The Senate Democrats now propose that capital gain will now be taxed at 100% in Wisconsin, instead of excluding 60% of capital gain from state income taxes.

http://www.jsonline.com/news/statepolitics/48253947.html

The Legislative Fiscal Bureau is saying it will raise a something like $315 million, but I don’t know anyone with any capital gains, so we’ll see.  It will hurt investment in the state because it raises the cost of capital–the same stuff I always say.

Anyway, Decker justified it by saying:

“Eliminating the capital gains exclusion is about tax fairness,” he said. “Why should someone who sells a painting, a second home or gold coins get a tax break while someone who earns their money by working all year does not?”

That’s accurate as far as the income tax is concerned.  However, if you sell a painting or gold coins, you will pay sales tax which is sort of odd if you think it’s an investment like Decker is thinking (the sales tax is kind of a mess in that no one really knows what it is theoretically supposed to tax).  You don’t pay sales tax on real property, but, really, what about the property taxes you’ve been paying on your second home?  So it’s not really the same, is it, when it comes to tax fairness?  It may not be the same, but it isn’t really a loophole.

No matter, because gold coins are not where the bulk of the $315 million is going to be coming from (well, may be if Obama doesn’t get his money printing machine under control).  The bulk will come from investments in corporations–buying and selling stock and mutual funds.  Decker probably doesn’t want to talk about that, because large numbers of voters sell stocks for a profit (although, again, not for a few years now).

And therein lies the rub–corporate profits were already taxed by the state at 7.9% (and the recycling surcharge) .  Profits are then  distributed out as dividends to be taxed again at 6.75% (and now probably 7.75%).  The one sop to an investor was that when he sold his investment, the investor could exclude a portion of the capital gain from tax.  Investors do not have it easy.

Decker makes an implicit argument that Wisconsin should tax capital and labor income similarly, but looks to a very narrow definition of “tax”.

Want to know the good, the bad and the ugly about the new state budget? 

Come to CYP Happy Hour to find out from our Special Guest Rep. Scott Newcomer (33rd District)

Wed., July 15, 5:30-8:00

Place:  “Zen on 7″ on the 7th floor rooftop bar at Hotel Metro.

Meet up at one of Milwaukee’s coolest spots.  Hopefully the scenery can distract you from the terrible provisions in the state budget.  Scott Newcomer will briefly address the budget and getting involved in politics.

Special thanks to Heather Treptow for getting this great spot and to Jeff Schaefer for getting our speaker.

http://www.jsonline.com/news/wisconsin/48072932.html

The state budget has a tax on oil companies.  As proposed, the law prohibits oil companies from passing on the tax to consumers at the gas pump.  The problem is, and the Assembly rightly realized, is that such a law is unconstitutional.   They took out the part that prohibited the oil company from passing along the tax.

Now, Russ Decker thinks that he doesn’t have to follow the Constitution.  Well, when we’re refunding all of the tax collections from the new gas tax, I guess Decker will have to believe it when the state is refunding the tax to oil companies at 9% interest.  Is anyone even paying attention in the legislature any more? 

http://www.hamilton-consulting.com/updates/docs/foley_opinion-oil-tax.pdf

Wow.  In contrast to many people, I actually think that most reports of media bias are bunk.  But I have seen a shift in the traditional media–they really have given up on trying to be fair to both sides of a debate.  The abomination that is reporting on Sarah Palin (like her or hate her, she and her children have been singled out) is a good case in point.

Apparently, according to Drudgereport.com, the Nightly News will look like the propaganda arm of the White House.  The press is free to do whatever they want–that’s the first amendment.  They can cuddle with the White House all they want.  But when they shouldn’t  wonder why conservatives–a plurality of voters–don’t watch their crummy quasi-news shows.

ABCNEWS anchor Charlie Gibson will deliver WORLD NEWS from the Blue Room of the White House.

The network plans a primetime special — ‘Prescription for America’ — originating from the East Room, exclude opposing voices on the debate.

http://www.jsonline.com/blogs/news/47966021.html

In the secret budget negotiations (the Assembly Democrats have closed their caucus) where the state budget is being hashed out, the Democrats have decided that they’ve had enough of the school choice program.  They originally wanted to cut the number to 20,500, but they “compromised” at 21,500.

First, this is policy and does not belong in a budget that is only half-heartedly being debated anyway.  This way, goes the thinking, no one has to really be responsible, because they can say things like “Oh, well, it was the best deal we could get.”

But more importantly, people are choosing to send their children to these schools.  If you believe people can make decisions for themselves and their children, this is ridiculous–Democrats want to take the option away to make sure union-run schools have a monopoly on education.  This would at least be arguable if MPS was a decent school district, but it is pretty apparent that it is not.  The people who are howling over school choice should take a long look at themselves in the mirror and ask themselves why 20,000 children are not coming to their schools and what they are going to do about it.

Coincidence?  I think not.  Behold the power of CYP! 

On Friday, June 12, 2009, Milwaukee County Circuit Judge Thomas Cooper struck down the City of Milwaukee’s paid sick leave mandate, stating that the mandate was, “invalidly enacted and unconstitutional.”

MMAC President Tim Sheehy called the ruling, “A victory for the City of Milwaukee’s economic competitiveness and the workers who depend on a growing economy for their jobs.”

And now for the state budget (it appears we also fixed global warming, too).

www.mmac.org for more info.

Thanks to everyone who attended our CYP event last night. It’s great to meet new people who are interested in the cause. And it was great to meet Tim Sheehy of the MMAC (www.MMAC.org)–we were proud to host him.
Tim, in his remarks, explained his way of viewing public policy in Milwaukee. Milwaukee and Wisconsin are in a tough competition for investment (and the jobs that come along with that investment). If the Milwaukee region does not compete, then it will lose companies, investment, growth, and jobs to other cities. We can’t adopt uncompetitive policies such as mandatory sick leave (which increases the cost of doing business in the Milwaukee area) or combined corporate income tax reporting (I’m probably the only person who cared, but trust me, it’s very bad for the state).
The next happy hour is: July 15th at the bar on the 7th floor of Hotel Metro.
Get your tailgate money in! After all this time, we may now run out of tickets.

When is traditional passenger rail (a la Amtrak) the same as high speed rail?  Apparently, when lots of “free” federal dollars are at stake.

According to the The Capital Times, the Midwest high speed rail plan “has a good chance of landing part of the $8 billion in federal stimulus earmarked for passenger trains.”  There’s just once catch, though.  Federal guidelines for prospective projects receiving funding define high-speed rail as 90-110 mph, while the Midwest “high speed” rail corridor from Chicago to the Twin Cities would host trains averaging less than 80 mph.

Frank Busalacchi, secretary of the Wisconsin Department of Transportation and a leader of the Midwest Regional Rail Initiative, told federal officials last week that service in the 434-mile Chicago-to-Twin-Cities corridor would average 67 mph for local trains and 78 mph for express trains making fewer stops — well below the federal speed guidelines.

Is that a big deal?  Nope.  At least, that’s the opinion of Kevin Brubaker, deputy director of the Environmental Law & Policy Center in Chicago, who suggests that “speed is only one of many factors that will be considered.”

“The speed issue is much ado about nothing,” Brubaker says in a phone interview. “What Secretary Busalacchi is saying is we don’t need bullet trains in the Midwest.”

Is it a meaningless issue?  The Wikipedia high-speed rail entry notes that:

High-speed rail is a type of passenger rail transport that operates significantly faster than the normal speed of rail traffic. Specific definitions include 200 km/h (125 mph) and faster — depending on whether the track is upgraded or new — by the European Union, and above 90 mph (145 km/h) by the United States Federal Railroad Administration, but there is no single standard, and lower speeds can be required by local constraints.

The German ICE (Inter-city Express), which I’ve had the opportunity to ride, routinely travels between 180-200 mph.  This is competitive with air travel over shorter distances (up to about 4 hours) from a travel time perspective.  Unfortunately, due to the “local constraints” noted in the Capital Times’ article, we can expect our “high speed” rail to lead to travel times at least twice as long as what Europeans, Japanese, and Chinese enjoy.

One question that needs to be asked of the DOT and other proponents of this project is why speed isn’t the main consideration (aside from cost effectiveness)?  After all, speed determines travel time and most of us value our time even if we are unable to put a dollar figure on it.  If “we” decide to subsidize high speed rail for all of the alleged benefits it provides such as economic growth, a cleaner environment, and happier commuters, shouldn’t we actually provide high speed rail?  Of course, the simple answer is that real high speed rail is very expensive and would be less politically feasible.  So, we will settle for the minor league of high speed rail with a modest price tag of $10 billion.

In this race, it isn’t the hare that loses, but all taxpayers.

If you’ve been paying attention to the budget, you’ve seen the Democrats in the state legislature do some terribly mind-numbingly dumb things.  Things such as pass a gas tax that they now acknowledge is unconstitutional.  I can tell you, the tax policy in the budget is truly heineous.  The budget contains discounts on higher education for illegal immigrants and a whole host of other bad things.  It’s led many people to wonder outloud, what were they thinking?

The Democrats put their thoughts in a talking-points memo which the MacIver Institute has found and published on their website. 

http://maciverinstitute.com/2009/06/dem-budget-talking-points-weak-laughable.html

When you read the talking points and trite responses, you realize they aren’t thinking very hard at all.

Come meet Tim Sheehy and hear him talk about the mandatory sick leave ordinance and how it will kill jobs in Milwaukee.   Thursday at Mo’s (Downtown) at 5:30-8:00.

Apparently,  drug dealers are wising up to the outrageous spending the U.S. has been engaged in.  They are worried that with the Obama Administration spending like druken sailors, the ensuing inflation (and weakening of the dollar) will erode their profits. 

http://www.telegraph.co.uk/finance/comment/citydiary/5423734/Dealing-gold-in-the-Dominican-Republic.html

In a report entitled US Gold, Going, or Completely Gone? Rob Kirby, forensic analyst at Kirby Analytics, says almost 3,000 metric tonnes of gold compounds were exported from the US in 2008.”

Paul Mylchreest, of the Thunder Road Report, notes that a “very suspicious” 174 tonnes of gold compounds were exported to the Dominican Republican – “that well known hub of the world gold trade”.

“Maybe these gold compounds really are used in gold paint and that artist who normally puts colourful tarpaulins around islands and buildings has painted the whole of the Dominican Republic gold,” Mylchreest ponders. “I’ll go and check Google Earth.”

But, he reckons the transformation of the Dominican Republic into a key staging post in the cocaine trade between South America and the US, is a far more likely.

“Wouldn’t it be interesting if drug smugglers have seen the writing on the wall for the paper dollar and will now only accept payment in gold bullion?”

This is good news for Ron Paul.