The GOP's last chance

[volinbham]

I'm shocked - another "the GOP is doomed" thread from LG.

 

[sjt18]

China; China has boomed since reducing their "Corporate Tax" (State Ownership) in the 1980s and implementing very high individual income tax rates (45% top bracket).

China has been dropping rates and increasing economic liberty for about 20 years now. They are the "antithesis" of what you need for a "proof" that increasing taxes helps an economy.

 

[sjt18]

Clearly one will occur in terms of the debt ceiling.

I'm saying that we had a great chance here to take a sizable bite out of the total debt but the TP wired our collective jaws shut with ideological intransigence.

Nope. Obama did. Tax increases are not the answer... and Obama has NOT been specific about cuts or willing to front load them.

Obama and Dems will contend, correctly, that the reason the deficit moving forward will not be $4 trillion lower than it might have been was because 1) Boehner is ineffective and can't herd the cats; and 2) the TP wing of the party wanted to protect the rich.

You will believe that. No question. Rational people will know that the deficit is a spending problem... not a tax rate problem.

The GOP is playing this stupid. While negotiations are going on, they should very publicly draft a bill that raises the debt limit, provides real cuts, and simplifies the tax code. If Obama continues to refuse to negotiate in good faith... they should pass it and send it to the Senate.

If they REALLY want to be crafty about it... they'll propose a wage freeze for all federal employees for two years followed by no more than 2% growth in federal labor budgets for an additional five. They will eliminate funding for various unnecessary programs like the NEA and CPB.

 

[sjt18]

Obama just said that we just need a modest adjustment to get our house in order.

I would sort of agree. They need to limit spending growth overall to one half inflation until the budget is brought in line. COLA's should be no higher in total. That is pretty "modest" if they had any courage at all. Corporate leaders do it all the time.

For several years, the private sector has had to freeze wages, raise benefit costs, and/or limit both. Federal employees should not be exempt. For many years now, the private sector has been under pressure to get more work done with lower headcount. The gov't should not be exempt from that either.

 

[droski]

Clearly one will occur in terms of the debt ceiling.

I'm saying that we had a great chance here to take a sizable bite out of the total debt but the TP wired our collective jaws shut with ideological intransigence.

Obama and Dems will contend, correctly, that the reason the deficit moving forward will not be $4 trillion lower than it might have been was because 1) Boehner is ineffective and can't herd the cats; and 2) the TP wing of the party wanted to protect the rich.

sigh. you really don't get the objection to the cuts being 10 years down the road do you? you don't understand the difference?

 

[therealUT]

China has been dropping rates and increasing economic liberty for about 20 years now. They are the "antithesis" of what you need for a "proof" that increasing taxes helps an economy.

China did not have income taxes prior to the 1980s; since instituting them, they have continued to rise while state-ownership and corporate income taxes have continued to drop.

 

[utgibbs]

Rebpublicans have traditionally been "slash and spend" - slash desperately needed social programs, while instituting socialism for finance, dead industries, and the 1%. Reagan and the Bush's mired us with the current debt woes and a shell of an economy.

Moodys and S&P (not that this isn't completely engineered) are "reviewing" the US debt. Obama walked out of the talks, citing Republicans intransigence in returning to a tax plan closer to the tenets of Adam Smith than the current, regressive system.

Republicans, rightly, will be blamed for sending the nation into default. I'm not sure I don't like this option, as it will also be the end of Late Capitalism. Their fiscal irresponsibility might bring it all to smash after all.

The real world outside the back door:

 

[rjd970]

I've posted the above graph before. Here is the explanation I get:

Reagan/Bush has cold war spending involved.

Clinton knew not what he was doing, was just lucky enough to be a part of the dot com boom.

Bush had to deal with Clinton's recession and 911.

Obama is a moron that can do no right.



....That about sums up what you are going to hear.

 

[utgibbs]

Focus of debt talks to narrow without deal by Friday, sources say - CNN.com

Translation: If the GOP will not deal today on a $4 trillion plan (or thereabouts) for deficit reduction that includes eliminating tax loopholes and Bush tax cuts to go along with trillions in spending cuts, the President is going to tell them they have to sign off on a no strings attached debt ceiling increase.

If the GOP then balks at that, politically the mess is squarely in the lap of Boehner and Cantor. If that happens, its adios for Republican controlled House or Senate.

Whoops. I should have read this first. I sense a merge coming.

Republicans, rightly, will bear the burden of their fiscal irresponsibility. Obama, to his credit, has tried to move them towards the tenets of Adam Smith, but, predictably they have balked. "Slash and spend" has been the Republican way for a generation or more. Reagan was responsible for the "debt" problem - in his efforts to socialize risk and privatize profits for his cherished industries.

 

[utvolpj]

how is he moving toward Adam Smith by wanting income taxes that are "absurd and destructive"?

 

[utgibbs]

I've posted the above graph before. Here is the explanation I get:

Reagan/Bush has cold war spending involved.

Clinton knew not what he was doing, was just lucky enough to be a part of the dot com boom.

Bush had to deal with Clinton's recession and 911.

Obama is a moron that can do no right.



....That about sums up what you are going to hear.

A couple of points:

1. The Cold War is a farce. The presidents which actually dealt with the Cold War (remember, Gorby was in during Reagan) brought Truman's debt down. [Note: These are the bourgeois facts on the matter. My view on the Cold War is much, much different]

2. Clinton did luck out that the socialized risk the American taxpayer took on building the nascent semi-conductor industry matured under Clinton into fantastic private profits for the few.

3. It is true Bush had to deal with the Clinton bubble. But it was the way he dealt with it that was such a freakin' disaster.

4. Obama is not a moron, but there is very little he does right it seems.

 

[utgibbs]

how is he moving toward Adam Smith by wanting income taxes that are "absurd and destructive"?

"Absurd and destructive" according to the most fiscally irresponsible people in world history - the Republicans.

Very sound, tried, true, and tested in the real world outside the back door. And more in-line with the tenets of Adam Smith.

 

[utvolpj]

no, absurd and destructive as described by Smith

 

[utgibbs]

no, absurd and destructive as described by Smith

Not correct and not surprising.

 

[utvolpj]

so he was pro-income tax?

 

[utgibbs]

so he was pro-income tax?

The mechanisms are anachronisms. It is silly to discuss what mechanism Adam Smith would approve of in our own historic time. It is about the general tenets for a tax code he presented (presciently, as the great man knew the mechanisms he discussed in his own day and age would become historic anachronisms) that are important.

Certainly he would certainly have no problem with what Obama has suggested. No one in their right mind would.

 

[droski]

another mind reader

 

[utvolpj]

so basically you take 3 things from Smith (the ones that match your views) but declare the rest to be hogwash? Got it

 

[utgibbs]

another mind reader

No, but the bourgeoisie assiduously avoid that other book by Adam Smith The Theory of Moral Sentiments. Of course, the bourgeoisie avoid anything with "moral" in the title.

Regardless, the four maxims are clear and (except in the hands of propagandists) unambiguous:

1. Simple
2. Transparent
3. Progressive

The fourth maxim, that the government should only take what it needs, really, comes from the first two.

The Wealth Of Nations, Book V Chapter II Part II, Appendix to Articles I&II, p. 861, para. 12.

The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities...

The Wealth Of Nations, Book V Chapter II Pt II, v. ii, p. 825, para. 3.

The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person...

The Wealth Of Nations, Book V Chapter II Pt II, p. 825, para. 4.

Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay...

The Wealth Of Nations, Book V Chapter II Pt II, p. 826, para. 5.

Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the state…

 

[therealUT]

No, but the bourgeoisie assiduously avoid that other book by Adam Smith The Theory of Moral Sentiments. Of course, the bourgeoisie avoid anything with "moral" in the title.

Regardless, the four maxims are clear and (except in the hands of propagandists) unambiguous:

1. Simple
2. Transparent
3. Progressive

The fourth maxim, that the government should only take what it needs, really, comes from the first two.

I always thought this was the third maxim:

III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributors to pay it.


A tax upon the rent of land or of houses, payable at the same term at which such rents are usually paid, is levied at the time when it is most likely to be convenient for the contributor to pay; or when he is most likely to have wherewithal to pay.

Taxes upon such consumable goods as are articles of luxury are all finally paid by the consumer, and generally in a manner that is very convenient for him.

He pays them by little and little, as he has occasion to buy the goods.

As he is at liberty, too, either to buy or not to buy, as he pleases, it must be his own fault if he ever suffers any considerable inconvenience from such taxes.

 

[utgibbs]

so basically you take 3 things from Smith (the ones that match your views) but declare the rest to be hogwash? Got it

Even if that were the case, there would be nothing wrong with that, if he got three things right and got the rest incorrect.

Smith was a genuine progressive for his time, a man of the Enlightenment. He truly felt (and in his own historic time, he could have been correct in his own historic time) that production and productivity would raise many boats.

It could and should have, but it took one hundred years of progressive battling to make it so. Stated no better than in almost the first sentence of Moral Sentiments.

This disposition to admire, and almost to worship , the rich and powerful, and to despise , or , at least neglect persons of poor and mean conditions, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments.

 

[utgibbs]

I always thought this was the third maxim:

STP (Simple, Transparent, Progressive) is my invention, distilling the essence of the maxims (the fourth of which falls naturally from the first two).

What you quote falls under "simplicity." Taxes should both be simple to understand and simple to collect.

And, btw, did you know that Milton Friedman's only lasting economic policy was the collection of the income tax at the point of receipt?

 

[therealUT]

STP (Simple, Transparent, Progressive) is my invention, distilling the essence of the maxims (the fourth of which falls naturally from the first two).

Fortunately, Smith was able to place his maxims in concise terms; therefore, I can easily post all of them for the edification of all readers:

I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities;

that is, in proportion to the revenue which they respectively enjoy under the protection of the state.


The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate.

In the observation or neglect of this maxim consists what is called the equality or inequality of taxation.

Every tax, it must be observed once for all, which falls finally upon one only of the three sorts of revenue above mentioned, is necessarily unequal in so far as it does not affect the other two.

In the following examination of different taxes I shall seldom take much further notice of this sort of inequality, but shall, in most cases, confine my observations to that inequality which is occasioned by a particular tax falling unequally even upon that particular sort of private revenue which is affected by it.

II. The tax which each individual is bound to pay ought to be certain, and not arbitrary.

The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.


Where it is otherwise, every person subject to the tax is put more or less in the power of the tax-gatherer, who can either aggravate the tax upon any obnoxious contributor, or extort, by the terror of such aggravation, some present or perquisite to himself.

The uncertainty of taxation encourages the insolence and favours the corruption of an order of men who are naturally unpopular, even where they are neither insolent nor corrupt.

The certainty of what each individual ought to pay is, in taxation, a matter of so great importance that a very considerable degree of inequality, it appears, I believe, from the experience of all nations, is not near so great an evil as a very small degree of uncertainty.

III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributors to pay it.


A tax upon the rent of land or of houses, payable at the same term at which such rents are usually paid, is levied at the time when it is most likely to be convenient for the contributor to pay; or when he is most likely to have wherewithal to pay.

Taxes upon such consumable goods as are articles of luxury are all finally paid by the consumer, and generally in a manner that is very convenient for him.

He pays them by little and little, as he has occasion to buy the goods.

As he is at liberty, too, either to buy or not to buy, as he pleases, it must be his own fault if he ever suffers any considerable inconvenience from such taxes.

IV. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state.


A tax may take out or keep out of the pockets of the people a great deal more than it brings into the public treasury, in the four following ways.

First, the levying of it may require a great number of officers, whose salaries may eat up the greater part of the produce of the tax, and whose perquisites may impose another additional tax upon the people.

Secondly, it may obstruct the industry of the people, and discourage them from applying to certain branches of business which might give maintenance and employment to great multitudes. While it obligates the people to pay, it may thus diminish, or perhaps destroy, some of the funds which might enable them more easily to do so.

Thirdly, by the forfeitures and other penalties which those unfortunate individuals incur who attempt unsuccessfully to evade the tax, it may frequently ruin them, and thereby put an end to the benefit which the community might have received from the employment of their capitals.

An injudicious tax offers a great temptation to smuggling. But the penalties of smuggling must rise in proportion to the temptation.

The law, contrary to all the ordinary principles of justice, first creates the temptation, and then punishes those who yield to it; and it commonly enhances the punishment, too, in proportion to the very circumstances which ought certainly to alleviate it, the temptation to commit the crime.

Fourthly, by subjecting the people to the frequent visits and the odious examination of the tax-gatherers, it may expose them to much unnecessary trouble, vexation, and oppression;

and though vexation is not, strictly speaking, expense, it is certainly equivalent to the expense at which every man would be willing to redeem himself from it.

It is in some or other of these four different ways that taxes are frequently so much more burdensome to the people than they are beneficial to the sovereign.

Would you now like to interpret Smith's meaning for us all (aka, invent your own meaning)?

Get AIDS and spread it to GS, please.

 

[MG1968]

a flat tax is progressive on the back end, for example if we have a 17% flat tax:

50K/year income = $8500 tax liability
100K = $17000

and so on. Now, I believe that the flat tax as proposed by Steve Forbes included an allowance for low-income people where the first 34K wasn't taxed or had no tax liability.

as much as I'd prefer a fair tax, a flat tax is probably the more likely to have a chance of being implemented.

 

[lawgator1]

STP (Simple, Transparent, Progressive) is my invention, distilling the essence of the maxims (the fourth of which falls naturally from the first two).

What you quote falls under "simplicity." Taxes should both be simple to understand and simple to collect.

And, btw, did you know that Milton Friedman's only lasting economic policy was the collection of the income tax at the point of receipt?

Big business and the wealthy loathe simplistic tax regulations. Who do you think is behind all of the complexity of the current code?