Posted on 03/09/2008 12:00:47 PM PDT by kellynla
Congratulations. The nomination of the Grand Old Party is yours. Now comes the hard part, winning, and the almost impossible part, governing sensibly. Since you were, in your usual modest way, genial enough to acknowledge recently that you know little about economics, may I offer you some thoughts on a big part of economics, namely tax policy, bearing in mind that no one knows much about it?
Let’s start with the obvious. Almost everyone dislikes taxes. No sane person enjoys writing out a big check to Uncle Sam when he could spend that money or bank it for retirement. By the same token, almost everyone likes the phrase “tax cuts” for the same reason.
The problem, and it’s a killer, is that over the years we have obligated ourselves as a nation to spend truly staggering sums. These sums are growing rapidly. They consist mostly of entitlements, like Social Security and Medicare; fixed obligations like interest on the national debt, pensions for federal and military employees and various subsidies that have already been enacted; and morally mandatory expenses like those for national security.
All politicians campaign on the promise to cut federal spending by identifying hitherto unfound waste, fraud and corruption. None of them ever do so in a meaningful way. Total federal spending has not once fallen noticeably since 1954, no matter the party or the promises of the incoming chief executive.
That is the first thing you need to know. The next thing is that the Republican Party (my party and yours) has for the last 30 years or so been operating under a demonstrably false and misleading premise: that tax cuts pay for themselves by generating so much economic growth that they replace the sums lost by tax cutting.
(Excerpt) Read more at nytimes.com ...
I too am disappointed in Stein’s deferral of responsibility.
The purpose of tax cuts is to undo the economic constraints imposed by the government. The fact that tax cuts increase revenues is a bonus. But that’s not the real issue; the government should not spend the money it doesn’t have.
Is the 23% FairTax revenue-neutral rate higher or lower when compared to income and Social Security taxes people pay today?
Most people are paying that much or more today — much of it is just hidden from view. The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. That’s 23 percent right there, without taking into account the 7.65 percent employer matching! On top of that, you have to add in the business taxes and associated compliance costs passed on to consumers in higher prices.
Effective tax rates vs. stated tax rates
Because the 23-percent FairTax rate of $0.23 on every dollar spent is not imposed on necessities, an individual spending $30,000 pays an effective tax rate of only 15.5 percent, not 23 percent. That same individual will pay 17.3 percent of his or her income to federal taxes under current law. http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#5
Not only do you have to partially privatize SS, you need to simultaneously get Medicare under control.
It alone will eat the budget by 2020.
Under the best of circumstances (and they are still possible), 1 in 5 dollars will be spent on healthcare in this country by 2020. That’s actually normal given where we are historically. But we have to start figuring out how to lower costs for services to elderly AND how they are going to start paying for it themselves NOW.
Folks, let’s bear in mind that Stein has also recently come out as a creationist.
He COULD do a lot of things, but I believe he'll follow the leftist agenda and RAISE them!!
Ben has strayed far from the reservation; anyway, at this point, it is probably unlikely that we will see tax cuts at any level of government.
Dear John McCain:
Th country is facing difficult economic times. A recession is possibly around the corner.The housing industry and lenders are in bad shape. Much of this is because of our politicians failiures and that includes you.
I propose you cut back on spending at all levels, local state and federal. The quickest and easiest way to do this would be to encourage the 25 million or so illegal aliens in this country to leave. They are a drain on our resources, and take up jobs that could go to tax paying legal immigrants or citizens. Costs for educating, incarcerating, doctoring, insuring and aiding these people will drop dramatically. Those are all a net drain on our economy. They will eventually be a net gain to the voting socialists of America if they are allowed to stay here.
Charity begins at home and the money earned in America should stay in America and be saved, spent,taxed here and given away only to Americans. Legal immigrants should be self supporting or asked to leave. If you don’t like that idea, then open the border for people from all countries, not just those who have the means to get here by foot or fraud. Keep America a country of fairness and justice for all that abide by its laws and not a place of opportunity and reward for those who choose to break its laws.
rs
Yeah, and on top of that, he’s completely lying about controlling spending. He won’t dare to upset his buddies in the senate. His veto pen will collect as much dust as Bush’s, if not more.
BS from BS here. Red meat for NY Times readers.
Clinton, Obama Put Middle Class On The Wrong Path To Prosperity http://www.ibdeditorials.com/IBDArticles.aspx?id=289699661705631
Someone's behavour might not change from lowering their tax rate from 36 to 34% but they will have 2% more to spend or invest, and not give to the government to waste a good portion of it. It will be put to good use.
What will the person who receives the additional two percent of their income do with it? Burn it? Not likely. What they will do is spend it or "save" it.
Saving it typically means that somebody else gets cheaper use of the money than they otherwise would.
Both scenarios increase economic activity and will increase the taxable base.
The only reason that taxes don't depress the economy more than they do, is because the government spends the tax money. Government activity generates economic activity that is then taxed.
Now you can ask yourself the question, "What will happen when the government must increase taxes to satisfy our debts, without being able to generate economic activity with the money?"
The answer is that economic activity will surge in areas populated by debtors of the U.S., like China, and economic activity will stagnate in the U.S.
There is never long term economic benefit from unnecessary government spending nor is there long term economic benefit to deficits which increase the national debt.
Most government spending is simply waste. It is the nation's wealth squandered on liberal nonsense. The delayed payment through deficit spending will not permit that waste to go unrecognized forever. In fact, as the boomers retire, the waste of government spending during their lifetimes will become quite evident.
"I'm struck by what an incredibly capable, hard-working guy he is," Stein told The Associated Press in a telephone interview Thursday. "He's a very smart liberal, he's a thoroughgoing patriot, and I would feel better with him in the Senate
But you knew that, right?
“To believe that anyone’s behavior is going to change as a result of lowering the tax rate from 36 to 34% beggars belief”
___________________________________________________________
Well, I think you and I are close to agreement that revenue will not always go up as you reduce taxes, depending on where we are on the Laffer Curve. To use the extreme, if the tax rate were zero, the tax revenue would be zero.
But I’ve never heard the GOP or conservative doctrine state that “”at every marginal point along the spectrum, every reduction in tax rates increases revenue.” I think the contention of the party is that currently tax rates are too high (on the Laffer Curve) such that reduction from where they are will result in higher revenue.
However, I do not subscribe to your contention that “To believe that anyone’s behavior is going to change as a result of lowering the tax rate from 36 to 34% beggars belief.” This is the same as saying that if a company lowers their price from $36 to $34 they won’t sell more product. It may not change the buying habits of 9 out of 10 people (or 99 out of 100) but it will cause an effect with some people.
In the case of taxes, however, it has a much more complex affect. What will the taxpayer do with the 2% of their income that they no longer have to pay in taxes? Let’s suppose they use the money to buy a hot tub. The company they bought the hot tub from will see increased revenue, which results in them having to pay more in taxes than they otherwise would have. They will have to pay their raw material suppliers more (who will end up paying more in taxes), will have to pay more for freight (causing the carrier to pay more in taxes) and on and on. The increased activity then passes on to the next level (the raw material supplier of the raw material supplier). If enough people use their tax savings to buy hot tubs, the hot tub manufacturer will have to hire more employees, or work them additional hours, which will also result in higher tax revenues.
A 2% reduction in taxes can, and has, caused significant changes to economic growth due to the compounding effect, and certainly can create a net increase in tax revenue.
No, I didn't say that. You did.
Frienship is one thing, But a so called "Republican" endorsing a radical leftist is another. All I did was post the mans own words.
You are pretty touchy about old Ben Stein the commie lover aren't you? It shows where you are at.
Ha ha.
But that is not the contention. The contention is that lowering tax rates from 36 to 34% increases tax revenues, because people who felt that there was no point in working or generating economic activity when rates were at 36%, suddenly become productive economic dynamoes when rates hit that new threshold of 34%.
__________________________________________________________
It’s not simply that individuals will work harder when those tax cuts are in place. It is that private individuals will invest/spend that money in the private sector to create jobs and/or raise the income of *other* people thus producing more (and higher) tax receipts.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.