So, I’m all for hardworking Americans to keep their hard-earned money, but when times get tough, shouldn’t they have to pay their fair share? Because it sure seems that they aren’t.
So over the last thirty years, the rich have gotten richer. Like, way richer.
And their tax rates have gone down steadily since WWII. And the super rich? They’ve recoved quite nicely from the recession.
Also, corporations end up paying no taxes. Wait, what? Yes yes. I know that we should tax businesses as a low rate, otherwise they, and their jobs move elsewhere (although, that seems to happen a lot anyway). But should they not be paying their fair share? I don't care if our corporate tax rate is 35%, if they don't actually pay it, then what is the tax rate of 35% for?
So, with the imminent arrival of a federal government shutdown, what is congress doing? Well, apparently duking it out over whether we should really kick the poor when they’re down or let ideology trump practicality.
I mean, it’s not like the Republicans have been acting sane over the things they want to cut? I mean, was it necessary to have an “emergency” session to cut funding to NPR?
Seems there aren’t a lot of options here. You can either:
1) Cut spending.
2) Raise taxes.
3) Do both.
The question is where to cut spending, or how to raise taxes.
As far as cutting spending, I think we should go after the things that actually take up the supermajority of the budget, Medicare, Medicaid, Social Security, and the Military. At least Representative Ryan mentioned going after Medicare. He may have done it poorly, ill-timed, and badly planned, but at least he talked about it. And at least this discussion is actually making Obama be serious about cutting the budget, like he wasn’t at the State of the Union Address, as shown by the beautiful youtube video.
But we shouldn't cut funding to certain things. Like Sesame Street.
In any event, all the actual discussion of cutting budgets is doing to me is reassuring me that my political status on facebook should remain “a pox on both your houses.” I watched a George Carlin skit years ago about the end of the American Dream. You can go youtube it if you want, but it’s George Carlin, so there’s a lot of swearing. Basically, he goes all conspiracy theory on how we can choose between Democrats and Republicans to give us the illusion of free choice, and in the end, it’s the rich and the corporations that actually control everything.
I don’t think he’s right. I’m certainly not thinking that the corporations and rich are a shadow government. But part of me thinks he’s not exactly wrong, either. He also said “Conservatives say that if you don’t give the rich more money, they will lose all their incentive to invest. As for the poor, they tell us they’ve lost all incentive because we’ve given them too much money.” Good comedians are good precisely because, sometimes, they hit the nail right on the head.
It also reminds me of this excerpt from the Gospel Principles manual. “All of us should be willing to serve, no matter what our income, age, or social position. Some people think only the poor and lowly should serve. Those people are called Republicans. Other people think service should be given only by the rich. Those people are called Democrats.”
Oh, sorry, that was my editing. However, that was the editing going on in my mind while I read it live in Priesthood a few weeks ago, when I took this picture on my iPhone precisely because I edited it in my head while reading it live.
So I’m sorry. We should cut spending. We should also, however, raise taxes. When the going gets tough, I think the wealthy should pay more taxes. And the going got tough a few years ago. This has also been proposed. But it’s not going to happen. We argued about that last year when deciding to extend the Bush tax cuts. (Krugman argues quite convincingly in that piece that "sacrifice is for the little people.") So the rich don’t have to pay higher taxes. However, I’m not exactly sure they’re in touch with reality anymore. Heck, I’m not sure our senators are all in touch with reality anymore.
Basically, it seems that whatever happens, the poor are the ones that get the short end of the stick. And it keeps getting shorter. I'm beginning to agree with George Carlin that the choice between Democrats and Republicans is a false dichotomy.
A pox on both your houses, Democrats and Republicans.
However, I’m no economist. Thoughts from you, my smart friends?
8 comments:
I'm no economist, either (yet), but it doesn't take an economist to get the message of that wonderful penny video. If I'm not mistaken, Social Security and such programs were established when the average life expectancy was around 62. I don't know if the government can afford to fund 20 year retirements for those who won't put their own money away towards that.
As for the tax changes, I agree that loopholes should be eliminated, but since I don't (yet) know much specifically about what these loopholes are, I can't make any specific suggestions.
One thing I will say, though, is that my desire to be more informed would certainly be more easily satisfied if people didn't manipulate statistics so blatantly. Take the whole "2/3 of corporations don't pay taxes" statistic. The article you cited briefly mentioned that part of those 2/3 are small and medium businesses who "avoid" corporation tax because they pay those income taxes in the form of private income.
Sorry, but that's a big detail to skim over so lightly. What percent of those 2/3 are in fact paying fair taxes in a different form? 90%? or 10%? Knowing that fact could change the entire focus of the article, and I suspect that since that vital statistic is absent from the article, it is intentionally witheld.
I think rhetoric gets a bad rap. It's actually a very useful tool to get your message across. I love good writing. Unfortunately, economists in general aren't gifted with good rhetoric, whereas politicians and journalists may have the gift of rhetoric, but lack the gifts of honesty and/or basic economic understanding.
The corporate tax problem is just a distraction from the real problem: the banks, investment firms, and the federal reserve.
Also, GE paid close to $2.7 billion in taxes for 2010. The media is just spreading misinformation as usual to misdirect our attention. GE source:
http://www.gereports.com/setting-the-record-straight-ge-and-taxes/
I don't mind at all that there are rich people in the world that control a lot of the money. But I do mind what they do with it: a lot of tax avoidance by the rich is done because they donate to universities, research, or other charitable institutions.
It's the parasites of society that need to be held accountable and removed - the ones making huge gains off of money transactions (i.e. most of Wall St., real estate, loan banking); the 'business men' bleeding us dry by buying and selling companies like they are stocks and destroying the livelihood of honest hard-working folk; and the patent trolls and other law agencies that exist to profit from exploting the legal system (this easily includes law-makers, too.)
I bet if the parasites are held accountable and cut off, we'll see a lot more money to work with (and more time because of less overhead.)
The real problem is that parasites breed like mad in a hedonistic society. We have no one to blame but ourselves.
And this is only one side of the coin: I won't go into the entitled poor...
Dear Xan,
I beg to differ. Some economists are gifted writers.
Yours,
Ben Pacini
Amateur Economist and Writer Extraodinaire
The historical level of spending for the last 50 years is near 21% of GDP, and the level of taxes was 18%. Spending is now near 24%, and taxes remain at 18%. We have an overspending problem, not an under taxing problem. And if we raise taxes now, we’ll never be able to stop.
Let me explain.
Meet Mork. Mork is from a planet where people are inherently good, and there is no government. People help each other when in need, and spontaneously do what makes the most sense. He feels that there is no need for government.
Now meet Mindy. She is from a planet where people lie, cheat, steal, are unfair, are racists, are sexists, and are poor. She feels that government could be used as an answer to these social problems.
Imagine that Mindy, our lefty friend, is the president. Mork is in charge of the house and senate. Mindy proposes a bunch of neat new programs that cost a lot of money. The people go ga-ga over the new flashy programs, and can't wait to have them. Mork explains that we don't have the money for them, but Mindy insists. So they create the programs, and borrow money to finance them. After all, these new programs will make America so economically dynamic that we'll have more money than we know what to do with!
Mindy continues to propose new (and expensive) programs, which Mork generally opposes, but can't quite stop. Mork gets frustrated, and tries to cut things, and gets booed. So he simply tries to stop new things from coming.
Finally, things reach a breaking point. There isn't enough money to pay for all the new programs. So Mork says "I told you so! We need to cut spending!" And Mindy responds, "Now, now, don't be so draconian! Let's compromise! Let's raise taxes half-way, and cut spending half-way."
So Mork--trying to be magnanimous--allows the tax increase. Mindy goes back to increasing the size and scope of government (never suggesting the future imperative of raising taxes) until the next showdown occurs. "We have no money! And the rich should pay their fair share!" intones Mindy.
So what does Mork do?
Mork buckles down, and swears that he won't let Mindy raise taxes. Or increase spending.
An odd story (and I have no idea why I chose Mork and Mindy) but perhaps illustrative. Democrats want a much larger government, and new programs are always fashionable. New taxes are not. So Republicans try to hold the line on taxes, because people are too easily persuaded on programs.
The budget debate that we just experienced was a reflection of the inner feelings of the two parties on the role of government. (Ironically, everyone called it politics, when it was one of the most principled things I've seen politicians do in quite a long time.) Republicans feel that we need less government, and Democrats feel that we need more. Republicans feel that the individual is the great key to societal change, while Democrats feel that communalism is a more effective force.
Republicans also view government as a deeply scary thing. The great tragedies of history have been perpetrated by (or at least enabled by) governments.
Republicans view taxes as the way we fund this evil thing called government. As such, taxes are not much more than government-sponsored theft.
Republicans--or, at least, conservatives--view the proper role of government to be limited to police power, military power, and breakdowns of markets (market inefficiencies, such as monopolies).
Democrats feel that government is smarter than the individual. Government can be the great guiding force that leads us to a brighter tomorrow, whereby the smartest of us create policy that makes the whole world better off.
As such, taxes are a moral imperative--they make life fairer by taking from the wealthy (who are often wealthy because of excess or evil, but who, at a minimum, owe society more than anyone else)and giving to the poor.
Ignore the deficit. This is a showdown of what makes the parties tick. The deficit is just finally bringing the showdown.
Republicans want to defund NPR because they don't think that funding public radio is a legitimate function of government. Republicans don't want to give money to planned parenthood because they feel like paying money to an organization that advocates for a position on a social issue (much less one that they disagree with) isn't a legitimate purpose of government. This isn't about the deficit. It's about why we have a government to begin with.
I'm roughly somewhere between a utilitarian and a libertarian. I think that government is necessary to protect us from each other (police, enforcing contracts) and from other countries (military [darn Canadians]). Beyond that, I get skeptical real quick.
I have much more to say, but unfortunately, I have to go and do my individual duty to make the world a better place. Home teaching calleth.
I look forward to responses.
Nanu Nanu.
The problem with your story Ben is that Mork has cut the Tax rate and Mindy wants to keep most of those cuts in place while being willing to cut some of the spending. Your story is great except that it forgets some of the facts and leaves them out of this world.
I would still like you to specifically address the "false dichotomy" aspect of the post.
Basically, yes I get that Republicans are small gov't, and Democrats are big gov't (with a wide spectrum even in the parties, but that's generally what the two parties are about), but it really does look to me more and more that BOTH parties are more in favor of the rich getting perks than the less-fortunate. And this does not mean that I think both parties want to start slave labor camps for people making under $30k a year.
I don't see gov't changing until the people do. Specifically, we need to be less hedonistic and more forward-looking.
We also need to teach and discipline our children.
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