Taxes on wealth creation are about "social justice," not revenue

There is an old saying, one that people of all philosophical persuasions seem to concur with, that "the more you tax something, the less you get of it." Those who support less government and more economic freedom have argued this for years. That was the reason behind the "supply side" tax cuts that proceeded periods of enormous economic growth. They came in the early 1920s, 1960s, 1980s, and at the beginning of this decade. In each case they resulted in huge increases in revenues and widespread job creation. Although "across the board," these cuts have a more immediate impact on those with higher incomes, because those are the ones who pay more in taxes. Why do these type of cuts increase revenue? The answer to that is simple -- such cuts increases taxable economic activity.

Those on the political left seem to understand the impact taxes have on an economic activity as well. One of the first things Obama did as president was raise taxes on cigarettes for the purpose of both getting revenue to pay for government programs and to discourage smoking. In fact, some in the Administration argued there would be a 10 percent decrease in the consumption of cigarettes after the tax increase. We all know this to be true, the more it costs to do something, the less likely we are to do that activity.

The founders of the US government understood this idea as well. They wrote in Article I, Section 9 of the Constitution that "No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken." This clause prohibited income taxes until the Sixteenth Amendment in the 20th century. These much wiser leaders than today believed that the government has no right to know how much an individual makes and even the sources of revenue. They believed taxes were purely for revenue and not any particular political or agendas, they merely taxed imports and did so at the same levels and at a very low rate (since government was very small in the beginning).

To tax the earnings of individuals, especially in a progressive manner in which the rate gets higher as the income grows, will eventually undermined the desire to earn. This is even more the case with businesses. Higher taxes on their activities makes them work all the harder to be less subject to the tax (rather than on the economic activities that benefits everyone). Businesses are not wood, they function with the same "fight or flight" behaviors as humans. When government causes a massive increase of taxes on those companies with 50 or more employees, like that which will come with Obamacare, they will layoff enough employees to avoid the tax. If the US decides to have one of the highest tax rates on businesses of any industrialized country in the world (it is in a battle for that top spot with Japan), businesses will either downsize or move to countries with friendlier tax environments (which are not hard to find).

Politicians get angry when businesses export these jobs to other countries. Governments know that businesses do not pay taxes, they are merely tax collectors. The government prefers to make the businesses do its dirty work. Now more than ever, businesses do not have to tolerate it and they can easily dispose of the burden by moving their activities to more profitable locations. Journalist Thomas Friedman has noted that "The World is Flat" and business can move capital with more ease and speed than in any time in history. Policy makers in Washington know this and they are casually observing and even supporting the greatest depletion of jobs we have since the Great Depression. Furthermore, as those jobs and businesses disappear, so does the revenue. It is how economies work.

This administration seems blinded by these realities because it is driven by ideas such as "social justice" and not in the creating of a wealthy and free nation. Its excessive taxes on the job creators seems to be far more personal than business. It is not about generating revenues or jobs, it is clearly about punishing those who are successful. It is driven by blind ideology and not common sense. Conspiracy theorists surmise that the Obama administration is in the process of creating more poverty, since the poor are among his primary constituents. After all, if incomes of all Americans increased and we had a significant increase in jobs creation, who would be left to support Obama's agenda? Any party that depends on poverty to succeed is dangerous to a healthy nation. This is the liberals' dilemma. If a political philosophy depends on poor voters for success, you need more poverty.

Now even the most reasonable of individuals are asking, "are these crazy conspiracy theories or painfully obvious truths?" What we know that is true is that Obama's policies are not working, unless the goal is move poverty and less prosperity.

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 radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Are the Democrats really for the Poor?

One of the big debates over fiscal policy is the discussion of "priorities." Government, is going to spend, it is merely a question in what areas, we are told. In that debate we are told that Democrats (or liberals of any political party) are for the "poor," while conservatives are for the "rich." We often hear about "rich Republicans" and "poor Democrats," but how does this line up with reality?

In the last Presidential election, the only two serious contenders on the Democrats side were Barack Obama (who eventually won) and Sen. Hillary Clinton. Both used very populist rhetoric and to varying degrees, both sounded as thought they were pulling chapters out of the works of Karl Marx. Yet there is a cloud that hang over these "poor Democrats." That is the political realities that financially drove both of their political campaigns.

Personal income is a strong indicator of ones relationship to the constituents they represent. Barack Obama made ten times more than Sen. John McCain (who became the Republican nominee in the last year) accounted, with over $4 million in income. Meanwhile his wife cries poverty over having to have to make "outrageous" student loan payments to their old schools -- Princeton, Columbia, and Harvard (where's the violin music when you need it?).

In the same vein, Sen. Hillary Clinton, made an impressive five times more than Obama at approximately $20 million. My mathematical skills suggests I refrain from attempting to calculate the difference between McCain and her.

But personal wealth is only the beginning, there is also the lessons we learn from those who supported their campaigns. From the media we would have to assume that McCain certainly received much more from his rich Republican buddies than either (or even both) of the Democrats. The reality could not be further from the truth, Sen. John McCain raised a fraction of what Obama raised (who broke a presidential campaign record) and during the primaries, he could not keep pace with Clinton.

The debate about wealth, poverty, and politics, is really quite cloudy. I sincerely doubt that homeless and other poor people (the alleged beneficiaries of Democrat policies) are fueling their Presidential campaigns. In fact, a Fortune Magazine article implied that business was voting for Hillary. What kind of business? The big corporations that can actually afford liberal and big government policies and see such as a way of keeping smaller competitors at bay. We saw from the so-called stimulus packages (designed by Democrats in Congress, yet supported by both parties) in September of 2008 and again in the early days of the Obama Administration, that some of the biggest beneficiaries were the largest corporations in the United States.

The truth of the matter is that the mega rich support liberals over conservatives. In fact, Obama's support was 3 to 1 in that category. The reasons the rich supports liberal candidates might be quite cynical. Major corporations know they can absorb the regulations, tax requirements, and other obligations that come with being large. They also know such laws could put their aspiring competition -- the rising enterprises often driven by the middle class -- out of existence. Americans need to get serious about this issue and start by asking the question, what type of policies actually help the poor?

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.

Politicians use Wrong Benchmark in Decision Making

After their designated election cycles members of the US House of Representatives and Senate, as well as the President of the United States, swear to defend the US Constitution. In the vast majority of cases, it appears they are lying.

Unfortunately, most Americans haven't read the half a dozen pages that make up that lean, but important, document. They haven't noticed Article I, Section 8 of the Constitution that limits Congress to around 20 powers. Real exciting things like post offices, standard weights and measures, and post roads.

Very few members care about these mandates and to support them as the scope of government makes them seem little more than eccentric (or worse) in the eyes of their colleagues. It simply isn't trendy to support the law you swear you will defend. When I think of such, I consider my own US Senators, John Cornyn and Kay Bailey Hutchinson, both of whom are Republicans. One of them, Cornyn, is consistently ranked in the top 10 percent of the most conservative by groups that rate voting records. I don't consider this a badge of honor, but an indictment of how liberal Republicans and the Senate have become.

John Cornyn, for example, is among the many who voted for TARP in 2008. Instead of being a true leader and representing his constituents, he chose to be a cheerleader and tried to win support from the GOP leadership. The bill he voted for began in the US Senate (unconstitutional according to Article I., Section 7, which states that "All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." TARP included provisions for raising revenue. Where it started was grounds for being unconstitutional. I won't even begin to list the many other areas that it fails to uphold the Constitution.

Many who brand themselves as "conservative" use their colleagues with very liberal agendas as the benchmark their philosophy. The reality is, it simply means they are willing to take their time as they stroll down the road to serfdom. I believe the American people prefer those who are honest about their agendas (liberals) than those who are dishonest (so-called conservatives). The last election seemed to prove that true.

The only way to solve this problem is to set a different standard for our elected officials. It is time to select politicians who are strict constructionists when it comes to the Constitution. People who have sworn to defend it and a voting record that reflects that they have done jsut that. Many call themselves "strict constructionists," even George W. Bush who paved the way to much of the socialism the US is now pursuing at a breakneck pace. That is where seriously examining one's political record matters. Instead of "conservatives," I'm looking for candidates who describe themselves as "restorationists" (of the Constitution), and can back it up with their actions.

Holding politicians to the Constitutional standard will lead to more honest government, less government, and the restoration of America's greatness. This won't happen over night and we will receive lectures about "practicality" and being "realistic." Making those concerns our primary drivers, which has been the case for decades, has squarely put us in the mess we are in today.

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. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” 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.

Farewell to Arlen Specter

Senator Arlen Specter has exited, stage left, from the Republican Party. The truth is, he has long been a Republican in name only for decades. Having begun his tenure in the Senate in 1981 as one noted for his independence, he has evolved into a very serious Liberal. One could argue that Democrats like Bill Nelson of Florida and Evan Bayh of Indiana were as conservative as him.
In spite of this, he had his moments that were beneficial to conservatives. One could argue that Supreme Court Justice Clarence Thomas (certainly one of the most conservative jurists on the Supreme Court) would not be if it were not for Specter championing him in a very grueling confirmation process. In fact, the bulk of the help conservatives have gotten from Specter has been in the appointment arena, but then again he has helped many Liberals get into their various offices as well.Spectorbelieves that the President should have discretion to make appointments. His help to conservatives in the appointment area is philosophical, but not in the way those on the right desire.

The final straw for conservatives when it came to Specter may have happened in January of this year when the Senator voted for the President’s far reaching “bailout” that dramatically increased the size of the government’s budget and scope of its power, but the electoral problems facing the Senator go much further back. In 2004 conservative Congressman Pat Toomey won 49 percent of the vote, on a much smaller budget, in the Republican Primary. This came with Spector getting substantial support from President George Bush and Sen. Rick Santorum (himself almost as conservative as Toomey). Spectoer knew it wasn’t looking promising in the future. When Specter sided with the Democrats on Obama’s package (one of only three members in either House of Congress to do so), Toomey couldn’t wait to go after Specter again. He immediately resigned his position from the Free Market think tank, Club for Growth to get ready to run again.

There was no way Specter would survive another Republican challenge in 2010. There have been rumors that Specter was changing parties for years, he formally made that decision when he casted his vote in January for the President’s package.

Those Republicans who are moderate or lean to the left will cry “the sky is falling” with the departure of Specter. The most common concern will be the end of the GOP’s ability to filibuster. Anyone of either party can filibuster and it will require 60 votes to bring it to a stop. Spector’s failure to support a filibuster in January is among the reasons the bill passed. For most conservatives, Specter’s departure is a victory in restoring the GOP into a party that means something. It is a first step towards becoming a party that stands for traditional values, free enterprise, and limited government. This is a first step in the Republican Party’s own road to recovery.

Kevin Price is Host of the Price of Business, the longest running show on CNN 650 (M-F at 11 am), AOL Radio, and CBS Radio. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” 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.

Michael Steele: Trendy or Substantive?

After one of the most contested races for GOP Chairman in years, Michael Steele was chosen to lead his party. Why anyone would want that job is beyond me, but he pursued it with a vengeance and he now has the post.

The question many will ask is, why was he chosen. Is he the GOP's answer to Barack Obama? Are they saying, as a party, that "we can choose a black man too"? There is no doubt that he is an articulate and successful African American who certainly has the biography that is worthy of the post, but is he the best person for the party in the times we are in today?

Pros of Steele

The new media is playing a bigger role in politics now than ever and that is only expected to grow. Steele is a huge fan of social networking websites (e.g., Facebook, LinkedIn, etc.) and used them even towards the goal of getting elected as Chairman of the party.

Furthermore, he is extremely articulate and conveys an image of the Republican Party that most people simply have not seen else where, but certainly needs portrayed if it is going to be anything more than a minor party. When Steele discusses the needs of minorities and issues of importance to them, it resonates in a very sincere way.

Cons of Steele

We keep hearing that the former Lt. Governor of Maryland is very "conservative." This is one of the statements that demands an asterisk or a disclaimer. He is "conservative" by media standards and the reporters who interview him. He is "conservative" by African American standards, which is a population that tends to be over whelming liberal. He is "conservative" by Maryland standards, which is one of the most liberal states in the union. He is not nearly as conservative, however, as the rank and file of his party that is crucial in electoral success.

The biggest problem facing the GOP is that it is becoming increasingly like "Democrats Light." Republicans are socialist, they are just not as socialistic as Democrats. We are soft on social issues, just not as liberal as Democrats. Some where along the way Republicans became convinced that the big thing the GOP can do is be a "softer" version of the Democrats. That is what the media, which is clearly in the Democrats pocket, has encouraged for years.

The GOP has always enjoyed its biggest level of success when it acted more like Republicans than Democrats. The stronger the positions that the party has enjoyed on free markets (particularly taxes), strong defense, and pro family, the greater the electoral wins. I believe Republicans need to restore its Reagan roots and becoming the party of success it use to be. I don't know if Michael Steele can help the GOP reach that objective.

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

Jackson is Furious and Limbaugh is Confused by Obama's Choices

Barack Obama is about to announce the make up of his economic team as Wall Street, Main Street, and the media pundits hold their collective breath. His choices appear to be very surprising. This is not because they are very radical, but surprisingly conventional. They are the type of choices that will likely relieve Wall Street and infuriate the radical base that brought him to power. Furthermore, all of those who wished Clinton had gotten elected, don't worry, your favorite members of that team are showing up for an encore. What is most surprising of all is that Obama seems to be drawing on the more pragmatic and technocratic wing of the Democratic Party. Limbaugh and Hannity might go crazy over how boring these choices are.

Don't get me wrong, this team is liberal. But it is not the rampant ideologues that had many on the Right worried. On the other hand, they could also be the ultimate collective Trojan Horse, creating a sense of complacency that may make it possible for Obama to pursue the far reaching agenda he campaigned on.

The following is a breakdown of two of his most prominent team members:

• Timothy Geithner will be nominated as the new Secretary of Treasury. Geithner has worked in government almost his entire adult life with positions that have included Deputy Assistant Secretary for International Monetary and Financial Policy (1995-1996), Senior Deputy Assistant Secretary of Treasury for International Affairs (1996-1997), and Assistant Secretary of Treasury for International Affairs (1997–1998). In 2003 he was appointed the President of the Federal Reserve Bank of New York. He has been a foot soldier of Bush's recovery efforts on Wall Street and was there when the disaster happened, which should raise questions as to why he would be a good Secretary of Treasury. However, I think he is a safe bet, since Democrats will want to make Obama look as strong as possible and Republicans will be pleased by such a "moderate" choice.


• Lawrence Summers, who was Treasury Secretary under President Bill Clinton, will be appointed to head the National Economic Council. Summers is the poster child of technocrats. Under Obama, Summers will actually be the architect of the new administration's economic policies. Considering Summers' faux paux while President of Harvard in which he claimed that women were not as capable as men in performing the hard sciences, I was surprised to see him in politics again so soon. Not only did it leave to his quick departure as Ivy League administrator, I thought it would see him exit the political scene entirely. However, it appears Democrats can say things that are politically incorrect without consequence. Summers will be perceived moderate by the political powers that be and should enjoy confirmation without incidence.

In the end, what we learn, is that Obama is actually was quite impressed by the accomplishments of Bill Clinton, as we see the former President's influence in virtually every area of policy in the new President's appointments. It is safe to assume that the radicals that drove Obama to the White House are going to feel like they are in the out house, if the new President continues to make such safe appointments. They have to be patient for a while, but I am sure Jesse Jackson is already sharpening his verbal sword. Finally, conservative pundits must be at a lost trying to figure out what kind of President Obama will in fact be. I don't have any doubt what Obama would like to do. His radical up bringing and the course he took to power makes that obvious. However, he may be shrewed enough to know that his agenda will have to be pursued with caution and such is reflected in his team.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

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

Conservative Bloggers Fight Back

The conservative movement has successfully dominated the radio air waves since the 1980s. While much of the country had written off the AM dial, talking heads like Rush Limbaugh were just about to fire those dying stations up during the Reagan years. The result is Right wing dominance of this media. Talk radio's success and value to conservatives was driven by the fact that the mainstream media had largely become elite and hostile to conservative values. Talk radio was listener driven (through callers) and changed the way people got their information.

Fast forward fifteen years ago and you have a new player on the media scene, which is blogging and it is starting to dominate its industry. For some reason, liberals embraced this vehicle as a tool for change and for quite some time they have been the leader. Conservatives have found themselves limping along. I'm sure that there are multiple more liberal bloggers for each Conservative.

The problem isn't merely in numbers, but infrastructure. The left has developed support mechanisms, liberal organizations recognized bloggers as media long before conservatives, and their web platforms are far more numerous and sophisticated.

Positive changes are on the way, however, and are seen on a micro level at the 2008 Texas Republican Convention. For one thing, the party itself made it easier to for bloggers to get media credentials than in any time in the past. Unfortunately those credentials may become devalued over time if "anyone" can get them. I am sure more vetting will need to take place over time as the number of bloggers grow, but erring on the side of generosity of credentials simply makes sense at this time.

More exciting than a friendly environment for bloggers is the efforts of the Texas office of Americans for Prosperity in developing RightOnline.com. This will be more than another blog, because its unique state focus will help bloggers fight their battles on several government levels. The site and project are early in their progress, but I hope that it breaks down categories in a way RedState.com does, but includes a section for states and even regions. In addition to that, the organization created a "media room" at the recent convention (actually a very elaborate booth) where boggers were provided wired work stations surrounding an attractive stage where elected officials and candidates could be interviewed by the bloggers. It included an excellent PA system, video cameras and the videos from the conferences will show up on YouTube.com. A large screen TV makes it for an even more "polished" event. I will have a slide show about it in the next few days.

The organization is planning an event for conservative bloggers that is designed to help them improve their craft in Austin, Texas on July 18th and 19th and its list of speakers is most impressive. The event seems to be designed to be both informational and inspirational and speakers include conservative writer Michelle Malkin, former Maryland Republican Governer Michael Steele, Erick Erickson of Redstate.com, and many others. You can get more information about it at RightOnline.com.

According to recent surveys on marketing, most advertising attracts sellers (others who want you to buy more ads) and not buyers. Do you want to know why? Email info@HoustonBusinessShow.com and put "marketing audio" in the subject line and we will get it to you.

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.