Debate, and discuss, just dont Bore me.
Published on October 18, 2006 By Dr Guy In Politics

There are several great debates going on today, 3 by Brad (most of the posters are anonymous, but most are keeping it civil as well).  Then Moderateman has a good one going that is now starting to digress, and I did not want to drag that one farther off topic responding to one point made, but felt it should be addressed.  It would have been much better in one of Brad's Instapundit articles.

Sean Conners made this point:

but you are correct in knowing that no democrat has suggested that they want to balance the budget by raising taxes on anyone earning less than 200,000 dollars a year in their campaigns. in fact many have called for tax cuts for "the rest of us." and elimination of tax for more poor americans.

While I have not been paying attention to exactly what the democrats are saying, for I know they are not talking "raising" taxes, they don't have to do anything to raise them.  They just merely have to wait for the last tax cut to sunset, and viola!  The taxes are going up.  But I did not actually want to discuss even that here as that is a debate in itself.

Instead I want to concentrate on Sean's statement.  Let us for the sake of argument assume it is true and that democrats really do have a plan (that would be one).  So they eliminate taxes on all poor people.  OK, first we have to define what poor is, and then what we mean by eliminating taxes on them.

OK, for the sake here, lets say that poor is any family of 4 making less than $40k/year.

Now here starts the problems.  The first problem is that while today,  a person making $40k may be considered middle class, that was not so 50 years ago.  When the Income tax amendment was passed 100 years ago, it was only supposed to tax the wealthy, and then only 1%.  Well, any working American knows that is not true today.  So what happened?  Wages went up, but the tax stayed the same or went up in rate.  Not until Reagan did we get indexing for inflation, and then not totally.

So the democrats say they only want to soak the rich.  Rich being over $200k.  Today.  So we soak them.  In 20 years, $200k is going to be middle income, and then eventually poor, but the soaking will not stop.  There are 2 things certain in life - death and taxes, and to that you can add a third, a politician never has enough money to spend.  So tax cuts are rare, and not to be trifled with.

But the democrats will promise today to soak the rich and give to the poor (modern day Jesse James, aren't they?).  But they will not change that and in a few years, all of a sudden, they will be soaking the middle class, and wondering why couples need 2 incomes to merely stay even with the previous generation.

The second problem is that no democrat, OR republican can ELIMINATE taxes on any working person!  There are 2 reasons for that.  One is that they do not want to due to the most powerful lobby in America.  The second is that they cannot because they do not have the power.

The first reason, is the most regressive tax in existence, and one that will never go away, just get worse.  That is Social Security and the Medicare/Medicaid tax.  Both have cut offs that leave the richest Americans not paying it after a certain amount of time, but the poor never stop paying it.  And make no mistake, you can call it whatever you want to, but the truth is it is a tax.  That one will never be touched because it is the "third rail" of politics, and the most powerful lobby, AARP, will make any politician pay with their career if they do.  So forget about eliminating that tax.  It wont happen.

The second reason, is that the politicians do not have the power to do it.  What?  A tax they cannot touch? Yes, if you look at politicians as being either state, or federal.  Federal politicians cannot eliminate state income taxes, state sales taxes (the second most regressive tax in existence), personal property tax, real estate tax, and a host of other taxes levied by state and local governments.  They do not have the jurisdiction or the guts to tackle any of those.

So when you hear a politician saying they are going "to eliminate taxes on the poor", they are lying through their teeth, and they know it.  At best they can be honest in their intentions and ignorant of taxes (but I doubt they would get as far as they did being stupid) and at worse they are using sophistry to try to get votes, knowing they cannot.  And indeed, in the near future, that they will be taxing those same "poor" people again as wages and inflation push them out of the "poor" category and into the "rich" category.


Comments (Page 2)
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on Oct 18, 2006

Wrong again; I did present a fact, namely, that Social Security has worked successfully for millions of Americans for decades. That isn't an assertion or an opinion, it is a fact. Such a universally recognized fact that noone even argues that it is true.

In the sense that social security has functioned as designed that I can agree with.  But that doesn't make it not a pyramid scheme.

It is a pay as you go system. Period. That is a fact. It robs Peter to pay Paul. It is a bad system in the sense that it drains money out of the economy that could have been much better used by the people themselves.

Make social security voluntary and then we can talk about it working "successfully".

on Oct 18, 2006
The issue of taxes have two elements. The first requirement is that the tax revenues must be equal to the spending -Balanced Budget.

The second issue is what mix of taxes is acceptable to achieve the first requirement.
on Oct 18, 2006
It is a bad system in the sense that it drains money out of the economy that could have been much better used by the people themselves.


Emphasis on the word 'could.' Not 'will' but 'could.' That's the whole point of SS; it's going to be there for you no matter how badly someone screw their life up. The reason it is important, is because those people whose lives are screwed up for one reason or another (poor planning, illness, loss of life of major provider for home, stock market crashes, etc) don't simply vanish once they realize they are broke. They go right on living, needing food and shelter. The money for that food and shelter has to come from somewhere, or there will be:

1, a lot of old folks starving and freezing to death, and

2, a lot of young folks who are directly supporting old folks to keep them from freezing or starving to death.

One of the major matricies that is quoted by those on the Right is that the rate of home ownership in America is tremendous compared to other countries. This is in large part because of Social Security, as these same home-buyers are not forced to take their retired parents into account when figuring out their finances. You remove Social Security, and there are a lot more consequences than just 'adding money to the economy.' You also add a lot of burden to a lot of people who currently don't have that burden.

A pyramid scheme invariably concentrates the greatest profits amongst those who are at the top of said scheme. Social Security doesn't work that way at all. There is no group of people who are going to profit far more from SS than those at the bottom. So, while you have problems with the program (and there are valid criticisms of SS, for sure) calling it a pyramid or 'ponzi' scheme is erroneous at best.

Cheers
on Oct 18, 2006
Only tax rich people? As far as a Democrat plan, no problem.

Here's the Democrat's logic:

Bush only gave tax cuts to the rich (the Democrats have told us so repeatedly, so it must be true)

Let the tax cuts sunset and the rich get a tax increase and pay more taxes.




Now for the dirty little secret .. which is not really a secret.

Everyone got a tax cut (at least those earning an income of any amount) so everyone who got one of those tax cuts is rich by Democratic logic.

In actuality, as a result of those tax cuts, the rich paid even more taxes (tax revenues collected are up).




Logic would suggest that if the rate is increased (sunsetting the tax cuts), tax revenues collected will drop to lower levels.
on Oct 18, 2006
“It is a bad system in the sense that it drains money out of the economy that could have been much better used by the people themselves”

This is an idea that is not predicated on any solid logic. If you look at where the money goes in the Federal Budget you see defense and homeland security. People could not make the "better Use" of the money to protect the country. Medical and funds for retirement are also areas that individuals have shown they do not provide proper spending to insure. Issues such as, law enforcement, roads, commerce and the many services that are ESSENTIAL for our society to operate would not be provided by individual spending decisions. There are many items that government does not need to be spending on like the bridge in Alaska. However the vast majority of things provided by the fed would not be provided by each individual deciding how and where to spend their money as this statement indicates.
on Oct 18, 2006
Now for the dirty little secret .. which is not really a secret.

Everyone got a tax cut (at least those earning an income of any amount) so everyone who got one of those tax cuts is rich by Democratic logic.

In actuality, as a result of those tax cuts, the rich paid even more taxes (tax revenues collected are up).


You are falling into the trap of non-corrolary statistics.

Everyone got a tax cut who pays taxes, true. I haven't seen where Dems argued that only the very rich got any sort of tax cut at all. But the vast majority of people saw their taxes cut by several hundred dollars, whereas the rich's taxes were cut by dozens of thousands of dollars. The overwhelming majority of the monies that were cut from tax revenues, were returned to the richest Americans. Who, coincidentally, needed it the least, and certainly didn't need it any more than our gov't and nation need it.

You state that the rich paid more taxes. But it wasn't because of the tax cuts; the rich pay more taxes because the percentage of our nations monies owned by the rich has risen significantly. This doesn't corrolate with the tax cuts, but with the cuts on Dividend taxes, which most certainly do not benefit all Americans equally.

Tax revenues collected are up, but in large part this is because Corporate profits are way up over the last 6 years. Once again this is not a category of the economy which has a direct benefit to the average person inside the economy. There is no direct correlation between tax cuts and rises in federal revenue. It is somewhat absurd to assume that there would be, as this has never historically been shown to be true.

Therefore, your 'logic' doesn't really hold out. The CBO has estimated that over the next decade, if not allowed to sunset, the Bush tax cuts will add at least an additional Trillion dollars to our national debt. The amount of growth it would take to offset that is tremendous, and is unsupportable by any theory of economics - or logic, for that matter.
on Oct 18, 2006
The Democrats are not called the "tax and spend" party for nothing.
on Oct 18, 2006
The GOP have proven they are the party of CHARGE and SPEND. The GOP has out spent the Democrats and then added it to the National debt so every year we can pay more and more interest because of the increased debt the GOP Policies have created!


National Debt and Interest paid on the Debt 1980- 2006


Fiscal Year Amount Interest Paid in Billions


09/30/2006 $8,549,647,928,127.47 $ 405.9
09/30/2005 $7,932,709,661,723.50 352.4
09/30/2004 $7,379,052,696,330.32 321.6
09/30/2003 $6,783,231,062,743.62 318.1
09/30/2002 $6,228,235,965,597.16 332.5
09/30/2001 $5,807,463,412,200.06 358.5
09/30/2000 $5,674,178,209,886.86 Bus43 became president 362.0
09/30/1999 5,656,270,901,615.43 353.5
09/30/1998 5,526,193,008,897.62 363.8
09/30/1997 5,413,146,011,397.34 355.8
09/30/1996 5,224,810,939,135.73 344.0
09/29/1995 4,973,982,900,709.39 332.4
09/30/1994 4,692,749,910,013.32 296.3
09/30/1993 4,411,488,883,139.38 292.5
09/30/1992 4,064,620,655,521.66 Clinton became president 292.4
09/30/1991 3,665,303,351,697.03 286.0
09/28/1990 3,233,313,451,777.25 264.6
09/29/1989 2,857,430,960,187.32 240.9
09/30/1988 2,602,337,712,041.16 Bush 41 became president 214.1
09/30/1987 2,350,276,890,953.00 195.0
09/30/1986 2,125,302,616,658.42 190.0
12/31/1985 1,945,941,616,459.88 180.0
12/31/1984 1,662,966,000,000.00 155.0
12/31/1983 1,410,702,000,000.00 130.0
12/31/1982 1,197,073,000,000.00 115.0
12/31/1981 1,028,729,000,000.00 95.0
12/31/1980 930,210,000,000.00 Reagan became president 80.0


Since September 30, 2005 the national debt has increased at a rate of $1.63 BILLION Dollars PER DAY!

Increase in the Annual interest paid by the United States

Reagan Up 134 Billion
Bush 41 Up 78 Billion
Clinton Up 70 Billion
Bush 43 Up 138 Billion

We took the interest paid EACH and EVERY year by American taxpayers from $80 Billion in 1980 to $500 Billion by 2010. That will be an increase of more then 6 times in 30 years!

Source- Bureau of Public Debt, Dept. of the U.S. Treasury
on Oct 18, 2006
Nice post Col. Gene.

Note that the average debt issued per year between 9/30/2001 and 9/30/2006 is....548,436,903,185.48.

That's 548 Billion dollars. Per year.

on Oct 18, 2006
Everyone should be taxed.

Well, except for me of course.
on Oct 18, 2006
I haven't seen where Dems argued that only the very rich got any sort of tax cut at all.


If you haven't seen or heard the claims by numerous Democrats that the tax cuts were for the rich, you haven't been paying attention. That has been almost a constant screech in the Democrat's objection to the tax cuts. "Tax cuts for the rich" You seriously can say you haven't heard that?

You state that the rich paid more taxes. But it wasn't because of the tax cuts; the rich pay more taxes because the percentage of our nations monies owned by the rich has risen significantly. This doesn't corrolate with the tax cuts, but with the cuts on Dividend taxes, which most certainly do not benefit all Americans equally.


That has no bearing on my statement. Tax rates went down and revenues collected went up. You admit this is so but somehow feel the specific mechanism changes the fact?


If you believe that taking money from one segment of society and giving what is left over to another segment of society (after considerable waste by the Federal Government, as is its normal method of operation) is proper and observes the tenets of equal rights for all, that is fine, but a tax cut is a tax cut, be it dividend or otherwise. To pretend that the type of tax cut somehow negates the fact that collections went up is a bit obtuse, if you'll allow the observation.


Granted I was being a bit facetious in my logic stream but only to show the blatant attempt by Democrats to portray tax cuts as something they are not. It is also not a secret that the reason tax cuts are mentioned (and usually outrightly correlated) along with the rich by the Democrats is to insinuate that only the rich get them and benefit by them. In truth everyone got a tax cut and benefited by them. This behavior by the Democrats has no other purpose than to try to elicit envy between segments of society for political gain. It is nothing short of trying to incite a financial lynch mob.

our nations monies


That is an interesting statement. It tends to suggest that you believe money is not owned by the individuals who earn it but rather a possesion of the collective (Government?). That would apply in a purely Communistic society perhaps but hardly seems appropriate to a Capitalistic Republic such as exists in the US.

Or perhaps you feel that is or should be the aim of the Democratic party; everything owned by the state and doled out to the subjects .. er .. citizens as deemed necessary by the ruling party.
on Oct 18, 2006
Oh, stop hyperventilating. By 'our Nations monies' I was referring to the size of the slice of the total pie that is held by the 'rich,' that is, the total picture of money ownership in America. Don't try to change this into some sort of conversation about communism, because it has nothing to do with that.

To begin,

That has no bearing on my statement. Tax rates went down and revenues collected went up. You admit this is so but somehow feel the specific mechanism changes the fact?


Of course the mechanism changes the fact. That's what non-corrollary statistics mean.

The intial claim was:

Now for the dirty little secret .. which is not really a secret.

Everyone got a tax cut (at least those earning an income of any amount) so everyone who got one of those tax cuts is rich by Democratic logic.

In actuality, as a result of those tax cuts, the rich paid even more taxes (tax revenues collected are up).


The problem is, there is a disconnect between your second and third sentence. Individual tax receipts haven't risen - corporate tax reciepts have risen. This isn't directly connected to tax cuts, but rather the massive profits made by corporations under the Republican administration over the last 5 years. The only real individual tax receipt rises have been in investment and dividend income - taxes which are not usually withheld from paychecks, and most certainly don't apply to the vast majority of Americans.

If you believe that taking money from one segment of society and giving what is left over to another segment of society (after considerable waste by the Federal Government, as is its normal method of operation) is proper and observes the tenets of equal rights for all, that is fine, but a tax cut is a tax cut, be it dividend or otherwise. To pretend that the type of tax cut somehow negates the fact that collections went up is a bit obtuse, if you'll allow the observation.


The argument that was made was that the tax cuts Bush passed for everyone lead to a rise in tax revenues. That argument is false. So it isn't obtuse to point out that the type of cut matters, because the tax relief passed for the majority of Americans was relatively tiny, especially when compared to the gains that the top 1% make off of the tax cut.

Bush has passed multiple tax cuts under his terms, and not all of them have been conducive to the needs of the middle class, that's for sure.

Granted I was being a bit facetious in my logic stream but only to show the blatant attempt by Democrats to portray tax cuts as something they are not. It is also not a secret that the reason tax cuts are mentioned (and usually outrightly correlated) along with the rich by the Democrats is to insinuate that only the rich get them and benefit by them. In truth everyone got a tax cut and benefited by them. This behavior by the Democrats has no other purpose than to try to elicit envy between segments of society for political gain. It is nothing short of trying to incite a financial lynch mob.


The rich benefited far, far, far more from Bush's tax cuts than any other section of society. Such statments are completely accurate.

For some reason, I'm having a hard time posting links; but google 'bush tax cut' and read the Brookings Institution article about the 2001 tax cut. Hardly a liberal organization. After that, think about the 2003 tax cuts, the dividend tax cuts, the corporate tax cuts. The rich have made out like bandits under Bush, and pretty much noone else has.



That is an interesting statement. It tends to suggest that you believe money is not owned by the individuals who earn it but rather a possesion of the collective (Government?). That would apply in a purely Communistic society perhaps but hardly seems appropriate to a Capitalistic Republic such as exists in the US.

Or perhaps you feel that is or should be the aim of the Democratic party; everything owned by the state and doled out to the subjects .. er .. citizens as deemed necessary by the ruling party.


Back to the subject of your hyperventilating. Do you know what IS owned collectively by the united states? That's right, the public debt. We are responsible for paying that money back. It is difficult to believe that you wouldn't already understand just how much your share of the debt has gone up in the last 6 years. Tax cuts are merely tax deferrents; the money is going to have to be paid sometime in the future. Ideas that we can 'grow it out' are completely idiotic and unsupportable by any real world numbers; our economy would have to grow faster than we rack up debt, and interest on that debt, which we are currently adding to at the rate of more than 500 billion dollars a year.

It's time for some fiscal sanity, folks. The debt isn't some arbitrary thing that doesn't belong to you. It belongs to you, me, everyone. As I said before, it's easy to make things look good when you buy everything on credit, but the reality is often a far grimmer picture.
on Oct 18, 2006
The only way to eliminate federal income taxes is to repeal the 16th amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Not going to happen. The "soak the rich" arguement was used to pass it in the first place.
Moral of the story: once the governments toe is in - expect to have a bumb in the living room forever.
on Oct 19, 2006

Wrong again; I did present a fact, namely, that Social Security has worked successfully for millions of Americans for decades. That isn't an assertion or an opinion, it is a fact. Such a universally recognized fact that noone even argues that it is true.

No, that again is your opinion.  It is not shared by all, and you provided no facts.

As for your "facts"just presented (and again they are opinion, not facts), you call a confiscatory tax "investment".  That is false.  Investors invest willingly.  They are not forced to.  And when they invest, they expect a return.  If you are lucky, you will pull out what you put in.  Hardly what one would call an investment.

Second, the fund is running a surplus, but every actuarial says it will go broke in 30 years or so.  Again, a definition of a ponzi scheme as when new "investors" dry up, the fund goes belly up.  That is what has been happening for the last 40 years, and each time, what has happened?  Simple, taxes raised.  To the point now that the rate is 12.6%

But we can debate that at another time.  This was not about the viability of SS, it was about how politicians lie by ommission.  Perhaps you would like to write an article on how great SS is.  But one thing is certain.  The tax is the most regressive tax in America, and no politician, of whatever stripe, has even dared mentioning cutting it for anyone, including the poor.

on Oct 19, 2006

Make social security voluntary and then we can talk about it working "successfully".

And call it an "investment".

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