Mountain Views News          Saturday, October 1, 2011

11

LEFT TURN/RIGHT TURN

 Mountain Views News Saturday, October 1, 2011 

HOWARD Hays As I See It

GREG Welborn


TALKING TURKEY ABOUT TAXES

“Why do you keep working 
so hard? You’ve got 
enough money.”

- Guest Mike Wallace on 
“The Jack Benny Program”

 

 “Yes - but - I don’t have 
it all.”

- Jack Benny

 

 Brothers Charles and 
David Koch, whose assets 
include mining, petrochemicals, 
paper, a controlling interest in the United 
States Congress, at least two members of the U.S. 
Supreme Court (Justices Scalia and Thomas) 
and numerous statehouses (the ones trying to 
eliminate public employee unions), have been 
reported to be worth a combined total of $50 
billion.

Charles is 75 years old; David is 71. We could 
figure each has twenty more years to enjoy life 
on our planet. I won’t presume to guess how 
they spend their time, but I could offer a suggestion: 
they could each spend $5 million on a 
worthy cause, or a million each on five worthy 
causes, every day. If they were to work a five-
day week, with two weeks’ vacation a year, from 
their individual fortunes of $25 billion apiece 
they’d each have enough to donate $5 million 
dollars every day for the next twenty years (not 
counting accumulated interest).

Funding for new schools, scholarships, program 
endowments and research grants for the 
eradication of poverty and disease, inner-city 
parklands, broadband access for remote rural 
classrooms, commissions for symphonies from 
promising 21st-century Gershwins - could all be 
an easily affordable goal of the Koch brothers - for 
the first week of those remaining twenty years.

They’ve got enough money - but they don’t 
(yet) have it all.

We used to have a tax system which encouraged 
making money by producing things, 
whether manufactured products or raw materials. 
Corporate heads knew they’d be taxed 
heavily if they cashed out with exorbitant salaries 
and bonuses, so profits instead were invested 
in expansion, development and a well-paid 
workforce.

Now, the Koch brothers’ assets in congress 
threaten to shut down government if the tax 
rates of the Bush years (a period of 0.45% annual 
growth) are allowed to return to what they were 
under Clinton (with 1.6% growth) - when rates 
for the wealthiest were still 10 points below what 
they were under Reagan.

With the current system, the Koch brothers no 
longer have to produce things to acquire wealth; 
they can simply suck money out from the economy. 
Almost a third of all corporate profit in 
this country now comes from the financial sector, 
where wealth is not “created” but extracted 
from the pockets of the many and funneled into 
the hands of the few.

Koch developed the first oil-related financial 
derivatives, proceeding to make billions through 
market manipulation. In the final weeks of the 
Clinton Administration, an amendment was 
slipped into a spending bill deregulating the 
market in energy-related commodity futures. 

According to the NY Times, the amendment 
was written by lobbyists for Koch, Enron, Goldman 
Sachs and Sempra (parent of our local gas 
company).

Soon, two-thirds of the traders in oil futures 
were pure speculators, while only a third actually 
used the product. When price spikes in 2008 
were attributed to this trading, Koch lobbyists 
had Republican assets in the Senate kill legislation 
to again regulate the market.

The Koch front group, Americans for Prosperity, 
argues the need to expand drilling and gut 
environmental protections, moves that would 
have nothing to do with what we pay (domestic 
production is at its highest level since 2002), 
but everything to do with the Koch brothers extracting 
billions more from the economy. With 
oil running a little above $80 a barrel, Goldman 
Sachs estimates $20 of that is due to oil speculators 
- with Koch counting themselves among the 
top five in the world.

They still don’t “have it all”, so they’ll go after 
where it is - like the Social Security trust fund. 
There’s nothing wrong with Social Security. It 
hasn’t missed a payment in almost seventy years. 
Right now it’s good to pay full benefits for another 
26 years, and if the ceiling under which 
taxes are assessed (currently $106,800 a year) is 
raised, it’s good for at least another 75.

In 2002 they spoke of “privatizing” Social Security, 
but that term didn’t test well with focus 
groups, so now it’s “individual accounts”. It 
means the same thing; entrusting our retirements 
to the Wall Street players who tanked the 
economy three years ago, who’ll be guaranteed 
their fees and bonuses whether they make the 
right bets with our funds or not. The risk of returning 
to the days before Social Security, when 
a third of our seniors lived in poverty, is of no 
concern.

To “have it all”, they’ll go after the billions 
we spend on healthcare, as they did in pushing 
through the Medicare Advantage program 
under President Bush - where taxpayers pay 
a surcharge of 40% to pad corporate profits. 
Now, they’ll do whatever it takes to kill the Affordable 
Care Act, and its provision that 85% 
of our healthcare premiums actually goes for 
healthcare.

They’ll even go after the Postal Service. In 
2006, Republicans pushed through a requirement 
that healthcare benefits for postal workers 
be prefunded for 75 years - prefunding benefits 
for workers not yet hired (and not even born), 
something unheard of in any other public or private 
organization. According to a Ralph Nader 
group, were it not for that requirement, the 
USPS would be showing a surplus of $1.5 billion.

This has nothing to do with protecting, but 
rather with killing the institution so more taxpayer 
funds can be shifted from public service 
to private profit.

Among their acquisitions, the Koch brothers 
can boast 70% of this year’s freshman class of 
Republican legislators. But they still “don’t have 
it all”, so they’ve already pledged $88 million to 
buy the 2012 elections. 

In the meantime, I’ll remember the sign at a 
recent Wall Street protest: “It’s only ‘class warfare’ 
when we fight back”.

So much for any hope that President Obama 
would seek re-election by tacking to the center or 
by returning to his original lofty goals of healing 
our political divisions. Instead in speeches that 
should have been substantive we got the first 
salvos of his re-election campaign, and it was 
pure pandering to his left with lots of falsehoods 
about who pays how much in taxes. Allow me to 
shine the light of truth into the darker corners of 
the President’s absurdities. 

One of the president’s most repeated phrases 
is “middle-class families shouldn’t pay higher 
taxes than millionaires and billionaires”. The 
president claims that his statement is “pretty 
straightforward” and that “it’s hard to argue 
against that”. In reality, the statement is 
anything but straightforward, and it’s pretty easy 
to demonstrate its falsehood.

According to the IRS, those who earned $1 
million in adjusted gross income paid an average 
federal income tax of 23.3%. Those earning 
$100,000 to $200,000 paid an average federal 
income tax of 12.7%. Those with an adjusted gross 
income of $30,000 to $40,000 paid an average 
of 7.2%. These statistics are fairly consistent 
from year to year and clearly demonstrate that 
millionaires pay a tax rate roughly 3 times higher 
than the average middle class family. If you want 
to look at this in terms of dollars actually paid 
(instead of percentage tax rates), the disparity is 
even greater.

That shouldn’t be a surprise if you run some 
simple math. $1 million at 23% is $230,000 in 
taxes. 7% on $40,000 is $7,200 in taxes. So in 
terms of dollars, the average millionaire pays 
32 times as much as the middle income earner. 
According to the National Taxpayers Union, the 
breakdown is as follows:

The top 1% of earners pay 38% of total federal 
income taxes

The top 5% of earners pay 58% of total federal 
income taxes

The top 10% of earners pay 69% of total federal 
income taxes

The top 25% of earners pay 86% of total federal 
income taxes

Any claim that the rich or super-rich aren’t 
paying their fair share is a blatant lie. If there 
is any unfairness in our tax code, it is the fact 
that these people are paying so much more than 
their fair share. This is especially true when you 
consider that the bottom half of the country’s 
earners pay only 3% of total federal income taxes. 

But what about Warren Buffet’s claim you 
might ask. Didn’t he say that he paid a lower rate 
than his secretary? Yes, he did say that, but he’s 
not unbiased in this debate. Warren Buffett is an 
ardent supporter of President Obama’s. Putting 
that aside, though, let’s look at the details of his 
assertion and how he manipulated the facts. 

Mr. Buffett, like many of his peers in the 
super-rich category, derives most of his income 
from capital gains, rather than from salary. The 
capital gains tax rate is 15%. That would seem 
pretty low and perhaps lend some credibility to 
the accusation that 
the rich can escape 
taxes that you and 
I, as middle income 
earners, have to pay. 
What’s missing here 
is the understanding 
that capital gains are 
double taxed. The total 
tax rate on this type of 
income approaches 
45%, according to the 
Wall Street Journal. Here’s how the math works 
out.

Most of these capital gains are coming from the 
sale of stock. The corporations which issue these 
stocks pay an income tax of 35%, which by the 
way is the second highest in the industrialized 
world. So if a rich investor owns corporate stock, 
he sees the earnings from that corporation taxed 
at 35%. Then if he decides to sell his stock in 
the company, he gets hit with an additional 15% 
capital gains tax. There are a few offsets to the 
calculation, so the effective tax rate becomes 
about 45%.

There is also one other hidden tax imposed on 
the “rich”. The capital gains tax isn’t indexed for 
inflation, but the income tax is. So, if the capital 
gains are a result of inflation, rather than a real 
increase in value, the rich investor still has to 
pay a 35% tax on inflated earnings. We middle 
income earners paying regular income tax rates 
get to index our income for inflation, and we 
don’t have to pay taxes on inflated earnings.

Beyond the factual inaccuracies of the 
President’s class warfare campaign rhetoric is 
a more destructive misunderstanding of basic 
economics. Every study and every real world 
example has shown that when you raise tax rates, 
people at the top end of the scale simply stop 
producing income to be taxed. Thus, total tax 
receipts go down. When you reduce tax rates, the 
rich generally increase the amount of income they 
produce, and tax receipts go up. If you doubt this, 
answer the following question. If we taxed 100% 
of what was earned on Tuesday and Thursday but 
only 20% of what was earned the rest of the week, 
how much income do you think would be earned 
on Tuesday and Thursday?

Our president is clearly campaigning to keep 
his job. But with each statement, accusation and 
policy proposal directed against “the rich”, he’s 
simply showing how unqualified he actually is to 
hold the job. 

About the author: Gregory J. Welborn is a 
freelance writer and has spoken to several civic 
and religious organizations on cultural and moral 
issues. He lives in Arcadia with his wife and 3 
children and is active in the community. He can 
be reached at gregwelborn@earthlink.net.


SUSAN Stamper Brown


RICH Johnson

SOCIAL INJUSTICE


World Peace Through Cribbage

Some of my fondest childhood memories include 
times when my father and I served meals to 
those in need at our town’s local Rescue Mission. 
Coming from humble beginnings as the daughter 
of a hard-working blue-collar worker, helping 
the homeless, sick, hungry, abused, and addicted 
taught me there would always be someone a little 
less fortunate than I out there who was in need 
of a helping hand. I came to understand was it 
not for my father’s self-determination and sense 
of personal responsibility, given his personal circumstances, 
Dad could have been on the other 
end of that kitchen counter, and I’d probably be a 
registered Democrat today.

These lessons are the reason why I have knee-
jerk reactions when I hear statements suggesting 
that government should do for us what we should 
be doing for ourselves. Progressive Democrats’ 
sacrosanct belief that the government was created 
to control how wealth is spread around is 
nothing more than a modern-day attempt to re-
invent Robin Hood, only without all the chivalry 
and green tights. 

Those supporting the president’s new plan 
to “ask” (Progressive-speak for mandate) the 
wealthiest Americans to “pay their fair share” romantically 
embrace the concept of social justice 
- the idea that progressive taxation and wealth redistribution 
will result in some sort of economic 
egalitarianism - and to get there, we must take 
from some and pass it on to those whom “should 
have had it in the first place.”

Offering a helping hand to the needy is right, 
but the ends must always justify the means.

Democrats do not own the market on charity. 
I know many charitable Conservatives who combine 
their compassion with common sense. They 
bring food in one hand and a fishing pole in the 
other. How true the saying, “Give a man a fish, 
and you feed him for a day. Teach a man to fish, 
and you feed him for a lifetime.” 

In contrast, preaching the gospel of wealth 
redistribution, Progressives bring food in one 
hand and a voter’s registration card in the other. 
Seizing the opportunity to convert victims into 
non-thinking entitlement aficionados, Progressives 
will stop at nothing to lead their followers 
to some mystical Shangri-La, where rich people 
roam the earth laden with bags full of loose cash, 
desperately looking for a place to unload it. 

Warren Buffett, as the left’s favorite compassionate 
rich guy, is like Robin Hood in reverse, 
in that he cannot seem to give his money away 
fast enough – with the 
exception of a little 
back-tax “http://www.
newsmax.com/InsideCover/
buffett-irs-
back-taxes/2011/09/01/
id/409520”squabble 
they say he has going 
on with the IRS - to the 
tune of an estimated $1 
billion. Of course, all 
rich guys are wicked, unless they agree, as an act 
of obedience to the government, to help bankroll 
the administration’s spending addiction by signing 
onto the proposed “Buffett Tax.”

I know, the devil is always in the details, but I’ll 
go ahead and say it anyways. Buffett’s billions are 
his. Not the government’s. Not mine. Not yours. 
The money is his. Those inclined to contribute 
their resources to help the poor, should. It’s called 
charity. People are generally more inclined to be 
charitable when they do it on their own.

The truth is, when the government takes 
money from the rich, it simultaneously hurts the 
poor when charitable organizations, like rescue 
missions, dependent upon gifts from society’s 
successful find themselves with fewer resources 
to share with those in need. There is a cascading 
series of events, which leads to more poverty and 
less prosperity. Likewise, high taxes choke the life 
out of creativity, undermine manufacturing, and 
weaken the middle class. In contrast, lower taxes 
enable business owners to increase job creation, 
salaries, and benefits.

Forced “charity,” only creates animosity between 
the less fortunate and those being charged 
with their fortune, under penalty of prosecution. 
There is a power in authentic generosity that no 
amount of government social-engineering will 
ever match.

© Copyright 2011 Susan Stamper Brown. Susan’s 
weekly column is nationally syndicated 
exclusively by Cagle Cartoons newspaper syndicate. 
For more info contact Cari Dawson Bartley 
at 800- 696-7561 or email HYPERLINK 
“mailto:cari@cagle.com”cari@cagle.com. Email 
Susan at HYPERLINK “mailto:writestamper@
gmail.com”writestamper@gmail.com

This column has been edited by the author. Representations 
of fact and opinions are solely those 
of the author.

If you ever wonder how 
I got started writing for 
this august publication, it 
revolves around a chance 
meeting with the editors 
and myself at the coffee 
shop now known as 
Fresco’s.

 

Editors Katina Dunn and Susan Henderson 
spotted me in the corner of this coffee shop with 
a cribbage board, a deck of cards and adversaries. 
The ladies cautiously approached our table 
inquiring as to what we were doing. (If you have 
no idea what cribbage is, it’s a card game that employs 
a deck of cards, a board with little holes in 
it, and pegs.) 

 

I told them we had an organization committed 
to world peace through cribbage. I went on 
to explain if we could only get warring factions 
to play cribbage, say in the mideast, all would 
calm down. It really shouldn’t surprise you that 
our efforts brought about peace in Northern Ireland, 
and the fall of communism in Europe. Our 
biggest hope is that someday, cribbage might end 
strife right here in Sierra Madre (a long shot I 
know, but let’s have faith.)

 

In an effort to gain added credibility for our 
benevolent organization I have mentored two 
Ph.D’s in the game of cribbage. Jealous of their 
considerable mental ability I decided to try and 
increase my intellectual capacity. I stumbled 
upon a test that gauges intellectual prowess. I 
pass this test on to you so we all might get smarter. 
Please take the test yourself and administer it 
to your friends and family. Next week I will provide 
the answers. Here goes:

Johnny’s mother had three children. The first 
child was named April. The second child was 
named May. What was the third child’s name? 

There is a clerk at the butcher shop who is five 
feet ten inches tall and wears size 13 tennis shoes. 
What does he weigh? 

Before Mt. Everest was discovered, what was 
the highest mountain in the world? 

How much dirt is there in a hole that measures 
two feet by three feet by four feet? 

What word in the English Language is always 
spelled incorrectly? 

Billy was born on December 28th, yet his 
birthday is always in the summer. How is this 
possible? 

In California, you cannot take a picture of a 
man with a wooden leg. Why not? 

What was the President’s name in 1975? 

If you were running a race, and you passed the 
person in 2nd place, what place would you be in 
now? 

If a farmer has 5 haystacks in one field and 4 
haystacks in the other field, how many haystacks 
would he have if he combined them all in another 
field? 

When administering this test to friends and 
family, pass out paper and pen or pencil, and 
ask the participants to write down their answers. 
Then you can compare answers at the end. It will 
give you a good indication of where everyone is 
intellectually. Have a good week.


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