Category Archives: Taxation

How Do You Measure The ‘American Dream?’

The question of class mobility has come to define the “American Dream” in political discourse. And, although this post will take a bit of a contrarian position, it is absolutely inarguable that there is a problem with economic immobility today that is having a very depressing impact on the way we communicate to solve problems and on our freedoms in general. But this is not how you go about making that point.

There are many accepted indicators of whether a person has “done everything right” but the most important such indicators have traditionally included college advancement (graduation and especially graduate degrees), marriage, and home ownership.

The original graphic is a classic example of a complex topic simplified into uselessness. When I look at the graph, I see that, in fact, college grads who started poor move up to the middle classes and stay there at much higher rates than rich kids who drop out of high school (yay!)…but somehow the Post comes away with the misleading headline: Poor kids who do everything right don’t do better than rich kids who do everything wrong.

Really? This only looks at the shear proportions who “graduate college” vs. “drop out of high school” – that can hardly be seen as “doing everything right” vs. “getting everything wrong”. What did the college grads major in? There is ample research supporting the conclusion that most college majors these days are bad long term investments. What did the rich kids who didn’t finish HS go on to do? Were they drop-outs because they had alternative plans? Did they pick up a trade?

And more to the point – how many of those poor kids had good parenting examples at home upon which to build the foundations of healthy marriages?

Slate takes on many of my same talking points here. They mention other confounding factors, and note the misleading nature of the Post’s article title. Props to them!

But they make the unfortunate logical leap that there is something inherently wrong with a system where not all poor college grads do well later in life, or that the forces leading to their remaining in poverty are things we can fix.

An excerpt:

The real issue, as O’Brien points out, is that rich kids enjoy lots of advantages that keep them from falling to the very bottom of income distribution, and sometimes those advantages keep them at the very top. They might be able to go to work for family businesses, for instance, or family friends. Researchers like Brookings’ Richard Reeves call that collection of advantages “the glass floor.” Educated poor kids are in the exact opposite position. Many attend second- or third-rate (and possibly for-profit) colleges that churn out less-than-useful degrees. And instead of a floor propping them up, their families and friends can act like an anchor pulling them down. A classic example: a college-educated woman who goes home and marries a boyfriend who never made it past high school and has trouble holding down a job.

Emphasis mine. Notice the not-so-subtle insinuation that colleges that operate for profit are bad for the poor, and that the less-useful degrees are not to be found in the halls of elite, expensive colleges, only those second rate low-end state schools or the aforementioned dirty capitalist institutions. Of course, even top end colleges (including the ivy leagues) are now offering degrees in a wide array of financially useless liberal arts curricula. Also notice the suggestion that the problem isn’t with the failure of people raised in poverty to establish and keep stable families, but that those families are holding them back. They’re getting it exactly backwards. Every credible study on the persistence of poverty finds that single parents and people who suffer divorce are the most likely to get stuck in poverty.

So let’s summarize the position of Slate’s team (and likely that of the Washington Post):

1) Economic mobility continues to be problematic at best for the poorest Americans, even with hard work.
2) Graduating from college is a mark of hard work.
3) Hard work should be rewarded with a high rate of success.
4) If we could separate the poor from the things that hold them back (especially their struggling families and their alternative education sources), they would thrive.

If the writers at Slate would like to address the problem of hard-working, driven poor people being less able to move up the economic ladder than (perhaps) would be ideal, I suggest that they stop grinding political axes and start looking at the hard data. The data all indicates that the leading indicator for economic immobility is single parenthood, and that children of single parents are more likely to also be single parents themselves later in life. Get to the root of the problem and you find that this is not something that government can forcefully correct – and frankly, I’d be terrified if they tried.

Jason Lewis Goes Galt; Quits Halfway Through Show on Air

Over the past week, talk show host Jason Lewis has been letting on that something big was going to happen on his show. July 31, 2014 he dubbed “Judgement Day.”

Being an avid listener of his, I thought it probably had something to do with his political activism site* and probably something to do with his cause called “Starve the Beast.” Was he going to announce that he was going to move his show from the high tax progressive state of Minnesota to a more tax friendly/liberty friendly state?

As it turns out, I wasn’t too far off but he took his “starve the beast” thing a step further. You could say he had “gone Galt” on the air halfway through his radio show.

The following was his epic final monologue:

All over the continent of Europe there are castles. Castles that children are taught to admire. But these monuments are not shrines to liberty but are a stark reminder of an oppressive past that we are quickly forgetting. These elaborate fortresses were built to honor the riches of royalty. Such wealth was not derived from the cooperation of capitalism but from the conquest of collectivism. It was stolen through taxes and fees collected from the serfs. It was not earned.

We have apparently learned little from history for today we have our own royalty dressed up in the robes of compassion. A false altruism that merely enables the mob and crushes the individual. We have erected a shrine called the welfare state and as a result, we now resemble a nation with more takers than makers. Crony capitalists who preach the virtue of community service while acting like economic parasites who live off the system. Indeed the real entrepreneurs are no longer valued. Only the political ones who loathe them. Profit is a dirty word while one’s obligation to society regulates the most productive to second class status. We are it seems endlessly told to live for others. Endlessly told. Taxes are patriotic. We are told to apologise for our own existence. The pursuit of happiness has been replaced by the mandate of self sacrifice. This is not freedom, it is tyranny.

And so we, I, you are faced with a choice. The choice that all people in all times must make: to fund the beast or to starve the beast. To host the parasite or walk away. To participate in the system that punishes the value of your own existence or boycott that system.

Ladies and gentlemen, I have now chosen the latter. They can now feed off one another.

I quit.


Just after Lewis uttered the words “I quit” there was silence followed by his confused producer getting on the air “Um…Jason?” and then announcing that Jason had left the mic. They then went to commercial and found another talk host to fill the remaining hour and a half remaining in the show.

From there there was a flurry of calls and people going to this website and the homepage. Was this some kind of stunt? Did Jason Lewis really quit halfway through his syndicated talk show?

Personally, I wasn’t sure. It does now seem that Jason Lewis indeed did quit and decided he was no longer willing to keep feeding the beast.

Okay, so a talk show host who would likely be retiring soon quit in dramatic fashion, what’s the big deal?

For me, it is a bummer. Jason Lewis was one of the few talk show hosts that didn’t tow the party line or spend three hours a day attacking Barack Obama for everything under the sun. Its true that he did attack Obama’s policies with gusto but he didn’t spare the Republicans either. He brought insights that no other syndicated show offers.

And maybe this going Galt is more symbolic than anything else. But what if his message resonates to other high achievers who could stop the motor of the world if they followed this example?

I for one hope this inspires such a revolution even if its on a smaller scale than what took place in Atlas Shrugged.

*I have a cause and a group that I started within The Non-Aggression Principle (educates people about the NAP) and my group called Restore Everyone’s Property And Individual Rights (REPAIR). Contact me via Twitter @s_littau if you would like to join and these and other causes.

It isn’t, wasn’t, aint ever gonna be…

I mentioned Social Security as an entitlement payment in my post on the government shutdown, and it raised a fairly common objection in several who read it:

They don’t think of Social Security as an entitlement, or a welfare payment; they view it as their right, by virtue of having contributed to the system for their entire working life.

So, time to correct a very major, and unfortunately common, misconception.

Social Security, is NOT a pension, nor is it insurance.

Now, I realize that the majority of the American public believe this is so, because they have been deliberately defrauded by our government…

First read this to understand the scope and scale of the fraud, and the problem it (now only vestigially) masks:

The Greatest Fraud in the History of the Human Race

Ok… so, by now, most people understand that Social Security, as it is, is essentially a legal Ponzi scheme (whether they accept that, or admit it… if they can do basic match, they at least understand it).

What I really didn’t fully appreciate until recently, is that often, even people who understand this is true, don’t understand why or how it got that way.

There is a very common misconception, even among otherwise economically, historically, and legally well informed and educated people, that the current state of Social Security is somehow a twisting of what it was intended to be, or taking advantage of loopholes etc…

Many people believe that Social Security was set up to be an annuity based insurance and pension plan. That paying FICA contributions was supposed to buy you into a long term annuity, or investment plan, and that your Social Security payments were intended to be the product of that investment.

They think that the “trust fund” exists, and was set up to collect and invest the contributions of the workers who paid into it, so that the investments would fund the workers retirements.

They believe that the problem with Social Security is that congress has been raiding the trust fund since 1958 (most don’t know it was since ’58, but they are sure that’s why Social Security is broke).

Unfortunately, every bit of this idea is entirely incorrect… and people who hold that idea generally do so, because they were deliberately misled.

I’s simply not true… though many… perhaps most… people believe it is; but in fact, Social Security was always nothing more than a pyramid scheme, and an entitlement.

They misunderstand entirely… Because they have been deliberately deceived; as has been the majority of the population.

Social Security was NEVER, EVER, an annuity, pension, or insurance.

Actual insurance, annuities, pensions etc… were not part of the legislation that created it, or anything thereafter.

Also, there never was an actual “trust fund” as such… simply an accounting of surplus contributions which were, in theory, to be placed into low yield “no risk” treasury bonds.

Note, I said “surplus contributions”… this means contributions in excess of payouts to existing recipients. Because benefit payments are not made from the proceeds of investment, they are made using the payroll taxes of those currently paying in today (this is why we call Social Security a ponzi scheme… When Bernie Madoff does it, it’s fraud and he goes to jail. When the government does it, it’s… well it’s still fraud, even worse fraud… but no-one goes to jail sadly).

The sham of it, particularly the sham of the accounting trick they called the “trust fund” was publicly proclaimed as early as 1936 (by Alf Landon in his presidential campaign).

Social Security is, and always has been, a tax and entitlement distribution scheme.

The government lied, and called it insurance, but in fact it has never been anything other than a payments and distributions pool, funded by taxes.

You can look it up, in 42usc (the section of U.S. code defining the various programs known as Social Security).

The programs collectively known as Social Security are referred to as insurance several times, but in fact they very clearly are not. The legal definitions and descriptions make this very clear. Social Security is a tax and entitlement disbursement scheme, by act of congress.

There is no individual ownership, no accrued value, no capital gain, it cannot be transferred, and it can be changed (or removed), at will, by congress; without being construed as a taking without due process.


Perhaps I am not explaining this properly…

It’s not that congress went against the intent, or written provisions of the law, and changed Social Security from what it was supposed to be, to what it is…

It’s that in fact, the law was NEVER what they told the American people it was.

In fact, if the law HAD been what they sold it as, then that law would have been declared unconstitutional by the supreme court (as had the earlier railroad pensions act, which actually DID created a property based pension scheme). It was specifically because it WAS a tax and distribution, that congress had the power to do it; and was argued thus before the court in 1937.

Helvering v. Davis clearly defines Social Security “Contributions” as a tax, and social security “benefits” as welfare payments. This is the basis for it’s constitutionality.

Fleming v. Nestor in 1960, reaffirmed that FICA is a tax, and that the “contributions” are government property, to be done with as the government sees fit; and that “contribution” through FICA did not cause one to accrue a property right to any asset, pension, or insurance scheme, nor did it create a contract consideration, right, or obligation on the part of the government. Further, it affirmed that “benefits” were NOT insurance or pension disbursements, but entitlements by act of congress, and that congress could change them at any time in any way they chose, without being construed as a taking under the 5th amendment (though they did say that they must have cause and due process to do so… but any legitimate cause within their purview would do).

Justices Black and Reich, specifically dissented from the majority opinion, explicitly and expressly addressing the issue of property rights. They believed that such contributions, to such a program, SHOULD as a matter of moral and public good, be considered property, and have property rights attached. They acknowledged however that the law as written did not, and that by strict interpretation the majority was correct… They just thought it was better to make it property anyway.

Unfortunately, it’s not… It is neither a pension or insurance, and never has been, from the very beginning.

However, almost every explanation ever given the public, and in most documentation, it is referred to as insurance, or even a pension.

All as part of the greatest fraud in the history of the human race.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Don’t Bail the Democrats Out By ‘Defunding’ Obamacare

If something isn’t done to stop the train wreck known as Obamacare before next year, the healthcare system and the economy will suffer. Tea Party Republicans in the House and Senate have vowed to “defund” Obamacare even if it means shutting the government down. Obviously, opponents of this law should do everything possible to stop this from happening…right?

Maybe it’s not so obvious.

Obamacare cannot truly be defunded because the spending is built into the law itself but for the sake of argument, lets say there was some loophole that would make defunding possible. Why would Republicans want to bail the Democrats out? The Democrats own this legislation because not a single Republican voted in favor.

Let the Democrats suffer the consequences at the ballot box in 2014 and 2016. If the Republicans somehow managed to delay, add exemptions from some of the laws worst aspects, or alter Obamacare’s implementation, the Democrats would then have an out. President Obama could resort to his usual demagoguery in the campaign season the “Affordable Care Act would have worked if the Tea Party extremists hadn’t screwed it up!” The Obama media would be more than happy to echo this party line.

There is a better way. What if allowing Obamacare to be fully implemented as scheduled would lead to its ultimate demise? Far from trying to soften the blow or delay the law’s implementation, opponents of the bill, especially Republicans in positions of leadership should call the president’s bluff and let the train wreck occur. Over the many objections from many of us, Obamacare passed, failed numerous repeal efforts, and prevailed in the Supreme Court.

Also, consider that Obama was reelected. Its time for the American people to take their medicine and live with the consequences. We keep hearing about how the progressives have a better plan than those of us who believe in smaller government and free markets; let’s find out together just how wise they are!

No delays to save incumbents in the 2014 election. No waivers for employees, employers, the labor unions, for Congress, or for government workers. No waivers for anyone. How many times have we heard progressives say “we’re all in this together”? We should call their bluff on this as well.

To the extent that President Obama is trying to selectively enforce the law, Republicans should challenge his authority to do so in the courts and ask the president why he wants to delay his signature accomplishment as president.

Let the American people experience the broken promises of Obamacare for themselves. Let the Democrats defend the law in the 2014 campaign when voters see their work hours cut to less than 30 hours a week (if they are lucky to keep their jobs at all), their premiums rise, and/or lose the insurance plans they already have.

If after the American people (and I mean all of the American people) experience this pain sooner than later and still decide that Obamacare is the way to reform health care then I suppose we are getting exactly the system we deserve.

The Constitutional History Lessons You Didn’t Learn in School

More often than not, history is written by the winners and taught by individuals who love big government. Tom Woods’ Liberty Classroom has been providing a refreshing non-P.C. presentation of history that is rarely brought up. Very little of what we call history either is “settled” without controversy or without lingering questions.

• What is the true philosophical inspiration for the Declaration of Independence?
• What is the meaning of “natural law” and “natural rights”?
• Was the American Revolution just about “no taxation without representation”?
• Was the Articles of Confederation really inadequate for the needs of the several states?
• Was the Constitution itself legally drafted and adopted in replacing the Articles of Confederation?
• How controversial was the Constitution previous to its ratification?
• Was it originally the intention that the union would be perpetual? (i.e. Was it the common understanding during the ratification debates that states could leave the union or not?)
• What did the founders think about states nullifying federal law?
• Was the American Civil War (or “War Between the States”) really about slavery?
• Might slavery have ended without war?
• Was the Supreme Court intended to be the final arbiter of both state and federal law?

These questions and more are explored in Tom Woods’ Liberty Classroom. The video below “German and British Antecedents [to the U.S. Constitution]” is the first of 15 videos available for free from Liberty Classroom (watch the rest here,). Each lecture runs for about 25 minutes. Enjoy!

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