Facebook and Taxation
Sometimes it is hard to figure out who the real jerks are. Creation Date Monday, 21 May 2012. Hits 1420
If you ever played a game of basketball with your friends as a kid, then you probably know both of these jerks. You've got the guy who thinks that everything that happens to him is a foul, but he never fouls anyone else and the guy who gets sick of it so he takes his ball and goes home. The kid who always thinks he got fouled never considers it to be his fault that the other guy took his ball and went home, and the kid who went home didn't consider the other kids who had to deal with the jerk and are now left standing around on a basketball court with no ball looking for something else to do. But what in the world does any of this have to do with facebook and taxation?
Before I get to that, in order to understand how catastrophically ignorant the Democrats are on issues of taxation, let's take a quick look at cigarette taxes in the United States. First, they start with a huge lie to sell them. They claim that smokers drive up the cost of health care. They make this claim by pointing to the last ten years of a person's life as being the most expensive years of care. They ignore the fact that this is a universal truth that does not apply only to smokers, and that since the average smoker takes ten years off of their life, they are actually cheaper to care for because there is a net difference of 10 fewer years of care required.
The real dichotomy of the cigarette tax, however, comes from the stated objective of the tax. It is put in place 1) to discourage people from smoking and 2) to pay for health care for children. Obviously, the tax could never achieve its stated objective of funding health care for kids if it achieved its stated objective of discouraging people from smoking, because if nobody smokes than nobody pays the tax and therefore it will generate no income to fund the program.
For the sake of this discussion, we want to look at the first objective. Consider this from the above linked article.
According to Nobel prize winning economist Gary Becker, who has studied the long-run price elasticity of cigarettes, the tax increase as a result of the Children’s Health Insurance Program Reauthorization Act increases the price of cigarettes 13.3% which ultimately means a 10.6% decrease in unit sales. The National Tax Foundation calculates these numbers to determine a predicted $1 billion loss for states. Another argument against this bill claims it to be regressive, holding that the tax increase unfairly targets the poor because according to the Centers for Disease Control and Prevention (CDC) more than half of all smokers are low income.
This establishes that economists are aware of the link between taxation and consumer spending. When you tax a product or activity, you get less of it. Recently, we have heard so much from the Obama Administration about the rich "paying their fair share" all the while calling for higher taxes on those who already pay the lions share of taxes collected in this country. Did you know that the top 1% of income earners account for 40% of the total government revenue collected from taxation? Wouldn't that be more than their fair share? President Obama is like the kid who calls everything a foul when it happens to him, but it is perfectly fine if he does it to someone else. Notice that while he himself is rich, we are not supposed to view him as a greedy guy who doesn't want to pay his fair share, despite the fact that he isn't paying above and beyond what the tax code demands of him. It is only a foul when someone else does it.
Since we have just established that taxing a product or service reduces demand for it, it should stand to reason that with the push for higher taxes on the creation of wealth, people would be less motivated to create wealth, right? But since wealth is what we are all after to some degree or another, the net result of President Obama's push is instead to foster the "I'm taking my ball and going home" mentality in others. And that is where Eduardo Saverin comes into play. He cashed in of the facebook IPO and took his ball and went to Singapore, reportedly to avoid paying the high rate of capital gains tax here in the United States. Some are calling him a hero for this, while others are saying it show ingratitude. Truth be told, he is just another in a long line of jerks who got so tired of playing with the kid who cried foul that he no longer cared about how his decisions affected the rest of his friends so he picked up his ball and went home. Yes, the roughly $75 million in taxes that would have been collected will hurt the country, but nobody stops to ask what would have happened if we had not demonized the rich and instead taxed them a little more fairly. Instead, we get these two losers.
On Thursday, Sens. Charles Schumer (D-N.Y.) and Bob Casey (D-Pa.) announced plans to introduce a bill to respond to Saverin’s move, which a news release from Schumer’s office called an “avoidance scheme.”
“The senators will call Saverin’s move an outrage and describe a plan to re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country,” the release said, adding that the legislation would bar individuals like Saverin from re-entering the country.
Casey’s office said the bill is called the “Ex-PATRIOT” Act, which stands for the “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act.
Under the proposal, “any expatriate with either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years will be presumed to have renounced their citizenship for tax avoidance purposes,” according to a release from Schumer’s office, and they would pay 30 percent capital gains tax — the same rate as people pay in the U.S.
Shouldn't they have seen this coming? They know that high taxation discourages a behavior. This guy had the perfect solution. Instead of being rich here and being over-taxed and simultaneously demonized for not paying his fair share, he could be rich somewhere else where he would be taxed less without being told what a jerk he is. At this point, couldn't a compromise be called? Couldn't the leftists who whine and complain agree to quit calling foul so much, and Saverin could admit that he did make a whole bunch of money? Could we agree on a fairer tax rate and meet in the middle so that Saverin doesn't leave with his ball? Of course not. Instead, the left decides it is time to pass even more laws that make the Government's reach even more onerous.
It is impossible for Schumer and Casey to be part of the sollution, because they are indeed part of the problem. Yes, Eduardo Saverin is being a prick for taking his ball to Singapore. But he is being a prick because leftist jerks like Schumer and Casey feel the need to constantly call "foul" when none has occurred. And while they do it in the name of "fairness", their true objective is much more devious. They don't mind leaving the rest of standing on the basketball court with no ball, so long as we think that they did it to protect the integrity of the game. So naturally, as long as we continue to look to them to be the guys to bring the ball back to us, they will continue to behave in this manner. It is high time these two clowns realize that we see right through them. The guys who ran the ball off in the first place are the last two that could ever bring it back to the court.