Token Dissonance

Black & gay, young & conservative. A Southern gentleman writes about life and politics after Yale

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The Golden Taxes

“Why would anybody in their right mind leave Dallas for Southern California? We’ve got the same weather without the liberals.” –Gigi Stopper, GCB

It’s hard out there for a baller.

As you may recall, California voters in the last election enacted a plan to raise taxes on their most successful neighbors. Top earners in the Golden State now owe more than half of their income to the government, effective retroactively, and more than half of all revenue in Sacramento will be supplied by less than 1% of residents who make 20% of income. Unsurprisingly, many of the wealthy are fleeing as swiftly and shamelessly as Nicholas Sarkozy from Socialist France.

Many in the “fair share” crowd who espouse Ted Strickland’s “economic patriotism” are predictably, scathingly maudlin over the fact that people have the temerity to pursue more economical happiness. Liberals even got a cautious quasi-apology from their latest high-profile tax-flight target, Phil Mickelson, for stating the obvious—people want to keep their money. But as many are noting, Mickelson has not recanted his intention to consider leaving California. He merely expressed regret for trying to encourage “change”. Funny, that.

As Ed Morrissey noted over at Hot Air:

“Well, I don’t think Mickelson was looking for sympathy. I think he was explaining that he doesn’t have to put up with Jerry Brown’s tax hikes to fund a massively dysfunctional state government, and that he’s not likely to do so.”

Meanwhile in my native Florida, California-expatriate Tiger Woods enjoys tax-free income. Elsewhere, in predictable blue-red splits, several states have considered “millionaire taxes”, while lawmakers elsewhere have announced plans to abolish income and corporate taxes. There are certainly many problems with our convoluted tax codes in America. But whatever your thoughts on the matter, one thing remains clear: the problem remains spending. Just as California has done little to prevent future budget woes, the federal chasm between revenue and spending endures primarily because of entitlements.

In wake of all this, President Obama’s inaugural address barely mentioned the top issues concerning most Americans: jobs (fewer of those than at Obama’s first inaugural), debt (a lot more of that), and economy. Instead, he triumphantly heralded a resurgent era of the welfare state in which none of the debt-driving programs—entitlements—would face any serious reforms to keep them solvent. Thus, the administration is doubling down on what Walter Russel Mead dubs the blue social model, which Presidents Reagan and Bill “Era of Big Government is Over” Clinton had previously rebuked en route to tax reform and balanced budgets. This comes even as well-to-do citizens get far more from entitlement programs than they paid in the first place.

So this is the bed we lie in, America. Until we’re willing to make tough decisions to rein in entitlement spending, our expenditures will rise and our revenue will stagnate. In response, liberal administrations will push tax hikes, as they have from California to Maryland to 1600 Pennsylvania Avenue, and ever growing government will depend on an ever shrinking group of earners. Contrary to what many on the Left like to believe, those earners can always leave. Many already have. Other successful American job-creators, like Mark Zuckerberg and Whole Foods CEO John Mackey, are voting Republican with their wallets, despite the chagrin of Democrats.

You can berate them for greed, callousness, and lack of “patriotism” all you want, but at the end of the day, they’ll still be taking their wealth and jobs to friendlier climes.

And we’ll still have our debts to fix.

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These Convenient Machines

Update: This post was adapted by The Huffington Post. You can find that article here.

“In our gradually shrinking world, everyone is in need of all the others. We must look for man wherever we can find him… We have many monsters to destroy.” –George Seferis

See your world in the palm of your Instagram.

The gods hiccupped yesterday. That is to say, Gmail and Facebook each went down for many users for several minutes or so. Predictably, everybody panicked (read: flocked to Twitter) and mocked each other’s panic, and some contemplated becoming, if only briefly, preternaturally productive.

If Harry Potter ever lost his wand, he would be left as unutterably alien to his own world as a quadriplegic quarterback in the Southeastern Conference. So many simple but essential tasks once taken for granted would suddenly be impossible. If there had ever been a time when J.K. Rowling’s wizards got along magically without their enchanted twigs, the knowledge of such a feat would be as lost on Harry as wilderness survival in a world without Wi-Fi or functioning smartphones is on most Americans.

Convenience is a tricky beast. As a group, we are technologically defined by our desire to do everything with nothing in no time at all. From DVR to YouTube, our attention spans shrink to minute intervals. In iPods and smartphones, erstwhile communal hotspots collapse into digital singularity. Through Xbox or social networks, we find our companionship online. As the latest devices emerge on the market, we are already bored with gadgets that would be magical to dead giants whose wars mutilated continents and disrupted civilizations.

The more our lives are functionally consolidated into ever fewer and smaller tools, the more susceptible our world becomes to more targeted disruption. Would it have been imaginable a couple decades ago that glitches in the product of a few institutions could stymie half the world in an instant? Yet now, in the twilight of 2012, Google links my email, internet browser, search habits, contacts, calendar, video watching, and innumerable accounts for websites not already linked to my Facebook or Twitter accounts.

Take out three companies, and my world stops. Take away my smartphone, and I couldn’t even find my way around the metro area I’ve lived in for years. I would go on about my laptop, but it would already be useless without our Silicon Valley overlords, and my body is fighting symptoms of withdrawal just thinking about all this. Excuse me while I watch some YouTube videos and check my Facebook feed to soothe that creeping anxiety…

All right, that’s much better.

It’s perhaps fitting that the latest instance of fiscal consolidation should occur around the engines of the cloud. Five weeks ago, voters in California opted to raise taxes on top earners in the state in order to resolve a spiraling budget crisis. The preliminary numbers are ostensibly favorable, and Democratic Governor Jerry Brown is heartily encouraging President Obama to follow through with such a plan at the national level. But if the gods are in the cloud, the devils are, as ever, in the details.

As Walter Russell Mead observes:

“There are two essential developments to note here. First, California will rely on a tiny group of people to erase $5 billion in debt. From now on, more than half of all the government operations will be funded by less than 1 percent of the state’s residents, who account for less than 20 percent of the state’s total income.

Second, the state economy is doing well at the moment relative to the rest of the country, but it is still losing jobs and skilled workers to lower-tax economies in Nevada, Texas, and the Southeast.

This tax-funded surplus will allow the state to momentarily ignore the underlying problems that drive the deficit. But the problem of the escalating costs of pensions and public services and the blue social model has not been resolved and will only worsen with time.”

For the federal government, the top 10% of households already accounts for more than 70% of income taxes and over half of all revenue. Since the recession, the federal tax burden has fallen on all but the top quintile. As taxes increasingly become the provenance of a shrinking base, our entitled deficit grows unchecked. How massively unsustainable must our system of taxes and borrowing get before we decide to rethink our asphyxiating choices? What happens when the next shock comes and the few key pillars of wealth cannot hold? What happens when the model fails?

Consolidation—like the convenience it breeds—is a tricky beast, indeed.