If a Tree Falls in the Woods is it Taxed?

If a tree falls in the wood, will it be taxed? In West Virginia that would be a yes, and the tax would be called the Timber Severance Tax. State code defines a severance tax as a tax on the privilege of engaging in a specific business. The fact that our state government feels it is granting businesses a “privilege” is one of the very reasons West Virginia is ranked 50^th in economic opportunity. That is backwards — the privilege is actually granted to the state by the business when it chooses to locate here.

Winston Churchill once said, “Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.” In West Virginia our business tax structure shoots both the horse and the cow and then the government wonders why the cow quit giving milk and the economic wagon stopped moving forward. We cannot continue on this course of economic self destruction.

For the past 60 plus years West Virginia has created policies that have destroyed our economy to the detriment of all citizens. The evidence lays in the census data. In 1950 West Virginia made up 1.3% of the US population and now we make up only 0.6%. We have been cut by more than half. The severance taxes are one of the very things holding us in last place. It is simply double taxation. The severance tax is on top of the income tax already paid on the same product or service.

If you’re in the timber industry and have your choice of locating in West Virginia or a state that has no timber severance tax, then you’re going to use a little common sense and locate in a state where you can be more profitable. If your timber business is already located here, then the severance tax is simply taking away money that can be used to expand your business. It is plain to see that severance taxes are shots being fired that are killing businesses.

The proponents of the severance tax will claim, “We will have to replace that revenue lost if the severance taxes are eliminated.” They are wrong; the economy will replace those taxes without intervention from government. History tells us exactly what will happen if the burden of the severance tax is removed from the timber industry. The industry will see an increase in revenue and that revenue will be plowed back into the businesses. The expansion will increase business, which will increase corporate taxes paid. New timber businesses will enter the West Virginia market place, further increasing corporate taxes collected by the state. Going back to the Churchill quote, you don’t increase the amount of milk you get from the cow by milking it more often — you increase the amount of milk by increasing the size of your herd.

Fewer taxes will cause growth in the economy, including employment growth. Growth in the economy will increase tax revenue. This has been proven over and over again through history. The current West Virginia government has proven the opposite — years of high and double taxation have helped push West Virginia into last place.

One of the sturdy horses pulling the economic wagon of West Virginia is our timber industry. My grandfather had a saying: you whip the horse that pulls. Let’s whip the timber horse by removing the severance tax to start down the road to economic growth in West Virginia. We need to change.

Ron Paul Redux

In my last commentary on Ron Paul, I was twice invited by "anonymous" to read Ron Paul's site. They apparently thought I had not done this in the first place. I did go back and look again at his positions and came away with the same feeling I had before. Some of his ideas are solid, but a few would put the country in danger.

Smaller government that puts more freedom into the hands of the people represents a positive good. We definitely need to roll back liberal cuts in property and education rights. As far as domestic ideas on individual rights are concerned, Ron Paul has good ideas. Fortunately Fred Thompson and other Republican candidates share Paul's desire to protect property rights, gun rights, and the right of every unborn child to live.

Paul's foreign policy ideas are, however, disastrous. They run absolutely contrary to the actions of the Founding Fathers when they assumed the presidency. Paul believes that military force ought not be used without a direct declaration of war by Congress. Again, the Founders themselves did not believe that this was reasonable. George Washington launched three wars against the Shawnee Nation and after his presidency supported an undeclared war against France launched by John Adams. Washington's Farewell Address warning about entanglements referred to alliances with Europe and most likely was meant to be a short term warning. Washington's actions throughout his life reflected those of a man who was flexible and adaptive to changing situations, never dogmatic.

Congress did not declare war against the Barbary Pirates in either the Jefferson or Madison administration. Each one of these men supported military action without the direct assent of Congress. Madison and Washington wielded powerful influences over the creation of the Constitution. If any men understood what it meant, these would be two. Jefferson advocated a very limited role for the chief executive, but still sent the Navy and Marines into action to protect US interests.

Paul's position on Iraq has no basis in reality and shows an appalling lack of any kind of sense about geopolitics. References to creating more enemies simply do not hold water and do not reflect the shifting and complex nature of society and politics in the Middle East. National Security means that the US needs to be involved in regions throughout the world. If a grease fire started in your kitchen, would you put it out immediately, or wait until your entire home was threatened? "No win police actions" and other uses of the military that Paul disdains head off more dangerous conflicts down the road. If we had the same foreign policy in the 1930s that we do now, millions of lives and trillions of dollars would have been saved. Paul has forgotten the lessons of 9/11, much less Munich and Pearl Harbor.

As far as NAFTA is concerned, neither the Canadians nor the United States want a European Union style system. Canada very jealously guards its cultural and political independence from possible US encroachment. That being said the EU represents a powerful economic competitor as a unified economic zone. Paul points out that France has blocked sales of US products. So be it. The best way to react is through a coordinated response with our primary trade partners. The European Union already shows signs of strain due to its increasingly socialistic regulations and is no model to follow. When BMW shows that Spartanburg, South Carolina is a better place to manufacture cars that their own country, it demonstrates that our system works. That being said, it is right to remain vigilant to make sure that Eurosocialism does not creep into our methods of doing business.

When it is all said and done, Paul is an idealist. Ideally the world's nations conduct their affairs reasonably, each nation peacefully advancing their own interest. In such a world Paul's ideas on foreign policy would be fine. The world has never reflected such a state. In both warfare and trade, the rest of the world does not play by the rules we would like to follow. We must follow a variety of strategies to protect our economic and political interests. Paul's ideas do not reflect reality. It is hard to tell what is more of a threat, Paul's dangerously ineffective idealism, or Obama's absolute vacancy. Likely we will never find out in either case.

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By the way, some over the years have bemoaned the fact that big money often exercises influence over politics. This is especially true in West Virginia. For the most part, convention delegates whether committed or uncommitted paid their own fees and travel expenses. The exception lies in Paul's delegates. As was reported by Gary Abernathy and Vic Sprouse, Ron Paul's campaign paid many of the delegate fees. Some of the travel expenses were also covered for Paul delegates. Imagine that, the outsider candidate trying to purchase a convention victory in West Virginia. They did nothing illegal, but it does explain why they hold a lead in "committeds." Fred Thompson, Rudy Giuliani, Mitt Romney, Mike Huckabee, John McCain and others could not afford to send a bunch of folks on a paid junket to Charleston.

Paul's campaign may be one of outsiders, but they learned some inside tricks in West Virginia politics fairly quickly.

The Mortgage Bailout...Again

http://finance.yahoo.com/loans/article/103997/What-the-Mortgage-Bailout-Means-for-You

What it means for most Americans, nothing good. I especially like the last paragraph where the negative effects are mentioned.

Who stands in the way of such an effort?
Investors in mortgages and mortgage-backed securities. If homeowners are going to pay less on their mortgages than originally planned, then somebody is going to lose money. These aren't just fat cats on Wall Street—although many such firms have invested in these securities—they're also pension funds for teachers, firemen, and police, as well as mutual funds whose clients include all sorts of individual investors. They probably even include homeowners who are facing the prospect of higher payments on their adjustable-rate mortgages.

So what is the answer? Not a seven year freeze on interest rates as some Democrats are calling for, the answer is a return to Conservative Politics and less government interference with the economy. No matter how you slice it, the people who are facing losing their houses, chose their mortgage plan. If they were mislead or lied to when they got their mortgage, the mortgage company has Errors and Omissions insurance and the mortgage company should be held liable for any problems their associates caused. But that's not the case, the problem is that the people bought too much house. There is no accountability with this plan. Next the government will have to address the complaints of investors (like pension plans, mutual fund holders, etc) who will be negatively affected by this plan, and so on and so forth.

Next, remember that the economy is a cycle. Ups and downs are a simple fact of life and help to balance everything; such as money, people, resources, etc. Home prices are ridiculously high in some areas, that's an OPPORTUNITY for young people and people looking for a fresh start to relocate to an area (like Mineral County) and build a life for themselves and their family. Isn't that how this country started? The poor and/or ambitious moved across the pond to start a life for themselves and their families? What happens to our area when our tax dollars are used to subsidize the lives of our urban counterparts? Without subsidies for housing and transportation, our area would look much more attractive than it does. We have a lower cost of living, you can buy a home with some land for less than it costs to rent a 1 bedroom apartment on the fourth floor of a building in DC. Without subsidies and programs like the mortgage bailout how many people might move to the lower cost areas, start businesses, use services, pay taxes, and boost our numbers? In a democracy, numbers count for a lot.

Perhaps Mineral County and for that matter WV, should change the slogan to "Build Your Life" and focus on passing the message to people 25-40 years old who are starting to have kids and looking for a place to raise their kids that they can call home. You know a nice house on a 1/2 acre or so, white picket fence, dog and a chance to be a pillar of the community and have an active role in their kids lives. There are plenty of those people out there. One problem is the "Math" problem. When I graduated from college and moved to WV, I made less from a dollar point than most if not all of my classmates. Within a year I owned a 3 BR home on a corner lot, a 4 unit apartment building (for sale in Shinnston, WV if anyone is interested), two cars, and a boat. I was also a board member for Big Brothers/Big Sisters attending black tie "Make A Wish" dinners. When I compared my lifestyle to that of my Columbus and New York counterparts, I greatly preferred my lifestyle and had more toys and financial freedom than many of my friends. But I made $10,000-$20,000 per year less than they did. If I had compared job offers from a pure dollar point of view, I would have never come to WV, but I saw the opportunity.

I feel that WV's greatest asset is that people can build their lives here, and build a place that their family can call home. When I need to get my fix for Big City living, I drive 2 1/2 hours to DC. Halfway through the first night when people are walking on the sidewalk 10 feet away from where I am sleeping, I remember why I love living in WV so much...there's room to grow.

Another Failure of the West Virginia Ruling Party

The complete failure of the Democrat controlled government in West Virginia has never been more apparent than in the past week. Kanawha County must somehow absorb a shock to its economy. Tens of millions of dollars now regularly pumped into the region will shortly disappear.

Dow Chemicals is transferring a large number of jobs out of its South Charleston research center. These are not simply service jobs, but six figure salaries paid to Phd's. Losing these jobs ought not come as a surprise to anyone because this facility has hemorrhaged employment since the 1970s. Dow does not plan to cut these jobs but transfer the positions to the Gulf Coast or overseas.

Obviously Dow needs these positions. The problem according to Dow lies in the fact that they cannot obtain cheap supplies of natural gas in this region. An incredible statement considering much of West Virginia sits atop natural gas deposits. However the Byzantine nature of state and federal regulation laid atop the state tax structure means that West Virginia has lost its competitive edge in retaining these crucial jobs.

It all sounds familiar. West Virginians generally support the kind of development that leads to good jobs. Unfortunately they continue to elect people that block that very situation from occurring. Locally we have seen almost insane, Chicken Little style efforts to block development. In the midst of a month long period where we have seen good amounts of rain and snow, people actually have argued that we should block all development or face running out of water.

It is simple. To retain and create jobs we need a good business climate. To achieve that we must elect people that truly understand how to build and maintain one. Over the past seventy eight years the vast majority of Democratic leaders have proven that they know better how to dismantle rather than sustain one.

Giddiness Over Iran

The media is giddy. Democrats are giddy. Even Iran is Giddy. What is the source of all this giddiness?

The National Intelligence Estimate laid what has been touted as a bombshell, that Iran has not actively tried to produce a nuclear weapon since 2003. Harry Reid of course used it to promote Bush as a warmonger trying to start a conflict with Iran for no real reason. The media, Nancy Pelosi, Ron Paul, the Iranian president and every other opponent of Bush's policy will pile on, once again touting a Bush failure, but hold on a second.

Seems to me that this 2003 date seems vaguely familiar. Why on earth would Iran select 2003 as a year to fall into line with the world's demands (minus France, Russia and all else making money off of Iran) to stop pursuing nuclear weapons. Did Iran just pick this day out of the clear blue? The Democrats and the media may have missed it, but I doubt thinking people have.

Cause and effect. We invaded Iraq in 2003 over the issue of weapons of mass destruction. Even the mullahocracy has a sense of self-preservation even though they discourage it in others. They understand the possibility of the United States targeting their regime next and shut down their program.

For four years they have not had an active program, but that does not mean they do not pose a threat. Iran continues to produce for its nuclear reactors the kind of enriched uranium that can be used for weapons. George W. Bush's policy in the Middle East once again has borne fruit. First Libya committed to disarming, now we see that Iran did the same. Only continued pressure and the threat of force will keep Iran from pursuing a nuclear weapon. Once again President Bush should receive the credit for removing a potential threat to the United States before it becomes too dangerous.

Two setbacks for the anti-war movement

It has been another nice weekend on the home front. Our troops should know that thanks to their hard won victories, Americans are beginning to see the light.

Firstly, NBC reversed their decision to not allow this ad to air.

Secondly, a key early critic of the Iraq War has changed his mind. Major General John Batiste, a member of the infamous antiwar group VoteVets.org (a front group for MoveOn.org), has now decided that he was wrong. He writes an op-ed in today's Washington Post with Pete Hegseth, executive director of Vets for Freedom:

First, the United States must be successful in the fight against worldwide Islamic extremism. We have seen this ruthless enemy firsthand, and its global ambitions are undeniable. This struggle, the Long War, will probably take decades to prosecute. Failure is not an option.

Second, whether or not we like it, Iraq is central to that fight. We cannot walk away from our strategic interests in the region. Iraq cannot become a staging ground for Islamic extremism or be dominated by other powers in the region, such as Iran and Syria. A premature or precipitous withdrawal from Iraq, without the requisite stability and security, is likely to cause the violence there -- which has decreased substantially but is still present -- to cascade into an even larger humanitarian crisis.

Third, the counterinsurgency campaign led by Gen. David Petraeus is the correct approach in Iraq. It is showing promise of success and, if continued, will provide the Iraqi government the opportunities it desperately needs to stabilize its country.

This follows up the recent begrudging admissions from Democrat Congressmen John Murtha and Earl Pomeroy that the surge is working.

2007 has certainly been a better year than 2006.

Hat tip: Rob at SayAnything , Drudgereport, and the Weekly Standard