The eyes of Texas

By Capt. Fogg

It's no secret that Florida's economy is hurting more than that of many other states, but I'm sure it would be much worse if our sales tax cap on yachts costing more than a quarter million weren't in place. Of course mine didn't cost quite enough for me to benefit significantly, but it's gratifying that some of my friends saved enough to pay for a few thousand gallons of fuel. I'm sure it puts a smile on the faces of the many who have to choose between lunch money for the kids and driving to work. I'm sure that the several of my neighbors in foreclosure are altruistic enough to be glad those with that level of disposable income might use the savings on that Taiwan built vessel for an extra trip to the Abacos this summer.

Texas, which has a share of the yacht trade, is jealous, which is an extraordinary thing to say of our second biggest state with its continental sized self esteem. A Republican sponsored bill to cap the sales tax on yachts is now out of committee and will be considered by the Texas House along with deep cuts to education, nursing homes and other things that benefit only the surplus population.

The eyes of Texas are on taxes and the rest of us are watching.

Banzai patriotism

By Capt. Fogg

There are all kinds of patriotism, some real, some pretended. With some countries it's mostly about supporting wars. It's been that way in most of my lifetime, with a few exceptions. With some people it's all about flags and pins and ceremonies. I'm straining to think of a time when it was seen as a reason to support a government you didn't vote for and I have to look back over 65 years ago to find a time when patriotism extended to making economic sacrifices in times of crisis, for the good of the country; for the good of the people. To me, Patriotism may once have meant something more than overgrown and somewhat pugnacious pride and militaristic ritual and it may once not have smelled so much of covert self-interest, but there are outside examples.

If it had been an American nuclear power plant destroyed by a natural event or anything of that magnitude, like a war, or flood or ecological disaster for example, I'd not expect to hear the party of big business or the mega-corporations that pay virtually no taxes anyway offer to suspend another round of corporate tax cuts. Yet that's what seems to be happening in Japan. The Japan Business Federation is a powerful corporate lobby -- sort of like the GOP. Its chairman, Hiromasa Yonekura says he will not stand in the government's way if it backs away from a proposed corporate tax cut.

"I don't mind if the government skips cutting the corporate tax rate," said Yonekura, who is also chairman of Sumitomo Chemical . "Instead I want the government to move swiftly in its recovery efforts."

I don't think I have to waste much space comparing Japan to the country that stood behind tax cuts and against paying off the enormous costs of war by taxing those who made the most money from it -- and challenged the patriotism of anyone who suggested it wasn't a good idea because tax cuts never have and never will pay for themselves -- so I won't.

THE RICH GET RICHER …

This article by David Cay Johnston, Tax Rates for Top 400 Earners Fall as Income Soars, is a damning indictment of economic inequities caused by Bush era tax cuts:

Since 1992, the bottom 90 percent of Americans have seen their incomes rise by 13 percent in 2009 dollars, compared with an increase of 399 percent for the top 400.

The annual top 400 report was first made public by the Clinton administration, but the George W. Bush administration shut down access to the report.  Its release was resumed a year ago when President Obama took office.

(…)

The top 400 reports understate actual top incomes because of deferral rules. For example, managers of offshore hedge funds who deferred their gains may not be counted in the top 400 reports, which are based on the figure on the last line of the front page of Form 1040.

At least three hedge fund managers made $3 billion in 2007. It is not known how much, if any, of their income they deferred.

(…)

The biggest source of income was capital gains, which are taxed at a maximum rate of 15 percent. Gains accounted for 66.3 percent of 2007 income for the top 400, up from 62.8 percent in 2006 and 36.1 percent in 1992.

(…)

The report shows that the number of the top 400 who paid an effective tax rate of 0 percent to 10 percent declined slightly, to 25 in 2007 from 31 in 2006. In 1992 only 6 of the top 400 paid an effective income tax rate of less than 10 percent.

Another 127 paid 10 percent to 15 percent in 2007, up from 113 in 2006.

Only 33 of the top 400 paid an effective tax rate of 30 percent to 35 percent, which is the maximum federal tax rate.

More tax cuts for the wealthy? Why isn't this called “socialism?”