Social Security checks, or their welfare checks, or their food stamps, or their medical care. They depend on those payments, and shutting down the government really frightens them, and loses votes for Republicans at the polls.

The founders designed a Constitutional system that was meant to be slow, with participants thinking and arguing over potential legislation extensively to be sure that it was good legislation. They had no concept of a federal government with hundreds of agencies, departments, offices and bureaus all with the power to issue regulations. Who knew that it would take a Freedom Of Information Act (FOIA) lawsuit which could take months and years to pry loose information that Congress needed to do their work? That many arguments about authority would go to the Supreme Court for a decision, and those can take years proceeding through the courts.

Of course there should not be hundreds of agencies, departments, offices and bureaus, and they shouldn’t be issuing regulations. Congress is supposed to be making the laws, not palming them off. It is the Democrats who are in favor of BIG government, and essentially believe that most everything should be done by government. I believe Bernie Sanders recently said that charities should be abolished and the government should take that task over. It is of course about power. And that’s why Democrat plans seldom work.

If  you are angry at the vast number of people who have dropped out of the labor market, the huge numbers on food stamps, the sluggish economy that Obama keeps claiming is growing and prospering — why aren’t you angry with Obama?

If you are distraught at open and unenforced borders, at illegals placed all over the country, and criminal illegals in sanctuary cities, blame the Democrats. If you are disturbed by President Obama’s announced numbers of “Syrian” refugees to be admitted to the country, Republicans are trying valiantly to stop some of these things.

If you worry about ISIS, then don’t fall for the Democrats’ propaganda about “Bush Lied, People Died.” Bush did not lie, every intelligence agency in the world believed that Saddam had WMD — and so he did. He had 500 tons of yellowcake, enough to make 168 nuclear weapons. He had vast warehouses full of “agricultural chemicals” which are the precursors of nerve gas and other poison gasses, and the chemicals that turned them into nerve gas were stored in Saddam’s scientists’ home refrigerators. ISIS has found vast stores of Saddam’s poison gas, which are still turning up. ISIS exists because Obama did not make any effort to make a status of forces agreement and just pulled all the troops out, leaving Iraq to fend for itself.

Republicans are doing what they can to prevent Obama’s overreach but as he has told us—he has a phone and a pen— and he is going to do as much as he possibly can to go around Congress and accomplish his ends with executive orders and signing statements and whatever other executive tricks he can think up. He has no intention of working with Congress at any time. Be as angry as you want, but at least direct your anger constructively at the source of the problems, not at those who are trying to remedy them.



Ten Long Years of Substandard Growth. Thanks, President Obama. by The Elephant's Child

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“The United States has gone for a record of 10 straight years without reaching 3 percent growth in real Gross Domestic Product.” President Obama has consistently tried to portray the economy as recovering and growing, but the Bureau of Economic Analysis has released the data and it’s a dismal picture.

The average growth rate for economic recoveries since the 1960s is 3.9 percent. The Obama recovery is ranked at an average GDP growth rate of just 2.1 percent — among the very slowest in history.

When the economy tanks, it is usually because optimism went a little overboard. There’s usually some big precipitating event, but too many small businesses were underfinanced, and too many large businesses hired too enthusiastically, and too many unwise investments were made, and when the trigger went off, everything tanked. People get laid off, businesses contract and refine their goals, tighten up and prepare to do business more efficiently.

The longest previous stretch of years when real GDP didn’t grow by at least 3.0 percent, as calculated by the BEA, was the four-year stretch from 1930 to 1933, during the Great Depression, when President Roosevelt embarked on a program of vast experimentation with the economy and the government. There have been four other periods when real GDP growth didn’t reach 3.0 percent — 1945-1947; 1956-1958; 1980-1982 and 2001-2003. The BEA put out a press release today when it published its revised estimate for GDP growth in the 4th quarter of 2015: September, October, November and December increased at an annual rate of 1.0 percent.

No wonder the people are angry.

Senator Dan Coats (R-IN), chairs the Joint Economic Committee of the U.S. Congress. In the Annual Report of the Council of Economic Advisers sent to Congress this week, the projection that real GDP would only grow by 2.7 percent this year and less in the following two years.

“Whether it is burdensome regulations, a broken tax code or a ballooning national debt, the Obama Administration’s policies are a dead weight on the economy,” said Sen. Coats. “Under this president, we continue to see stubbornly low workforce participation and historically high long-term unemployment rates.

“In order to boost GDP, we need to overhaul our tax code and strip away unnecessary government regulations to give employers the confidence they need grow their businesses and create new jobs. Congress can take action to help grow our economy, but we need a willing partner in the White House,” said Coats.



I Have a Few Questions for Mr. Trump, and I’ll Bet You Do Too! by The Elephant's Child

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Andrew Malcolm, who writes at Investor’s Business Daily, posted, “unfiltered, Trump’s remarks from Sunday night at an Alabama rally. No interpretation. No commercial interruptions. No analysis. Just Donald Trump, on the eve of Super Tuesday’s voting, in his very own words. Uncensored.”

“The 69-year-old making the case for why he wants to be president of the United States, commander-in-chief for the next four years. And why other candidates should not become chief executive, or even be allowed to run.

Perhaps reading in his own words how Trump details his positions and policies will help voters evaluate him and other candidates and decide how to vote, this week or later.

Trump takes the stage at a school stadium in Madison:

This is amazing. Amazing. I could listen to that music all day long, all day long.

Well, I want to thank you. By the way, there’s 3,000 people waiting to get in. Should we start without ‘em? Yes. Yes! That’s amazing. So this is the biggest crowd of the political season by far. We have 30,000 people. 30,000. Amazing. 30,000 people. I just want to thank everybody.

You know, we have a lot of folks in the Huntsville-Madison area, this whole area. Really thriving. You do know that, right? Really thriving. It’s doing well. And you know we’re going to keep that space program going, folks. Gotta keep it going. We’ll be doing a lot cutting. But when it comes to that, I have to tell you, we’re going to be keeping it going.

I want to thank the Benghazi guys, you met ’em, you saw ’em. So incredible. Guts. Courage. They know what happened. Amazing guys. I want to thank Mark and John for being here today. Amazing. Amazing.

The rest is here. Do read the whole thing. Learn about how Mr. Trump plans to deal with our twenty trillion national debt, his plans for dealing with ISIS, with al Qaeda, with the mess in Syria and with the Iran Deal, and Iran’s continuing work on nuclear weapons in spite of the “Deal.” And about the drastic decline in our military readiness, our Navy the size it was in 1915, and the Army the size it was in 1940. Is that adequate to meet the needs of today? And if not, how does he plan to pay for it while also shrinking the debt?

Is he concerned about the Zika virus? What about the felons President Obama has released from prison? What does he plan to do about North Korea and China’s brand new islands in the South China Sea? President Obama has planned to admit large numbers of “Syrian” Refugees, but it is suspected that many of them are actually ISIS fighters, and we have no way to vet them. Attacks on the police are growing because of #Black Lives Matter agitation, how will you handle that? ObamaCare is failing, and insurers are going broke, more and more physicians refuse to deal with ObamaCare patients. It is a program that cannot work, so how do we get government out of the health care business?

Those are just a few of my questions that Mr. Trump did not address in the first 60 minutes of Trump’s full remarks. You undoubtedly have some questions of your own.



The Immoral CEO — Worker Pay Gap, and How It Works by The Elephant's Child

From the Wall Street Journal, February 20, Notable & Quotable Column.

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Here’s The Donald: The Businessman from New York. by The Elephant's Child

Whether you are an admirer of the businessman from New York, or one of his detractors,  you should get acquainted with this documentary made a few years back about ‘the Donald.’ It is long, but utterly fascinating.  I come from the other side of the Rocky Mountains, and New York ways are not really familiar territory. We have enough trouble with the West Coast ways of Seattle and environs, and enviros. I added that last because I liked the combination, but Seattle is excessively environmentally loony.




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