Are Republicans falling into a trap by tying raising the debt ceiling to budget cuts?
Don Quixote on Jul 18 2011 at 6:35 pm | Filed under: Uncategorized
I just had an odd thought. Republicans have drawn a line in the sand: no new taxes, no restoration of the old tax levels, all deficit reduction must be accomplished by budget cuts. This is a fairly extreme position. While most Americans aren’t eager to have tax increases, I think most reasonably feel that the deficit is so large that the only practical way to even begin to rein it in is by both raising taxes and cutting spending. Anyway, the Republican have taken this stand and tied it directly to raising the debt ceiling. [As an aside, I think they will either have to back off of this position, allowing tax increases, or accept deficit reductions far too small to even begin to solve the problem. Perhaps they are just taking a hard negotiating position to see who blinks first, but I think they are setting themselves up to fail. We shall see.]
But, isn’t this all backwards? The implication if the Republican position is, gee, we’d like to do all of the things the government is doing, but we can’t afford it. By making this all about the budget deficit and the debt ceiling, rather than saying there are many things (mostly redistributions of income) that the government shouldn’t be doing at all, we’re saying we’re too broke to do them.
I’ve fallen into this trap myself. I’ve said on this blog that I think our government should do what real people do — figure out how much money we have, then budget what we are going to do with that money. When the government runs out of money, it should quit spending. Perhaps, however, the government should first figure out what it wants to do, and what it shouldn’t be doing, then budget to make sure it has the money to do what it wants to do. What do you think?
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It won’t matter if when they cut spending, when it’s the military they cut out. So what the government is spending money on is just as important as how much money they are spending.
If the Left can’t get the amount, they’ll get what also matters, which is the right sort of funding. And if that means destroying America’s ability to protect itself or our allies… well, the Democrats had a hell of a party when Saigon fell.
DQ, this is a good question you’ve posed. I think that eventually we will have to see our way to both increased taxes and drastic spending cuts. There is going to be pain no matter what.
The problem is many Americans, like me, are willing to pay increased taxes only IF:
—Some of the taxes are used to pay down the debt.
—That the increases come in the wake of the dismantling of non-essential and wasteful federal expenditures: The Energy Department, the Education Department, the Agriculture Department, the Department of Housing and Urban Development, monies to NEA and NPR.
—A restructuring of Social Security to raise the retirement age, allow for private investment of some withholding, and limit the eligibility of high-income people to access the system.
—Everybody pays something, even if only a pittance.
—The revocation of Obamacare and its pending billions in waste.
—Federal abandonment of any college loan guarantee programs after a specified date.
I’m sure others here to can add to the list.
Essentially what we’d be doing is what people who are in deep credit card debt do: They stop using their cards, they stop buying anything unless they can pay in cash, and they consolidate their debts into one monthly payment. Then they throw as many bucks at it as they can, short of starving, to drive their debt down.
The sole problem is spending, for one simple reason. It’s how Congress and the President look at it. Once any spending bill comes into the mix it becomes the new baseline for spending. For example, the spending for the wars in Afghanistan and Iraq add to the total of government spending; therefore the baseline is now higher. TARP? It completely absolves President Obama of increasing spending because he’s operating under the new baseline. They all do it.
These people look at it differently. There is a reason they are cautious about taxes, it’s immediate. Spending and debt? Not they’re problem
Did you ever dream a joke that seemed so funny as you awoke, but, when you tried to tell it, realized that there was some serious depth missing? Stay with me here.
It is a measure of just how seriously the media have manipulated public opinion that a majority believe that the Republicans or their policies deserve the blame for present economic conditions. Sure, ask them what policies and they reply with a blank stare. Rather like someone who tries to explain a joke that he dreamt. It fades in the clear light of morning, as he realizes that there was some important stuff left out.
We can’t control reporting, but we can influence events. IF we cave on the accelerated depreciation for company planes, increasing tax revenues by three hundred million a year, and the people who make those planes suffer huge layoffs, (rather quickly, I’d bet) the blame for the current economy is shifted back where it belongs, on the Social Democrats.
I think the first problem comes when you say the government should first figure out what it wants to do. No. The job of the government is not to tell us what it wants to do. In this country, we tell it what we are willing to fund it to allow it to do. We’ve been doing it the way you said for far too long now, and look where that’s put us.
It doesn’t work for the government to decide what it wants to do, because it is a parliament of whores. They will “bring home the bacon” – or whatever this week’s foul term is – at the expense of the country as a whole, in order to insure their own re-election. As long as you have people whose primary interest is self-interest, the general welfare will always finish a distant second. And so you have bridges to nowhere, vessels built and instantly mothballed without ever having spent so much as an hour at sea, and all kinds of assorted BS projects scattered throughout the union not to be of any benefit to said union, but just to be sure Senator Repulsive can buy a few votes in his state – with your dough, thereby keeping his ass comfortably submerged in a tub of butter. Earmarks, though far from the most costly, are the most visible example of this. Congress has the Constitutional mandate to raise (tax) money and expend it for the common public good. When a dimwit like Patty Murray grabs money to insure that wineries in Washington have funds to experiment with what wood makes the best barrels for aging grape juice, taxpayers in, say, Rhode Island, Kansas, Montana, and Florida – just to name a few at random – have every right to feel robbed. (Which is, by the way, why earmarks are, whether congress admits it or likes it or not, un-Constitutional and therefore illegal. They don’t require a court to find them illegal – they are illegal.)
That’s how government works: it is earmarks writ large, that’s all. And the only way to escape it is to mandate term limits for these low-lives you wouldn’t allow into your home, and fix it so there is nothing for them to gain by whoring with other people’s money, because they’re automatically gone in a couple of years. Until that happens, they will send our money to their homes, to buy votes. It becomes a joke, and until we as citizens take it the hell away from them, it won’t change. (I was driving down the Robert Byrd Highway, took the first left after the Robert Byrd Bridge, got onto Robert Byrd Boulevard, turned right at the Robert Byrd Library, went two blocks to the Robert Byrd Federal Building, and swung into the Robert Byrd Memorial Parking Garage, which is shared by the federal building and the Robert Byrd Hemorrhoid Institute across the street.)
We don’t need – or deserve – a government that figures out what it wants to do, thanks. We need one that does what the hell we tell it to do. It starts with term limits.
And with the shutting down of entire departments we’ll release workers into the private sector who are either over compensated by 100%, or given they are our best and brightest and deserving of that 100% they will create new businesses and the economy will boom.
In the worst case we get 1.5x savings into the GDP. In the best case it’s 3x. Feds employ 2.5M regular employees and at least the same number of contractors. To say nothing of what these institutions, now closed, would spend in addition to salaries, and the costs they impose in ever increasing regulation.
I agree with your idea that the Republicans are setting up for failure… but I don’t think they’re doing it intentionally, though. I think they don’t actually know what they want as a whole party. The Senior Republicans are trying to maximize spending reduction and keep taxing to a minimal whereas the Tea Party is utterly rejecting anything that has to do with tax on it. If they could make up their mind, perhaps a compromise can be reached.
Don Quixote: Republicans have drawn a line in the sand: no new taxes, no restoration of the old tax levels, all deficit reduction must be accomplished by budget cuts. This is a fairly extreme position. While most Americans aren’t eager to have tax increases, I think most reasonably feel that the deficit is so large that the only practical way to even begin to rein it in is by both raising taxes and cutting spending.
That is what most polling shows.
Don Quixote: The implication if the Republican position is, gee, we’d like to do all of the things the government is doing, but we can’t afford it. By making this all about the budget deficit and the debt ceiling, rather than saying there are many things (mostly redistributions of income) that the government shouldn’t be doing at all, we’re saying we’re too broke to do them.
Americans have had that discussion, and most Americans like their Social Security, FHA home loans, college loans, their food and drugs inspected, etc. It never hurts to revisit those questions, but it always seems to be more of a marketing ploy (e.g. personal accounts) than a real attempt at enlightened conversation.
Yes, America should decide the proper role of their government. Then raise the funds necessary to provide that government. The problem is that most people like social programs, but they also like lower taxes. Wishes and horses. However, most people seem to be willing to consider marginally higher taxes if there is significant belt-tightening in the public sector.
Don Quixote: Are Republicans falling into a trap by tying raising the debt ceiling to budget cuts?
It is reasonable to take a look at the books when raising the debt ceiling, and a bipartisan agreement would have been readily available if it included modest tax increases. That is, a deal was available through the usual give and take of politics.
But it was the responsibility of the House majority to make sure that the debt ceiling was increased. Instead, the right-wing of the Republican Party, which holds inordinate influence, decided to take the economy hostage. Essentially, they will kill the economy if they don’t get what they want. However, cooler heads will almost certainly prevail in the end. There never was any choice.
Oh, and yes. It was a very serious error on the part of the Republicans. It will hurt them politically, but more importantly, it may hurt U.S. standing in the financial markets.
“Republicans have drawn a line in the sand: no new taxes, no restoration of the old tax levels, all deficit reduction must be accomplished by budget cuts.”
Only in Washington is this an extreme position. This would be sound advice from an accountant or debt adviser if they were counseling a family on the brink of bankruptcy. In the real world, people don’t have the option of just demanding more income cover their current debt and ongoing spendthrift lifestyle. And the first changes a person nearing bankruptcy would make would be to cut out all of the minor extravagances - daily Starbucks coffee, dining out, expensive cable, vacations, buying books instead of borrowing from the library, etc.
It seems every day we hear about another ridiculous program (WH Tech & HHS jointly working to create an app that helps women avoid getting raped) or government sponsored study (p*nis size of gay men). If the public truly knew how much money was wasted on items like this, talk of tax increases would go nowhere. Individually these cost are insignificant, but they are indicative of a much greater problem with the government, such as the out of control earmarks that JJ mentioned, and this mindset that if something fails it needs more money instead of elimination.
While I would prefer elimination of entire department (which actually is extreme), such as Education and Energy, I would be happy with something along the lines of no spending increases, across the board budget cuts (5-15%), return of any unused stimulus funds, repeal of Obamacare, and a ban on earmarks.
Well, not quite, Libby. Families on the brink of bankruptcy often increase their income by working more overtime, taking on a second job or whatever. My own son is working a second, part-time job because he found he couldn’t make ends meet with just his first job (his girlfriend was supposes to live with him & contribute, she died suddenly in her sleep, it’s a long story). Increasing income is often one choice to at least consider.
DQ, you’re right to be suspicious. As Ymar says, take away a portion of their budget, and all they’ll do is shift the remaining resources into *their* priorities, not ours. We’ll see the Washington Monument ploy writ large, with everyone pointing the finger at Republican grinches, while high-speed rail and green projects continue to be well-fed.
We have to take functions away from the government–such as eliminating the DOE. And all we’d have to do to sell it to the public is say “You’ll get your lightbulbs back.”
DQ, I don’t consider increasing taxes on par with getting an additional job. Money from an additional job is earned, and requires additional work and some sacrifice (less free time, etc). Additional taxes only require that you get more money from someone else’s hard work, such as getting food stamps to supplement your budget.
Fair enough, Libby. I was just pointing out that both families and the government can look at both the income and the expenditures when trying to balance their budgets. The source of that income is another matter entirely.
Your comment was, “In the real world, people don’t have the option of just demanding more income cover their current debt and ongoing spendthrift lifestyle.” I agree, to a point, but they do have the option of exploring ways of obtaining more income, whether getting a second job, demanding a raise from their boss, going on food stamps, whatever. So does the government — raising taxes, imposing higher fees, selling government lands, legalizing casinos on all federal lands, starting up a national lottery, leasing federal lands for oil drilling and other uses, etc.
By the way, isn’t it odd that all we hear about is tax increases. We almost never hear about other ways the government could increase income without tax increases.
DQ in around 2008, asked why I was supposedly “pessimistic” about Democrat or Leftist policies and their effects on the American body, mind, and spirit.
I told him that it wasn’t pessimism, but a realistic assessment of true evil, its goal, its intentions, and the harm it has done, is doing, and will do to humanity.
In war, one plans for the worst and hopes for the best. But hoping for the best won’t do a damn thing to change reality.
As you all are seeing now, in 2011, after X some odd years of Leftist and Obama totalitarian policies. Whether you like it or not.
Right on JJ, and Libby, too.
How did we ever get to the point of seriously thinking that it is up to the “government” to decide what it wants to do? Shaking head.
We know what the government wants to do. It wants to grow and grow and… Get the idea? Notice the latest kerfuffel over appointments. It is not about replacing some agency head; it about appointing the head of a new agency, hatched in the minds of Chris Dodds and Barney Frank and foisted on us supposedly to protect us from the stupidity resulting from previous ideas of Chris Dodds, Barney Frank and their merry friends. New agencies, more power; that is what government wants.
The GOP best stand up for spending cuts. The future of the country requires it, and the majority of “fly over” Americans demand it.
Just a reminder. Everyone of the polls; everyone of the stories of apocalypse if the GOP does not compromise, originate in Washington DC or New York. Mostly the former. Need I state the obvious? Congressmen and Senators by and large are not elected in DC or New York.
Concentrating power in a capital that is so far away from where most Americans live, is probably one of the more fatal mistakes of far flung empires.
Z, cites unidentified polls to tell us that most Americans like all of the benefits of big government. He needs to identify those polls to have credibility; but even then he would run into the old conundrum. Who pays? As a personal example. My wife and I are contemplating a move to Southern California to be near kids and grand kids. We would love to continue to live as we do now, in a house of the same size as the one in Virginia, sited on a one acre, secluded lot. There is an obvious problem. We cannot pay for it in that locale. It is a pipe dream. We will have to make significant adjustments. Continuing to spend at the rate at which government has become accustomed is also a pipe dream. Don’t try to tell me that taxing the super rich would make it possible. That simply does not sell. Tax the middle class? Fine, except that we know that you are simply feeding an insatiable appetite; and that it will consume you sooner or later.
Like most Conservatives, I am willing to pay a bit more in taxes. Provided that the tax code is overhauled and all of the sweetheart deals are eliminated. Straight up, everyone pay the same percentage of total income; and that percentage based on what government needs to perform its proper functions. Now, as to the question of proper functions, Z and I will never agree.
Don Quixote: While most Americans aren’t eager to have tax increases, I think most reasonably feel that the deficit is so large that the only practical way to even begin to rein it in is by both raising taxes and cutting spending.
Zachriel: That is what most polling shows.
Oldflyer: Z, cites unidentified polls to tell us that most Americans like all of the benefits of big government.
If you are referring to the mention above, it didn’t have to do with the benefits of big government, but how to close the budget gap.
“Americans’ preferences for deficit reduction clearly favor spending cuts to tax increases, but most Americans favor a mix of the two approaches.”
http://www.gallup.com/poll/148472/deficit-americans-prefer-spending-cuts-open-tax-hikes.aspx
While it is good for the Republicans to make this internal increase in credit limit, the sad fact is that if taxes are increased, there will be no deficit reduction only more spending. The only real change will come when the deficit ceiling is imposed by some outside party, i.e., we cannot sell anymore bond for any reasonable price. And that day is coming, the day when China, India, or the bond market just suddenly realizes we can’t pay what we owe. Just like the Mortgage crisis it will come quickly and it will be painful.
Our credit rating is going down regardless of the debt ceiling if there are no credible measures taken to reduce the debt. The bait and switch that usually happens where taxes go up but the spending cuts never happen isn’t going to work. Everyone knows, that if the taxes are increased, the deficit will still grow and someday, those buying bonds are going to panic.
It is an odd situation where government borrowing rates are low because of the flight to “safety” and will rise if the economy starts to recover as investors seek higher yields in stocks. But while stocks are down, income tax revenue will be down due to lower payrolls, unemployment will be up, investment income will be down as it settles in for the storm so tax revenue will be down so the low government borrowing rate is still an untenable burden.
Thanks for belatedly citing your sources, Z.
One quote from that source sums it up (I high lighted a couple of key phrases.) :
The question does not make clear what types of tax increases Americans might be willing to accept, or whether those saying deficit reduction should come “mostly” from spending cuts would prefer that the proportion of spending cuts be closer to 51% or 99%. The public has been willing to endorse higher taxes on wealthy Americans in recent months, in terms of allowing Bush-era income tax cuts to expire and as a means of keeping Social Security solvent. (The phrase in blue, as it was in the original, is ludicrous. Letting the Bush tax cuts on the “rich” expire would have no effect on SS. Everyone knows it, and it is disingenuous to even suggest such a preposterous notion.)
I suspect we can surmise that those who favor tax increases, want them imposed on some one else; e.g., “the rich”. The question of whether the respondent pays taxes at all, and whether the individual is willing to pay more taxes is seldom or never presented. Another issue with polls of all adults is that approximately 40% of the population do not pay federal income taxes, therefore, they are happy to raise the taxes of those who do. So, here are a couple of questions for you Z: If you favor raising taxes to meet sustain government spending at, or near, its present level of spending, how much more would you be willing to pay? (Assuming you are at present a tax payer. Are you?) In the interest of fairness, would you favor a flat tax on every individual with earnings in cash, or in kind, from any source, including government hand-outs?
On the issue of fairness. Keep in mind that the couple with $250,000 taxable income already pays 9 times as much in federal income taxes as the one with $50,000 taxable; and the one with $1mil pays 13 times as much as the one with $130,000. In other terms, under the Bush rates, the actual tax paid differential in either example is almost double the income differential. So, what do you consider a fair tax burden?
Oldflyer: The public has been willing to endorse higher taxes on wealthy Americans in recent months, in terms of allowing Bush-era income tax cuts to expire and as a means of keeping Social Security solvent. (The phrase in blue, as it was in the original, is ludicrous. Letting the Bush tax cuts on the “rich” expire would have no effect on SS. Everyone knows it, and it is disingenuous to even suggest such a preposterous notion.)
You seem to be confusing two things. Though the first survey you link to is about the income tax, and though it says that typical Americans “favor higher taxes on wealthy Americans as a means to fund government programs, such as Social Security,” they link to a survey about raising the income cap on payroll taxes. It seems to make sense in context. So putting it together, it says the typical American is okay with letting the Bush tax cuts expire on the richest Americans, and also with raising the Social Security cap so that the richest Americans contribute more to Social Security.
Oldflyer: If you favor raising taxes to meet sustain government spending at, or near, its present level of spending, how much more would you be willing to pay?
You may have missed our earlier discussion. The historical rates are revenues 18% and spending 20%, which is why the U.S. has had troubles with deficits over the last several decades. The projected rates are revenues 18% and spending 24%. In order to close the gap, it would seem reasonable to raise revenues and cut spending each to 20%. That was the rate of revenue during the Clinton Administration, and not only was it one of the longest sustained economic expansions in U.S. history, but the prosperity was widespread.
Oldflyer: In the interest of fairness, would you favor a flat tax on every individual with earnings in cash, or in kind, from any source, including government hand-outs?
A flat tax isn’t necessarily fair, nor does it make sense economically. More of a poor person’s income is used to sustain the basics of living. The rich have far more expendable income, and have the most to gain from stable and well-regulated markets. Also, progressive taxation is countercyclical, so tends to mitigate the extremes of the market cycle. Furthermore, the current U.S. system is not particularly progressive. The effective federal tax burden in 2007 by quintile was 4%, 11%, 14%, 17%, 25%.
Oldflyer, you will note that he did not indicate how much he is willing to pay. In other words, although you asked the question, in his mind you did not. If he chooses not see it, it does not exist. As I’ve said before, Orwellian.
What’s the problem? Zach is simply very comfortable taking other peoples’ money in order to let the Zach’s of the world build a new Utopia. Why do I suspect that the Zach’s of the world have no respect for other peoples’ money because they themselves have never had to contribute something of value to society for which people were willing to exchange hard-earned money.
Reminds me of one of the best-ever lines from the Aviator: self-made multimillionaire Howard Hughes is visiting Katherine Hepburn’s family out east – splendidly wealthy, the WASP Hepburn parents warble on about how they consider themselves communists, while studiously treating their household servants with disdain.
One of the parents (the father?) says (I paraphrase), “you know, we really don’t believe that money is important”.
“That’s because you never had to earn it!” retorts Hughes.
An evaluation on the latest…
http://directorblue.blogspot.com/2011/07/gang-of-six-reactions-from-around-web.html
suek’s link leads me to the obvious question about the elephant in the room and the herd in DC.
What if? What if the Gang of Six behaves more like the Gang of Four. It all reminds me of one of those Zimmerman (Food Network) strange food episodes. We’re looking at some awful fried something or other and he’s telling the viewer “it tastes just like chicken”. I know what a chicken looks like and it doesn’t have 8 legs and eyes that bulge and pop after cooking it. Damn it – Bring me the steak I ordered!
In ‘foody’ terms – stay in the kitchen until you get the order right.
Lol. That’s exactly what David Weber called the totalitarian theocrats of Safehold that ruled the corrupt church: The Gang of Four.
Z falls back on the same line that I discussed earlier, and which my little example elaborates. He talks about effective tax rates; he never talks about the the actual amount of taxes paid. That way the facts get distorted. The truth is that a couple with a million dollars of taxable income, pays $320,300 in taxes. The couple with a $130,000 pays $24,700. The effective tax rate is only 13% apart, but the difference in taxes paid is 13 times greater.
Prattling about progressivity and tax rates is simply smoke. The worst smoke of all is babbling about fairness. A fair tax would take the same from every American in an amount just sufficient to fund government. Anything else is arbitrary, and arbitrariness is never fair. Besides, we have no elected elected position with a job description entitled “arbiter of fairness”; and the United States long ago and firmly rejected the idea of a hereditary or self-appointed one.
Z, you are b
.
It would be a fascinating poll to ask the public the following, “If a person making $100,000 a year pays $25,000 in taxes, how much should a person making $1,000,000 a year pay?” I’ll bet the majority would say $250,000, or not much more than that, anyway.
Oldflyer: Z falls back on the same line that I discussed earlier, and which my little example elaborates. He talks about effective tax rates; he never talks about the the actual amount of taxes paid. That way the facts get distorted. The truth is that a couple with a million dollars of taxable income, pays $320,300 in taxes.
The average person making a million dollars pays about $250000 in federal taxes (tax burden 25%), leaving about $750000 to make the mortgage and pay the grocer. The average household making $44000 pays about $6000 in federal taxes (tax burden 14%).
(Using taxable income distorts “the actual amount of taxes paid.” Someone making a million dollars a year from tax-free municipal bonds may have zero taxable income, but still made a million dollars.)
Me thinks Z has steered himself to revelaing his true agenda: not regulating what people pay in taxes, but regulating what people “make” (earn) in income. This is basing economic policy on envy and nothing more. What business is it of Z’s how much people make?
Moose: Me thinks Z has steered himself to revelaing his true agenda: not regulating what people pay in taxes, but regulating what people “make” (earn) in income.
Not sure where you got that idea. Markets, including the ability to make money, are the driving force of economic and technological development. We are merely pointing out that the U.S. federal tax structure is not nearly as progressive as some may think.
I got the hint by this remark: Z – “Someone making a million dollars a year from tax-free municipal bonds may have zero taxable income, but still made a million dollars.”
OK, he made a million dollars. So? In your example, how did he earn the money to buy those tas-free municipal bonds in the frist place?
Z – “the U.S. federal tax structure is not nearly as progressive as some may think.”
At least he is acknowledging that our tax structure IS progressive.
What about a consumer tax? Eliminate taxes on food. That could get us away from the politics of class envy in the tax debate.
Good idea, Moose. I’ve always thought it made more sense to tax consumption that to tax income.
Like Obama said, you’ve earned enough. And like MIchelle said, BARACK will make you work and get off your couch.
Moose, I think this is what is called “conservative” in Britain now a days. Z is not an American and a lot of his political alignments have nothing to do with us. Hence why Z said before that he wants to “take back” conservatism to its “real roots”, but none of those roots were actually American…
I think that the new republic formed after sucession will incorporate a consumer based tax structure.
Moose: OK, he made a million dollars. So? In your example, how did he earn the money to buy those tas-free municipal bonds in the frist place?
Maybe they earned it. Maybe they inherited it. We’re merely trying to determine the effective federal tax burden. If you use taxable income, it skews the numbers. It groups someone making a million dollars in tax-free income with someone who is completely destitute, indeed, it measures someone working at McDonald’s as having a higher income.
Moose: At least he is acknowledging that our tax structure IS progressive.
We have posted the same numbers several times previously.
Ymarsakar: Hence why Z said before that he wants to “take back” conservatism to its “real roots”, but none of those roots were actually American…
conservatism, a political philosophy based on tradition and social stability, stressing established institutions, and preferring gradual development to abrupt change.
http://www.merriam-webster.com/dictionary/conservatism
Moose: I think that the new republic formed after sucession will incorporate a consumer based tax structure.
Are you advocating the breakup of the United States?
In case you haven’t noticed, these staes are not so united. Someone posted that our politicians only think inside the beltway, that has harmed the rest of America. Liberally run states are drowning in debt that people in other states are getting tired of paying for.
I’m not advocating (yet), but the thought is not so far-fetched as it ince was.
Z, thank you for your latest response. By focusing primarily on what each income level has left after taxes, you reveal yourself perfectly. Just like Barack Hussein Obama, your goal is not to fund the government with the tax system, it is to level society. Clearly you belong to the school of thought that defines equality as equal outcomes rather than equal opportunity. For the sake of brevity, I won’t go through the whole litany of Leftist/Statist dogma.
Another interesting point from your response. You cite tax free investments as if they were tax evasion. Tax-free municipals and federal bonds are not evil. Nor are the people who invest in them. They are what makes it possible for Barack Hussein Obama, and other politicians, to spend money they don’t have. If they did not offer tax advantages they could not compete with other investment grade bonds. (Although some of the government issue could now be categorized as junk.) If rich people, and not so rich people like me, did not buy the bonds and the tax-free mutuals, the government would be a lot leaner. Maybe we should abolish them after all.
Finally, then it is past time to let it go. I used a simplified example. The essential point is that focusing solely on published, or if you prefer effective tax rates, obscures the magnitude of the differential in taxes actually paid. I suspect that is why you, and others, harp on tax rates all of the time, or in the extreme case how much is left after taxes, and never talk about how much individuals in each bracket pay. Typically, with a 10 to 12 per cent differential in effective tax rates, the magnitude of the differential in taxes paid was 8 to 12 times. Further, the differential in taxes was nearly twice as large as the differential in income. In other words a person making 5 times the income would pay 9 times as much in taxes. Those are significant numbers.
No political body will remain stable forever. After awhile, internal pressure starts to build up and we need to fight a civil war or two to fix things.
It’s nothing special. Keeping it to once every century or 2 centuries, is about the best humans can expect.
Old, one of the reasons why aristocracy started to rot from the inside out is that the top 5% of the population held over 90% of the property and capital, yet the work done to make that capital exist was in the lower 95% percentile, the peasants, the merchants, and so forth. The nobles paid no taxes. They were exempt. And wars were fought by peasant cannon fodder shielding more noble armored soldiers.
Now we have the complete inverse, where the top 5% of income earners in a country pay for the vast majority of that country’s expenditures, maintenance, army, wealth, and prosperity. Yet it is the bottom 95% that decide how much those people pay, and the bottom 40% of taxable income brackets, pay little, and the bottom quarter of the total population pay nothing.
Instability doesn’t care which corner of the spectrum a nation is wobbling towards. All it cares about is that instability breeds chaos and chaos breeds wars and wars will re-balance things human refuse to balance themselves.
SO basically, what Z is telling me is that a slave owning conservative holding true to the “traditions” of slavery and totalitarianism, and maintaining the established “institutions” of chattel slavery is the same as American conservatives right now and the American Constitution.
What a dense bloke he be.
Moose: Liberally run states are drowning in debt that people in other states are getting tired of paying for.
Nearly all states are facing shortfalls due to the recession and widespread unemployment. Furthermore, Blue states send more to federal government than they receive in benefits while Red states send less and receive more.
http://activerain.com/image_store/uploads/8/2/9/8/8/ar13050316388928.jpg
Oldflyer: Just like Barack Hussein Obama, your goal is not to fund the government with the tax system, it is to level society.
Not sure where you got that idea. Markets, including the ability to make money, are the driving force of economic and technological development. We are merely pointing out that the U.S. federal tax structure is not nearly as progressive as some may think.
Oldflyer: You cite tax free investments as if they were tax evasion.
No. Actually, we didn’t. Rather, we pointed out that using taxable income gives a distorted picture of the actual tax burden.
Oldflyer: In other words a person making 5 times the income would pay 9 times as much in taxes. Those are significant numbers.
That’s closer to the actual tax burden for all except the lowest quintile. By the way, we explained above our thinking on the matter, before we got bogged down in the numbers. Here it is again.
A flat tax isn’t necessarily fair, nor does it make sense economically. More of a poor person’s income is used to sustain the basics of living. The rich have far more expendable income, and have the most to gain from stable and well-regulated markets. Also, progressive taxation is countercyclical, so tends to mitigate the extremes of the market cycle. Furthermore, the current U.S. system is not particularly progressive. The effective federal tax burden in 2007 by quintile was 4%, 11%, 14%, 17%, 25%.
Zach’s attempt to duplicate Inspector Renault’s shock (“Are you advocating the breakup of the United States?”) is DOA. I don’t think anybody here is really shocked at the suggestion that the United States is currently heading toward secessionist movements or even outright civil war given the level of corruption in Washington and among America’s elites.
The question is are we too far gone to avoid either? I think we can avoid those tumultuous outcomes if the Tea Party and like-minded citizens are successful in forcing the GOP to acknowledge that it needs to don some war paint.
But if not: A federal attempt to put down a secession, such as by Utah or Texas, would create an interesting state of affairs. Actual attempts to secure federal sovereignty via military power would be problematical. Soldiers swear to defend the Constitution, not the government, so many would defect. There would be the problem of resistance by former military men who would be, thank God, heavily armed under their Second Amendment rights. There would also be the problem of attempting to use modern technology to control banks and the media among highly sophisticated, computer-savvy civilians. There’s also the problem of how a nearly bankrupt federal government would finance a suppression without inviting more outbreaks of resistance.
On a more speculative note: Given the level of hatred that so many leftists operate at, I would not be surprised if suppression were to involve brutal methods like the ones Sherman used during the Civil War. For example, one way to channel gang activity during a scessionist crisis or outright civil war would be to recruit gang members as temporarily deputized federal officers. A thug like Eric Holder has already demonstrated that he has no regard for the law, so using street fodder to maintain order would present no moral or ethical problems for him. (Of course it would probably backfire—street thugs are like tribal warriors, individually brave but lacking in team-level cohesion or the ability to plan strategically. Small groups of well organized, heavily armed vigilantes would be able to take them out quickly.)
Ymarsakar: SO basically, what Z is telling me is that a slave owning conservative holding true to the “traditions” of slavery and totalitarianism, and maintaining the established “institutions” of chattel slavery is the same as American conservatives right now and the American Constitution.
No. The conservative position in 1811 is not the same as the conservative postion in 2011. The center has moved. For instance, it used to be that only white men of property could vote. Now, nearly everyone but the most reactionary believe in universal suffrage.
Here is an interesting link to help explain your vague little chart:
http://www.idahostatesman.com/2010/09/19/1346603/liney-liney.html
An interesting pull from the link:
“…why the disparities? One reason is differences in incomes. Federal taxes are somewhat progressive, so states with high average incomes pay more on a per capita basis than those with lower incomes. Historically, states in the South and most states west of the Mississippi (except the Pacific Coast) tend to have lower average incomes than states in the Midwest or Northeast or on the Pacific Coast.”
You see, the result of your beautiful progressive tax scheme results in the very condition you claim to be unfair.
Moose: You see, the result of your beautiful progressive tax scheme results in the very condition you claim to be unfair.
Please try to read more carefully. We didn’t say it was unfair. You had said “Liberally run states are drowning in debt that people in other states are getting tired of paying for.” In fact, the money is flowing from Blue States to the Red States.
No, Z. Your graph represents RATIOS, NOT actual amounts flowing to the states OR for what those expenditures are used. So, again, you present a vague chart and require that someone else do the heavy lifting on your behalf. Wait, isn’t that the definition of a liberal?
Moose: Your graph represents RATIOS, NOT actual amounts flowing to the states …
In 2003, Blue states paid in $130 billion more than they received. Red states netted about $212 billion.
http://www.taxfoundation.org/taxdata/show/22685.html
You had suggested that the non-liberal states were footing the bill for the liberal state, but it turns out that the money is flowing the other way. If you eliminated the disparity, then it would go a long way to eliminating the deficits in the liberal states. Did you have a point?
Perhaps another pull from the link link provided will help explain you chart a little more:
“This is accentuated by the fact that most large corporations are headquartered in states like New York and Illinois and thus the corporate income tax they pay is tallied as from those states even though the corporations may have factories and offices in many states.”
Maybe your response should be: “You’re right, maybe my chart didn’t reinforce my position clearly, but I will get my people on getting an applicable link.”
Zach often trips over his would-be cleverness. But, as always, it’s entertaining.
For example, he suggests that we could eliminate the disparity between states that pay more in federal taxes than they get back. Does he say how this might be done? Of course not—that would require original thought. But, since Moose has aptly pointed out that Zach lets others do his heavy lifting, perhaps he could point us to a link that explains “if you eliminated the disparity?”
Next Zache blithely passes over why blue states run such enormous deficits, except to imply that somehow it’s the federal taxes they’re paying that are the culprit. Not a hint of cognition about the nature of blue-state governments, which do not peg their deficit spending sprees on how much their citizens pay in federal taxes.
Moose: Perhaps another pull from the link link provided will help explain you chart a little more:
Yes, we read your link, and this was your point above.
Moose: You see, the result of your beautiful progressive tax scheme results in the very condition you claim to be unfair.
To which we responded.
Moose: Maybe your response should be: “You’re right, maybe my chart didn’t reinforce my position clearly, but I will get my people on getting an applicable link.”
No. The chart did provide the necessary information. You had suggested that blue states were sponging off the red states, but the money is flowing in the opposite direction. Your original claim was wrong.
Z, your chart explains zero, zilch, nada. As mentioned in the provided link, your chart cannot reinforce your position clearly.
Here is some clarification of my point: ranking of federal non-defense spending by state
http://www.usgovernmentspending.com/federal_spending_by_state.php?chart=Z0&year=2008&units=b&rank=n
You may have to do a little work, Z, to sort by the appropriate heading.
Charles Martel: For example, he suggests that we could eliminate the disparity between states that pay more in federal taxes than they get back.
There are a number of reasons for the disparities and there would be no practical way to eliminate them, nor is there necessarily anything wrong with some disparities. The Tax Foundation discusses the issue here.
http://www.taxfoundation.org/blog/show/1397.html
Moose: Z, your chart explains zero, zilch, nada.
Sure it does. It shows that money generally flows from the Blue States to the Red States, directly contradicting your previous position.
http://activerain.com/image_store/uploads/8/2/9/8/8/ar13050316388928.jpg
Moose: Here is some clarification of my point: ranking of federal non-defense spending by state… You may have to do a little work, Z, to sort by the appropriate heading.
You still aren’t making your point clear. Blue states put more in than they take out. We’re talking about money, right?
Hey Z; what’s with the “WE”? Is this the “Royal we”? Are you a team of low level Lefty staffers huddled in the incredible talking White House, trying to keep up with the flow of the blog? Are you a bunch of college kids trying to act like grown ups? Does the collective you get extra credit for participating in this discussion?
You let another cat out of the bag, Z. So far you have revealed that the tax code, in the minds of you and your collaborators, is not about funding government, but about leveling society. You revealed that you think it is “fair” for the government to confiscate from people who exceed an arbitrary income level so as to distribute the money to others; after the government wastes a significant percentage, of course. Now you reveal that the verbose Zachriel is not a person but actually a cabal in disguise.
HA! HA! Cracking me up!
You should be more careful with your responses.
Z, we are also talking about geography. Payroll taxes are being credited to states where companies are based, but the employees for whom those payroll taxes are contributed live elsewhere. I live in a red state but your silly chart gives the tax contribution apportionment to a blue state because it is headquartered there. If we were to place the contributions accordingly, your cute little chart may not look the same.
My chart depicts actual dollars (yes, money) that flows TO each state from the federal government.
Oldflyer: So far you have revealed that the tax code, in the minds of you and your collaborators, is not about funding government, but about leveling society.
Not sure where you got that idea. Markets, including the ability to make money (i.e. disparities in income), are the driving force of economic and technological development.
Z is unsure where you are getting original ideas from, Old. Can you imagine that.
Moose: My chart depicts actual dollars (yes, money) that flows TO each state from the federal government.
Yes, but that is only meaningful in resolving your previous claim if you include money coming from each state. Most of the disparity is due to income differences. Blue States have higher income levels, on average, and pay higher marginal tax rates. They carry more of the federal tax burden.
Hey Z; what’s with the “WE”? Is this the “Royal we”?
Old, he does that whenever Z is annoyed at not getting his way ideologically. He’s like a cultist relying upon dogma and saying we have numbers and thus we are right. Or at least, that’s what he thinks even if he won’t say it.
Actually, with his “consensus” propaganda lines, he did say.
Z is, by some accounts, British or German. Not American at all even.
He did all this a long time ago, Old. For those of us that read most of his comments, at least. You could say he isn’t careful, because he already knows that we know.
Z – ” Blue States have higher income levels, on average, and pay higher marginal tax rates.”
This proves my point. Your chart does not clarify what taxes are being represented. You state ONLY “income tax levels,” but the chart vaguely includes “Taxes.” without any clarification.
If company located in Minneapolis employes tens of thousands of people spread accross the land, those payroll taxes would be credited to ONLY MN. So, the chart does a poor job of reinforcing your point, whereas my chart describes specifically to which states go most of the federal funds.
I am willing to engage in debate, if you can retract your chart and start fresh with better ammunition.
Zach: “If you eliminated the disparity, then it would go a long way to eliminating the deficits in the liberal states.”
Zach: “There are a number of reasons for the disparities and there would be no practical way to eliminate them, nor is there necessarily anything wrong with some disparities.”
LOL! Oh, Great Pontificator, which one is it?
Charles, looks like that puts an end to this debate. Z needs to decide on their position in order to contribute to another string. I, myself, have to go to work in order that the VAST MAJORITY of my income tax will be routed to liberal states that need to distribute to those more deserving than myself.
Goodbye for now, Bookworm Room.
Moose: Your chart does not clarify what taxes are being represented.
We provided links to the study and to a discussion of the disparities from the Tax Foundation.
Moose: I am willing to engage in debate, if you can retract your chart and start fresh with better ammunition.
It’s your claim at issue.
Moose: Liberally run states are drowning in debt that people in other states are getting tired of paying for.
In reply, we cited studies by the Tax Foundation, a nonpartisan tax research group, which contradicted your assertion, while you have provided nothing to support your claim.
Zach, you’re done. Moose pretty well demolished your argument, and most of us have had it up to here with your autistic tactics. Try moving over to a fresh thread where you can bore us anew.
Charles Martel – LOL. You really charm me. I am more of an Eastwood fan.
You‘ve got to ask yourself one question: ‘Do I feel lucky?’ Well, do ya punk?
On the contrary, CM neither Zach nor Moose has proven his point. And Moose, as the person who made the statement, has the burden of proof.
Zach’s chart and argument fails to take account of things like the clustering of corproations in the liberal states. Nor do they control for income. For example, what is the tax expense and benefit for a person making $50,000 a year in a blue state compared to a person making $50,000 a year in a red state?
Moose’s article and chart are interesting, but they don’treally answer the question either. The charts aren’t even broken down per capita, which they woulod need to be for the comparison to even begin to be meaningful.
I have no idea who is right, or even if it matters, but we certainly need more data than we have so far. By the way, I thought it was interesting that one of the factors mentioned in Moose’s article was farm subsidies, which I think is the kind of government expenditure that Zach would say illustrates his point.