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Kuros
Joined: 27 Apr 2004
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 Posted: Sun Mar 30, 2008 2:38 pm Post subject: McCain's Fiscal Program |
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McCain's fiscal program: joke or fantasy?
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There's an emerging theme surrounding [McCain's] campaign: The problem with the last eight years isn't that the Bush administration had the wrong policies or was incompetent. No, the problem is that it lacked intensity. Which is why McCain is bent on offering a more concentrated, sustained, high-energy form of Bushism. Bush has been adamant about staying in Iraq until the end of his presidency; McCain is adamant about staying up to 100 years, if necessary. Bush has taken to carefully cherry-picking facts and metrics (the number of soccer games visible from the air, to cite one) to construct a narrative on how well things are going there. (I bet there weren't many soccer matches in Sadr City today.) McCain prefers simple declarations to data points: "We're winning. I don't care what people say. I've seen the facts on the ground."
The same holds true for the economy. By virtue of his history as a deficit hawk, a foe of earmarks, and an opponent of the Bush tax cuts�not to mention the presence of reality-based advisers like Douglas Holtz-Eakin, former director of the Congressional Budget Office�McCain deserves some benefit of the doubt. Unfortunately, the brains behind the economic operation seems to be former Sen. Phil Gramm, the Texas A&M economist-turned-senator who confidently forecast in 1993 that the Clinton program of spending cuts and tax increases on the wealthy would be "a one-way ticket to recession." And the sections on McCain's Web site about domestic policy reveal, as Matt Yglesias noted, "a nearly astounding level of vacuity."
Reading McCain's economic agenda and listening to his speech, it appears that the problem with the last eight years is that we haven't seen enough tax breaks for the wealthy, that economic royalism hasn't been pursued with sufficient vigor, and that the middle and working classes haven't been stiffed sufficiently. |
The article is a bit harsh. I think that reducing the corporate tax rate from 35% to 25% is a fine idea, IF accompanied by an elimination on industry-specific special tax breaks.
Nevertheless, I do not think McCain's message is a winner. |
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Tiger Beer
Joined: 07 Feb 2003
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| Posted: Sun Mar 30, 2008 7:32 pm Post subject: |
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| When I hear '100 years in Iraq', I hear a man who has NO PLAN for Iraq whatsoever, won't address it, and will just stick with the current status quo. |
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Justin Hale
Joined: 24 Nov 2007
Location: the Straight Talk Express
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| Posted: Mon Mar 31, 2008 2:22 pm Post subject: |
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I understand your position, Tiger Beer, but McCain has ideas, points as to why pulling out is just wrong, quite the contrary to your criticism. McCain thinks (privately) � rightly in my opinion � that (a) Muslim extremists are killing each other, (b) we�re killing Muslim extremists and (c) we�re also overseeing the whole thing doesn�t develop into chaotic chaos. What�s desirable is manageable chaos. And yes, apologies to the families of dead soldiers and Iraqi civilians for my insensitivity, but I have my views and my right to air them. Muslims want a war with America and with each other and we�ve given them what they want. Saddam didn't give them what they want.
As for McCain�s fiscal policies, it�s not my area, but McCain has expressed Left Wing conservative views on taxation previously which naturally appeal to me. I don�t believe in a flat tax rate and McCain has expressed liberal views on tax which I agreed with and � not unusually for him � found refreshing in a Republican. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Mon Mar 31, 2008 3:39 pm Post subject: |
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| Justin Hale wrote: |
As for McCain�s fiscal policies, it�s not my area, but McCain has expressed Left Wing conservative views on taxation previously which naturally appeal to me. I don�t believe in a flat tax rate and McCain has expressed liberal views on tax which I agreed with and � not unusually for him � found refreshing in a Republican. |
Yes, its true, McCain doesn't advocate a moronic and regressive flat tax like Huckabee has. But, McCain wants to extend corporate tax cuts while retaining Bush's prior tax cuts on the upper class.
As someone who leans right economically, I have to say he cannot have both. Better that the rich pay more in personal income and corporations pay less. The first two priorities should be a) fiscal solvency for the US gov't and b) a competitive taxation scheme to encourage FDI / keep our businesses competitive. These benefit everyone in America. The tax cuts for the rich may benefit the middle class and the poor through trickle down of conspicious consumption or increased investment by the investing class. However, we simply cannot afford it at this time.
As it is in America, corporations are suffering big time following 9-11 and SarBox, while Private Equity firms are enjoying an unprecedented boom. I think there's a counter-financial revolution going on as the rich, with million dollar minimums for entry into Equity firms, now have a qualitative advantage (instead of a merely quantitative dollar-for-dollar advantage) over the average investor sitting at his computer. Anyone can invest in corporations, so lowering the taxes on them increases profits for all investors. But insulating the very rich from taxation benefits two privileged groups, Equity firms themselves and the rich who invest in them. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Tue Apr 01, 2008 6:17 am Post subject: |
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| Kuros wrote: |
As someone who leans right economically, I have to say he cannot have both. Better that the rich pay more in personal income and corporations pay less. The first two priorities should be a) fiscal solvency for the US gov't and b) a competitive taxation scheme to encourage FDI / keep our businesses competitive. These benefit everyone in America. The tax cuts for the rich may benefit the middle class and the poor through trickle down of conspicious consumption or increased investment by the investing class. However, we simply cannot afford it at this time.
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One must be careful when implementing policies of higher taxation for the rich because all the rich will do is pass the buck, so to speak. All things equal, except for taxes, a manager is likely to earn 15% more in New York than Houston. The reason is that NYC has an incredibly high tax rate while there is no income tax in Houston. Of course, there are things to consider such as the size of the firm, demand elasticity whatever and whatnot. Though the larger owners and managers will pass the buck down resulting in either lower wages, more unemployment or higher costs for goods and services. Point is, if you think the rich should pay their fair share, they will do whatever they can to pass the buck. Those in the lower income strata end up getting hurt the most, no matter who's taxed. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Apr 02, 2008 5:32 pm Post subject: |
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Pluto, I don't know why we shouldn't hit the rich with 43% Federal taxes. Its low for the Western world, even figuring in 7% for state taxes. I have some other goodies for you.
First, Hillary's second 3am ad.
Second, a little pin-up for this economic thread.
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Apr 02, 2008 7:38 pm Post subject: |
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McCain responds to Hillary's second 3am ad!
I know responding to your own post is a no-no. But when its 3am, you can only trust one member of this board to keep abreast of CE responses: Kuros. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Wed Apr 02, 2008 8:15 pm Post subject: |
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First, as for the commercials. It shows really different ideas. The question is do you want Hillary taking care of you? Do you want the Gov't taking care of you? Do you want to kiss some bureaucrat's butt to get what you want? I little biased because I really do believe in the positive synergies a free people. I also fear that any gov't interference will only exacerbate the problem. McCain has admitted to needing to learn more about economics but I feel, for the most part, his instincts have mostly been right with some notable exceptions(e.g. campaign finance.)
As for taxes, I hope were not going to tax the rich just for the sake of taxing. I really don't know what to make of your graph that you posted except for that Republicans tend to be more entrepreneurial so lower taxes would help them out a lot. I also don't know how we are defining rich. Is it in income or wealth? You should also keep in mind that there are opportunity costs to consider when you tax the rich as the rich are the ones most poised to take on large capital risk projects which benefit everyone. While I've got huge problems with the income tax, my feeling on taxes is that the government should try its best to maximize the taxpayers' utility. This is the most general sense because utility here is a matter of debate.
Speaking of economic illiterates, Check this out. Keep in mind, 100 Million Americans own stocks! |
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stillnotking
Joined: 18 Dec 2007
Location: Oregon, USA
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| Posted: Thu Apr 03, 2008 9:48 am Post subject: |
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The graph Kuros posted refers to real income growth (subdivided by class) under different Presidential administrations. It's no secret that income grew more in the 20th century under Democratic Presidents than Republicans, but the reasons for it are somewhat obscure. The President can do very little to directly affect this statistic, and Republican critics say that Democrats have simply benefited because they happened to be in office during the two major economic expansions.
There are very good reasons to tax rich people much more heavily than the poor and middle class. Among them: diminishing marginal returns (40% of Warren Buffet's income means a lot less to him in real terms than 20% of mine means to me), turnover (poor & middle class people spend their money rather than saving it, which helps the economy), and transparency (the poor & middle class don't have access to the tax-evasion schemes that the rich use). It's also arguable that the rich benefit disproportionately from government spending.
During the Eisenhower administration, the top tax bracket was 92%. 92%! No one today is advocating anything close to that, and yet the Eisenhower years were very robust in terms of economic growth and real wage growth. IMO the top tax bracket should be something like 70-80%. |
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stillnotking
Joined: 18 Dec 2007
Location: Oregon, USA
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| Posted: Thu Apr 03, 2008 9:56 am Post subject: |
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| Pluto wrote: |
| Kuros wrote: |
As someone who leans right economically, I have to say he cannot have both. Better that the rich pay more in personal income and corporations pay less. The first two priorities should be a) fiscal solvency for the US gov't and b) a competitive taxation scheme to encourage FDI / keep our businesses competitive. These benefit everyone in America. The tax cuts for the rich may benefit the middle class and the poor through trickle down of conspicious consumption or increased investment by the investing class. However, we simply cannot afford it at this time.
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One must be careful when implementing policies of higher taxation for the rich because all the rich will do is pass the buck, so to speak. All things equal, except for taxes, a manager is likely to earn 15% more in New York than Houston. The reason is that NYC has an incredibly high tax rate while there is no income tax in Houston. Of course, there are things to consider such as the size of the firm, demand elasticity whatever and whatnot. Though the larger owners and managers will pass the buck down resulting in either lower wages, more unemployment or higher costs for goods and services. Point is, if you think the rich should pay their fair share, they will do whatever they can to pass the buck. Those in the lower income strata end up getting hurt the most, no matter who's taxed. |
Two things. First, the higher wages in cities have little if anything to do with higher taxation. Check out Tim Harford's The Logic of Life -- it's one of my favorite econ books of all time and it delves into this topic at some length.
Second, the fact that rich people tend to be better at evading taxes than poor people is an argument for taxing them more, not less. The idea that the rich will somehow "pass the buck" with 100% consistency doesn't hold any water. The higher the tax rate of a group, the more taxes that group will pay, whatever countermeasures they take. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Thu Apr 03, 2008 12:29 pm Post subject: |
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| stillnotking wrote: |
| Pluto wrote: |
| Kuros wrote: |
As someone who leans right economically, I have to say he cannot have both. Better that the rich pay more in personal income and corporations pay less. The first two priorities should be a) fiscal solvency for the US gov't and b) a competitive taxation scheme to encourage FDI / keep our businesses competitive. These benefit everyone in America. The tax cuts for the rich may benefit the middle class and the poor through trickle down of conspicious consumption or increased investment by the investing class. However, we simply cannot afford it at this time.
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One must be careful when implementing policies of higher taxation for the rich because all the rich will do is pass the buck, so to speak. All things equal, except for taxes, a manager is likely to earn 15% more in New York than Houston. The reason is that NYC has an incredibly high tax rate while there is no income tax in Houston. Of course, there are things to consider such as the size of the firm, demand elasticity whatever and whatnot. Though the larger owners and managers will pass the buck down resulting in either lower wages, more unemployment or higher costs for goods and services. Point is, if you think the rich should pay their fair share, they will do whatever they can to pass the buck. Those in the lower income strata end up getting hurt the most, no matter who's taxed. |
Two things. First, the higher wages in cities have little if anything to do with higher taxation. Check out Tim Harford's The Logic of Life -- it's one of my favorite econ books of all time and it delves into this topic at some length.
Second, the fact that rich people tend to be better at evading taxes than poor people is an argument for taxing them more, not less. The idea that the rich will somehow "pass the buck" with 100% consistency doesn't hold any water. The higher the tax rate of a group, the more taxes that group will pay, whatever countermeasures they take. |
No, no, no this is all wrong. First the income tax is the most destructive tax there is. If you look closer I was comparing two cities with two different tax codes. You should know that executive and owner salaries always equilibrate due to the tax code. This means top C-level execs get the money, send what they have to the tax man and invest what is left over though smaller businesses really get hammered because they can't pass the buck; they go out of business. These are huge opportunity costs that you're not thinking of.
Secondly, what is the point of taxing the rich 70-80%. Are we taxing them just for the sake of higher taxes. Everyone deserves the right to the fruits of their labor and the government should keep nose out of people's business. Also, who benefits most from higher taxes? Can't you see the link between higher taxes and more corporatism? |
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stillnotking
Joined: 18 Dec 2007
Location: Oregon, USA
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| Posted: Thu Apr 03, 2008 3:49 pm Post subject: |
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| Pluto wrote: |
| Secondly, what is the point of taxing the rich 70-80%. Are we taxing them just for the sake of higher taxes. Everyone deserves the right to the fruits of their labor and the government should keep nose out of people's business. Also, who benefits most from higher taxes? Can't you see the link between higher taxes and more corporatism? |
"Everyone deserves the right to the fruits of their labor" -- of course they do. But everyone also has the responsibility to pay for the society that supports them. And, like I said, there are several excellent reasons why it makes sense to demand that the rich pay a higher percentage of their income.
The question here isn't whether taxes in general are good or bad. It's about the amount of tax each income bracket should be paying. "For the sake of higher taxes"? What do you think, I'm advocating high rates on the top brackets out of spite? I have nothing against rich people. I just want to find the most equitable and productive way to distribute the inevitable tax burden.
I think you may be confusing corporate tax rates with individual income tax. I'm talking about the latter, not the former. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Thu Apr 03, 2008 4:34 pm Post subject: |
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| stillnotking wrote: |
| Pluto wrote: |
| Secondly, what is the point of taxing the rich 70-80%. Are we taxing them just for the sake of higher taxes. Everyone deserves the right to the fruits of their labor and the government should keep nose out of people's business. Also, who benefits most from higher taxes? Can't you see the link between higher taxes and more corporatism? |
"Everyone deserves the right to the fruits of their labor" -- of course they do. But everyone also has the responsibility to pay for the society that supports them. And, like I said, there are several excellent reasons why it makes sense to demand that the rich pay a higher percentage of their income.
The question here isn't whether taxes in general are good or bad. It's about the amount of tax each income bracket should be paying. "For the sake of higher taxes"? What do you think, I'm advocating high rates on the top brackets out of spite? I have nothing against rich people. I just want to find the most equitable and productive way to distribute the inevitable tax burden.
I think you may be confusing corporate tax rates with individual income tax. I'm talking about the latter, not the former. |
You mentioned tax burden which is important because we can't talk about taxes unless we talk about spending. Government spending must be cut straight away. I really wish Congress would put an end to earmarks and pork-barrel spending or whatever the euphemism is nowadays. Also, there is a lot of burdensome bureaucracy in the government that must go, too. Say what you want about Ron Paul, but he's right about the Dept. of Education; it must go. Some bureaucracy must be done away with outright, others should be streamlined. The less spending and power the government has, the more that can be passed on to the taxpayer.
As for both corporate taxes and income taxes, I don't like either of them. I wish they'd both be done away with or minimized as much as possible. |
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stillnotking
Joined: 18 Dec 2007
Location: Oregon, USA
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| Posted: Thu Apr 03, 2008 4:54 pm Post subject: |
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Government spending must be cut straight away. I agree one thousand percent, and as the first item on the chopping block I propose our $3 trillion war in Iraq. Of course the majority of those funds are sunk costs by this time (or represent future health care for veterans, which I'm not coldhearted enough to deny); as a means of recouping some of the losses, perhaps we could put Bush, Cheney, Rumsfeld, Feith, Wolfowitz, Powell, etc. etc. in a dunking booth above an alligator tank, and sell tennis balls for a hundred K a pop.
You have a preference for the species of alligator? Never mind; we can work it out in committee. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Thu Apr 03, 2008 5:26 pm Post subject: |
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| stillnotking wrote: |
Government spending must be cut straight away. I agree one thousand percent, and as the first item on the chopping block I propose our $3 trillion war in Iraq. Of course the majority of those funds are sunk costs by this time (or represent future health care for veterans, which I'm not coldhearted enough to deny); as a means of recouping some of the losses, perhaps we could put Bush, Cheney, Rumsfeld, Feith, Wolfowitz, Powell, etc. etc. in a dunking booth above an alligator tank, and sell tennis balls for a hundred K a pop.
You have a preference for the species of alligator? Never mind; we can work it out in committee. |
Well, for as much as I might agree Libertarian philosophy, I must part ways with them on matters of foreign policy and national defense. The Iraq war, as you say, is certainly a sunk cost. Therefore, the commitment has been made and the promise must be kept.
The DoD certainly should be streamlined, too. The DoD must use its power of monopsony and move back to encouraging inter-service rivalry. However, these adjustments cannot be realized without congressional leadership. These two small adjustments within the DoD will ensure the best dollar spent on defense for the American taxpayer. Cato had some common sense ideas which can be read here. |
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