Dishonest Rhetoric to Sell Tax Cut

Great Debates
41

Sure, you can always find a way to punish the rich, if that’s what matters to you. For example, you could make them all come down to a government office to get their tax rebates, and then slap them each in the head for being rich.

Me, I’m more interested in things like economic efficiency and maximizing growth. I don’t like class warfare, and I don’t buy into the notion that there is a ‘rich’ class and a ‘poor’ class, and that the job of the government is to move money from one class to the other. Mostly, poor people move into the middle class and often into the rich classes as they gain experience and move up in their careers. At the very least people should have the opportunity to do so.

To help the ‘poor’ class, I’d rather see a stronger overall economy, and focus on whatever problems there might be in preventing people from advancing. Just taking money away from the rich and giving it back to the poor is a non-starter in my book. That way has been tried in Europe and Canada, and after a few decades of that experiment the results are coming in, and they don’t look particularly appetizing to me.

Here in Canada, we did a lot of crowing about how much kinder and gentler we were than the Americans, and the liberals here have praised our social welfare system as being better than the American way. Well, after a few decades of you going your way and us going ours, you can start to see the difference. Unemployment in Canada is perpetually 3-4 percentage points higher than in the U.S. Economic growth is lower. And the standard of living compared to the U.S. is falling. The dollar fluctuates around 60-65 cents. Our health care system is starting to crumble, and our best people are leaving in droves to go to the United States.

I think the class warfare argument is losing traction with the public, which is one of the reasons why the Democrats are losing support. I notice that even they aren’t spinning their alternative tax scheme in terms of ‘social justice’, but rather are claiming that theirs is a better stimulus.

42

Goodness, one hardly knows where to begin! At least we have disposed of the opinion of that self-described “economist”, Mr. Krugman. He has not sufficiently praised Republicans, that will be quite enough out of him. But lets move on to articles of faith posted as fact.

Why? Divine right? What special dispensation is granted to the privileged, beyond what is already thiers? Where is it written? This at least has the advantage of honesty, it does not pretend a compassion it does not possess.

But please note that the first to use the words “class war” were not the Democrats, but the Republicans, as if brandishing a crucifix to ward off a vampire. Thier unshakeable faith in the right of property above all would be charming in a small child, clutching his toys and crying “Mine!”. No doubt we are expected to shrink away from such an amulet of faith. But, in truth, it is based on no more than the insistence that it is so.

We should express some gratitude, I suppose, for Mr. Stone’s warning of snowbacks clamoring over the border for a better life in America. Due, of course, to the certain and impending collapse of social order, which is, we are assured, mirrored in the equally certain collapse of Europe, whose moral fiber has been rotted away by the same despicable liberal corruption.

I’ve been hearing the same litany for lo, these many years now, how first Sweden, then Denmark, then all the rest are collapsing, tumbling down around thier misguided ears. Yet, like the Apocalypse, it always seems to be just around the corner, next year, next month, but never today. Odd, isn’t it?

I do not hold, as some do, that greed is a worthy human motivation, to be nourished and protected. I hold that the purpose of governance is the well-being of the governed, and not the protection of those who need none. I contend that a man who willfully witholds what he does not need from another who does is niether a worthy man nor a worthy citizen.

If this be class war, make the most of it.

43

I take it, then, that you donate all your income above a certain amount? I’ll be generous and not hold you to keeping yourself as poor as the poorest in the world, but surely you don’t need more than the world average income of, say, $8500? And I REALLY hope you don’t keep more than the U.S. average income of about $30,000?

But wait, it’s always OTHER people’s money you want to give to the poor, right? You know, there’s no virtue in being charitable with other people’s money.

I have a friend who is a Catholic Priest and a political agnostic. He took a vow of celibacy and poverty, and lives a very modest existence. But he wouldn’t dream of telling other people that they must follow his example.

My Grandparents worked hard all their lives, and were political conservatives. They lived frugally, and saved half a million dollars in cash by the time they died. They gave half of it to charity, a quarter to their church, and the other quarter to their family.

I have infinitely more respect for those kinds of people, and much more respect for their calls to charity, than I do for those limousine liberals like Paul Krugman who have the kind of income where a $50,000 speaking fee is trivial, but go around spouting rhetoric like elucidator’s.

44

Well, this is Sam Stone’s (and the Administration’s) idea, not mine. I’m agnostic on the idea of eliminating the dividend tax, as long as it is coupled to a rise in other taxes on the rich so that we can make it revenue neutral and spend the money we decide to spend on tax breaks for those who need the breaks and those who haven’t benefitted very much from the economic expansion that made these breaks possible.

Well, your grandparents sound like very decent folks but I don’t see what the fact that Krugman makes a lot of money has to do with how we should feel about him. Personally, I respect wealthy people who don’t favor government policies that increase their windfalls over wealthy people (like many in the current administration) who do.

So, let’s see, we aren’t suppose to care about the distribution impacts of changes in the tax code. We are simply supposed to ignore it and base things on maximizing efficiency. Except that we have no idea how to do that, although many wealthy people conveniently believe that giving money back to the wealthy is the answer. Never mind that businesses aren’t spending not because money is hard for them to get but rather because they don’t have very much confidence in consumer demand…which would seem to imply stimulating the demand side. No, we have to continue to think up ways that conveniently give tax breaks to the wealthy and then justify them as being for the good of the entire economy. Trickle down rules and percolate up sucks! I see how the game is played now.

45

I am at a loss as to how to take your recent post, Sam, other than to commend your choice in friends and ancestors. Am I to understand that my argument stands or falls relative to my personal virtue?

Then I am sorely vexed, for I am a scoundrel, sir, a despoiler of maidens and a tosspot. Alas! Further, I make my living as a consultant, fastening leech-like on the ignorance of innocent middle-management, draining thier quarterly budget with cruel avarice. In my defense, I can only point to being born and raised in Texas, much like being raised by wolves, except for improved language skills. I’m probably a hypocrite as well, I’m not certain, having not looked in volume “H” recently.

As to Mr. Krugman’s virtue, he may well deserve your contempt as a “limo liberal”, I cannot testify. I suspect he is as good a person as Mr. Bennet, who makes quite a good living as a public scold.

46

jshore:

This is true. The government has no mandate to redistribute wealth.

Yes.

Wrong. Utterly wrong. Ridiculously wrong.

We know exactly how to do it. Lower taxes are an economic stimulous. It ain’t no mystery. And, you are not giving money back to wealthy, you are simply not confiscating it in the first place.

How do you propose stimulating demand?

No. I’m pretty sure that there are scales on your eyes.

By definition any meaningful tax cut will benefit those who earn more.

A married couple filing jointly who make $30,000, have about a $4,200 tax liability before any deductions. If they have a kid and a mortgage they likely pay nothing or next to nothing. Let’s call it $500.00 after deductions.

Meanwhile somebody who makes $300,000 is gonna owe north of $100,00 before deductions. Let’s say after deductions he’s left with a $75,000 tax liability.

A family that makes ten times as much pays 150 times as much in taxes according to this example.

Now you want to create a stimulous, or reduce taxes, where do you look? Who deserves the cut?

What you seem to be missing time and time again is that there is nowhere to meaningfully cut taxes that doesn’t benefit the wealthy. The wealthy pay the vast majority of taxes, not the poor.

And, our guy making 30k isn’t poor by any standard. He’s doing well, and he’s hardly paying any taxes. The current tax rates are already a penalty on the rich.

Another thing that you seem to be missing, and that just about everybody who’s a knee-jerk “screw the wealthy” type misses is that the government does not and should not have any control of these things.

People in highly compensated positions are there because of supply and demand.

If you tax highly compensated people highly, they will simply demand more for the goods and services that they provide, or they will give up until demand allows them to get their higher price. Increasing tax rates disproportianately to the wealthy serves to actually further the wealth gap. It is also a disincentive for people to do well, you create scarcity, and you raise prices for those that can least afford it.

47

What argument? Have you made one?

All I see is this kind of crap:

48

jshore:

I’ll give you an example:

Doctors tend to make lots of money, right? Why don’t you just decide to levy a flat tax against Doctors of 80%?

If they all make 1/2 a million a year that’ll still leave them with 100k. That should be enough for anybody, right?

Do it though, and fewer people will want to be Doctors. Fewer will be willing to go through medical school and the time and the expense necessary to get to be highly compensated in their profession. They’ll go and do something. Becoming a Doctor is a hardship and a sacrifice and one often acquires significant debts doing so. When they look at it in their heads, and evaluate their potential professions, Doctor will no longer be as desirable a profession because the reward has been significantly decreased.

People stop being Doctors. Costs of remaining Doctors go up. It reaches a balance again when Doctor’s take home pay is back to where it was, because that is where the economy has set up.

Already many highly compensated professionals negotiate and percieve income based on take home pay. $300,000 means nothing if you don’t keep it.

In dealing with a free market, the basic concept is that you tamper with it as little as possible. This is because tampering will have undesired side-effects and a free economy builds in its own buffers.

A free market works, specifically because it is left alone as much as is humanly possible. It will resist tampering. If the market places a demand on Doctors that they are worth 100 times more than garbagemen in terms of compensation than that is what’s going to happen. If you tamper you’re going to produce side effects and repercussions that move the economy back to its original level. If you taxes Doctors more, they will earn more, or charge more, effectively meaning that a garbageman gets paid less, or it may happen in actuality.

If you lower taxes, and that means lowering taxes for the wealthy, then you benefit everybody in that economy.

49

Wouldn’t the argument be more to the point if if were about the efficiency of government actions in sponsoring wide-based economic growth and employment? If that truly is the goal, is there any way in God’s green earth that cutting taxes on corporate dividends is the best possible answer? What is the logic that gets one to conclude that, instead of some combination of government investment in wealth-creating sectors of the economy instead of wealth*-collecting* sectors?

Supply-side was always a fraud, and many even in the Reagan administration knew it and admitted it. It is very hard to find a way in which it could be both honestly and intelligently reproposed.

k2dave

And we’re into the ninth quarter of the Bush Admin. When does he get to start taking any of the blame?

Apos, excellent post. Like the Pickering renomination, it shows another symptom of Bush/Rove’s, hmmm… what are the best words? Political tone-deafness? Lack of touch with reality? Simple vengefulness? Contempt for those with shallow pockets? Whatever.

You might also have addressed the dishonesty of professing that the tax cut proposals are class-blind, and that anyone suggesting otherwise is committing “class warfare”. That’s akin to suggesting that anyone who points out bigotry in others must himself be a bigot. Fortunately, that’s one argument that’s so dishonest that it probably won’t work, either - even the ever-evanescent polls are against the frat boy on this one.

There’s also the dishonesty of calling an estate tax that nearly nobody actually pays an onerous “death tax”, and the dishonesty that anyone paying income tax at a lower rate simply due to poverty-level rhather than top-percentile income, despite their higher percentage burden of other taxes, is a “lucky ducky” (a word that december’s revered WSJ has used in making that assertion) … Where does the self-deception stop?

50

Perhaps. Perhaps not. I’ll oversimplify, so as not to further tax your patience.

Your child is mildly ill. I offer you a choice of two doctors, more or less equivalent in skill, etc.

One went to medical school because she wanted to be doctor. The other went because he wanted to make money.

Which would you prefer?

51

The woman.

52

My point is either well taken or well evaded. Care to clarify?

53

Sure. It’s an arbirtrary decision. A completely moot point.

If as you say, the quality of care is equal, than my choice is arbitrary. I choose the woman, because my child is a girl.

If quality of care is equal, I couldn’t care less about their motivation, and, if you want to put me on the spot, I’ll tell you I distrust altruistic motivations. If they’re both women and equal, I’ll take the one with the profit motive every day of the week.

54

I take it back. I want profit Doc no matter what. The one that simply wants to be a Doctor has achieved her goal. I have little to offer her. The one with a profit motive is interested in my business and potential referrals and is thus motivated to make sure that I and my daughter are as satisfied with our experience as possible.

55

elucidator: I was pointing out the fundamental hypocrisy of saying,

when used as an argument in an economic debate, by someone who doesn’t even act according to these beliefs. You clearly don’t believe it, or you’d do it yourself. You think this attitude of yours is virtuous, and I claim it’s the opposite: You want OTHER people to live by these fine ideals, but you aren’t willing to make those sacrifices yourself. According to the above paragraph, YOU are neither a worthy human or a worthy citizen. Do you honestly believe that? The self-loathing must be unbearable if you do.
That’s why I gave some examples of people who lived in exactly the opposite way: They didn’t deign to tell others what they must give of their own, but they lived exactly according to your philosophy.

My point is that it takes immense chutzpah to enter an economic debate and drop that, “You’re all evil people for thinking the way you do” bomb while acting in the same fashion.

On to other things:

One of the reasons conservatives and liberals talk past each other is because liberals tend to think in terms of government revenue, and conservatives think in terms of economic growth. ALL taxes are a drain on the economy - the trick is to set up a tax system that distorts the free market as little as possible while raising enough funds to pay for the services people need. So conservatives will say, “we should cut taxes to stimulate growth”, and then liberals go, “There’s that voodoo economics again, saying that tax cuts will pay for themselves.” But they are two totally separate things. Compounding this split is that liberals see the tax system as being a way to engineer society. Taxing the rich, paying the poor.

This illuminates the fundamental difference between the Bush plan and the Democrat’s plan. Bush is saying, “The economy is in trouble, so the government better not drag as much money out of it.” The Democrats say, "The economy needs a stimulus, so let’s take some of our tax revenue and give it to the people we think should get it (i.e. the payroll tax ‘cut’ for low income earners, which is not a cut at all, but a subsidy of their retirement, given that Social Security is supposed to be a self-funded program).

Then there’s the Democrat’s idea of writing rebate checks to people. Does anyone really think an efficient way to tax society is to take money from people, then turn around and write checks back out? It would be far better to just not take the money in the first place, because that would minimize the distorting effect of the tax system. But Liberals can’t go for that, because it means the RICH get to keep their own money.

56

Please define for me “redistribution”. Please explain to me in detail what tax cuts constitute redistribution and what constitute merely going with the correct distribution willed be God. Please explain to me why this is the correct distribution. (Don’t forget to show all your work.)

Well, if you asked 9 different economists, you would get 9 different answers. Some, for example, would argue that deficits created from cutting taxes would raise interest rates and crowd out investment. Some would focus on increasing government spending on infrastructure, education, and other public investments. But, even ignoring those, there would be disagreement about whose taxes to cut (and what taxes to cut).

By cutting taxes on those people who go out and spend whatever money they get … i.e., poor to middle income people. That part is not rocket science. Economists do understand who spends money and who tends to save and invest it.

Your examples are all silliness. There are a hell of a lot of less well off people. So, you could give back lots and lots of money without throwing most of it to the rich. I gave the example of cutting the lower rates only. This still gives the richest something but it saturates out at some dollar figure so the richest 1% end up getting only a bit more than 1% of the cuts.

The Wall Street Journal stresses out about the “non-taxpaying class” and the richest 1% paying nearly double the share of taxes that they did in 1980. But, that only reflects the fact that inequality has gotten that much worse. In fact, the income share of the top 1% has risen by nearly a factor of 2.5 over the time when their share of the income tax nearly doubled. And, now they want to argue that given this, we have to give the lion’s share of the taxes to the wealthy lest they end up paying too much of the income tax. You want to talk about chutzpah…That’s chutzpah!

The people who most deserve the cut, in my view, are those who haven’t been benefitting so far from our economic growth and expansion. I have nothing against rich people (being perhaps not rich, but quite well off myself) but the fact is that they are not the ones who have been left behind in our economy. And, we have made choices in our society that have caused this. It’s not just the magical market that has decided everything. (And, of course, the market is not without its faults anyway.) That’s just hocus-pocus b.s. Government of necessity has control over how much each person contributes monetarily to our society as well as setting up the rules for that society. There is simply no avoiding the issue. It is completely disingenius to ask the government to be “distribution blind”. And, given how money infects our political process, it is nowhere near distribution-blind anyway!

Really, this idea that we are supposed to be blind to the distributional effects of our decisions is just about the most pernicious form of nonsense I have ever heard. I am amazed that it has come to the point in this country that people can be making that argument and getting away with it.

57

Very droll, Sam I especially like the part where you talk like you know diddly squat about me or how I live. Had me going for a second there, but then I realized, hey, nobody’s that clueless, not even Canadians. But that doesn’t even come close to your parody of a doctrinaire conservative mouthing empty platitudes like a self-righteous vacuum.

Boy, that was good! Thanks again!

58

Maybe its about time for a cite here.

From the Washington Post, David S. Broder.

“According to an analysis by the Urban Institute and the Brookings Institution, 64 percent of the 364 billion in benefits from dividend tax elimination would go to the top 5 percent of taxpayers”

Well, now, thats one heck of a lot of money. I was curious as to how this jibes with any thread participant’s expectations. Myself, I wasn’t very happy with it when I thought it was considerably less money. Reading this, I am dumfounded. So thats about 233 billion dollars. For five percent of the taxpayers. Which group, taxpayers, doesn’t include the poorest folks (the "lucky duckys, in WSJ oh-so-droll phrase).

Are these figures off base, some liberal economist cooking the books? Some radical skullduggery, trying to foment class war? And the working stiffs get $300 apiece. Oh, wait, the rich guys get the $300 as well. Gotta be fair.

Is this shit for real?

59

jshore:

Please stop asking me stupid questions that do not follow from my statements. I have made no claims to “will of God” or what is the “correct distribution,” and you can look up redistribution on your own.

I consider this request empty rhetoric.

9 different answers, huh? I doubt it. I doubt you’ll find a single economist who will go against the principle that tax cuts are stimulous.

You seem to think the economics is some kind of soft science where anybody can say anything. It’s not. Economic has a lot of common ground upon which different opinions are formed. But, I’ll keep an open ear, waiting for you to support this, and find an economist who says tax cuts aren’t a stimulous. Good luck.

I think you know very little about what economists know or think, because this is just false. If you don’t know the answer you should ask instead of making things up. If consumer confidence is low it doesn’t matter how much money you give back the consumer, he’ll spend it. I can’t imagine making predictions about who’s going to be likelier to spend incremental income based on tax bracket, so I think we can dismiss this unless you want to back it up. Again, good luck.

Silliness? In what way? I created my examples directly from the tax tables. I am confident that they are accurate. I’ll repeat, at $30,000 dollars or less (hardly the poverty line,) a married couple with a kid and mortgage is paying almost nothing in taxes, while someone who earns ten times as much pays 150 times much in taxes. You keep saying that you want to ease taxes on the poor, but where are these taxpaying poor?

Understand. As a general immutable rule, poor people don’t pay much if any in taxes.

And, if you wish to say my examples are silliness then I’ll expect you to challenge them and not simply dismiss them.

I’ll need a cite on those figures, before I respond other than to say, you didn’t read my last post very well.

And how do you judge who hasn’t benefitted, or is this just simply another euphemism for the poor, who again, don’t pay taxes? How do you give a tax cut to people who don’t pay taxes?
And, I disagree. You ease where the burden is.

That’s a good trick. Let me try it:

Everything you say is hocus-pocus b.s.

Look! I’ve succesfully rebutted your entire argument!

No. No. No. No. No. No wonder your arguments are so screwed up. The government has no control over these things.

The people control these things. The government is simply the agent of the will of the people. It neither does nor can do any of these things.

It is not “distribution blind.” The government does not distribute. It can give you nothing. The government takes. It can give you nothing.

Ignorance and indignance is a poor combination. You keep saying distributional as if the government has this endless pool of resources and they’re simply bestowing it upon the wealthy while the poor suffer.

You keep pretending that there’s some kind of distribution going one, and that is your basic fallacy.

Everything the government has, it takes. One cannot distribute what one does not own.
Elucidator:

I have no idea whether that is accurate or not. Seeing as nobody seems to be arguing that such a tax cut would not primarily benefit the wealthy, I’m not sure what the point is.

60

Oh, come on Scylla, you are better than that. Now you are just resorting to sophistry and pretending you don’t know what I am talking about because you don’t have the answers.

I am at work now and can’t track down the cites you want. But the numbers on the share of income and of income taxes are available from an organization (not liberal by any means) called something like “Institute on Taxation” and are straight from the IRS. I’ve provided that cite in so many threads that I am surprised you have never seen it but I’ll pull it up again for you when I get home.

As for the whole distribution / redistribution thing. I think you know my point is that there is no good definition of what constitutes “redistribution”. In order to do that, you must first define how much you think the government ought to collect in taxes from each person in order for there to be no redistribution. And, you have to justify this definition. You haven’t even come close.

As for the different views of economics, well, I would tend to agree that most economists view tax cuts as stimulative. However, most also agree that the biggest bang for the buck is if you give to those who spend…i.e., the poor and middle class. And, there are economists such as the deficit hawk in the Clinton administration who argue about the importance of deficits and their effects on interest rates. (I forget his name at the moment but if you read the WSJ editorial pages, they attack him with extreme regularity.) My WAG is to agree with the WSJ editorial page that this view is probably overstated, although the sort of evidence that they present for this claim is so ridiculously oversold (as is all their abuse of statistics) that I really don’t know what the state of the empirical evidence on this is.

And, you might think you can’t predict what people will do with their money but the idea that the poor and middle class spend a higher fraction of their income and are more likely to spend additional income on the margin is so wildly held by economists that to find a cite on it is like looking for a cite of Newton’s 2nd law. (I love how you tell me in one paragraph that economists know much more with certainty than I claim and then in the next, you deny any knowledge of what has to be one of the most certain ideas around.) I am sure I can dig out articles that mention this but I think you know damn well that this is the case because I refuse to believe you are as ignorant of basic economics here as you seem to be claiming.

As for taxes, there are numbers from the IRS showing what fraction people pay in income taxes as a function of their AGI. (I don’t know if similar ones exist as a function of income before various deductions.) And, you are clearly exagerating things. Of course, you are also ignoring other taxes paid such as payroll taxes. The bottom 40% of earners pay more in payroll taxes than income taxes.

As for who hasn’t benefitted, I have provided cites on that before too. I’ll dig that up again. The basic picture is that those in the top 1% have seen real incomes rise by something like 150% over the past 20 years. Those near the median income have seen a much more anemic rise and nearly all of it accounted for by working more hours rather than rises in mean hourly wage. For those at the bottom, the story is worse still.