With the Tea Party Convention less than a month away here in Nashville, I thought it's worth chiming in with my two cents worth.
For starters, I'm a fiscal conservative. I think we should pay our bills. I share the concerns of Blue Dog democrats that money doesn't grow on trees and that we should do all we can to use PAYGO rules and not spend money we don't have.
That being said, it's worth noting that the Reagan administration and both Bush administrations were responsible for the vast majority of the national debt. Reagan's "win the Cold War through huge deficit spending" strategy might have worked in the short term. But in the long term, we're really in worse shape because of it. (Not worse compared to other nations ... worse in terms of our own national balance sheet.)
Our national debt stands at over $12 TRILLION right now. (As you see from my link, you can actually follow the national debt tracker on Twitter.)
But as Bruce Bartlett (Reagan-era economic advisor) and others have noted repeatedly over the past 2-3 years, our biggest problem right now isn't spending. Actually, we're cutting spending and waste through contract reform and other important budget reforms under the leadership of Peter Orszag and the Obama Administration's Office of Management and Budget. Countless executive branch reforms have helped to curtail out of control spending (the worst waste is in military "emergency" spending ... and no, ACORN is not responsible.). But we still have a long way to go.
What I am NOT hearing from Republicans right now is a commitment to cut or eliminate Medicare. I'm not hearing a commitment to eliminate Social Security. I'm not hearing any commitment from Republicans to cut ANYTHING significant - other than taxes.
And more tax cuts are exactly what we DON'T need.
Well, let me rephrase that.
More tax cuts for the wealthy are what we don't need. As it turns out, the middle class received the largest tax cut in history from the dreaded and much-maligned (by Tea Party activists) Obama-Pelosi agenda. The $288 billion tax cut ($500 per family) was passed without any Republican support by the Democratic Party as part of the American Recovery and Reinvestment Act (ARRA).
And this is what really confuses me about the Tea Party movement.
They hate the Obama administration and the Democratic Party, but they want tax cuts - tax cuts that the Democrats gave them (in spite of the fact that this increases the deficit).
And this is where I get confused about the Tea Party and its identity.
Is the Tea Party movement interested in eliminating the national debt? Or are they interested in evading or avoiding the payment of income taxes?
Because this is one of those situations where you've gotta die to live. We need to make short-term sacrifices to get our financial house back in order. The short-term stimulus will spur economic growth (already has!) and this will bring more revenue back into the government coffers. But without raising taxes to collect on our national debt, we're going to continue falling into a deeper and deeper hole.
Again - tax cuts alone will not stimulate the economy. We need smart, sustainable policies for economic growth. And we need to eliminate our debt. Spending cuts alone will not solve the problem, and spending cuts with tax cuts will actually drive us further into recession.
*Samuel Alito's flag is upside down. So is the Supreme Court*
At least we know how the Alito house is going to vote come November.
*Democrat calls out 'd...
12 hours ago
7 comments:
Great point. Cutting revenue doesn't really help to pay for debt or programs in my reality? Maybe there is some other alternative reality where that works....
...compare the U.K. tax structure with the one in the U.S. For example, a family making $60,000 in the U.K. faces a 20 percent rate, while the American family faces a 15 percent tax rate. (There are other differences in the systems concerning personal allowances, etc., but those are not relevant for this discussion.) British tax authorities report that those making more than 1 million pounds, or about $1.6 million, pay an average tax rate of 35.7 percent. By comparison, the IRS reports that Americans making more than $1 million pay just a 15.9 percent average tax rate. (The figures are from 2008 for the U.K. and 2006 for the United States.) Those at the lowest end of the earnings spectrum in the U.S. are, surprisingly, slightly better off than their poor U.K. counterparts. Due largely to the refundable earned income credit, Americans with income up to $50,000 have a negative tax liability, while even the lowest-income group in the U.K. must pony up something to Her Majesty's revenue service... From: http://www.politicsdaily.com/2010/01/08/why-the-land-of-the-free-is-so-conflicted-about-health-care/
http://www.politicsdaily.com/2010/01/08/why-the-land-of-the-free-is-so-conflicted-about-health-care/ "...the American family faces a 15 percent tax rate...Americans making more than $1 million pay just a 15.9 percent average tax rate..." The rich have been successful in fooling the voters of both parties... Mike
I have few corrections to the figures cited in Mike's posts. According to the 2006 IRS report mentioned in the article, Americans making more than $1 million pay a 22.6 percent, not 15.9 percent, average tax rate in 2006 (Figure B in http://www.irs.gov/pub/irs-soi/09winbulinincome.pdf) while those making between $50000 to $100000 pay a 9.0 average tax rate. I believe the 15% tax rate mentioned for a family making $60000 is the marginal tax rate and not the average tax rate.
In any case, corporations like Goldman Sachs are paying something like a 1% tax rate because they "play the game" and work the system in their favor.
If you haven't seen the classic interview with Brian Williams and Warren Buffett, you should find it. I'm too lazy to find a link for it, but Buffett notes that his secretary pays a higher tax rate than he does!
America was founded on individual liberty and local government no more than one day’s horseback ride from the governed. The 19th century Democrat was the staunch defender of state’s rights, which, under Federalists, Whigs and Republicans was assigned the role of slavery’s justifiers. The civil war cost us local government, the laws affecting behavior rising to the states and then the Federal government, way outside the one-day horseback distance rule that worked so well. The vigilante movements in the West and South were remnants of local home rule, where citizens concerned with the way they were governed took action to right the wrongs. The Tea Party Movement is another example of citizen participation against the governing elite centered far, far from the folks. It demonstrates the founding ideals of America are still the dominant tradition. The 20th century Democrats have declared war on Tea Parties as vigilantes and on America’s founding traditions, as cited in THE CHANGING FACE OF DEMOCRATS, Our Lost Libertarian Roots on claysamerica.com.
I agree there should be reform in the corporate income tax system. The effective corporate tax rate has been steadily declining over the last decade despite we have one of the highest statutory corporate income tax rates.
Regarding to Warren Buffett's tax situation, it is an exception to the rule rather than a norm. According to CBO's complied data for the years 1979-2005 (http://www.cbo.gov/ftpdocs/98xx/doc9884/12-23-EffectiveTaxRates_Letter.pdf), the total effective federal tax rate increased as income increased until you reached the top 0.01 percentile (average household income of about $35.5 million) where the rate decreased slightly (0.6% decrease between 99.9-99.99 percentile group and the top 0.01 percentile group in 2005). I am not making an argument about how high or low the income rate for the top income earners should be. I just want to point out that the rich, on average, do pay taxes at a higher rate than the middle class.
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