Will we decide we're ready to get on with our lives, that government should serve us and not just be tolerated by us? Who knows. I'm sure the changes we're all holding our collective breath for are beyond the reach of any one president, but I'm also pretty sure another rich white guy who doesn't seem to know what he stands for and who's running mate is less qualified than my father-in-law (seriously) to run the country ain't the answer.
I had hoped to discuss a lot of things on here before now. I had hoped to give a brief lesson on the Laffer Curve, made most famous outside of economic circles in Ferris Beuhler's Day Off by Ben Stein's character... and how even conservative economists all but shot it down within its first year in public light because, among various other problems with it, one interpretation is that if it's true, and if we haven't reached the peak point of taxation, then MORE taxes are the answer to economic growth, not less. Another problem is that there was never enough data to suggest this wasn't the case. Turns out it's almost impossible to follow up on the theory of such a dynamic issue using only static data. That's why the theory is discredited among economists but works so well in a campaign wherein the greatest virtue seems to be being just like Joe the (insert trade of choice here)rather than having some complex vision for our future. If you don't have to think it through, it sounds great. It's Limbaugh Logic and it polls all too well with Joe Six Pack!
I had hoped to talk more about how or why John McCain somehow escaped the scrutiny faced by Bill Clinton, Al Gore, John Kerry or John Edwards. I still don't get that. Since the primaries started, I've been amazed by what I've learned about Senator McCain. As I've made abundantly clear, I really thought he was one of few congressmen earning his keep, but looking back over his career (military and political) now makes him look a lot more like someone who simply latched on to what would gain him some ground for his next election. And I get that you have to win before you can do anything else, but if his plan is different from W's, then he hasn't really proposed anything else yet... except a McCain victory, which, based on his career history, is about all he's planned.
I don't know if a president has the ability to truly shape our economy, but I know that the guy who turned the place over to W left him some extra money, a warning about Bin Laden, and a rolling economy. Eight years later we're back in the extrapolated Reagan era - big business is rolling in it while the rest of us are wondering what we'll have to cut next... still waiting for the trickle. It didn't work for Reagan in most senses and it isn't working now.
I have an economic theory that those of us in the bottom 95% really make up more of our economy than we're given credit for. Even in these economic times, we still have to fill our tanks, buy groceries, pay the bills. That day to day spending IS the American economy. Yacht, mansion, and Bentley orders may be down, but we still have to get to the store weekly to keep the cupboards full, even if the economy means they're full of peanut butter, jelly and store brand bread. The bottom 95% of income earners in America are the ones who buy the products that the top 5% are selling. The last eight years have proven that they can only rob from us for so long before we don't have any money left to buy anything anymore. That's when the economy collapses. That's where we are. That's why a progressive tax makes at least as much sense as the Laffer Curve as an economic principle.
A progressive tax plan says simply that those who benefit most from the resources government provides pay the most for those resources. Is it really that crazy? Is that really socialist? (maybe in the sense that FDR, Warren Buffet, Allan Greespan and John McCain are, well used to be, socialists) I drive one car on the road, have one house that needs fire protection, draws electricity off the public grid, etc. and so on. Should I really pay a larger portion of my income for those roads, power, etc. than Sam Walton (for instance), who as a result of using the entire country's roads, power grids, sewers, etc. also pockets more profit than I ever aspire to? There's nothing wrong with him making as much money as he has, but it comes with a tax liability equal to if not in excess of my own. Is it really crazy to think otherwise? I'll share that burden with him in the form of sales taxes and abatements to defray the cost of him opening up a new store, but after that, he's on his own. Is that really too much to ask? Is that perspective so crazy?
Look at it this way: I have a house, he has a house. I have an income, he has an income. I have a job, he has a job. So far we're equal and we're taxed equally. but Sam also has a fleet of trucks spread out across the American highways. He's got stores and warehouses scattered over every state. Each one requires government funded roads, power, water, sewer, police and fire protection. Given that I don't profit from all of those assets, why should I share the tax burden they require?
Jobs you say? Sure those assets of Sam's provide jobs... for people who also pay income taxes, shop at Wal-Mart and pay sales taxes. The only guy left out of the picture here in the Laffer Curve model is the owner of that vast network. The burden is his. It is NOT a penalty for his success, it's his responsibility. Let me repeat that, it is NOT a penalty for his success. It is his RESPONSIBILITY. It is the part of the American dream that begets future American dreams. If Sam's stuff sucks up more of those services we're all paying for, then Sam needs to pay more than those of us who aren't sucking up more of the services. It is selfish to think otherwise. It is unpatriotic to think otherwise. It is greedy to think otherwise. It is illogical to think otherwise. That burden is Sam's. That burden can only be shouldered by the bottom 95% of American taxpayers for so long. We're reaping the results of the flawed Laffer Curve model being the basis of our economy for 20 of the last 28 years. How much longer must we test a theory we know to be flawed. How much more of "the wealth" must be redistributed from the bottom 95% to the top 5% before we can no longer afford those roads, power grids, services any longer?
Redistribution of wealth isn't some abomination of a libertarian tax plan in a capitalist society, it's one of the primary reasons for taxes. Taxes fund government and government provides the basic services that would be unreasonable for individuals, including individual corporations, to provide on their own. Asking those who use and benefit most from those services to pay the most for them isn't socialist. In fact little could be more American. We all pay our own way here... except for all those things we share the cost of that government provides. Why shouldn't Sam pay his share of that?
I doubt anyone who would be swayed by my ramblings will read this before they head to the polls tomorrow, but there's always 2012.
Here's to a bright new America, starting Wednesday!
Luth,
Out
3 comments:
Amen. Time to go and vote soon!
Well I read most of your ramblings and I'm waiting for the polls to open so I can vote for McCain/Palin. It appears that you have many facts wrong. A few examples follow.
The federal income tax is more progressive under W than it was under Clinton. Walmart's fleet of trucks pays more for roads through the fuel tax. Raising the fuel tax would tend to raise prices. The increase in Social Security taxes has been necessitated by demographics (fewer workers per retiree). This situation has been made worse by federal mismanagement. W tried to reform this and was shot down by reactionaries mainly in the Democratic party. You and Obama think the rich steal from the middle class. If anything the opposite is the case. The federal government spends roughly $10,000 for every man, woman and child in the US. If your family pays less than this (and we know it does!) you have the likes of the late Mr. Walton to thank. As for the Laffer curve, you, like most lefties, have it seriously wrong. A good project for your next 4 years would be to try to understand the related ideas: if tax rates are above a certain level the government could collect as much with a lower rate. Or, if you double tax rates you won't get double the receipts. Bush's tax rate cuts were not based (solely)on the Laffer curve. He thought it was wrong for the gov. to take more than 1/3 of anyone's income. Finally, McCain disagrees more with Bush than Obama does. McCain thought the Bush rate cuts should be matched with spending cuts (as did the inventor of the term "Laffer Curve", Jude Wanniski). I don't believe Obama has such scruples! And notice: McCain expected tax receipts to go down! He was right too, sadly.
Now that you're done with the ramble, and done voting McPain, perhaps you can point to those facts I had wrong.
The Laffer CurveI is a bell curve, the peak of which represents the ultimate tax/revenue point. Higher taxes would create less revenue down the right side and lower taxes would create less revenue down the left side. So as long as we're left of that peak - and it's never been established that we're not - then taxes could still go up, even if it's more than 1/3 of someone's income, and revenue would also increase. We're looking at different aspects of it, but neither of us seems to be disputing any part of it. So where's the wrong fact?
WalMart's trucks SHOULD pay taxes to drive on govt built and maintained roads. Those of us who shop there should expect to pay some of that in the prices we pay for goods those trucks carry. (it's actually a cool system!) But to have more of that burden placed upon the bottom 95% instead of the folks profiting from those trucks is bad policy. It's the policy W came into office on and got away with until it all came crashing down. Early returns tell us even those who drank the kool aid in 04 have seen through it now. Where's the wrong facts?
W didn't try to reform Social Security, he tried to privatize it... encouraging folks to invest in the stock market - with solid, safe companies like Enron, I presume. Since I never mentioned Social Security, I'm pretty sure I didn't have any facts wrong about it, but as noted, you seem to have bent one of them.
You comment on what I wrote, but you apparently missed some key parts. The basis of my rant is that we're neither stealing nor penalizing businesses for existing, but simply asking that they pay their way instead of passing that share back to the bottom 95% not only in prices of goods (which we'll pay if we choose to buy those goods) but also in taxes a la W economics, wherein the country is sold out to big business... as it has been... without question in the last 8 years. (to his credit, this was his genius, country be damned) Look at the businesses that are thriving right now and look for the footprints. Are you suggesting I manipulated Exxon's profit reports too?
Look, I'm all for big business providing a nice cushy income to its employees including owners or CEOs, and that personal income probably shouldn't be taxed at more than 33%, but the business itself has to pay its dues as well. Pay the great salaries... the payroll is an expense, genius, reducing the net profit, but then pay a business share of the taxes on that profit commensurate with the resources that business devour rather than passing that burden down to those who are already paying their share, as you mentioned, through the higher cost of goods. That was the entire argument and I don't see any rebuttal of that in your comments.
And finally, McCain had a chance to add those spending cuts to the Bush tax plan. Instead, he chose to shoot the plan down. Now he's promising us it will save us? He had the chance to cut $2 billion a week in spending and yet he still says that's good money spent. He's part of the new breed of spend and spend Republicans and it's really tough to convince me that that philosophy is gonna work any better than it has.
McPain and Obama present about the same amounts of spending, basically. We both know that by the time those budgets make it through congress, they'll be even closer. This isn't about the total numbers, it's about the intentions. McPain (who has made it clear that he's not a numbers guy and who didn't exactly recruit much help in his VP) offers as his best proposal W2. Obama's plan requires us to abandon that model and trust that the economic recovery this will spark will eventually cover the costs based on that old model. The cost won't be covered right away, but given the hole he'll start in, how could it? I say it's worth a shot. Must I remind you that the last balanced budget (ie the last time that actually happened) was the product of a Dem administration?
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