Jump to content
Sign in to follow this  
Muda69

The Progressive Revolution: From Democratic to Liberal to Progressive to Socialist

Recommended Posts

Paid Family Leave Act Will Raise Taxes: https://reason.com/2020/03/05/paid-family-leave-act-will-raise-taxes/

Quote

Following increased interest in expanding access to paid family and medical leave, Rep. Rosa DeLauro (D–Conn.) joined forces with Sen. Kirsten Gillibrand (D­–N.Y.) to promote the Family and Medical Insurance Leave, or FAMILY, Act. If we believe the act's supporters, it would cost close to nothing and provide essential benefits to employees who don't currently receive them.

Unfortunately, these claims are bogus.

Under the FAMILY Act, the federal government would offer 12 weeks of paid time off to enable workers to care for infants, recover from major illnesses, and care for severely ill relatives. During that time, employees would receive benefits administered by the Social Security Administration equal to 66 percent of their regular earnings, with a minimum monthly benefit of $580 and a maximum monthly benefit of $4,000. To pay for this new handout, the federal government would impose a 0.4 percent payroll tax to be divided evenly between employers and employees.

Gillibrand argues that the act would provide greatly needed benefits to employees at a minimal cost to them. One of her favorite talking points about the proposal is that it would cost employees only $4 a week, or the equivalent of a cup of coffee.

Unfortunately, the senator's assertion is quite misleading. For starters, a 0.4 percent hike in the payroll tax would not be enough to pay for the federal spending under the plan. The Congressional Budget Office, or the CBO, released a score of the bill as introduced and found that the FAMILY Act would increase spending by $547 billion in benefits and administrative costs over 10 years, but it would only increase net federal revenues by $319 billion during that time. That means that $228 billion in spending wouldn't be paid for by the FAMILY Act's new tax.

While the federal government is no stranger to deficits, in this case—and contrary to what FAMILY Act supporters seem to believe—this deficit will require either more tax revenues or fewer government benefits. The CBO points out that the act "would limit program outlays to amounts in the trust fund," which the Heritage Foundation's Rachel Greszler explains in her recently released paper "is the accumulation of the FAMILY Act's payroll taxes." This means that one way or another, spending must equal tax revenues. Therefore, Congress will have to either ration benefits or raise the payroll tax.

By how much? It would double within four years of the first benefits, which would be paid in October 2022.

Greszler calculates that as the number of people claiming the benefit increases, if benefits aren't rationed, "In 2023, the initial 0.4 percentage point payroll tax would have to rise by 25 percent to 0.5 percentage points. By 2026, the necessary payroll tax would need to double to 0.8 percentage points, and by 2028, it would need to rise to about 240 percent of its initial level, to 0.95 percentage points." And that's just the beginning. This, of course, is on top of the already steep and regressive existing payroll tax.

Moreover, even though employees and employers split the FAMILY Act's payroll tax, most of the employer's share of the tax will still fall on workers. That's because, over time, employers shift the costs of new taxes onto employees in the form of lower wages. In other words, employees will shoulder most of the payroll-tax increase. The CBO accounts for some of this shifting as it projects a $42 billion reduction in federal revenues because employers will reduce workers' wages and benefits.

The FAMILY Act would also lead to other undesirable changes, like a shift in resources from those with lesser means to those who already have more. Greszler explains that in the United States, "where substantial employer-provided paid family leave exists, a government program could be even more regressive because it would provide windfall benefits to larger companies and higher-income employees who already have paid family leave policies." This is currently happening with state-based paid family leave programs. Companies that used to provide the benefits are now asking their employees to tap into the taxpayer provided program first.

Finally, but importantly, economic research reveals that employees—and women in particular—in countries where government has implemented such benefits face more discrimination, fewer advancement opportunities, fewer hours of employment, and lower wages. These are the unseen costs of such programs that the act's supporters ignore.

All of these facts together make for a very expensive cup of coffee.

Once again we have socialists attempting to have the federal government stick it's nose into something where it has no constitutional basis to do so.    Why should I in Indiana be forced to to support the paid-leave of another citizen in Oregon, or vice-versa?

 

  • Disdain 2

Share this post


Link to post
Share on other sites

Let's Give Bernie-Syle Socialism a Try in California First: https://mises.org/wire/lets-give-bernie-syle-socialism-try-california-first

Quote

I have a suggestion for the people in America who dream of the US becoming a socialist paradise—try it in California first and see what happens. Of course, I don’t really want this to happen. I live in California. But I think that this idea of California becoming an independent republic based on “democratic socialism” would be a helpful thought experiment.

Socialism has imploded everywhere it has been implemented, but socialists always give the excuse that they “just didn’t do it right.” If California’s experiment with socialism failed, there would be no more excuses. No state has a more diverse amount of natural resources. No state has better weather. No state has a better technology sector. California is the fifth-largest economy in the world. And California is primed for socialism already, having one of the most progressive legislatures in the country. Bernie Sanders could be president of the Socialist Republic of California, which would secede from the union. Their new currency (called the “pinko”) would have Bernie’s and other socialists’ pictures on it.

Think of all the programs the Bern and progressives/socialists could enact—Medicare for All, the Green New Deal, free college education, and providing a living income to those who choose not to work would fly through the state legislature in pursuit of the socialist utopia. The problem is that all these government programs have been shown to lower economic output, because they divert lots of money to unproductive ventures. Lots of money means lots of taxes on everyone.

But people don’t like high taxes. California has already lost many businesses and workers to higher taxes and a bad business environment. Once socialist, California would lose thousands of millionaires more, who would pack up and leave the state, taking with them their investments, businesses, and the tax money that they would have paid. I’m willing to bet that even the big shots in Hollywood would leave, even though they claim to want to have more of their earnings and wealth confiscated. The middle class would continue to emigrate from the state as well. And nonproductive people would pour into the state for all the free benefits. That is a recipe for disaster.

Commensurate with the outflow of producers, tax revenues would plummet. The top 1 percent of income earners pays 48 percent of the income tax collected. The state is expected to receive around $100 billion in income tax revenue this year, amounting to 68.8 percent of all revenues; total revenues are estimated to be just $146 billion. These revenues are way too low to provide for any of the socialists’ grand schemes.

And those grand schemes will cost ever increasing amounts of money. People not just from Mexico but from all over the world will come to the promised land for all the handouts, such as Bernie’s proposed free medical care for undocumented immigrants. And migrants will be able to easily enter the state, as Bernie wants to significantly relax immigration laws. The costs of these programs will explode at the same time that revenues plummet, something that is not sustainable for very long.

In fairness, California would be able to increase its income tax rates, since no one in the state would owe federal taxes any longer, which should raise revenues. But even if they raised the tax rates to 52 percent (Bernie’s ideal top tax rate) for those with adjusted gross incomes of over $100,000, they would still realize less than $400 billion in total income tax revenues. Since the amounts raised would not be sufficient to fund the socialists’ programs costing trillions of dollars each year, huge fiscal deficits would be created. Then the only way to pay for all of Bernie’s handouts would be for California to borrow like crazy, even if all the producers remained in the state and paid the higher taxes (which they wouldn’t).

A vicious cycle would ensue. Borrowing tremendously to fund these programs would reach a tipping point. The state’s credit rating would go down precipitously, forcing it to offer junk bonds at much higher rates of interest, compounding its cash flow problems. At that point, their only option to provide for government spending would be the death knell for an economy—printing more pinkos. Printing money that is not commensurate with wealth production results in hyperinflation. Venezuela’s inflation rate hit a high of over 344,000 percent in February 2019, mostly from printing money that is worthless. And we all know how life in Venezuela is right now.

Why subject the entire country to a socialist experiment that everyone knows will fail in the long run? Instead, allow one of the strongest economies in the world, California, to vote itself socialist, secede, and then elect Bernie as president. After it became the next Greece and failed, the rest of the country could welcome California back into the fold, where the state would become a powerhouse once again.

If my predictions of the demise of California under socialism ended up being wrong and the state became a paradise instead, then the rest of the country should emulate California’s socialism. However, if my predictions of gloom were to come true, we could finally put to bed the notion that socialism can be successful if “just done the right way.”

Sounds like a good plan.

 

  • Like 1
  • Disdain 2

Share this post


Link to post
Share on other sites
On 3/23/2020 at 10:31 AM, Howe said:

See the source image

In fairness to Barack, he didn't say the man wasn't a meth head......

  • Haha 1

Share this post


Link to post
Share on other sites
Sign in to follow this  

×
×
  • Create New...