Rebane's Ruminations
June 2011
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George Rebane

According to the progressive worldview, you will work just as hard and take just as much risk when the government takes 80% of your earnings as you will when the government takes only 30% of those same earnings.  That simple proposition is the left’s basis for funding any additional revenues they deem government to need.  Just raise tax rates until the numbers come out as required by your spending programs.

UncleSamGimme And it isn’t only the sheeple in their ranks that fervently believe this.  It is also a phalanx of credentialed economists (some Nobelists included) and behavioral sociologists.

That the historical data does not support this conclusion is ignored by the apologists who see all fiscal problems solved by simply raising taxes.  Most people will instinctively understand the insanity of such a belief, at least when they put themselves into the earner’s shoes.  ‘Why should I work just as hard for the dollar from which the government will let me keep twenty cents, than I do for the same dollar from which I got to keep seventy cents?  I think I’ll just take some extra time off and figure out where to put my energies so I can keep more of what I earn.’

And that such thoughts are beyond rocket science to the collectivist is borne out by their constant surprise of why government revenues fall when tax rates approach confiscatory levels.  Yet, as we can see today, their tax hike solution is in stasis, trotted out every time the debt burdens and unfunded liabilities of governments are discussed.  ‘We’ll just tax the rich, they’re so stupid that they won’t notice, and we’ll get all that extra money that they will continue earning no matter what we do.’


Stephen Moore in the 28may11 WSJ presents an analysis showing how the Obama administration expects to solve our fiscal problems by raising total tax rates above 60% in the near term, with the expectation of returning to even higher rates later.  Their assurance to the rest of us is ‘Don’t worry, the rich can afford it and they will pay it.’

Elsewhere we have been shown that if the rich really are that stupid and keep their earnings constant, AND the government takes ALL their earnings, it still won’t amount to a hill of beans as far as the real cuts we have to make in our entitlements payouts.

But the liberal mind is beyond conversion when it comes to looking at the world as a neat collection of little boxes of human activity, each isolated from the others, what you do to one of them affects only that specific activity.  Most people gave up that kind of thinking at a very young age and started seeing the linkages between almost everything that humans plan and do.  The fundamental paradigm that captures this reality is, ‘You can’t do just one thing.’

But liberal control of education teaches kids exactly the opposite in the affairs of man.  In those schools it is only natural things, like the environment, in which linkages exist.  And these linkages are only the politically mandated ones.  A tax-based example of this, which government monopoly schools have embedded in little formative minds, is the wholesale ignorance that state workers and corporations really pay taxes.  The little darlings grow up believing it until life’s last breath, and go to their reward never knowing that corporate taxes are just another sleight of government’s hand in their own wallets.

What’s more, it is real easy to get these good hearted folks to support raising taxes on greedy corporations, else it just adds to the filthy lucre of corporate profits, which, as we all know, is a pretty seamy reason to conduct business.

Posted in , , ,

143 responses to “The Liberal Mind – Tax Rates Don’t Affect Earnings”

  1. George Rebane Avatar

    “Your disregard for labor is astonishing.”
    BenE, from what do you conclude that I have disregard for labor?

    Like

  2. Ben Emery Avatar

    Todd,
    What I want is a fair days wage for a fair days labor at all levels. Tell me what a hedge fund manager does that deserves a $2 billion income in one year? Off the top of my head that is in the ballpark of $5million a day.

    Like

  3. Ben Emery Avatar

    George,
    “The rest of my money goes to ‘labor’ (whoever they are), the poor, the destitute, …, anyone who did not earn it. But if it was out there for the earning, one might ask ‘why then did they not earn it?”
    Is one example.

    Like

  4. wmartin Avatar
    wmartin

    “wmartin,
    You are right that there are many factors in what makes an economy click or not. So the indicators I look for is when the economy was doing well and looking at the policies that were in place. ”
    I just wouldn’t be so quick to assign either causes or possible solutions. It’s a form of cargo-cult thinking to believe that merely resurrecting some single rule set (say, tax rates) from a previous time will cause the world to return to what you might view as better days, the birds chirping and the sun shining.
    . Is 1968 (as a possible best year for income equality) a normal or abnormal time? Perhaps, we are just returning to normalcy.
    . You could argue that the post-war period up to the gas crunch was a time of decreasing energy prices capped off with peak oil in the US. Perhaps cheaper stuff = a better economy for the hoi polloi.
    . Tax rates likely have a strong effect on reported income. Lower tax rates imply a lot less in the way of income hiding and thus skew the numbers.
    . Maybe what’s broken aren’t tax rates but lack of a functioning marketplace for the wealthy. Is there any reason to pay a CEO of a Fortune 500 so much? Isn’t there somebody who’ll do the job for half price? Something is odd there.
    . As a side note, does it make sense to leave the broken marketplaces alone and then claw back taxes? That sounds like a suboptimal solution.
    . What’s the chance that the runup in the net worth and income of the wealthy is based on a BS economy generally? It seems to me that wealth based on speculation on bits of paper naturally tends to concentrate.
    . Maybe a lot of the runup in wealth was based on encouraging the general public to speculate in the stock market via 401k’s.
    . Maybe there’s been a big reduction in blue collar incomes via illegal immigration. Does raising taxes effect this?
    . The US doesn’t operate in a vacuum. Typically, large economic events here seem to have their shadows in other countries. There’s a good chance that there’s something at work beyond the tax code.
    I firmly believe that people vastly overestimate their ability to manipulate these large systems via something as trivial as tax policy. It’s a strategy problem after all, not merely physics. It’s a case where the boulder isn’t merely heavy, but doesn’t want to be moved.

    Like

  5. George Rebane Avatar

    BenE, how does my highlighting the assignation of money I earned to (your definition of) ‘labor’ constitute my “disregard for labor”? Most baffling logic.

    Like

  6. Ben Emery Avatar

    One gift item at a time. Made in America needs to be our united motto if we want a economic recovery for all Americans.
    http://sanders.senate.gov/newsroom/media/view/?id=2b2545a8-9b39-477c-8135-e91c1fc326c4
    Bernie Sander (I) from Vermont made it happen.

    Like

  7. Scott Obermuller Avatar

    Fair is fair only if Ben is in charge of what is fair. How about a fair day’s wage for a fair day of production? If a person earns 10 billion a year then that is what is fair. If a person works his or her ass off but produces nothing of value then they get no wage. That is fair. Why should the govt put a gun to my head and demand I give my labor to some one who has a larger income than I? Supply and demand is a law of nature. Defy it at your peril. Ben wants a simpler life – the feds have doubled the amount of limos he has to pay for. How is that simpler life working for ya’ Ben?

    Like

  8. Ben Emery Avatar

    George,
    First you couldn’t identify what or who labor is and then lumped it into the category with the poor, the destitute, and a general free loader comment.
    Another example is wanting American workers to compete with third world wages and safety standards as we discussed a few days back.

    Like

  9. Ben Emery Avatar

    Just for the record the regulars at Ruminations are in the minority about taxes. And most here want to reduce tax burdens on the rich and large corporations even more, which would land you in the teens for agreement.
    http://www.reuters.com/article/2011/01/03/us-usa-taxes-poll-idUSTRE7022AK20110103
    “Sixty-one percent of Americans polled would rather see taxes for the wealthy increased as a first step to tackling the deficit, the poll showed.”
    Here is a tax plan I could back by Robert Reich talking about average American households
    Excerpt
    “The most direct way to get more money into their pockets is to expand the Earned Income Tax Credit (a wage subsidy) all the way up through people earning $50,000, and reduce their income taxes to zero. Taxes on incomes between $50,000 and $90,000 should be cut to 10 percent; between $90,000 and $150,000 to 20 percent; between $150,000 and $250,000 to 30 percent.
    And exempt the first $20,000 of income from payroll taxes.
    Make up the revenues by increasing taxes on incomes between $250,000 to $500,000 to 40 percent; between $500,000 and $5 million, to 50 percent; between $5 million and $15 million, to 60 percent; and anything over $15 million, to 70 percent.
    And raise the ceiling on the portion of income subject to payroll taxes to $500,000.
    It’s called progressive taxation.”

    Like

  10. D. King Avatar
    D. King

    Scan to min.17 and listen through min. 25
    Where have I heard this before…before?
    http://www.youtube.com/watch?v=_8YxFc_1b_0

    Like

  11. George Rebane Avatar

    Again Ben, it seems you’re circling the wrong barn. I can identify precisely who labor is, and did not lump it with the other categories that were included only as other recipients of monies I earn. To you ‘labor’ appears to be anyone not in any of the other entitlement categories. ‘Labor’ to you is a new entitlement category (hence the semi-quotes) to be paid a wage you determine to be fair whether the work they do, if any, is judged to be fair by the one for whom they work. And anyone, according to your lights, who gets paid too much is automatically no longer in ‘labor’, and belongs to some oppressor class stealing his wages from someone else and, therefore, needs to be punished. This is the communist system that produced anemic and dead economies along with untold human misery.
    To me labor consists of a person or persons freely willing to perform a job for an employer for a compensation that the employer is prepared to pay, and that both parties agree upon. The employer has no intrinsic right to any person’s work, and the worker has no intrinsic right to any employer’s wages. Both parties are free to seek maximum return for what they have to offer with each other or elsewhere. In no case does labor become the ward of the employer.

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  12. Bob W Avatar
    Bob W

    Ben
    Remember I’m just trying to help. I am still questioning your math skills. The thing is now I am questioning Robert Reich’s math skills. But then my recollection of Reich was that he was always coming up with the goofiest ideas anyway. Try running the actual numbers on that proposition. Maybe you would be better served by spending a little less effort on memorizing the words and putting a little more attention on understanding the meaning of the words.

    Like

  13. wmartin Avatar
    wmartin

    Here is a tax plan I could back by Robert Reich talking about average American households
    Excerpt
    “The most direct way to get more money into their pockets is …
    [remove some words which change the tax tables]….
    It’s called progressive taxation.”…..
    Meh. Really, progressive taxation is any table which increases rates with income (or wealth perhaps), all based on a reasonable assumption that the marginal value of money drops with increasing amount. I’m afraid that Reich’s ‘plan’ isn’t the only thing that qualifies.
    Taxes are funny things. Should they be constructed to absolutely maximize how much you can squeeze out of any given individual? be whatever feels ‘fair’ to the code writer? be used to drive behavior?
    It’s hard to escape the fact that the footprint of the combined size of government has increased over time. I suspect it’s a law of nature with an inevitable denouement built in when it finally collapses.
    You can argue that the growth is so inevitable at this point that it will occur regardless of funding issues. Where taxes or fees aren’t available, debt will do. No debt? Sell off some assets. The roads must roll.
    When the currency collapse happens, everyone can look surprised and begin the cycle anew. That being said, sometimes these things can go for quite a while. Byzantium lasted a good long time as it shrank in influence, at least until the Moslems decapitated it (a common behavior it seems) and got the ball rolling again for a few hundred years.

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  14. Mike Thornton Avatar

    Gee, George, why don;t you try reading your own blog and you’ll see how often regressives go from whatever the topic is into violent rhetoric of one form or another within a pretty short period of time.
    Ben, as I’ve said before, regressives see workers as spare parts. Workers are to be bought as cheaply as possible, used up, discarded and disposed of (also) as cheaply as possible.
    The assault on unions, social security, medicare, public education, social services, etc. are all examples of how the capitalists are trying to cut costs and undercut anything that might work in the favor of labor. The fact is that Marx had it (basically) right.
    The sooner the working class recognizes this fact and starts acting accordingly, the better off we and the country will be!

    Like

  15. wmartin Avatar
    wmartin

    I’ll indulge myself with another short post.
    A thing everyone should look up, just for shits and grins, are a few charts on this business of income or wealth disparity.
    I run into a lot of impassioned stories on why this is so and why it’s changed over time, always over simplified and convinced of some solution to the problem. I suspect it usually comes from reading a book on the matter (or hearing about the reading of a book from another) which builds a convincing case for a simple model. I admit that scarcely anyone has the time, interest, or intellect to do original research, plus the telling of a good tale trumps all.
    In any case, it’s interesting to look at the various charts of share of national income and then compare those to other charts. Not that you can imply cause from correlation, but it is interesting. Marvel at the similar charts from other Western (particularly English-speaking) countries, be amazed at how these charts often appear to shadow stock prices.
    It would be interesting to see any kind of rigorous analysis of wealth cycles on a worldwide basis, and not merely a Greek chorus of people who claim that since cars had tailfins in 1960 and since 1960 was better, we should reintroduce tailfins. Post ’em if you got ’em.

    Like

  16. theworkingclass Avatar
    theworkingclass

    The sooner the working class recognizes this fact and starts acting accordingly, the better off we and the country will be!

    Posted by: Mike Thornton

    What do you mean ‘we’, paleface?

    Like

  17. Dixie Redfearn Avatar
    Dixie Redfearn

    Great comment thread!

    Like

  18. George Rebane Avatar

    “violent rhetoric”?? Hard to find that from the conservatives on RR. MikeT, do you have some specific examples in mind?
    Is it only me, or does anyone else perceive that with each succeeding comment MikeT and BenE are sounding more and more like a couple of Lenin’s Lads? … and I would want to be the last to attempt stilling their voices. Carry on comrades!

    Like

  19. George Rebane Avatar

    wmartin, wealth cycles have been approximated by the Gini Index (GI) or coefficient that measures income inequality, which I covered here http://rebaneruminations.typepad.com/rebanes_ruminations/2009/03/our-new-course-is-declared.html
    I also provided a simplified explanation of the GI and its generating Lorenz curve here http://rebaneruminations.typepad.com/files/tn0903-1-gini-index-1.pdf
    A more technical discussion of the GI with a chart of its historical values for major countries can be found here.
    http://en.wikipedia.org/wiki/Gini_coefficient

    Like

  20. Bob W Avatar
    Bob W

    Ah Charts! Some mention of charts has occurred hear. And at other times in these blogs. I have tried to interject consideration of math also. Fact is these to subjects are inexorably linked as I am sure George and Russ are aware. How about it George and Russ? Maybe it is time for a discussion on how irrelative charts are when they compare two or more types of data that are measured in different units
    But then you and I already know how many of these participants would be able to follow that!

    Like

  21. Mike Thornton Avatar

    George, I think you need to have your medical marijuana RX reevaluated…..
    The regressives on RR, regularly drop down into their 2nd Amendment rhetoric whenever they feel like it.
    I have no problem with taking the valid points of Marx’s economic theory and applying it to the current situation in America. Clearly, Marx is a more authoritative source than Ayn Rand with her “Cult of the killer” philosophy.
    Regressives worship at the feet of the fraud, who in the end took all of the governmental “socialist” assistance she could get her grubby little hands on.

    Like

  22. George Rebane Avatar

    MikeT, I take it from your “2nd Amendment rhetoric” answer that you have no evidence of conservative “violent rhetoric” on RR, or that the mere mention/discussion of 2nd Amendment rights is already sufficiently violent to those of you who promote a disarmed citizenry.
    Rand’s “Cult of the killer” philosophy? Does that have the same heritage as your use of the pejorative “regressives”?

    Like

  23. Bob W Avatar
    Bob W

    “Down into 2nd Amendment rhetoric”. “valid points of Marx’s economic theory”. Yes! “medical marijuana” indeed!

    Like

  24. Scott Obermuller Avatar

    The problem with Reich’s tax plan is that he fails to think through what would be the result of it’s implementation beyond the part about how some middle class folks would have more money to spend. What about the wealthier folks that now have a lot less money to spend/invest? Ooops – kinda forgot to factor that in, huh? I’m sure the polls can ‘prove’ that most Americans want some one else to pay their taxes, but if they are also told that it won’t balance the budget or take care of the entitlement bomb or increase employment, then you might get a different answer.
    Mike’s comments are a constant source of wonder. He refers to ‘the working class’ a lot and I’d like to know why conservatives aren’t included. Don’t we work? Gee – I kinda thought that’s what I did for about 40 years. I certainly didn’t get rich. I actually made less than a lot of the oppressed working class. Kinda confusing – any thoughts, Mike?

    Like

  25. Scott Obermuller Avatar

    Oh – I missed that last post by Mike. “Clearly, Marx is a more authoritative source than Ayn Rand with her “Cult of the killer” philosophy.” How many millions of innocent lives perished under the wise adages of Marx? And he claims we conservatives are violent?

    Like

  26. Todd Juvinall Avatar
    Todd Juvinall

    Keep posting Thornton, please. You are a perfect example of a ideology of failure. The folks who inhabit the middle class have no conformity with you or your beliefs. Only in the hills and woods of perhaps Cuba would we find your ilk.

    Like

  27. Mike Thornton Avatar

    Marx, was an economic theorist and some people killed as they called themselves “Marxists”
    How many people have died at the hands of people who described themselves as “capitalists”?
    Rand (herself) said she modeled her “perfect man” on a brutal sociopath and killer. This became the touchstone for her theory of socio-economics.
    George, you and I both know, that in this very thread your regressive friends raised the issue of engaging in violence and their (supposed) justification in doing so, on their own, with nothing to provoke it.
    Regressive randism is ruining this nation. The only thing that interrupted the American people’s recognition of that, was a stupid fool, who could keep his “Anthony” in his pants.
    But them again, even he wasn’t paying hookers to spank him while he wore a diaper, getting caught hustling sex in an airport bathroom or while living in a Christian Cult house, “C Street”, with a bunch of Republican Nazi worshiping Congressmen,engaged in hush money payoffs, for having sex with his (married) staffer.

    Like

  28. D. King Avatar
    D. King

    “George, you and I both know, that in this very thread your regressive friends raised the issue of engaging in violence and their (supposed) justification in doing so, on their own, with nothing to provoke it.”
    Yes, we’re scary people…Boo!

    Like

  29. Todd Juvinall Avatar
    Todd Juvinall

    ooga booga. Libs are so funny!

    Like

  30. Bob W Avatar
    Bob W

    Where are those strawberries?

    Like

  31. Mike Thornton Avatar

    You guys don’t scare me, even a little bit.
    I’m just pointing out that you’re a bunch of hypocrites and that George is either in denial or nothing more than a biased and phony apologist trying to pose himself as an intellectual.

    Like

  32. wmartin Avatar
    wmartin

    “Maybe it is time for a discussion on how irrelative charts are when they compare two or more types of data that are measured in different units”
    Irrelevant?
    Anyhow, here’s a chart filled with different units that still manages to display some information, and it looks good to boot.
    http://upload.wikimedia.org/wikipedia/commons/6/63/Minards_chart_Napoleons_Russian_campaign_of_1812_made_in_1869.jpg

    Like

  33. Scott Obermuller Avatar

    Mike – Why should you be afraid of us? I wasn’t trying to scare anyone. Marx’s theories put into practice always lead to mass extermination because most of the intelligent productive folks have to be done away with in order to set up a commie shop. I know that you think that it can some how be done peacefully but it would be limited to a small voluntary communal setting. You want Marx in America? I thought it was being done quite a bit right now. Notice any violence from the right?

    Like

  34. Paul Emery Avatar
    Paul Emery

    Scott
    I have to remind you that Marks was never a member of the Communist Party. He died in 1983 and the Communist party did not emerge till around 1919 as a spinoff of the Bolshevik revolution. Some Socialistic ideas have been incorporated into many Western European Democracies that have yet to see mass extermination and actually have some very intelligent people running the show that obviously were not “neutralized”.

    Like

  35. Todd Juvinall Avatar
    Todd Juvinall

    Marx was one of four brothers who would never get a laugh out of the old sourpusses like MikeT etal. Paul, 1983? Hmmm. And you spelled his name wrong man, come on.
    What is interesting to me about the leftwing is they really sincerely believe in their crap. It has been thrown out of almost every country on the planer but the hangers on like MT are in total denial.

    Like

  36. Scott Obermuller Avatar

    Yes, Paul – True facts that mean nothing apropos to my point. America has already started to follow Marx and as I have stated, the violence is always on the left. These lovely communities you mention are falling apart and their violence is getting worse. Germany and the Scanda-hoovians are only doing well because we protect them. Once we continue to Marx-lite our economy it will continue to decline and our economy will not allow us to field a military powerful enough to protect the other socialist countries. You follow Marx and you will have mass violence. Marxisms of all stripes only are implemented by promising the masses that they will have milk and honey at the expense of some other bad class of humans. Once in place the rulers quickly (or slowly, if we ease into it) run out of the bad peoples’ resources and the whole mess goes to hell quite quickly. That’s the way it always works. Venezuela is the latest example.

    Like

  37. George Rebane Avatar

    PaulE, I don’t think that anyone joining this comment stream would mistake Marx as a member of the actual party the name of which finally bore the name of his political philosophy. But Marx and Engels did indeed name the party in their ‘Manifesto of the Communist Party’ (1848). And small political factions came to call themselves communists even though their organizations had other names (e.g. the Bolshevik Party, which was not a spinoff but the former name of The Communist Party of the USSR.)
    Communists were called Marxist first, and again later when communism began to have ideological schisms and began “merging” with various socialists and workers parties across the world after WW2 when communism became a dirty word.

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  38. Bob W Avatar
    Bob W

    wmartin- I wish I could read French if that is what that is but sadly I cannot. At any rate I already indicated that not many on this forum would understand. You have just illustrated that. Russ is good with charts Perhaps he can try to enlighten you.

    Like

  39. Bob W Avatar
    Bob W

    I would like everyone to take note of the fact that Mike wants us all to know that he is not afraid of us. You would do well to keep that in mind when reading his comments.

    Like

  40. wmartin Avatar
    wmartin

    “Russ is good with charts Perhaps he can try to enlighten you.”
    Cool. I can always stand enlightenment.

    Like

  41. Paul Emery Avatar
    Paul Emery

    Scott
    So are you saying that Western Europe will soon see bayonets in the streets and mass violence? Also, include Canada, Australia, Japan and New Zealand in this scenario since I’m sure you would consider them to be Marxist-Socialist countries.

    Like

  42. Paul Emery Avatar
    Paul Emery

    Even Bruce Bartlett, Reagan and Bush 1 economic guru doesn’t go for this lower taxes means prosperity weeper story.
    “Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.
    By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950 according to the Office of Management and Budget.”
    Here’s more and the link to Forbes, not exactly a Liberal rag.
    “If taxes are low historically and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are.”
    http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

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  43. Mike Thornton Avatar

    The regressive “randers” see Communist Muslims hiding everywhere.
    I just heard an interesting analysis regarding the regressives and their obsessional fear with fundamentalist Islam and and totalitarian forms of government.
    In essence, the reason they focus on these things is because they actually describe the regressives themselves. They are (for all intents and purposes) “Fundamentalist/Totalitarians”.
    You can spend days, weeks, months and years showing them all the data and facts you want, but they’ll never ever admit they’re wrong, Paul. They simply can’t do it!
    “Sieg Ayn!”

    Like

  44. wmartin Avatar
    wmartin

    “They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, ”
    Really, it’s been the other side of the aisle that drones on and on about statutory tax rates, thus all the fuss about how “IT USETA BE 90% BACK WHEN THINGS WERE BETTER THAN NOW”. You were doing it yourself a few days ago, so ‘fess up.
    Effective tax rates are where it’s at. The important thing to make sure of is that they include all the jillion taxes that have been added in the last half century. I’d probably leave Medicare out of that since practically everyone gets more out of that than they put in.
    The real change in spending, ever since we had that ratchet up in the size and scope of federal government under FDR for various reasons, has been at the state and local level. You could argue that that’s a form of growth in the federal government since so much of it is federal mandates.
    Since there’s been a pretty straight line of growth over the last 100 years, I wonder if it’ll flame out or stabilize in the near future. I can’t imagine shrinkage in the size of government now that so much of the population has gotten used to depending on it for their livelihood. Philosophically, a modern American is from a different planet than one from a century ago.
    My personal bet for the future is that no change in tax law will save the day. The paper pyramid that forms the bond and stock markets seems largely formed by a common illusion of value combined with money parked by those the Left wishes to tax. Nasty feedback loops could easily erupt if you start confiscating money from the wealthy in any great amount to make the books balance. Scrabbling for what’s left could get interesting in a country filled with a hungry bureaucracy (both current and pensioners), 20 million Mexican nationals, a collapsing currency value, an aging population, and the inability to make it’s own clothing or shoes.
    It should be quite a show.

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  45. wmartin Avatar
    wmartin

    “Sieg Ayn!”
    I think you might mean “Heil Ayn”.
    When skirting Godwin’s Law, “Victory Ayn” has kind of a strange sound to it. I suppose noting that she was from a Jewish family isn’t valuable here either.

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  46. George Rebane Avatar

    Bartlett’s argument about the nation’s effective tax rate has a very large hole in it. First and foremost dividing federal revenues by GDP is not the aggregate tax rate that can be compared to or directly (mathematically) derived from the personal and corporate income tax tables – it’s an apples and oranges comparison. Second, the total taxes, fees, etc paid to government make up the existential friction that government puts on individuals and businesses. Third, capital migrates to where it is most productive, and US capital evinces that today by going where profits are minimally confiscated.
    The result is that federal revenues under the current tax and regulatory burdens have therefore decreased – in short, the feds ain’t pulling in as much with respect to the GDP. This therefore reduces the fed revs to GDP ratio, which is not then an aggregate national tax rate, but represents the decreasing revenues as a result of the escape of capital while government is pumping in new dollars to increase the GDP denominator. If we want to see this ratio go even lower, just increase the tax rates and regulatory burdens. Then everyone will begin to understand what Art Laffer was talking about. (Again the NYT gets a C- in economics.)

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  47. Paul Emery Avatar
    Paul Emery

    George
    The NYT had nothing to do with the substance of this article. It was an opinion piece written entirely by Bruce Bartlett whose Conservative credentials are unchallenged. More from Bartlett
    “The G.O.P. says global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development……..
    The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.”
    Cracks are appearing in the Republican cathedral all over the place on this. Even the Grover Norquist rule of no new taxes is being challenged most recently by Oklahoma Republican Senator Tom Coborn
    From the Christain Science Monitor
    “Sen. Tom Coburn’s bid to end tax subsidies for ethanol failed. But the measure got 34 GOP votes, suggesting that many Republicans are open to eliminating tax breaks to trim the deficit.”
    http://www.csmonitor.com/USA/Politics/2011/0614/Ethanol-vote-First-step-toward-extinction-for-federal-tax-subsidies
    Also, from the Seattle PI
    “An intra-GOP feud played out in the U.S. Senate on Tuesday.
    The dispute is between Sen. Tom Coburn, R-Okla., and Grover Norquist of Americans for Tax Reform. Norquist insists – and many Republican politicans have agreed – that policy makers sign a “no new taxes” pledge. But Norquist’s definition of taxes is broad. For instance, he says eliminating the multi-billion dollar subsidy for ethanol is a tax increase, something Coburn has publicly said is absurb, especially if Republicans are going to be effective in cutting the federal deficit.
    There was a complicated procedural vote in the Senate in which 43 Republicans sided with Coburn and against Norquist. (Check out Ezra Klein’s post on the subject if you want to go deeper into the weeds). The practical upshot is Coburn took a big chink out of Norquists’s armor.
    Speaking later Tuesday on ”The Last Word with Lawrence O’Donnell” on MSNBC, Coburn said: “Grover’s old news, it doesn’t matter what he says.”

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  48. wmartin Avatar
    wmartin

    “The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.”
    Cracks are appearing in the Republican cathedral all over the place on this. ”
    I’m certainly not going to wet my pants over the Republican cathedral. From where I sit, the difference between elected officials of both parties is pretty small. They mostly squabble about which end of the egg to crack open first.
    If you believe these numbers:
    http://www.usgovernmentrevenue.com/downchart_gr.php?year=1910_2010&view=1&expand=&units=p&log=linear&fy=fy12&chart=11-fed_12-fed&bar=0&stack=1&size=l&title=&state=US&color=c&local=s
    It looks like individual taxes currently are more than 1950, less than 1960 and interestingly peaked in 2000. This last I attribute to that last stock market blowout and the associated capital gains, but I’m not sure. It’d be a sad thing if we needed regular financial frenzies to keep the books balanced. Pct of GDP seems as good a measure of any of taxation I think.
    Squinting at the chart, individual taxes look to gyrate between 6% to 8.5% (ignoring 2000 as an outlier) and are currently at 6.5%ish. No doubt, they are lower than Sweden and all of the other model countries. Also, keep in mind that our current financial issues have resulted in less tax collections than normal.
    The obvious notable change is the one in 1940. Maybe it’s just proves some sort of Universal Ratcheting Law of government. The number was cranked up to defeat the Nazis (who still live, per Mr. Thornton above), but never came back down. If you hunt for pie chart representations of the federal budget, you’ll see that a much larger slice was apportioned to defense in the immediate post war period, but accreted over to social programs since.
    It looks to me like the essential lesson here is that once government gets it’s mitts on a funding source, it never ever gives it back. There’s always some good deed to be done.

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  49. Scott Obermuller Avatar

    Once again I see the lefties here conflating the R’s with conservatives. I’m not an R and don’t think that having that after your name makes you a conservative. There are lots of RINOs – Arnie was the latest greatest example. That article on taxes is so bad it’s funny.
    The US has one of the highest corporate tax rates in the world. What he was showing was how much money actually comes in. You can’t run a govt on rates. It runs on cash. Well, except for our govt right now running on a printing press. That article actually shows what a disaster the high rates are. They end up bringing in less money and drive jobs over seas. A multi-national company based in the US will leave it’s cash over seas to avoid paying the higher rate here. SEC filings and stock holder reports show over all earnings, but the company will only pay taxes on what gets taxed here. Another thing to consider is that GDP includes our govt expenditures. That has sky rocketed from the 50s so it skews the whole mess since there will be no tax revenue from that. Focusing on only one tax out of many also is deceptive as it doesn’t take into account all of the other costs imposed on businesses by the various levels of govt. These are taxes just as surely as any other. The over all regulatory and tax burden on businesses is large and growing. It is wasteful and non-productive. It drives manufacturing out of our country. The left has done an excellent job to get rid of jobs in this country – why are they unhappy?

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