User:Woozle/esr/2779/Woozle 1

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Woozle Says:

December 2nd, 2010 at 5:44 pm

In case this hasn't already been pointed out, the main "entitlement" which contributed to the current financial crisis in the US was Bush's tax cuts for the rich – not social welfare programs.

I do agree that this is a systematic problem, though, as the rich are more easily able to manipulate the purse strings in their favor – and then get everyone else reciting propaganda about how socialism and the welfare state were really to blame.

esr Says:

December 2nd, 2010 at 6:19 pm

In case this hasn't already been pointed out, the main "entitlement" which contributed to the current financial crisis in the US was Bush's tax cuts for the rich – not social welfare programs.

I know this is an article of faith on the left, but it's completely false. The Bush cuts increased revenues.

Jay Maynard Says:

December 2nd, 2010 at 6:44 pm

The Bush cuts increased revenues.

This brings up a question: Is there a case on record where cutting a broad-based tax, such as income taxes. didn't result in increased revenues?

Roger Phillips Says:

December 2nd, 2010 at 7:10 pm

I know this is an article of faith on the left, but it's completely false. The Bush cuts increased revenues.

I am not asserting that this untrue, but I would like to see how it is established.

esr Says:

December 2nd, 2010 at 7:45 pm

I am not asserting that this untrue, but I would like to see how it is established.

See for example this article from American Thinker, which (unlike any articles I could find on the other side of the controversy) cites actual numbers for CBO projected revenues and how actual revenues exceeded them.

The more honest sort of left-statist is reduced to admitting that yes, revenues did go up, but asserting that they would have risen even more without the nassty nassty tax cuts. This was the line the Washington Post took.

Roger Phillips Says:

December 2nd, 2010 at 8:08 pm

See for example this article from American Thinker, which (unlike any articles I could find on the other side of the controversy) cites actual numbers for CBO projected revenues and how actual revenues exceeded them.

The argument in the article is less than compelling, even for a correlative one. I would like to see all of the given figures, for example, for time periods preceding and following the given periods. Even then, eliminating confounding factors would be very difficult. The most pragmatic thing to do would be to allow the cuts to lapse tentatively as an experiment.

Patrick Maupin Says:

December 2nd, 2010 at 9:11 pm

esr:

CBO projections are just that – projections. I notice that, conspicuously absent from the article you cited, were CBO projections for GDP. Also absent is percentage of wealth and percentage of income owned by the top 20%, which (if memory serves) grew at an even higher rate than their taxes.

I don't know what the right answer is and don't have time to dig too deeply right now, but there are a few articles that actually have some math and graphs that purport to show that total tax revenue really would have been bigger absent the cuts:

Darrencardinal Says:

December 2nd, 2010 at 9:22 pm

Woozle says:

In case this hasn't already been pointed out, the main "entitlement" which contributed to the current financial crisis in the US was Bush's tax cuts for the rich – not social welfare programs.

Tax cuts are not an entitlement. Letting people keep a bit more of what they earn is not an entitlement. Things like social security, welfare, food stamps, and medicare and medicaid are entitlements.

As someone once said, words mean things. Try and keep it straight.

Patrick Maupin Says:

December 2nd, 2010 at 10:11 pm

@DarrenCardinal:

Yes, words mean things. And the whole taxes vs. entitlements debate is so polarized it's not even funny.

I've had it up to here with leftists who can't understand that people get upset, and sometimes rightly so, when you take more away from them. But I've also had it up to here with conservatives who can't see that at the margin when somebody transitions from being on welfare to being a taxpayer, there are places where the effective "tax rate" is almost infinite. In some places, earning one more dollar can mean the difference between medicaid and not medicaid. It's been awhile, but I remember seeing stats in the past where someone being transitioned off welfare lost fifty cents of benefits for every dollar they earned. Perhaps philosophically, taking away an entitlement is completely different than imposing a tax, but again, at the margin a welfare recipient who loses fifty cents of benefits for every dollar they earn is effectively being taxed at a 50% rate. You can argue until you're blue in the face that it's not a tax (and surely be technically correct), but that doesn't affect the fact that if they earn one more dollar (and report it properly) it only enriches them by fifty cents.

So it always amazes me when people self-righteously claim that the high-powered executives "need" a lower marginal rate to incentivize them to do more work, yet will often fight uncompromisingly against any measures that make the transition off of welfare to productive work more seamless.

Even my own situation shows some of the idiocy in the tax code. I make enough that various tax concessions (for example the deduction for college education) are "phased-out". Anybody in one of these "phase-out" ranges is taxed at a higher marginal rate than somebody who makes a million dollars.

I understand that some people have a visceral reaction against the government subsidizing education and mortgage interest for wealthy people, but phase-outs don't penalize the truly rich at all. Neither does the AMT any more. And, of course (especially with low inflation) the capital gains tax helps them tremendously.

I understand the appeal of a flat tax, in that it would fix some of the problems we have now. But I also think that, morally, there is nothing wrong with a somewhat progressive tax. To argue otherwise is effectively to argue that the government should never lend a helping hand in any sort of welfare, because taxes and benefits really do form a continuum. I know some people firmly believe that the government should never provide any sort of welfare. Personally, I think the government should ensure people don't starve or freeze to death, but that it should be able to provide conditions. For example, live in these bunks and eat these beans. Or "OK we'll help feed you and your 3 kids, but you've got to get sterilized first."

Darrencardinal Says:

December 2nd, 2010 at 11:13 pm

Patrick Maupin says:

So it always amazes me when people self-righteously claim that the high-powered executives "need" a lower marginal rate to incentivize them to do more work, yet will often fight uncompromisingly against any measures that make the transition off of welfare to productive work more seamless.

It is more about keeping tax rates reasonable so, for example, those high powered executives will invest their money wisely, and not just in things that are designed to avoid taxes like municipal bonds.

And I have no problem helping people transition from welfare to work, that is exactly what we should be doing. Talking about subsidies, you realize these are more a benefit to the wealthy and middle class, not the poor. Personally, I think too many people are going to college, and if you want to go you should find a way to pay for it yourself. There are ways. I worked my way through.

And personally I would prefer a flat tax, but a progressive tax code doesn't bother me that much, as long as the whole thing is reasonable.

And the whole idea of the government requiring people to get sterilized freaks me out. Maybe it is the jew in me.

Patrick Maupin Says:

December 2nd, 2010 at 11:14 pm

An interesting take on how government spending and taxation do not always march in lockstep:

http://wallstreetpit.com/51536-the-idiocy-of-starve-the-beast-theory

Darrencardinal Says:

December 2nd, 2010 at 11:15 pm

As far as tax rates:

I was reading at the Instapundit yesterday, that no matter the tax rates, the government collects about 19% of revenue.

Since higher rates tend to choke the economy, it will be 19% of less.

Patrick Maupin Says:

December 2nd, 2010 at 11:25 pm

And the whole idea of the government requiring people to get sterilized freaks me out. Maybe it is the jew in me.

Obviously a lot of people are freaked out by that. But the current incentives are all wrong, and the chasm between the republicans and the democrats on social issues (which is possibly the only huge chasm between the parties) means that we will never get entitlements right. On the one hand, we have people who don't want the government spending anything, ever, for anybody. On the other hand, we have people who want to insure a reasonable standard of living for everybody, with nothing required in return. We have a couple of seemingly reasonable compromises (like the earned income credit), but when it comes to social policy, the tension between "every child should have equality of opportunity" and "I should be able to spend my own money in ways that help to give my child every possible advantage" is never discussed in an adult setting.

This is why we have octomom, and the huge backlash against octomom. Society is poorer when we let people act like cowbirds and require others to take care of their kids, but society is also poorer when we don't take care of the kids.

Patrick Maupin Says:

December 2nd, 2010 at 11:31 pm

@DarrenCardinal:

Since higher rates tend to choke the economy, it will be 19% of less.

Apparently, InstaPundit == InstaBumperSticker, because it's not that simple. Also, the tax rate is "lumpy" and nominally (at least in theory) progressive. So even if it were true that we are only going to get 19% of whatever, there is still an issue to be decided about the various rates and brackets.

But I would be interested in seeing how the government can collect 19% of GDP with a zero percent tax rate.

Darrencardinal Says:

December 2nd, 2010 at 11:49 pm

But I would be interested in seeing how the government can collect 19% of GDP with a zero percent tax rate.

Well the gov would collect none, since anything times 0 is zero. Duh. You have to be reasonable in how you look at this. Obviously the gov is not going to lower the rate to zip. The real question is what are the optimal rates. 19 or 20% sounds about right.

I share societies horror at Octomom. I think maybe we need to promote old fashioned virtue a bit more. It is hard to imagine Octomom in the 50s and 60s.

Some people seem to feel that we have no right to require people to feed and cloth their kids. More people are on foodstamps than ever before, and more students are receiving free school meals than ever. I really get tired of hearing retarded rhetoric about "starving children". As a red-blooded American, I simply cannot accept that people cannot feed themselves in this country. "You can't judge." I say fuck that.

Roger Phillips Says:

December 2nd, 2010 at 11:52 pm

As a red-blooded American, I simply cannot accept that people cannot feed themselves in this country. "You can't judge." I say fuck that.

Perhaps you should consider the question from the perspective of an objective observer rather than through an ignorant cultural lens.

Darrencardinal Says:

December 2nd, 2010 at 11:57 pm

And who exactly is an objective observer? You? The news media perhaps?

Is that even possible?

Patrick Maupin Says:

December 3rd, 2010 at 1:02 am

BTW, the author of one of the articles I mentioned earlier:

was apparently one of the architects of the Reagan tax cuts.

Andy Freeman Says:

December 3rd, 2010 at 1:47 am

I would be interested in seeing where you get your numbers. I read somewhere that at the end of Clinton's term, we reached that 20.6% number, but that in 2009 we were at 15%, which is the lowest percentage of the GDP as tax revenue in 50 years.

Time to find what you "read".

She cites the source of her numbers.

We have three alternatives. She lied, the OMB is wrong, or you are.

Show your work.

Also, how do you know we couldn't sustain 20%?

We haven't, with a wide variety of higher rate tax policies. Maybe a different one would, but you get to explain why "this time will be different", to coin a phrase. (Hope is not a plan and intent is not a result.)

But I would be interested in seeing how the government can collect 19% of GDP with a zero percent tax rate.

No one said that, the statement was that 19-20% was the max that has been collected, but thanks for demonstrating that either you can't read or...

That's why, in Texas where I live, we have the school textbook committee always trying to push a creationist agenda.

Everyone pushes an agenda. Do you really want to argue that they're the only bad ones, let alone the worst?

You're just mad because they're not pushing your agenda.

Me, I'd rather not pay for anyone else's agenda, but I'll bet that you don't want to give me that option.

Roger Phillips Says:

December 3rd, 2010 at 2:17 am

And who exactly is an objective observer? You? The news media perhaps?

Is that even possible?

A good start would be not "refusing to believe" things based on blind faith in some cultural construct.

BobW Says:

December 4th, 2010 at 6:09 pm

It seems to me that high tax rates are an instrument of corruption. People who have a lot have a lot to lose. The more they have, the more they are willing to spend to protect the rest.

This becomes a gravy train for lobbyists and anyone else involved in making tax policy. Tax payers in the top brackets don't wind up paying much more, but somebody gets a cut for helping them avoid paying the full rate.

It becomes a terrible distraction as high powered people focus on tax avoidance instead of on increasing their income.

notes

Wow, that's almost a legitimate argument. Too bad none of the other anti-taxers thought of it. Patrick Maupin counters nicely.

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