The Foundation

"To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it." --Thomas Jefferson

Editorial Exegesis

2013-01-02-chronicleNo 'grand bargain,' but a deal nonetheless

"The Senate-White House [fiscal cliff] compromise grudgingly passed by the House is a Beltway classic: The biggest tax increase in 20 years in return for spending increases, and all spun for political purposes as a 'tax cut for the middle class.' ... [T]he tax rate on capital gains will rise to 23.8% (including the 3.8% ObamaCare surtax), the highest rate since 1996, and at a time when business investment is mediocre. ... The estate tax deal is a reprieve only compared to the 45% that Mr. Obama wanted and the 55% that would have hit without a deal. Republicans still had to agree to a rate increase to 40% from 35%, and the $5 million exemption is a pittance for 50 years of work and thrift. ... As for small business, the overall tax increase this year is substantial. The new listed top rate of 39.6% doesn't include the phaseout of deductions that will take the actual rate to 41% or so for many taxpayers. Add the ObamaCare surtaxes on investment income (3.8%) and Medicare (0.9%), as well as the current Medicare tax of 1.45% (employee share), and the real top marginal tax rate on a dollar of investment income from a bank savings or money-market account will be about 46%. Throw in state taxes, and the marginal rates in many places will be in the mid-50%-or-higher-range. ... Keep in mind that this entire exercise was also supposed to promote 'deficit reduction.' But the bill's special-interest favors give away much of the new tax revenue that Mr. Obama says he wants, and the bill's estimate of $620 billion more revenue over 10 years is probably too high as the rich change their behavior to avoid the higher rates. In any event, this bill increases spending by at least $30 billion by extending extra jobless benefits for another year. It also postpones for two months the automatic spending cuts that were set to begin this week, so in February we can all witness the delights of another phony showdown that will result in more phony deficit reduction. ... [W]e hope the GOP has learned, after two failed attempts, that Mr. Obama is not someone with whom it can do a 'grand bargain.' ... House Republicans should pursue their own agenda and let Mr. Obama and Senate Democrats pursue theirs. Mr. Obama has his tax triumph. Let it be his last." --The Wall Street Journal 

Upright

"All the debate over spending is starting to remind me of the movie Jaws. We have some people who believe there is this big threat headed our way, but the authorities all tell us not to panic -- but instead of the mayor of Amity Island telling us the beaches are safe, President Obama is telling us we'll grow our way out of this deficit. ... People don't want to listen. But Math is coming. It's $16 trillion in debt and growing, and one day it will rise out of the water, and even those ignoring it will finally be afraid and gasp, 'We're going to need a bigger boat.' No, you idiots! Haven't you been listening? We need a smaller boat. One we can actually afford." --columnist Frank J. Fleming