http://www.schneier.com/blog/

This guy, Bruce Schneier, has some interesting takes on the TSA and Homeland Security in gerneral. Some pretty good reads. He does an interview with Kip Hawley, Head of the TSA.

Here we go. It’s time for an election and we have a Democratic congress with the possibility of a Democratic president.
Why does this scare me?

Simply because every Democratic candidate has announced plans to raise taxes. All of these nice tax breaks that we received in 2001 and 2003 are going to sunset in 2008 unless they are renewed by congress.
They had a LOT to do with the recovery of the U.S. economy. I fail to understand why Dems can’t get this through their head (that raising taxes actually hurts the majority of Americans).

Listen to some of the idiotic Democrat proposals:

* A proposal on withholding taxes on the U.S. subsidiaries of foreign companies — in essence a tax increase on foreign investment in America.
* Raising the capital gains rate to 28 percent from the current 15 percent.
* A levy on oil and gas produced from deep-water leases in the Gulf of Mexico.
* A tax surcharge of 4.3 percentage points on income of more than $500,000, which would take the top marginal rate to 39.3 percent.

What makes me crazy is that there is NO NEED to raise taxes. See below:

* The latest budget estimate is that fiscal 2007 revenues will reach 18.8 percent of GDP, compared to the 40-year historical average of 18.3 percent.
I.E. the government is receiving more than enough of our money already (by historical standards).

* Tax revenues this year are rising by nearly 8 percent, following increases of 11.8 percent in 2006 and 14.6 percent in 2005.
How many more dollars do they need?

* The budget deficit is down to 1.5 percent of GDP, and falling.
This is actually quite a low percentage of GDP, historically.

There are basically two camps when it comes to tax policy.

1) Pro-growth tax policy:
This policy seeks to reduce the effects of taxes that hamper economic growth. I.E. lower capital gains taxes, lower tax overall for citizens, less effect of taxes on the economy.

2) Pro-redistribution policy:
This policy seeks to redistribute wealth among it’s citizens (socialism anyone?). This means highly progressive taxes, large penalties for investment (capital gains, dividend taxes, etc) and a focus on social programs that give away this wealth to those who cannot earn it for themselves (perhaps tax policy is affecting the economy in a negative way, making it more difficult for them to get ahead?).

When the economy is working well and not overburdened by excessive taxation, there is very little need to redistribute a large portion of the country’s wealth.

The case for a pro-growth tax policy is unbeatable.

Inevitably we are going to hear a lot of talk about raising taxes on the “rich” during this political campaign.
Defining what rich means depends on who you talk to. Most liberals define this as someone making more than 200k per year. However lately many have been stating that the rich are people who make more than 100k per year. Wow. As we all know, in today’s society a large percentage of households contain two working adults. It would seem logical that this 100k number apply to a great many taxpayers.

Why is it bad to raise taxes on the “rich”?
Richard Rahn of the Washington Times makes the case very well below:

• Most Americans believe it is not fair for the government to take more than one-quarter of anyone’s income, and many Americans who are not rich think they may become rich.
• Most Americans (unlike many Europeans) do not resent rich people; they admire them and want to be one of them.
• Hence, pro-growth candidates tend to do better at the polls than pro-redistribution candidates.

The economic case for not raising tax rates on the rich is even more compelling, says Rahn:

• High tax rates can destroy wealth creation, and they won’t make the rich pay more.
• One advantage of being very rich is that you tend to have a choice about the form in which you receive your income, where you earn it, and where you are taxed.
• Many rich Swedes and Frenchmen have become tax exiles from their own countries; when a rich person leaves, his government gets nothing.
• When tax rates are perceived to be too high, people tend to choose leisure over work, and consumption over saving and investment, resulting in less revenue for government.

It is politically unacceptable to have an explicitly higher tax rate for middle-income taxpayers than for the truly rich, and economically destructive to have very high rates on the rich. The only way out of the dilemma is to move to a modest flat rate or consumption tax system, with exemptions or rebates for low income people, says Rahn.

I challenge anyone to find a top economist that will say that the lowering of tax rates DIDN’T lead in a large way to the INCREASE in government revenues.
The best way to gather more revenue for the government is NOT to raise taxes folks! It is far more economically sound to implement a tax policy that spurs investment and an expanding economy.

Can you guess which party stands for which tax policy?

Manly