Liberals, the Super Rich, and Strange Allies

If you read the fairy tale weaved by the major media and our history books, we would believe that liberal policies are beneficial to everyone, whether if those policies are popular are not. The upper classes can complain all they want, but they sleep better at night knowing that the government is generous with their wealth, even if those wealthy are actually "quite greedy." The middle class who aspire to be rich might have to face tougher regulations and taxes that might prevent them from meeting their dream, but at least they know their "fundamental needs" are being met. This would never happen, we are told, without the benevolent hand of the government. Than there are those who are poor and they are obviously the biggest beneficiaries of a big and generous government. These people would surely be found lying dead in the street without the generosity of a redistributing government.

The reality is, the only ones who benefit at all from a government that is growing out of control are the super rich and, if you consider getting "something for nothing" a "good thing," the poor. The rest of us are squeezed by the pressures driven by the highest income groups.

Liberals want us to believe that conservatives are "for business" while they are for "the people." It is correct that, true conservatives, support bills that encourage economic freedom. But businesses support liberal candidates as well. Liberals want us to believe that Obama raised almost ten times more than McCain in the last Presidential campaign by getting coupons and food stamps from the homeless and the destitute. According to the FEC, the top 1 parent income group gave three to one more to Barack Obama than John McCain. How is that possible for a President who is bent on being the "Peoples' President?" The reason for this is simple, the mega rich are the only ones that can actually afford big government.

I worked for a member of the US Senate and learned how the super rich and the liberals work hand and hand. For example, major energy companies and environmental activists (yes, odd bedfellows) decide that it was time to upgrade the environmental quality of gas pumps in the early 1990s. So, they send their team of lobbyists upon Washington, DC to persuade members of Congress to pass legislation that would cost -- $10,000 per gas pump on average in order to bring them up to code.

Now, the liberal members of Congress are sitting in their office and the lobbyists visit them. They see a "business man" who represents an energy company saying that forcing the upgrade of gas pumps is a good thing for everyone -- including business. It will "create new jobs" for those who make these better pumps. More "important," this legislation will make a "cleaner and safer environment," because fewer gas fumes will be pumped into the environment. The liberal, who is inclined towards expanding government any way, loves this. It is "pro-business" and "pro-environment, what can we lose?" What was lost was thousands of jobs, untold numbers of "mom and pop" gas stations that could not afford the upgrades, and consumers lost choices for buying gas. This epitomizes government at its worse. Big business has partnered with big government to mug small businesses for years with regulation and tax laws the latter cannot afford.

There is a similar situation when it comes to excessive, progressive, taxation. The super rich find this to be a laughable situation, since most of these taxes only apply when money is being used in economic activities. A great example is the capital gains tax. When you look at history, and when this tax was very high or in the process of increasing (like now), the result is a dramatic drop in economic activity and the jobs they created. The rich would sit on the largess they enjoyed and accumulated, while those who want to be rich find themselves unable to afford to take risks because the rewards were so damaged by the tax. The super rich actually get a break from the upper middle class that aspires to be rich when all taxes are high. In a way, these high taxes are an actual insurance program against those who would want to displace them on the economic ladder.

Big government, and its proponents, have always been funded and supported by the super rich. Although more than 80 percent of all jobs are created by small business, major corporations and the people that benefit from them, dictate government policies that keep the wealthy on top and increases the numbers of the poor (by destroying job creation among small businesses and providing increased incentives for choosing a life of poverty). So, the next time you meet someone who says they are liberal, ask them why don't they give the "little guy" a break and support freedom instead.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN 650). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

People in New York are Voting with their Feet

Politicians keep telling us that the rich need to "suck it up" and throw in well beyond their share. They tried this in Maryland and it has resulted in a drop in revenue that is comparable in their tax rate increases. A recent study from the Empire Center for New York State Policy is showing that the state is suffering from a similar fate.

The authors of the studies -- E.J. McMahon and Wendell Cox -- point out that between the years 2000 and 2008, there was a departure of 1.5 million people, mostly from New York City, with destinations that were safer for finances. Proof that money was a major factor in the decision making is seen in the income groups that have been coming and going from the state and the impact it is having on the budget.

According to the study, the families that have been leaving have income levels that were 13 percent higher than those arriving to the Empire State. In Manhattan and the New York County area, the impact was even more profound. Those leaving the Big Apple had an average income of $93,264, which was approximately 28 percent higher than those who were arriving (which made $72,726 on average).

The real injury is not so much in people, but in revenue. According to the study, the trade off in the income groups of those arriving and those leaving translated in a lost $4.3 billion in taxpayer income. Add that to the other years in the study (2001 through 2008) and it adds up to a devastating $30 billion.

The authors of the study are some what cautious in their approach and do not attempt to single out a particular reason for the mass departure, but the Wall Street Journal places the state's and city's excessive tax rates. Citing the Tax Foundation, between the years of 1977 and 2008, New York was consistently ranked first or second for having the highest rates compared to the rest of the country. During the years covered in the Empire Center Study, New York's taxes ranged between 11 and 12 percent of income.

Taxes reach its highest level in 2004 saw a high in departures in 2005. That year, the state lost approximately 250,000 people who moved to other parts of the country. Meanwhile the state has passed another massive tax bill that likely lead to people leaving the state as they vote with their feet.

There is an old saying, "the more you tax something, the less you get of it. The more you subsidize something, the more you get of it." New York is committing economic genocide, through heavy taxation, on its most affluent residents. The result, ironically will be fewer tax dollars and a decidedly poorer state.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Why John McCain Wants to Lower Corporate Taxes

John McCain, the presumptive nominee of the Republican Party for President, is pledging to fight for lower corporate taxes if elected. The media and his opponents will likely treat this as accommodating "the rich" in a manner that Republicans are "known." Reality check: a policy such as this is one of the few ways to help the poor become middle class and the middle class move towards affluence. That is what good economic policy accomplishes.

How will lower corporate tax rates achieve such an objective? There are several reasons and here are a few:

* Currently the US is getting pounded on the world stage by economies that either have significantly lower tax rates, ridiculously low salaries, are both. Competition exists on the micro level (store "A" vs. store "B") and on the macro level (country "A" vs. country "B"). When companies stay here because of a better tax environment, we keep more jobs, which helps every income group.

* Lower corporate tax rates encourages individuals to become entrepreneurs to create businesses and to climb the economic ladder. This benefits those individuals willing to take the risk and all the people they will hire as they rise. This doesn't even address the new tax revenues these companies create.

* One of the only beneficiaries of high corporate taxes are, ironically, the very rich. Why? Because they are insulated from potential competition who are intimidated by the high price of corporate taxes. The other beneficiary would be the government, who enjoys the revenue and let's the government be the "bad guy" by letting businesses do the tax collecting. That leads to the final point: businesses don't pay taxes, they collect taxes, and if that negatively affects their business to the point of harming competitiveness, they will move their companies some where else or never create them in the first place. Who benefits from that?

For people who believe in the free market, like myself, McCain's commitment is great news and long over due.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.