While the Republicans and Democrats agree that the deficit must be reduced, they have different views about how this is to be done. The more moderate Republicans and Democrats are in favor of modest spending reductions and the illusion that something is being done. The Tea Party folks are pushing for radical cuts, seemingly guided by their interpretation of Ayn Rand. These cuts are aimed at programs and entitlements that help those who are not wealthy. Some of the Democrats, including Obama, have pushed for repealing the Bush era tax cuts for the rich. Naturally, the Republicans are united in their opposition to this plan.
Interestingly enough, the radical cuts of the Tea Party and repealing the Bush era tax cuts for the rich would have approximately the same impact on the deficit. One does this by increasing revenue, the other by reducing spending. As far as defending both the cuts that seem aimed at the less wealthy and keeping the tax cuts for the wealthy, the argument cannot be one of need. Obviously, the less wealthy would certainly seem to need the aid of the state more than the wealthy need the money they would have to pay in taxes. For the poor, going without aid can mean doing without medical care or going into food insecurity. For the rich, being taxed somewhat more might mean that they might have to give up one designer gown that year or go with a slightly less diamond encrusted watch. I exaggerate a bit, but not by much.
One stock defense for keeping the tax cuts is that they will help the economy by creating jobs via spending. The two obvious replies to this claim are that 1) the tax cuts were in place before the recession and seem to have had little impact and 2) the wealthy seem to be having a great year (for the most part) and yet this seems to have had little impact for the rest of us. As such, the idea that keeping the cuts will improve the economy for mainstream America is clearly absurd.
A second line of defense is that the taxes are taking money that belongs to the rich. The most obvious reply to this is that is true of all taxes. As such, if the rich should not have their taxes returned to the pre-cut levels because it is their money, then it should follow that no one should be taxed. While some people do accept this idea, this would effectively entail the failure of the state. This would mean no defense, no police, no fire departments, no road repair and so on. As such, this line of defense easily falls.
A third line of defense is restoring the tax rates would somehow be unfair. On the face of it, this does have some appeal. After all, if the less wealthy Americans kept their cuts while the wealthy Americans lost their cuts, this would treat Americans differently based on their income/wealth. If this is not a relevant difference that would justify the difference in treatment, then it would be clearly unfair for the rich to lose their cuts while the less wealthy retained their’s.
One reply worth considering is that there is a relevant difference in the incomes. To be specific, the rich have so much more that given up a greater percentage of their income/wealth is less of a hardship for them relative to what people actually need. To use an analogy, imagine a water tax. Suppose that a human needs 8 glasses of water a day to survive and imagine that Sally has 100 glasses available per day, Sam has 10 and Wendy has 6. If they are taxed 20%, then Sally is left with 10 times what she needs to survive, Sam will be able to survive (but just barely) and Wendy will die. If Sam’s tax is reduced to 10% and Wendy is given 2 glasses from the tax on Sam and Sally, then Sally does not die and Sam is a bit better off. Sally is, however, vastly better off than either because of her wealth of water-even though she pays a higher percentage of the water tax.
But, someone might say, why should Sally pay a higher percentage even though she is so wealthy? After all, that still seems unfair. Surely lazy Sam and lazy Wendy could go out and get more water (or income). Now, if it were true that Sam and Wendy had less water because they were lazy or otherwise failed themselves, then it would certainly seem unfair for Sally to be “punished” for working harder or otherwise earning her vast amount of water. However, if Sally has her wealth of water because of unfair conditions while Sam and Wendy have less because of those same conditions, then it would seem fair to do at least this small thing to correct these unfair conditions. As such, a seemingly “unfair” tax difference could be justified because it does a little bit to offset a significantly unfair system. The rich do, of course, remain rich and remain beneficiaries of an incredibly unbalanced system. As such, they would seem to have little to complain about.
Mike, what is the fallacy called when you just ignore the available evidence and make up facts to suit your argument?
The CBO has examined the case in which the “rich” (income > $200K) pay higher taxes, and lower income people see no tax increase. It is called the “alternative fiscal scenario” and can be found in this CBO document:
http://www.cbo.gov/ftpdocs/115xx/doc11579/06-30-LTBO.pdf
The alternative fiscal scenario, by contrast, embodies several
possible changes to current law that would continue
certain tax policies that people have grown accustomed
to—because those policies are in place now or were in
place until recently. In particular, most tax cuts enacted
under EGTRRA and JGTRRA, which are currently
scheduled to expire in 2011, are assumed to remain in
place. Those extensions would apply primarily to middleand
low-income taxpayers; certain provisions applying to
high-income taxpayers (married couples with adjusted
gross income above $250,000 and singles with income
above $200,000) would not be extended.
So, when you say:
“Interestingly enough, the radical cuts of the Tea Party and repealing the Bush era tax cuts for the rich would have approximately the same impact on the deficit.”
I call bullshit.
There is a fallacy that involves ignoring evidence. However, to simply make up facts would be considered lying (if the person knows what they are doing and are doing it with an intent to deceive) or an error (if the person does so out of mere ignorance and without an intent to deceive).
While I am willing to admit an error when I make one (and I could be quite wrong about the impact of the spending cuts or removing the tax cuts), the quote you present does not seem to show that my claim is false. But I could be misreading it-long run this morning followed by biking, so the brain is a bit…what was I saying?
The point is that simply taxing rich people more is not by itself enough to solve our budget problems, although it could (and probably will) be part of the solution.
Realistically, it will take a combination of tax increases and serious entitlement reform to dig our way out of the mess we are in.
It is also exceedingly misleading when people describe seniors and the elderly as being “helpless” or without political clout. The AARP is the 900 lb. gorilla in Washington, and politicians are terrified of crossing seniors.
It is extremely disheartening to see Obama pretending that just by taxing rich people a little more we will be able to solve our problems, when there is abundant evidence to the contrary, including Obama’s own fiscal comission.
The AARP and the “senior lobby” do have a great deal of clout. However, some seniors do need the support of the state. One challenge is sorting out what entitlements are providing support that people really need and which ones are merely giving more to those who already have much.
You are right-merely taxing the rich at the pre-Bush levels will not solve the deficit. In fact, I infer that an increase in revenue would inspire even more spending.
There are those who think that the solution to supporting us geriatrified people is for us to work ’til we’re older. Fine, but it’s not always possible.
Take, for example, a construction worker. That requires hard manual labor which tends to wear out the body, so few construction workers could work ’til age 70 or beyond. Even for older people whose jobs require little physical ability, there is discrimination based on age. Also, it becomes hard to keep one’s knowledge current so as to remain employable.
It would help if re-training and part-time jobs were more readily available, but until then, most people would find it very difficult to work past age 65.
And why is it that Democrats have so much trouble actually, you know, paying their taxes?
“US Attorney General Eric Holder and his brother failed to pay the property taxes on their childhood home in Queens, which they inherited last August after their mother died, The Post has learned.”
http://www.nypost.com/p/news/local/queens/holder_tax_lax_ZLrjDOZehZHon7fDakSwTL
“And why is it that Democrats have so much trouble actually, you know, paying their taxes?” Here’s a silly answer to a silly question.
http://dccc.org/blog/entry/special_tax_day_report_at_least_17_house_republicans_with_tax_problems/
And the answer is. . . Wait for it. . .If you have the references to prove that over a specified period (let’s say 25 years) more Democrats [compared to Republicans] at the individual, local, state, and federal levels “have so much trouble actually, you know, paying their taxes”, give the reference here. Your reference presents only one.
Then I’ll have to ask “And why is it that Republicans have so much trouble actually, you know, trouble keeping their peckers in their pants?” Then you’ll have to futz around finding references that prove that Republicans like Newt Gingrich, Larry Craig, are exceptions to the standard requirements of GOP moral purity.
Kudos, however, on an earlier comment: “The point is that simply taxing rich people more is not by itself enough to solve our budget problems, although it could (and probably will) be part of the solution. ” That’s one step up from popular meme that the only thing Dems want to do to solve the problem is tax the rich. Some of us, believe it or not would like to dig into an area you omitted– wasteful defense spending. All the pie charts I see make defense a pretty big chuck of the pie along with social programs.
The story I hear mostly from the other side is “Taxing the rich will destroy society as we know it.” Again, kudos. You seem to seem capable of seeing the light at the end of that tunnel
“Your reference presents only one.”
If your treasury secretary doesn’t pay income taxes and your attorney general doesn’t pay property taxes, what kid of message does that send?
I think my point was made perfectly clear. I attacked your statement “And why is it that Democrats have so much trouble actually, you know, paying their taxes?”Here’s what I object to: You’ll find crooks and liars at every level of government from the local school board treasurer siphoning off tax dollars to pay for a new addition for his house to the city mayor who takes bribes, and on up the line. They’re not all Dems or Reps.
http://voices.washingtonpost.com/debonis/2010/10/ward_3_republican_candidate_ow.html
There are crooks in some churches, for the love of God! My message should be perfectly clear. If my attorney general or your attorney general doesn’t adhere to the letter of the law he should be treated accordingly. Just as a president who approves the Watergate wiretapping scheme should be treated as a crook.
Has Tom DeLay been released from prison yet? Is he just another poor Republican who got screwed by our “legal” system while all the Democrats skate?
A $70 tax lien! And he wasn’t even in politics at that time. You got me, frk…
TX-17: Bill Flores: On May 28, 1998, the State of Indiana placed a $70 tax lien against Western Atlas, Inc. At the time, Bill Flores was the Senior Vice President and Chief Operating Officer of Western Atlas, Inc. The lien was satisfied on April 9, 1999. [Indiana Tax Lien, Marion County Circuit Court, Filing # 03048419, 5/28/98; Business Wire, 8/20/97; Oil & Gas Journal, 4/19/99]
TJ: What luck! Got the sucker before he became another Tom DeLay. . .
Listen to Hedgepeth in the wapo piece. This is what you “love” to hear from your politicians when they’re caught with their hands in the cookie jar:
“[W]e have little to show for the high taxes we pay because of the millions of dollars of waste and inefficiency in the system, and we cannot afford it,” he writes on his Web site. “Is your family getting $21,000 in services? Dave will fight for a more effective and efficient government so that D.C. taxpayers can get more for their money.”
Dave Decider. He determines when He’s received enough for His money. He decides what is waste and efficiency. Can I do the same? Do you think I’ll agree with Dave the Dunderhead? Will you? You want in on the system? You’re welcome to our whacky little group. . . 🙂
I fear for the future of any country that bases its tax system on Dave’s criteria.
WASHINGTON — President Obama’s pick for health and human services secretary, Tom Daschle, failed to pay more than $128,000 in taxes, partly for free use of a car and driver that had been provided to him by a prominent businessman and Democratic fund-raiser, administration officials said Friday.
http://www.nytimes.com/2009/01/31/us/politics/31daschle.html
The 2004 Democratic presidential nominee has been dogged by charges of tax evasion since last week, when the Boston Herald first reported about his decision to dock the 76-foot sloop Isabel in Newport, R.I.
Doing so spared Kerry a $437,500 one-time sales tax charge in Massachusetts, as well as about $70,000 in annual excise taxes. Rhode Island repealed those taxes in 1993, making the state something of a nautical tax haven.
Read more: http://www.foxnews.com/politics/2010/07/27/kerry-agrees-pay-massachusetts-tax-yacht-docked-rhode-island/#ixzz1JseGopaH
Here is a link to the Simpson-Bowles plan:
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf
Good analysis of the current situation:
But it’s important to look at the larger political context of the Ryan proposal as well as its specific content. We inhabit a moment when neither major party has been willing to level with the public about 1) the fiscal challenges facing the United States, and 2) the implications of its ideological stance for public policy over the coming decades. Eschewing tax increases and keeping government’s share of the economy around its post-WWII average, as conservatives want to do, will require a very substantial overhaul of the entitlement system — and yet Republican politicians spent the first two years of the Obama era demagoguing Democrats on entitlement cuts. Alternatively, keeping Medicare and Social Security in more or less their current form, as liberals prefer, will require a very substantial increase in middle-class taxes — and yet the president and his party have repeatedly suggested that the middle class can rest secure, because they’re only interested in raising taxes on the wealthy. We’ve had greater honesty from blue-ribbon panels, to be sure, but from the leaders of the two major parties, not so much. Indeed, President Obama very conspicuously distanced himself from his own deficit commission’s recommendations this winter, while offering only bland evasions in their stead.
Why haven’t our leaders been frank with us? Well, because they believe, not unreasonably, that the political costs of frankness are too high, and that they’re better off waiting for the other guys to put their cards on the table first. So against that backdrop, how would you describe a party leadership that decides to risk the backlash and be honest about the long-term implications of its own vision for the federal budget? Even if this honesty doesn’t produce a completely optimal policy proposal, I think you have to call that leadership … brave. In contemporary American politics, I freely acknowledge, the bar for profiles in courage is set rather low. But last week, the House Republicans easily cleared it.
http://douthat.blogs.nytimes.com/2011/04/13/is-paul-ryans-budget-brave/
Medicare could be cut without hurting anyone.
A couple years ago, a health care provider ordered tests and procedures for me that were totally unjustified, the result being that Medicare paid about $3000 too much for my treatment. As a patient, I could clearly see that the expense was not justified, but could do little without risking been accused of being uncooperative and not getting the care that was justified.
ONE of the unnecessary tests was an MRI scan of my brain (cost about $2500) just because I had a moderate headache which was a known side effect of a medication.
Upon talking to others in the medical field, I learned that is not uncommon for medical care providers to order unjustifiable tests and procedures when they know that either Medicare of private insurance will pay for it. Although it’s not clear to me how to stop this abuse without having excessive regulation, it is obvious that something must be done to control the excessive costs which are contributing to an unbalanced federal budget.
That’s really interesting, FRE. It seems reasonable that a patient should be able to decline services without jeopardizing those they wish to accept.
The only real argument against that seems to be a “what if” scenario where a patient declines an essential aspect of a multi-part treatment, thereby wasting the other parts — that would certainly be a case of money spent for no gain, which is bad. For a few reasons, I don’t this objection is strong enough to matter, though.
In some cases it may not be a simple matter, but in my case, it really was.
A late aunt of mine was revived instead of being permitted to die. She was very angry and asserted that since she was already past 100, she obviously didn’t have much longer to live anyway and should have been allowed to die. So, the next time, they followed her wishes and she died about three months before her 101th birthday.
I don’t know how many people are being kept alive against their wishes, but it shouldn’t happen, and not only because of cost. I’ve signed a document to prevent that but of course there is no guarantee that my wishes will be followed.
There does seem to be something of a money pipe from Medicare to certain health care providers. Part of the problem is due to the for-profit focus of health care. While health care providers do need to make money, there is an important difference between providing health care and making money and providing health care so as to make money.
One side-effect of the for-profit health care model that I have seen is health care professionals pushing a variety of services, products and procedures that seem to hardly be necessary (aside from boosting revenue). While the for-profit model can motivate people to provide good care, a primary focus on health care as a profit making business means that the health care aspect is second.
Here is a link to information about overuse of medical care:
http://www.treatmenttrap.org/
From today’s WSJ:
Where the Tax Money Is
Obama targets the middle class while pretending to tax only the rich.
A dominant theme of President Obama’s budget speech last Wednesday was that our fiscal problems would vanish if only the wealthiest Americans were asked “to pay a little more.” Since he’s asking, imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%.
Let’s stipulate that this is a thought experiment, because Democrats don’t need any more ideas. But it’s still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit. The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that’s where the big money is.
Lots more at the link:
http://online.wsj.com/article/SB10001424052748704621304576267113524583554.html?mod=WSJ_Opinion_LEADTop#printMode
The only other place in this article and the accompanying comments where you’ll see the phrase “defense spending” is in one of my comments. Every time we see a pie chart about government spending, defense represents a mighty chunk. And honest people will admit there are many areas to cut defense spending without compromising our national defense. Yet when the discussions begin there’s nary a whisper of serious defense cuts. It’s raising taxes on the rich and/or the middle class and/ or cutting or eliminating entitlement programs .
Once defense spending becomes a REAL item on the table, up for REAL consideration among REAL sane leaders whose jobs don’t depend on saving defense contracts and military bases in their districts, then the entitlement cuts required become more doable and the tax increases on the wealthy need not be so overwhelming that Mr. M.L Yanayre will have to miss out on even one expensive breakfast.
http://www.funny-potato.com/expensive-meal.html
In fact, I’ll bet he’d even have some money left over from his weekly shoe budget to invest in new, promising business ventures. And he’d still have money left to be comfortably happy on his estate in the Hamptons and his tidy little town house overlooking Central Park.
http://www.forbes.com/2005/07/29/expensivehomes-world-realestate-cx_sc_0729home_ls.html
He may have to take out a short term loan, God forbid, but he likely has buddies on Wall Street. They could cut him a good deal.
One extravagance is is the amount spent to prevent attacks on airplanes. It may not be a high percentage of the federal budget, but looking at it objectively, it makes little sense.
If the same amount were spent on health care or road safety, more lives would be saved. The public reacts more to how people die than to how many people die. Thus, the public is more willing to accept far more deaths resulting from inadequate health care or inadequate road safety than from a terrorist attack on airplanes.
Airplanes had been hijacked since the late 1950s and yet, when 9/11 occurred, the cockpits still had not been hardened to prevent unauthorized entry. Hardened cockpits would have made it impossible for the terrorists to take over the airplanes and surely would cost less than X-raying and feeling up passengers.
I strongly suspect that if all federal expenditures were carefully examined, ways could be found to reduce the federal budget significantly without causing damage.