We're still talking about George!

Wednesday – December 1, 2010

We’re still talking about George!

As we start the countdown to Christmas and New Years - we still don’t know what the federal government is going to do with our taxes. This is one of the reasons that the poor job numbers in this poor recovery continue to be so poor. The nation’s unemployment rate is still holding at 9.6%, although some individual states have a higher rate.

The President met with the new Republican leadership and everyone went away from that meeting in good spirits. The topic that was discussed was the continuation of the Bush tax cuts. These tax cuts are not new cuts; they were the cuts that President Bush enacted when he was president. If they are extended, taxes will remain the same.

The controversy in the capital is that the Bush tax cuts are set to expire in January. If they do expire, every one will have a tax hike in January. During this lame duck session of Congress the debate is now the controversy. If these cuts are kept in place/ extended taxes would remain the same. If they expire then we all will have a tax hike. This President and this Congress still have not submitted their budget or their recommendations for their next budget. This is the first time this has happened since 1974.

If any one says that George Bush did not impact the economy in a positive way they are mistaken. We are still talking about George two years after he left office. We are still talking about the effectiveness that his tax cuts had and we are still debating with the other side why tax hikes should not occur. The democrats cannot pass a tax hike by themselves. This is why, in this lame duck session, they want Republican support.

The President says he wants to work with the Republicans and the Republican leadership says they will work with him to get the nation’s business done. It is the nation’s business that we are talking about. Over 70 % of jobs in this country are created by small business. George Bush was smart, because he realized this. This President is not so smart, because he does not want to come to the realization of this. One thing remains constant in this debate. The left is still in control of this Congress and they still are fighting to impose their ideology no matter how mistaken they are.

The thing that bothers me most is that this debate cannot be won unless we have real leadership. Real leadership can now win over the president’s current plan. Real leadership will not conform to the status quo. Real leadership will say enough is enough we need the economic stimulus in the form of low taxes so more money is kept in the private sector for investment. The banks are not lending and the business owners are not hiring. We are still talking about George’s tax cuts and we still don’t have a budget or a firm notion of what the president’s tax picture will be for next year.

I had a conversation yesterday day with another small business owner. He said he has the work, but he doesn’t want to hire anybody right now, because he doesn’t know what next year will bring. I see this in my own business.

George Bush had confidence and he had conviction. These are the words that now describe him especially when we speak about him. The positives are far outshining the negatives. When our new leaders in Congress take control in January, they must display the same type of confidence and they must have conviction in what they are selling. This would be the advice that I would give to them.

On this date, in 1913, Henry Ford introduced the continuous moving assembly line. Ford was able to produce a Ford car every two minutes and thirty eight seconds. Henry Ford also paid his workers a livable wage. The sixteenth amendment was also added to the Constitution in the same year. The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows the Congress to levy an income tax without apportioning it among the states or basing it on Census results. This amendment exempted income taxes from the constitutional requirements regarding direct taxes, after income taxes on rents, dividends, and interest were ruled to be direct taxes in Pollock v. Farmers' Loan & Trust Co. (1895). It was ratified on February 3, 1913.

The history of taxation in this country has been a part of our fabric since the Civil War. The history of taxation in this country has been something we revolted against. The tax situation in this country is still a drain on those with the confidence and the conviction to improve business and our economy. Henry Ford didn’t worry about taxes. He was concerned about making automobiles. George Bush was concerned about small business, because he saw the greatness in men like Ford who had a better idea.

Below is all you need to know about the history of our current tax structure and how it works.

(http://www.taxfoundation.org/publications/show/151.html)

Taxation in the United States is a complex system which may involve payment to many different levels of government and many methods of taxation. United States taxation includes local government, possibly including one or more of municipal, township, district and county governments. It also includes regional entities such as school and utility, and transit districts as well as state and federal government. Tariffs were the largest source of federal revenue from the 1790s to the eve of World War I, until they were surpassed by income taxes.[citation needed]
The first federal statutes imposing the legal obligation to pay a federal income tax were adopted by Congress in 1861 and 1862 to pay for the Civil War. The 1862 law levied a 3% tax on incomes above $800, rising to 5% for incomes above $10,000. Rates were raised in 1864. This income tax was repealed in 1872, but a new income tax statute was enacted as part of the Wilson-Gorman Tariff Act in 1894.[1]

The United States Constitution specified Congress could impose a direct tax only if it was apportioned among the states according to each state's census population.[2] In its 1895 decision the Supreme Court held in the case of Pollock v. Farmers' Loan & Trust Co. that a tax on income from property (a tax on interest, dividends or rent) was a direct tax under the Constitution, and so had to be apportioned.

The apportionment requirement made income taxes on property practically impossible, and Congress did not want to limit the income tax solely to a tax on wages. Therefore, in 1909 Congress proposed the Sixteenth Amendment, which became part of the Constitution in 1913 when it was ratified by the required number of states. The Amendment modified the requirement for apportionment of direct taxes by exempting all income taxes—whether considered direct or indirect—from the apportionment requirement.

Congress re-adopted the income tax that same year, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000) to finance World War I. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925, and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and has steadily increased since then. When we add all the entitlement cost and the impact of the progressive tax system on top of that you can begin to see why we are in the shape we are in today.

With all of what you just read, do you think we should even be having the debate about raising taxes or do you think we should be helping businesses to hire people? George and Henry had a great deal in common. They had conviction and confidence. They also knew it was the American worker that made them succeed.

Gregory C. Dildilian
Founder and Executive Director
Pinecone Conservatives

A footnote: I am proud to speak about George Bush, because he new who had the better idea.