A Drug To Eliminate The Memory Of New Taxes

As California and Kansas struggle to pay state tax refund checks to taxpayers due to government mismanagement and an inability to balance a state budget, other places continue in their never ending quest to raise more tax revenue.

In Portland Oregon, four legislators joined a Springfield senator to introduce Oregon House Bill 2461, which would impose a $49.61 tax on each barrel of beer produced by Oregon brewers. Its a 1900% tax increase. The tax would raise revenue for the state at a time when budgets are running in the red. Specifically, the bill says it would fund prevention, treatment and recovery programs for those addicted to alcohol and other substances. The bill's language defends the tax by arguing alcoholism and “untreated substance abuse” costs the state $4.15 billion in lost earnings as well as more than $8 million for health care and nearly $1 billion in law enforcement-related expenditures.

Meanwhile in Austrailia: A household would be charged for each flush under a radical new toilet tax designed to help beat the drought. The scheme would replace the current system, which sees sewage charges based on a home's value - not its waste water output.

CSIRO Policy and Economic Research Unit member Jim McColl and Adelaide University Water Management Professor Mike Young plan to promote the move to state and federal politicians and experts across the country. "It would encourage people to reduce their sewage output by taking shorter showers,recycling washing machine water or connecting rainwater tanks to internal plumbingto reduce their charges,''Professor Young said.

Do you want to get away from this ever increasing tax burden? Well you can now just forget about the whole thing. From Reuters:

A widely available blood pressure pill could one day help people erase bad memories, perhaps treating some anxiety disorders and phobias, according to a Dutch study published on Sunday.

The drug was shown to significantly weaken people's fearful memories of spiders. The generic beta-blocker propranolol significantly weakened people's fearful memories of spiders among a group of healthy volunteers who took it, said Merel Kindt, a psychologist at the University of Amsterdam, who led the study."We could show that the fear response went away, which suggests the memory was weakened," Kindt said in a telephone interview.
The findings published in the journal Nature Neuroscience are important because the drug may offer another way to help people suffering from post-traumatic stress disorder and other problems related to bad memories.

Election Day In Israel

Its election day in Israel. 5.3 million Israelis will be eligible to vote in the elections for the 18th Knesset (Israeli parliament). The party that wins the election needs the support of 61 members to form a coalition government.

To gain a seat, a party must win a minimum of 2 per cent of the national vote. There are 34 registered parties competing for seats in today's election. The three main parties are Kadima, Likud and Labour.

The right-wing Likud party is just two seats ahead of the centrist Kadima in the last Haaretz-Dialog poll the Israeli newspaper Haaretz reported Friday.The newspaper says the poll showed the far right-wing Yisrael Beiteinu party gaining three seats in the last week for a total of 18.

The country is moving right due to the threat posed by Hamas, Hezbollah and Iran. A coalition government formed by Likud Party leader Binyamin Netanyahu is a real possibility. Todays's vote will have ramifications for the entire Middle East and U.S. foreign policy in the region.

Executive Salary Cap Is A Political Sound Bite

Barack Obama announced executive salary restrictions for institutions . It certainly sounded fair. Taxpayer money for failed banks will result in limits to failed executive compensation. However, a problem becomes apparent when we look at the actual details and beyond the political sound bite.

An overview of the executive salary cap from this article in Bloomberg:

Executives at Goldman Sachs Group Inc., JPMorgan Chase & Co. and hundreds of financial institutions receiving federal aid are not likely to be affected by pay restrictions announced yesterday by President Barack Obama. The rules, created in response to growing public anger about the record bonuses the financial industry doled out last year, will apply only to top executives at companies that need “exceptional” assistance in the future. The limits are not retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more.

So, all the tarp money already spend will be given without any restriction to executive pay. As a result, it won't apply to the executives of the hundreds of financial services firms that have already taken TARP money. It does not even apply to the worst offenders like AIG, Merrill Lynch and Citigroup that have already come back twice to take government capital.

The new financial services executive salary cap will only effect institutions in the future that need financial assistance. It will only serve to preclude some better run banks from getting government assistance.

Style over substance is the reality of this announcement. The Executive Salary Cap is really a political ad given to assuage an outraged voter base. It is a policy that currently has a lot more political bark than regulatory bite.

A Rush For Stimulus To Avoid Economic Catastrophe

The debate on stimulus continues and the bill on the Senate floor continues to grow toward one trillion dollars. Meanwhile, unless the package dramatically changes only twelve cents of every dollar will eventually be for economic stimulus.

The remainder will be just a huge bill of pork. The one area that has not had much discussion is the stimulus given to the states. Here is some of what this taxpayer money will go to:

From Today's Wall Street Journal:

Las Vegas, which by some accounts already glitters, wants $2 million for neon signs. Boynton Beach, Fla., is looking for $4.5 million for an "eco park" featuring butterfly gardens and gopher tortoises and Chula Vista, Calif., would like $500,000 to create a place for dogs to run off the leash. These are among 18,750 projects listed in "Ready to Go," the U.S. Conference of Mayors' wish list for funding from the stimulus bill moving through Congress. The group asked cities and towns to suggest "shovel ready" projects for the report, which it gave to Congress and the Obama administration. Although the bulk of proposals are roads, sewers and similar projects, some wouldn't require a shovel at all. The mayors group sees a potential 1.6 million new jobs from the projects, though a few of them wouldn't create any. Some localities are using a kitchen-sink strategy. "Our approach has been to list everything, because we don't know what the final guidelines will be or what the final dollar amount will be," says Greg MacLean, public-works director in Lincoln, Neb. Among entries on Lincoln's list is a $3 million environmentally friendly clubhouse for a municipal golf course.

So, does the United States government just give money to the states to fund all these dubious "shovel ready" projects? It seems that money going to these projects should be separately approved and be made transparent all the way down to the local level.

Meanwhile, President Barack Obama warned again today that the financial crisis will turn into "a catastrophe" if a stimulus bill isn't passed quickly. This is the same haste that was used to approve the TARP program. A program that still has not achieved anything, is constantly changing, and has billions of dollars being spent without any transparency.

Its the dubious crisis politics of today. Its the rush to spend a trillion in the hope to avoid economic catastrophe. So, what happens if this stimulus solution doesnt work and an out of control deficit sends the dollar into a free fall? Then we will see an economic catastrophe and realize that spending hundreds of billions of dollars on pork was not really a practical solution at all.

Daschle And Killefer Withdraw As Nominees

Here is the Daschle withdrawal from the Associated Press:

Tom Daschle withdrew his nomination on Tuesday to be President Barack Obama's Health and Human Services secretary, dealing potential blows to both speedy health care reform and Obama's hopes for a smoother start as president.

"Now we must move forward," Obama said in a written statement accepting "with sadness and regret" Daschle's surprise request to be removed from consideration. A day earlier, Obama had said he "absolutely" stood by Daschle in the face of problems over back taxes and potential conflicts of interest.

Here is the Killefer withdrawal from the Associated Press:

Nancy Killefer, who failed for a year and a half to pay employment taxes on household help, has withdrawn her candidacy to be the first chief performance officer for the federal government, the White House said Tuesday.

Killefer was the second major Obama administration nominee to withdraw and the third to have tax problems complicate their nomination after President Barack Obama announced their selection.

"Nancy Killefer has decided to withdraw her nomination, and we accepted her withdrawal," Tommy Vietor, a White House spokesman, said Tuesday. The 55-year-old executive with consulting giant McKinsey & Co., was expected to explain her reasons for pulling out later in the day.

When her selection was announced by Obama on Jan. 7, The Associated Press disclosed that in 2005 the District of Columbia government had filed a $946.69 tax lien on her home for failure to pay unemployment compensation tax on household help.

So, in this administration not paying taxes excludes a nominee from being HHC Secretary or Performance Czar. However, the problem of not paying taxes is not as important in the position of Treasury Secretary in charge of the IRS? Treasury Secretary Tim Geithner needs to do the right thing and submit his resignation.

For more on ethics in Washington read today's Daily Vu: Reforming Washington Is Just A Campaign Game

Democrats Show Its Time For The Flat Tax

Tom Daschle the current nominee for Secretary of Health and Human Services is “deeply embarrassed” about $128,000 in errors on his taxes.

Daschle has amended his returns for 2005, 2006 and 2007, and paid $140,000 in taxes and interest.Daschle refiled his returns Jan. 2 to add unreported consulting fees, unspecified charitable contributions and a car and driver provided by Leo Hindery Jr., a founder of the private-equity firm InterMedia Advisors.

Of course, the Congress recently approved the nomination of Timothy Geithner for Treasury Secretary. Geitner had been at the upper reaches of international finance for more than a decade. He has an MA in international economics from Johns Hopkins SAIS.

The new Treasury Secretary who is also now charge of the Internal Revenue Service failed to pay $34,000 in Medicare and Social Security tax in 2001 through 2004. After being nailed by the IRS in an audit for 2003 and 2004 deficiencies, he still failed to pay what was owed for 2001 and 2002 until he became aware that Obama would nominate him to be Treasury secretary.

Either the tax code is so complex that even these rich Democratic lawyers are making errors,or Barack Obama is nominating tax cheats and the Congress is recklessly approving their nominations to positions of power in the new administration.

If we give the new administration the benefit of the doubt, it seems the Democrats are making a strong case to eliminate the IRS. Indeed Democratic errors on tax returns show that its time for a change and should give everyone new hope for the implementation of the flat tax.

Be sure to read todays Daily Vu: The California Budget Mess Is Spending Unrestrained