October 27, 2011

Soak The Rich

Do any of you remember when the Dimocrats in Congress decided to try to "soak the rich" by imposing a luxury tax on yachts. Yep! Those mean old rich dudes have way too much money so we're gonna start taxing the purchase of their toys. How did that work out? The rich quit buying yachts as Walter williams points out.

President Barack Obama has called for a luxury tax on corporate jets as a means to generate revenue to fight federal deficits. The president's economic advisers ought to be fired for not telling him that doing so is unwise and counterproductive. They might have already told him so, only to have the president say, "Look, I know you're right, but I'm exploiting the public's envy of the rich!" Let's look at what happened when Obama's predecessor George H.W. Bush signed the Omnibus Budget Reconciliation Act of 1990 and broke his "read my lips" vow not to agree to new taxes.

Besides torpedoing Bush 41's reelection it had other adverse effects but that doesn't matter to Oblamebush. Remember, during his election campaign he wanted to raise capital gains taxes, even though that would cause a decrease in tax revenues, because the low capital gains tax "wasn't fair". Lose tax revenue in the name of "fairness". WTF? No wonder our economy is hosed with this idiot in charge.

So what did this luxury tax do? Dr. Williams continues.

When Congress imposed a 10 percent luxury tax on yachts, private airplanes and expensive automobiles, Sen. Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share of taxes.

Sound familiar? As Yogi Berra once said, "Deja vu all over again."

What actually happened is laid out in a Heartland Institute blog post by Edmund Contoski titled "Economically illiterate Obama, re: Corporate Jets" (7/12/2011).

Within eight months after the change in the law took effect, Viking Yachts, the largest U.S. yacht manufacturer, laid off 1,140 of its 1,400 employees and closed one of its two manufacturing plants. Before it was all over, Viking Yachts was down to 68 employees. In the first year, one-third of U.S. yacht-building companies stopped production, and according to a report by the congressional Joint Economic Committee, the industry lost 7,600 jobs. When it was over, 25,000 workers had lost their jobs building yachts, and 75,000 more jobs were lost in companies that supplied yacht parts and material. Ocean Yachts trimmed its workforce from 350 to 50. Egg Harbor Yachts went from 200 employees to five and later filed for bankruptcy. The U.S., which had been a net exporter of yachts, became a net importer as U.S. companies closed. Jobs shifted to companies in Europe and the Bahamas. The U.S. Treasury collected zero revenue from the sales driven overseas.

Way to go Dimocrats. How did that "soak the rich" tax work out? Take your "fairness" and cram it up your collective asses.

Yannow, it seems that every time the rat bastard commie Dimocrats try to "soak the rich" it's the American worker who gets screwed. If the Dimocrats make sumpin' too expensive, the "rich" will not buy it or will buy it cheaper elsewhere.

But it wasn't just yachts that were affected.

Back then, Congress told us that the luxury tax on boats, aircraft and jewelry would raise $31 million in revenue a year. Instead, the tax destroyed 330 jobs in jewelry manufacturing and 1,470 in the aircraft industry, in addition to the thousands destroyed in the yacht industry. Those job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. The net effect of the luxury tax was a loss of $7.6 million in fiscal 1991, which means Congress' projection was off by $38.6 million. The Joint Economic Committee concluded that the value of jobs lost in just the first six months of the luxury tax was $159.6 million.

Another Dimocrat success story. And let's not forget, that this tax was signed into law by Bush 41. Yet another reason that the Tea Party does not want to elect another RINO. Plus, Bush 41 was taken to the cleaners by the Dimocrats (as are most RINO's). He agreed to raise taxes if the Dimocrats in Congress would cut spending. Yeah. Like Dimocrats would cut spending. Didn't happen. Never does. That's why I'm leery of any budget agreement that raises taxes now in return for future budget cuts. The cuts never materialize. Never! Ever!

Congress repealed the luxury tax in 1993 after realizing it was a job killer and raised little net revenue. Why did congressional dreams of greater revenues turn into a nightmare?

Because soak the rich plans seldom work?

Kennedy, Mitchell and their congressional colleagues simply assumed that the rich would act the same after the imposition of the luxury tax as they did before and that the only difference would be more money in the government's coffers. Like most politicians then and now, they had what economists call a zero-elasticity vision of the world, a fancy way of saying they believed that people do not respond to price changes. People always respond to price changes. The only debatable issue is how much and over what period.

Here's my question for you: Is it likely that in the two decades since 1990, American human nature has changed?

Nope. Just like Dimocrats never change their love of high taxes on the rich.

If Congress imposes a luxury tax on corporate jets and other luxury items, will Americans behave differently this time?

Nope. Do Dimocrats ever behave differently? Nope.

In other words, can we expect federal tax revenues to rise and unemployment to fall as a result of Obama's tax proposaal?

Nope! Remember, this is the guy that even knowing that raising the capital gains tax would bring in less revenue, wants to do it anyway in the name of "fairness".

I don't believe that Obama is dumb enough to believe that a tax on corporate jets would be a revenue generator.

I do.

His agenda is to inspire envy and resentment against wealthy Americans as a tool in pursuit of his higher-tax agenda.

And as long as we're talking about corporate jets, maybe the proposed tax caused this.

Piper Aircraft has cancelled development of its Altaire personal business jet.

The single engine jet had been in design for several years and had been aimed at bringing the jet technology to Piper's thousands of owner pilots, mostly in the USA.


“Following an evaluation of Altaire development and light jet forecasts we determined the best course of action for the company going forward is to indefinitely suspend the program, preserving intellectual property and progress to date,” said Simon Caldecott, the company’s interim president and CEO.

Jack Kemp stated it so succinctly, "If you want more of something, subsidize it. If you want less of something, tax it."

Works every time.

Posted by denny at October 27, 2011 03:33 PM  

Beware conspiracy theory ahead:

Obama is not stupid. Everything he has done has been on purpose.

Economics: He is intentionally bankrupting the country in order to make a "less" of a country in the world. When we are bleeding red what is the first Dept. everyone looks to cut? The Defence Dept. - the major Constitutional requirement that is the President's fucking responsibility.

Do we ever heard talk of cutting the State Dept? No... why? because it is a totally useless Dept. loaded from top to bottom with "can we talk?" liberals.

From State Dept to the Middle East: Every one of this dept's (and O's) moves has been to "strenthen" radical middle eastern countries.

Iran cracks down on its people who try to overthrow the govt. because of corrupt elections - Obama - "not our business."
Syria - no action even though they have and are killing far more of its own people. No action because they are radical islamists.
Lybia - takes action (unilaterally w/advice from UN and Arabs) because though he was an asshole, Qadaffy was really no longer a problem.Why not replace him with radical islamists, including al queda.
Egypt - threw Mubarak under the bus. Long time ally of US and Isreal.

Obamama has taken more action or no action all to assist Islam to expand and realise their goal of the caliphate. And of course he has allowed thousands of immigrants from ME countries (right, he's not a fucking muslim).

O-shit has made Jimmah look like a piker when it comes to helping the spread and cause of islam.

In islam the US is the Great Satan, what better way to destroy satan than to starve it to death, opening the door to defencelessness and of course islam.

O has "intentionally" created destruction from with-in in order to also allow destruction from with-out.

He even boasts that he has completed 80% of his agenda. He said he needs another 5 years to complete his vision.

Posted by: Willie on October 27, 2011 05:19 PM

SP -- Defense Dept.

Posted by: Willie on October 27, 2011 05:21 PM

Also, the Yacht builders here in Ft. Lauderdale have never recovered.

There are no Yacht builders, just "dealers" but their yachts usually come from Taiwan.

Posted by: Willie on October 27, 2011 05:26 PM

A student of mine writing a paper on cause-->effect quoted a book which laid out the unforeseen results of knee-jerk social action, such as price controls for building materials after a natural disaster or heavily restrictive laws on the heels of a major foul-up, such as a chemical spill or medication side-effects.

Can’t remember all the causes he listed, but the ones that stick out in my mind were “arrogance,” “narrow-mindedness,” “fear,” “ignorance,” and “greed.” Arrogance, ignorance, and greed (in the form of lust for power) sure seem to comfortably fit our Potus Terribilis, n’est ce-pas?

Posted by: bocopro on October 27, 2011 05:27 PM

The numbers I've heard (tell me if anyone thinks this isn't true) indicate that even if Obama got all the tax hikes he wants, and even if his flawed dogma that subsequent revenue would rise rather than fall were correct, the deficit reduction would be something like 2%. In other words, he's putting all his energy into promoting a plan that wouldn't do anything to address our real problems. All he can do by following this path is rev up his base, presumably enhancing his chances of reelection.

The nation is living in a little bubble of fantasy, where life-and-death decisions are made entirely for the purpose of public relations, and to hell with the real-world consequences. What's wrong with us, that we put up with treachery that will shortly do us in?

Posted by: TalkinHorse on October 27, 2011 05:51 PM

Stand The Rich up against a wall somewhere & shoot 'em for being "Evil", whatever that means. Now, confiscate ALL their accumulated wealth, ostensibly to pay off our they-had-to-invent-new-numbers debt. Somewhere I read that even if they actually DID this, our debt is so huge, it would barely be a drop in the bucket.

Posted by: Sandy G on October 27, 2011 07:18 PM

I am reminded of Obama's glorious Golden Gate Bridge comment just a couple of days ago. You know, he may be onto something; however, it's not our imagination that has lost, it's just we simply can no longer afford it, no thanks to the Democrat Party of Shit. The American yacht industry will likely never recover.

Posted by: Paul on October 27, 2011 07:33 PM

Eat the Rich.


The left really hates the "tone" of this video, by the way. And the fake blood splattered on the calendar is "too disturbing and provocative". Really? Compared to their propaganda? GMAFB.

Posted by: KarlU on October 28, 2011 01:31 AM

Liberals exemplify "Stupid is as stupid does."

And America didn't lose her ambition, imagination or willingness. Politically correct, clueless left-wing elitist twits like the Halfrican stole it.

Posted by: thatjerryguy on October 28, 2011 09:28 AM

Teddy Kennedrunk "crowing about the rich finally having to pay their fair share of taxes?" That is hilarious, considering that the Kennedy's are among the wealthiest families in the country. Or were they going to be declared exempt from increased taxes? And don't look for yachts to be getting any new tax increases any time soon. After all, John Heinz-Kerry, Senator from Massachusetts, has a yacht that he moved from Massachusetts to Rhode Island to keep from paying his state's high luxury tax on such things.

I don't know about the other states around the U.S., but here in Vancouver USA, we have a yacht building company located in the east end of the old Kaiser Shipyard, that builds extremely upscale yachts. They built Tiger Woods' yacht a few years ago and there was an article in the Vancouver Columbian a few weeks ago that focused on another one being built there that will cost somewhere north of 8 figures.

Posted by: Scottiebill on October 28, 2011 03:37 PM

My wife's parents lived on Cape Cod, just a few miles from The Compound. I asked my brother-in-law to drive me over there, he did, but I didn't get to get out & leave Ted a large, brown smelly souvenier of my visit...You really CAN'T get all that close to the house, & the locals up there are pretty nasty when it comes to somebody wanting to "Mess" w/them.

Posted by: Sandy G on October 29, 2011 04:59 AM
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