Frisco Nan Plans To Tax Your IRA

This was sent to me by a friend a few days ago. It's part of one of those chain emails.

Frisco Nan has plans to eviscerate your financial assets in ways that will shock you. Read on....

"Madam Speaker Nancy Pelosi wants to put a Windfall tax on all stock market profits (including Retirement fund, 401K's and Mutual Funds)

Alas it is true. All to help the 12 Million Illegal Immigrants and other unemployed Minorities!

This woman is frightening. Nancy Pelosi condemned the new record highs of the stock market as "just another example of Bush policies helping the rich get richer".

"First Bush cut taxes for the rich and the economy has rebounded with new record low unemployment rates, which only means wealthy employers are getting even wealthier at the expense of the underpaid working class". She went on to say,

"Despite the billions of dollars being spent in Iraq our economy is still strong and government tax revenues are at all time highs. What this really means is that business is exploiting the war effort and working Americans, just to put money in their own pockets".

When questioned about recent stock market highs she responded,

"Only the rich benefit from these record highs. Working Americans, welfare recipients, the unemployed and minorities are not sharing in these obscene record highs". There is no question these windfall profits and income created by the Bush administration need to be taxed at 100% rate and those dollars redistributed to the poor and working class".

"Profits from the stock market do not reward the hard work of our working
class who, by their hard work, are responsible for generating these corporate
profits that create stock market profits for the rich. We in congress will need
to address this issue to either tax these profits or to control the stock market
to prevent this unearned income to flow to the rich."

When asked about the fact that over 80% of all Americans have investments
in mutual funds, retirement funds, 401K's, and the stock market she replied,

"That may be true, but probably only 5% account for 90% of all these investment
dollars. That's just more "trickle down" economics claiming that if a corporation
is successful that everyone from the CEO to the floor sweeper benefit from
higher wages and job security which is ridiculous".

"How much of this 'trickle down' ever get to the unemployed and minorities in our county? None, and that's the tragedy of these stock market highs."

"We democrats are going to address this issue after the election when we take
control of the congress. We will return to the 60% to 80% tax rates on the rich
and we will be able to take at least 30% of all current lower Federal Income Tax
taxpayers off the roles and increase government income substantially. We need
to work toward the goal of equalizing income in our country and at the same
time limiting the amount the rich can invest."

When asked how these new tax dollars would be spent, she replied,

"We need to raise the standard of living of our poor, unemployed and minorities.
For example, we have an estimated 12 million illegal immigrants in our country who
need our help along with millions of unemployed minorities. Stock market windfall
profits taxes could go a long ways to guarantee these people the standard of living
they would like to have as "Americans"."

If any of this is true, it only adds to the likelihood that the GOP will return to a majority in at least the lower House come 2008.

Terrorist Heaven

My partner sent me this rather humorous picture the other day. To see a larger version, click on the picture.

If, like me, you believe that the war on terror represents the West's response to what is, in effect, a religiously-based war recommenced by extremists in the Muslim religion, then you'll enjoy this.

Steve Landsburg On 'A Brief History of Economic Time'

Steve Landsburg , Professor of Economics at the University of Rochester, wrote a fun piece in the weekend Wall Street Journal on economic expectations throughout time, and the sources of economic prosperity and wealth.

Described as a libertarian who voted against Kerry in 2004, because Kerry's running mate, John Edwards, was, in Landsburg's words, a "xenophobe," probably tells you all you need to know. He allegedly compared Edwards' opposition to free trade to David Duke's racism.

Landsburg's article is priceless, so I've included much of it below,

"Modern humans first emerged about 100,000 years ago. For the next 99,800 years or so, nothing happened. Well, not quite nothing. There were wars, political intrigue, the invention of agriculture -- but none of that stuff had much effect on the quality of people's lives. Almost everyone lived on the modern equivalent of $400 to $600 a year, just above the subsistence level. True, there were always tiny aristocracies who lived far better, but numerically they were quite insignificant.

Then -- just a couple of hundred years ago, maybe 10 generations -- people started getting richer. And richer and richer still. Per capita income, at least in the West, began to grow at the unprecedented rate of about three quarters of a percent per year. A couple of decades later, the same thing was happening around the world.

Then it got even better. By the 20th century, per capita real incomes, that is, incomes adjusted for inflation, were growing at 1.5% per year, on average, and for the past half century they've been growing at about 2.3%. If you're earning a modest middle-class income of $50,000 a year, and if you expect your children, 25 years from now, to occupy that same modest rung on the economic ladder, then with a 2.3% growth rate, they'll be earning the inflation-adjusted equivalent of $89,000 a year. Their children, another 25 years down the line, will earn $158,000 a year.

Against a backdrop like that, the temporary ups and downs of the business cycle seem fantastically minor. In the 1930s, we had a Great Depression, when income levels fell back to where they had been 20 years earlier. For a few years, people had to live the way their parents had always lived, and they found it almost intolerable. The underlying expectation -- that the present is supposed to be better than the past -- is a new phenomenon in history. No 18th-century politician would have asked "Are you better off than you were four years ago?" because it never would have occurred to anyone that they ought to be better off than they were four years ago.

Rising income is only part of the story. One hundred years ago the average American workweek was over 60 hours; today it's under 35. One hundred years ago 6% of manufacturing workers took vacations; today it's over 90%. One hundred years ago the average housekeeper spent 12 hours a day on laundry, cooking, cleaning and sewing; today it's about three hours.

The average middle-class American might have a smaller measured income than the European monarchs of the Middle Ages, but I suspect that Tudor King Henry VIII would have traded half his kingdom for modern plumbing, a lifetime supply of antibiotics and access to the Internet.

The source of this wealth -- the engine of prosperity -- is technological progress. And the engine of technological progress is ideas -- not just the ideas from engineering laboratories, but also ideas like new methods of crop rotation, or just-in-time inventory management. You can fly from New York to Tokyo partly because someone figured out how to build an airplane and partly because someone figured out how to insure it. I'm writing this on a personal computer instead of an electric typewriter partly because someone said, "Hey! I wonder if we can make computer chips out of silicon!" and partly because someone said "Hey! I wonder if we can finance startups with junk bonds!"

Which contribution is more important? By one rough measure -- the profits earned by the innovator -- they're about equal. In the late 1980s, Microsoft earned economic profits of about $600 million a year, while Michael Milken, the inventor of the junk bond, earned an annual income that was just about the same.

Engineers figure out how to harness the power of technology; economists figure out how to harness the power of incentives. Our prosperity relies on both."

I love Landsburg's opening paragraphs. Who can be a unionist and economic protectionist in the face of such evidence? Our own lack of a sense of history, both political and economic, seems to leave people to whine that they have it so tough. In reality, life today is much better, even at low income levels, than it ever was even just decades ago.

Landsburg doesn't mention the availability of: pre-loaded debit cards, cell phones, inexpensive computers, or their availability at free libraries, and the internet. Not to mention simply the existence of the now commonly-held notion that your economic expectations should, and can, exceed those of your parents.

The G8 Backs Bush's Original Climate Change Positions

Kim Strassel, the Wall Street Journal's superb editorial columnist, and a senior WSJ executive, wrote a scintillating piece on Friday concerning the recent G8 climate statement.

While no one will admit it, she points out that they adopted George Bush's original positions on nearly every point in the release. Over the last few years, the infamous Kyoto Accords have failed.

Governmental fiat didn't push back the carbon tide. Bush's idea was to engage industry to grow its way to less pollution, rather than force emissions down simply by edict.

Ms. Strassel notes that someone 'capitulated' over this issue, but it wasn't Bush. She further notes that, under Kyoto, Europe increased emissions by 2.3 percentage points in five years, while most signatories can't meet their targets.

She even quotes Tony Blair as saying,

"The truth is, no country is going to cut its growth or consumption substantially in the light of a long-term environmental problem." He even doubted that the Kyoto treaty will have a successor instrument after its expiration in 2012.

Perhaps the major Bush victory is to abstain from taking this whole issue seriously while two of the world's largest countries, India and China, also abstain. Instead, Bush led the US to establish a voluntary climate pact with Asia-Pacific nations, including China and India.

Moreover, the G8 declaration is full of 'goals,' and states that programs "must be undertaken in a way that supports growth in developing, emerging and industrialized economies."

Though roundly excoriates by liberals and greens, Bush's patient common sense has won the day internationally on this issue. Gore may have won an Oscar, but Bush won the war on how to effect a response to climate change.