Thursday, April 21, 2011

Why you need to read Ann Coulter, Part 1

As my readers probably know, I was born, raised and educated in the former Russia/USSR. I remember growing up in the socialist paradise - and I remember feeling quite disgusted with it.
When I moved to the US, it was only natural that American right-wingers like Rush Limbaugh and Ann Coulter appealed to me. After all, their views of socialism, progressivism and so-called "liberalism" were indistinguishable from mine. I am actually quite impressed that they were able to gain so much insight into communism without actually living under the communist yoke.

And speaking of Ann Coulter - I've read most of her books, and I must confess that her books gave a plethora of new information. For example, I was quite ignorant of Joe McCarthy, and her expose on this American patriot slandered by the left was very valuable. Speaking of slander - how many of you know why one of the left-wing inquisitors started whining about McCarthy's "decency"? What exactly did McCarthy say that the leftist found so disgusting? I have a strong feeling that few of you know the actual story - and I challenge you to answer me without doing the internet search.

While Coulter's history lessons are valuable to anyone who wants to learn the truth, she also teaches her readers how to quickly dissect liberal arguments. As she said in one of her books (I am quoting from the memory): "When a liberal expresses outrage about particular issue, but he is vague on the details, you can be pretty sure that he is lying". Let me show how Ann's maxim can be used to analyze an article by Stephen Ohlemacher, Associated Press. Amazingly, the article starts with a bold-faced lie:
"As millions of procrastinators scramble to meet Monday's tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all."
What evidence does Stephen provide to prove his assertion that super rich pay less in taxes? Here it is:
"The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992."

Now, remember what Ann Coulter said - if a liberal is vague on details, he is lying. Notice that Stephen undoubtedly took some time to collect the evidence to prove that super rich pay less in taxes. But if you look at the actual statistics that he cites - you will surely discern that none of it proves his point. Yes, indeed, the rick pay taxes at lower rate than before - but does it prove that they pay less in absolute numbers? When my wife showed me this article - I immediately noticed that Stephen was trying to create an impression that statistics confirmed his hypothesis - but then he clearly avoided giving actual numbers on the tax revenue collected from the super rich. If anything, this was proof positive to me that he was lying.

So, as an honest and hard-working man I found the government website that quoted the taxes collected from the super rich - it can be found here, see Table 1 -- Selected Items for Taxpayers with the Top 400 Adjusted Gross Income (AGI), 1992-2007. I put all the numbers in the Excel, and here is the graph that shows the tax rates for the richest 400 households in US from 1992 to 2007.

And indeed, comrade Stephen is correct, "average federal income tax rate was 17 percent, down from 26 percent in 1992". But how about the actual tax revenue? Figure below shows how much federal income tax was collected from the 400 richest households in US.

As the figure shows, the tax revenue collected from the super rich grew from $4,601,023,000 in 1992 to $14,454,803,000 in 2007 in constant 1990 dollars. This is a 300% growth - which clearly shows that Stephen was lying. And let's make the next step, and put the tax rates and tax revenue for the richest 400 households on the same graph:

Evidently, cutting the tax rates for the super rich did not in any way cut the tax collection. One could easily argue that tax cutting increased the revenue - just as the Supply-Side economists predicted.

Of course, Stephen was not the only one who rushed to support Obama's proposal to soak the rich. A reliable Obama's lackey, E.J. Dione Jr. also jumped in the same wagon. In his Washington (com)Post article, he quotes a liberal economist  David Cay Johnston. According to David:

“The effective rate for the top 400 taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush. So their effective rate has gone down more than 40 percent... The overarching drive right now is to push the burden of government, of taxes, down the income ladder.”
Is this true? Well, indeed the tax rate for the top 400 taxpayers indeed went down (from 22% in 2000 to 17% in 2007). But does it mean that the tax burden shifted down the income ladder? Here is the graph from the exact same government site, which proves that David was lying:

As the readers can see, the top 400 households are now paying a larger portion of the total federal tax revenue. Indeed, that portion went from 1% in 1992, to 1.19% in 2002 - and then skyrocketed to 2% in 2007. Indeed, it's easy to see that lower tax rates on the top 400 households resulted in absolute gain in tax revenue from them - and their relative contribution to the federal tax collection nearly doubled. Does this look in any way similar to what the liberals are proclaiming?

Again, I suggest anyone to remember Ann Coulter's axiom - when liberals are vague in details - that means they are lying. If a liberal article gives you all kind of statistics - but none of it directly proves the assertion - that means the article is lying. The authors went through the pain of looking at all available statistics - and he decided to withold the numbers that prove that he is wrong.

And surely the New York Slimes could not walk away from repeating same numbers, and making same conclusions - without actually bothering to quote the tax revenue from the richest households. Charles Blow, the NYT columnist in an article called "Pirates of Capitol Hill" writes the following: just the period from 1992 to 2007, the tax rate on the top 400 households in America — those with an average annual income of nearly $350 million — fell by more than a third. In fact, the tax rate for these supermillionaires is now less than the tax rate for average Americans.

He concludes the article with a call for murder and mayhem:
More tax cuts would be gluttony in a time of starvation. That is not America. That is a nation about to be plundered, and a people laid to waste.  
For some reason, Charlie neglected to mention that lower tax rates resulted in increased revenue from the top 400 households. In what way is this harmful to the US economy? People earn more money and pay more in taxes - why does that bother Charlie so much? And moreover, and most importantly, why did he "forget" to compare the tax receipts in 1992 and 2007? Is it because it was inconvenient truth?

Last but  not least I must note that an article with similar claims (richest 400 households see a drop in taxes) was published on Alexandria - a blog which I also contribute to. The article quotes same numbers as the previous authors, and just as previous authors it refuses to divulge the dynamics of the actual taxes paid by the rich. The end of the article is rather instructive:

This special treatment of the wealthy might well be worthwhile if it had produced the job creation and growth predicted by supply siders. Instead, we saw years of stagnation with growth largely limited to the financial sector. Now, Ryan wants to reduce top tax rates to 25%, while eliminating loopholes. I say close the loopholes first. Prove that you overcome the political clout of the wealthy to have specific tax laws written, then we can talk about lowering rates, after the debt is reduced.

Of course, had the author took the pain of examining the actual tax revenue, he would have noticed that, just as the supply siders predicted, lowered tax rates on the rich produced more revenue. And once we examine the empirical evidence that shows exactly that - the idea to raise tax rates on the rich can be seen as a naked attempt to punish the rich for their success - even at the cost of lowered revenue. As Alexandria's left-wing blogger Hector infamously explained - he was fine with making the poor people even poorer if only that allowed him to punish the rich. And that's what it all about - American liberals do not mind hurting the poor people in America, they do not care about the negative effects on the tax revenue - their purpose is to hurt the rich. This is pure, unadulterated evil.

"Hatred of a neighbor is to deliberately wish him evil, and is thus a grave sin (CCC 2303 and Galatians 5:19-20).”

Last but not least - don't forget to read Ann Coulter - her books are a valuable tool for American patriots.


Kid said...

No doubt about this. The Laffer curve shows that there is a tipping point where increases in the tax rate results in lower tax revenue, even with higher GDP. It is proven again and again in history.

It is why the depression became the Great Depression.

Old Liberals have a mental disease. Their mental development is stunted and they end up stuck as children, in a constant fruitless search for 'fairness', ever hating of those who have more than they do. It becomes their mission to take from those people without regard for anything else.

The rich take their money elsewhere when government gets too heavy handed which is why the children will never win at this game.

10% of Americans pay 70% of the federal tax revenue. Also easy to find.

Silverfiddle said...

Excellent analysis. The person you fisk in this post is a crapweasel from the Krugman institute.

This goes beyond propaganda and is a blatant lie. Sad thing is, lefties eat this crap up, and that is why it is so hard to argue with them, even when you cite facts.