No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for May 27th, 2009

Wednesday (or is it Thursday?) Hot Read – MKH’s “Are You Ready for a VAT?”

by @ 23:56. Filed under Politics - National, Taxes.

Those who know me know that I have a crush on Mary Katharine Ham. That I find her very attractive does not diminish in the least the brilliance of this tour de force on the onrushing VAT to supposedly pay for health care. Let’s take a few paragraphs from the middle:

Remain extremely skeptical, folks. No matter how much lovely alliteration Obama uses to describe this plan, it’s just another pathway into your wallet for the federal government. It’s just another source to tap for revenue when they’re unwilling to make “tough choices.” It will go up and up, and the relief the nation sees on the corporate income tax or the income tax as a trade-off will be precious little in the Congress we’ve got now.

It should also be noted that the VAT costs $3 billion just to collect in Canada, according to the National Post, on top of the added cost to every single item you buy, every day.

Luckily, because the VAT is a highly visible tax and disproportionately affects the poor, constituents and even their tax-happy Democrat representatives are likely to be wary about enacting one. Heck, even the floating of one might be enough to earn Republicans a few points on the generic ballot.

I hate to have to quibble on a point, but I must. As Charlie Sykes said in his post on this, “Don’t count on it. Just ask smokers.” In fact, depending on the labeling requirements, it can be very easy to hide this (no, I will not say any more; even though I realize that anything I can think of the tax-and-spend-and-tax-and-spend-and-tax-and-spenders can, I’m not in the business of making their jobs easier).

With that out of the way, the fact that every level of production sees a sales tax which is based on the difference of the purchase price of the product (or raw material) and the sale price of the product is a massive drain on the producer. Even a “simple” product like Mountain Dew has 16 different components the bottler has to keep track of.

Related to that, it is impossible to claim that a VAT of X% will not cost more than a end-user sales tax of the same X%. That is becasue not every raw material involved in the manufacture of, say, Mountain Dew has the same number of steps between the individual raw materials and final consumption.

While I won’t steal more of Mary’s content, I do have to comment on another aspect she brought up – the Left’s proposed dual-mode tax scheme. The existence of two different stages of taxation (in this case, wealth-acquisition and wealth-expenditure) makes it easier for government to raise first one stage, then the other. The older among us in Wisconsin remember when the sales tax was a “mere” 4%, and then “temporarily” raised to 5%. In a couple weeks, depending on one’s locale and choice of expenditure, that will be as high as 6.85%. Meanwhile, there’s a new, higher top income tax bracket in that same budget that will hike Milwaukee County’s sales tax rate by a percentage point.

So, what are you still doing here (other than wondering why The Weekly Standard doesn’t offer comments)? Go. Read! NOW!

We’ll know the rest of the sausage tomorrow

by @ 22:41. Filed under Politics - Wisconsin.

WisPoliitcs is reporting that the Dems in the Joint Finance Committee have figured out every other way they’re going to screw the taxpay…er, fudge the numbers in the FY2010-FY2011 budget. Since they don’t want to miss last call while waiting for the Joint Fiscal Bureau to draw up the motions, instead of delaying the start of tonight’s session another 3 hours, they’re supposedly going to show up at the crack of noon to ram it home.

As Asian Badger would say, grab the K-Y.

Revisions/extensions (10:57 pm 5/27/2009) – Speaking of the K-Y, this “compromise” on the elimination of the QEO from WEAC which purports to delay the elimination for a year, isn’t exactly passing the smell test. What I believe will happen is that it will be written in such a way that Doyle can line-item out the delay, while leaving items friendly to WEAC and unfriendly to taxpayers intact.

First, and maybe last, post on Justice-designee Sonia Sotomayor

by @ 22:11. Filed under Lawgivers-In-Black, Politics - National.

Between focusing on the government/UAW takeover of 2/3rds of the Not-So-Big Three, keeping an eye on what the Spendocrats who run the Joint Finance Committee are throwing on the funeral pyre known as the FY2010-FY2011 Wisconsin budget, and preparing for my annual spring walleye hunt, I haven’t exactly been keeping an eye on the nomination of Judge Sonia Sotomayor to replace retiring Justice David Souter. Fortunately, Karl Rove is better-able to handle multitasking. He wrote in tomorrow’s Wall Street Journal regarding the Sotomayor nomination, and what the Senate Republicans can and should do:

The Sotomayor nomination also provides Republicans with some advantages. They can stress their support for judges who strictly interpret the Constitution and apply the law as written. A majority of the public is with the GOP on opposing liberal activist judges. There is something in our political DNA that wants impartial umpires who apply the rules, regardless of who thereby wins or loses.

Mr. Obama understands the danger of heralding Judge Sotomayor as the liberal activist she is, so his spinners are intent on selling her as a moderate. The problem is that she described herself as liberal before becoming a judge, and fair-minded observers find her on the left of the federal bench….

Nonetheless, Republicans must treat her with far more care than Democrats treated John Roberts or Samuel Alito and avoid angry speeches like Sen. Ted Kennedy’s tirade against Robert Bork. The GOP must make measured arguments against her views and philosophy, using her own words and actions.

Indeed, those are wise words for the rest of us right-of-center, words that are echoed by Fox News’ Brit Hume (H/T – Mike)…
[youtube]http://www.youtube.com/watch?v=FDZa2QmezPE[/youtube]

Of course, I expect Shoebox (if he manages to come up for air long enough to comment on this) and the co-bloggers to make further comments about the nomination. Somehow I expect to see that she was confirmed by the time I get back from vacation next week Saturday.

Union battle over Chrysler – revisited

by @ 18:00. Tags:
Filed under Business, Politics - National.

Earlier, I brought you news of three Indiana government trust funds (two pension funds and a construction fund) holding senior secured Chrysler debt that had sued (unsuccessfully, at least at this point) to stop the “sale” of Chrysler to the UAW, the American and Canadian governments, and Fiat because they would get far less consideration than the junior creditor UAW. While reading through the comments at a Hot Air post on the shutdown of GM’s stock-for-bonds offer), what is happening between the UAW’s retiree health-care fund (VEBA) plan and the various pension funds (mostly for the benefit of unionized government workers) hit me like a freight train.

It’s not exactly a battle between the UAW and the government unions. Since VEBAs are not defined-benefit plans, they are not covered by the Pension Benefit Guaranty Corporation. Worse, at least from the UAW’s, and thus the Democrats’, point of view, the VEBA obligations are junior in stature.

Since GM and Chrysler are utterly incapable of meeting their full obligations to the VEBAs ($20 billion and $10.6 billion respectively), even in the event of liquidation, a pair of complicated schemes to make the UAW whole came about. In both cases, the UAW was given preferential treatment over other creditors, including creditors senior to it. What is left unreported is that many of those creditors are the aforementioned pension funds, which would be made substantially-whole by the PBGC.

As I termed it in the comments, it’s the Chicago Double-Tap. Step 1 was to screw everybody to make whole the suddenly-politically-powerful UAW. Step 2 is to make the traditionally-politically-powerful government unions that were screwed whole. Other funds, like Indiana’s road construction fund, and the various 401(k)/403(b)/IRA plans, would still be left hung out to dry. Somehow, I doubt that is an unplanned coincidence.

GM shuts down the bondholder buyout plan

by @ 16:56. Tags:
Filed under Business.

(H/T – Ed Morrissey)

USA Today reports that Government Motors shut down the proposed stock-for-bonds buyout plan it had been offering, and will not be honoring any of the exchange offers accepted by the few bondholders that did accept the plan. GM had been offering 225 shares in the “new” GM for each $1,000 in bonds, and had all of the bondholders, which held $27 billion in bonds, accepted, they would have received a total of 10% stake in the “new” GM. One of the conditions the Obama administration set for receiving new taxpayer financing outside of bankruptcy court had been to get those holding at least 90% of the debt to agree.

Given that the current version of the reorganization plan had envisioned 10% of the “new” GM going to those bondholders, with the UAW eventually taking 20% and the government taking 70%, the question is who will get the 10% that was slated to go to the bondholders?

Open Thread Thur…er, Wednesday – 5/27/2009

by @ 6:45. Filed under Open Thread Thursday.

I will be on the road much of the day, so I won’t be doing a lot of posts. The comm-box is open.

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