In the twentieth century, campaign slogans and campaign promises were much more simple than those of today. In the 1900 presidential election, William McKinley used the slogan, ‘Four more years of the full dinner pail.’ How many millennials would even know what a dinner pail is?
In 1916, Woodrow Wilson’s big slogan was, ‘War in the east, peace in the west, thank God for Woodrow Wilson.’ Well, this slogan is interesting for two reasons: firstly, the US got involved with WWI one year later, and secondly, who today would include God in their campaign slogan?
The most famous campaign promise/slogan was used by Herbert Hoover in his 1928 election. His famous slogan? ‘A chicken in every pot and a car in every garage.’ Now common sense would easily indicate that the Federal Government was not going to buy everyone a chicken and a car. The gist of that slogan was that America would be so prosperous that everyone would be able to afford food and a car. It was still an era of self-sufficiency and independence in the US. Well, like Wilson entering WWI, Hoover got thrown for a loop because of the stock market crash of 1929, less than a year after he took the oath of office.
Hoover lost the election to Franklin Delano Roosevelt in 1932. FDR’s biggest campaign promise was to provide a ‘New Deal.’ FDR quickly turned on another one of his campaign promises….balancing the budget. According to one historian, FDR issued in a government that created a ‘firm desire on the part of the American people to use the government as an agency of human welfare.’ FDR determined that balancing the federal budget was outweighed by what he termed, ‘government activism.’
Now we get to some of the more recent campaign issues and promises.
Have you seen the Hillary Clinton TV ad stating that she would tax corporations and wealthy individuals, as it is time for them to pay their fair share of taxes? I have seen this ad too many times already. But be that as it may, one thing has become evident, no one from her staff knows how to use a computer for research, … only for sending classified emails. Here are the most current statistics, easily found by anyone who is familiar with using google. The United States pays the highest federal corporate taxes of the 34 industrial nations of the world. The maximum federal corporate tax rate is 39%. In the worldly picture, the US is tied with Puerto Rico, and only behind the United Arab Emirates (55%) and Chad (40%). The US federal tax rate is 16 percentage points higher that the worldwide average of 22.8%. (For my info junkies, the federal tax rate in Mexico is 30%)
But, just like the TV commercial, there is more. There are also state corporate taxes. Would you like to guess which state has the highest corporate tax rate? New York? California? New Jersey? All good guesses but the state with the highest corporate tax rate at 12% is……………..Iowa! Yup, those Hawkeyes finally got to be #1 at something. Four states levy a maximum state corporate tax rate higher than 9%. Those states are Pennsylvania (9.99%), District of Columbia (9.4%), Minnesota (9.84%) and Alaska (9.4%) Ohio, Texas and Washington forego state corporate taxes but instead impose gross receipt taxes on businesses. Nevada, South Dakota and Wyoming levy neither corporate income nor gross receipts taxes. All the other states have a maximum corporate tax rate.
Here is an example of why US corporations are moving their headquarters and facilities out of the US. Medtronic is located in Minnesota. They make sophisticated medical devices. Let us imagine that Medtronic makes $100 million profit in a year. According to our present taxing structure, they would pay $39 million to the federal government and almost $10 to the state of Minnesota. In round numbers, they pay $49 million in taxes and get to keep $51 million of their profit. But wait….Medtronic is moving their entire operation to Ireland. Why? The new corporate tax rate is going to be 18%, with no state corporate taxes. Under this scenario, they pay $18 million in taxes to Ireland and get to keep $82 million of their $100 million profit.
And Hillary Clinton wants to tax corporations more?
Let us take this one step further. Do you know what percentage of federal tax receipts are attributable to corporations and what percentage are attributable to individual income taxes? Here is a simplified breakdown of where the federal government gets its money: Social insurance (payroll) taxes are 33.9%, excise taxes are 3.1%, Miscellaneous taxes account for 6.3%, corporate income taxes account for 10.6%, and individual income taxes account for a whooping 46.2% of federal tax revenue. Would it be common sense to lower corporate tax rates to keep more companies within the United States, thereby creating more jobs? If we would cut the corporate tax rate in half, would we not create more jobs? Jobs that would provide more federal income to make up and exceed the difference in lost corporate taxes?
But wait, what are we going to do with all those high income tax payers that are not paying their fair share of taxes? Well, here again, all those computers at Hillary’s campaign headquarters must be on the blink. Did you know that the top 1% of the top wage earners in the United States, those people having an adjusted gross income (AGI) higher than $428,713, contribute 37.8% of the personal income taxes paid to the federal government. The top 5%, those with an AGI greater than $179,760, pay 58.55% of the personal income taxes paid to the federal government. The top 50% of the US wage earners, with an AGI greater than $36,841 contribute 97.22% of all federal personal income taxes. Those 50% that are below $36,841 contribute 2.78% to federal personal income taxes. That’s right, 50% of the US population only pays 2.78% of the total federal income tax revenues. So who pays their fair share of taxes???? There may be tax loopholes that need to be addressed, but if Hillary wants the higher wage earners to contribute more is she advocating a flat tax for everyone? I doubt that. That would be too much common sense for today’s political climate. (Remember Mitt Romney being castigated by mentioning that 47% of the population does not pay taxes? All true.)
How about that campaign promise of free college for everyone. OK all you college bound students, who will ultimately pay for your education? That would be all of us, even though there are other ways to pay for school. I know this is out of vogue, but you could begin working part-time jobs and start saving money. I had one year of college paid for before I started. There are scholarships and grants. There are, heaven forbid, jobs to do while in college. I did that as well and graduated without a college debt. You could go into the military and gain use of the GI bill. Viet Nam prompted my generation to make early life decisions, but until you know what you exactly want to do, why waste your money and flounder in college. A little maturity goes a long way when it comes to life decisions.
In 2013, the average cost of tuition and fees in private colleges was $32,405. In state resident public schools, tuition and fees averaged $9,410. For out of state residents attending a public college, the tuition and fees averaged $23,893. None of these costs include living expenses. This year, there will be 21 million students attending college. If the government were to pick up the tab at an average of $20,000 per student, that would cost, if my math is correct, $420 billion a year. That would be almost 15% of our $3 trillion annual budget. It would match our defense budget. Oh, don’t forget, our federal deficit is almost $20 trillion and we are expecting a $600 billion shortfall for the 2016 budget. So, do you members of the ‘give me a trophy for participating’ generation and the ‘I can’t work, I’m going on spring break’ generation really think the government should pay for your school?
We will build a wall. How many times have we heard that recently? I am neither a proponent or an opponent of this particular campaign promise. But, having said that I would like to ask a question, “Would you get on an airplane without seeing everyone going through security?” Not in today’s environment. The same procedures apply if you want to board a cruise ship. Your bags are taken and examined as well as your carry-on baggage. So if we would not board a plane or a ship without going through stringent security, why would we oppose stopping illegal aliens and drugs from entering this country. I have no problem with work permits or temporary visas, but everyone needs to be vetted. I would hope some smart people could come up with a quick efficient way of granting work permits and temporary visas.
There are many more campaign promises and slogans circulating during this election year. I just selected some of the juicier ones for review in this blog. The next time a candidate comes up with something that smells a little fishy, all in the hopes of buying votes, do a little research. I am sure your computers work just fine.