# Economic conservatives: what changes do you want to make? **URL:** \ **Category:** Great Debates\ **Created:** [March 26, 2014, 7:40pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623 "2014-03-26T19:40:39Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [March 27, 2014, 2:02am UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/21 "2014-03-27T02:02:55Z")
> [@Algher](#): > > Investment capital is productive. Instead, tax all gains/income/lottery winnings/carried interest/etc/ identically so that you don’t drive money from one bucket to another. That brings up another point. I am not opposed to gambling in general but I do oppose state-run lotteries. It is a regressive tax on the poor and Massachusetts is the worst about it. I would abolish all state lotteries because the false promises about using the money for things like education are deceptive at best and generally predatory on the poor. You can still have private licensed casinos and gambling and they can use they proceeds however they wish. However, I do not think any government should be a part of the gambling industry. It sends a bad message that everyone has hope of being rich just by spending $1 or (more likely) several thousand dollars or more over time on a game that would have worked out much better if they concentrated on hard skills or work. Even if you don’t want to do that, the best strategy is never to play at all. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [March 27, 2014, 2:18am UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/22 "2014-03-27T02:18:40Z")
I would also radically reduce military spending or, at the very least, refine its mission. The U.S. military is so ridiculously superior to the rest of the world in terms of actual war operations that there is little point to advancing the lead. We can take over any non-nuclear power within days at will and there is nothing anyone can do to stop it. However, that doesn’t translate into real utility. We can invade and destroy Baghdad, Iraq or Kabul, Afghanistan at will but we still can’t change the fundamental nature of the country so it becomes a hopeless and expensive quagmire with a multi-year commitment. The real threats are Russia, China and possibly Pakistan. We cannot do anything extreme about those because they are all nuclear powers and the MAD doctrine is still in place to this day. We already have all the possible military power and personnel that we can possibly conceive of using. Most of them do make-work that looks cool but doesn’t truly amount to anything on a worldwide scale. How about we pull many of those back to domestic duties and make them more like full-time National Guard troops that do domestic humanitarian efforts rather than be on constant call for foreign invasions? There is a small area of Washington state with a landslide that could use those resources now just like there was for New Orleans and Hurricane Katrina. Reform the military services to serve domestic concerns during lulls in true war (also be very hesitant to start new wars). ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [March 27, 2014, 4:20am UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/23 "2014-03-27T04:20:04Z")
> [@Algher](#): > > Investment capital is productive. Instead, tax all gains/income/lottery winnings/carried interest/etc/ identically so that you don’t drive money from one bucket to another. It is productive, but less so than income. It makes no sense to tax less earnings from stocks or real estate than earnings from one’s one work. To build a house is more productive and beneficial to society than to purchase one and re-sell it 20 years later. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 27, 2014, 12:51pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/24 "2014-03-27T12:51:44Z")
Get rid of the corporate income tax, get rid of taxes on capital, dramatically reduce inheritance taxes, replace income tax with consumption taxes. Replace all forms of welfare with negative income tax. Means test Medicare, privatize Social Security, close the departments of energy, commerce, agriculture, labor, education, HHS, HUD, cut defense by two thirds, and end all corporate welfare. ---
**Author:** ![ThisUsernameIsForbidden](https://avatars.discourse-cdn.com/v4/letter/t/b4bc9f/32.png) [@ThisUsernameIsForbidden](https://boards.straightdope.com/u/ThisUsernameIsForbidden)\ **Post date:** [March 27, 2014, 12:58pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/25 "2014-03-27T12:58:13Z")
“Economic conservative” as opposed to what? ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [March 27, 2014, 1:08pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/26 "2014-03-27T13:08:59Z")
1. Eliminate corporate/business taxes. Not because they are the job creators but because taxing anyone who has the ability to pass that cost on is recessive. 2. Change the entire budget process to clearly identify current account (salaries, food and bullets for soldiers) from investment account (a tank that will be used for years, infrastructure). Then balance the buget where current account plus servicing investment account (interest plus principle for some time less than expected usage) must be less than revenue. ---
**Author:** ![yellowjacketcoder](https://avatars.discourse-cdn.com/v4/letter/y/4bbf92/32.png) [@yellowjacketcoder](https://boards.straightdope.com/u/yellowjacketcoder)\ **Post date:** [March 27, 2014, 1:21pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/27 "2014-03-27T13:21:14Z")
> [@Jonathan\_Chance](#): > > 1. No longer allocate the budget by dollars. Instead, do it by percentages and those line items get that percentage of annual or quarterly revenue. If receipts go down, cash for each program goes down unless specifically acted upon by congress. I find this both interesting and novel. My first thought, though, was that if the receipts go down, it might be more beneficial to lower amounts paid to agency X before taking from agency Y, which I don’t see allowed in this system. The other is that when receipts are up, you can end up goldplating a system, for example: “It costs $100K to repair this bridge, we got 0.000274% of the federal budget to do that, but the economy boomed and now we have $120K for this bridge. Um, guess we buy all the workers a fifth of Jack when it’s finished?” ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [March 27, 2014, 1:38pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/28 "2014-03-27T13:38:36Z")
That’s when you gold-plate the bridge, of course! You’re correct that it’s just something I’ve idly toyed with…though I’ve toyed with it since I was running around as a reporter. It would require some accounting and some workarounds but it would be interesting to work with. Another fun one: End the concept of [baselining](http://en.wikipedia.org/wiki/Baseline_(budgeting)). For those not aware of baselining it assumes that all budget items will go up by a means of factoring the inflation rate and population growth. So something like this 2014: 100,000,000 2015: 103,000,000 2016: 106,090,000 Would be considered ‘budget neutral’ instead of an increase. That may be fine, depending on the program. But it leads to a perception that the budget is not increasing when, instead, it is. Worse, if the 2016 budget for this item was 105,000,000 it would be presented as a budget cut rather than a 5% increase over 2 years. I would much prefer a world in which each government program had to fight to keep it’s budget rather than always assuming that any line item will automatically continue AND will continue to be funded at increasing levels. If it’s worth fighting for once, it’s worth continuing to fight for again. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [March 27, 2014, 1:51pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/29 "2014-03-27T13:51:52Z")
> [@puddleglum](#): > > Get rid of the corporate income tax, get rid of taxes on capital, dramatically reduce inheritance taxes, replace **income tax with consumption taxe** s. Replace all forms of welfare with negative income tax. Means test Medicare, privatize Social Security, close the departments of energy, commerce, agriculture, labor, education, HHS, HUD, cut defense by two thirds, and end all corporate welfare. Now, look, I find most of this silly and unrealistic. It’s the sort of thing we see screamed about on cable news for people riling up the base and not really trying to accomplish anything. However… The bolded item - emphasis mine - is one that has long intrigued me. First, I’m opposed to consumer culture and this would put a break on consumption. Fine. But also, I think this would be doable if it were extended to all purchased. Make it a national sales tax on all transactions. Most people see that as similar to the current sales tax. Buy a case of beer, pay 5% or whatever. But a national sales tax (or consumption tax, if you prefer) could apply to everything. Buy beer? Tax. Buy a car? Tax. Buy a house? Tax. Buy 1000 shares of Apple? Tax. National sales tax. No exemptions. That might just work. Example, yesterday (3/26) there were 950K shares of AAPL traded. At ~$535/share that’s $508,250,000 sold. At 5% that means AAPL sales yesterday would have generated $25,000,000 in federal sales tax yesterday. If that’s the average then over the 250 trading days $6.25B in tax. So one equity would generate 0.15% of the federal budget (assuming a budget of $4.3 trillion). I do note, however, that most national sales tax advocates balk when I bring this up. They all seem to want sales taxes to apply to OTHER people’s purchases and not theirs. Human nature, I suppose. ---
**Author:** ![tonyfop](https://avatars.discourse-cdn.com/v4/letter/t/85f322/32.png) [@tonyfop](https://boards.straightdope.com/u/tonyfop)\ **Post date:** [March 27, 2014, 2:16pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/30 "2014-03-27T14:16:24Z")
> [@Jonathan\_Chance](#): > > National sales tax. No exemptions. That might just work. Example, yesterday (3/26) there were 950K shares of AAPL traded. At ~$535/share that’s $508,250,000 sold. At 5% that means AAPL sales yesterday would have generated $25,000,000 in federal sales tax yesterday. If that’s the average then over the 250 trading days $6.25B in tax. So one equity would generate 0.15% of the federal budget (assuming a budget of $4.3 trillion). > > I do note, however, that most national sales tax advocates balk when I bring this up. They all seem to want sales taxes to apply to OTHER people’s purchases and not theirs. > > Human nature, I suppose. Actually, what that shows to me is that if we were to implement a National Sales Tax, it could be i mplemented at a much lower rate, probably lower than 1%, to bring in the revenue that our current income tax brings in. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [March 27, 2014, 3:04pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/31 "2014-03-27T15:04:36Z")
I figured someone would notice that. Apple may be a special case, but I bet it’s not a real outlier. If AAPL is at 950K shares moved at $535 let’s look at some blue chips: General Mills: AvgVOL: 3.226M Cost: 51.27 Revenue: 165,397,000 Microsoft: AV: 37.97M Cost: 39.62 Revenue: 1,504,371,400 ExxonMobil: AV: 12.31M Cost: 95.53 Revenue: 1,175,974,300 Coca-cola: AV: 16.42M Cost: 38.97 Revenue: 639,887,400 Disney: AV: 7.297M Cost: 78.21 Revenue: 570,698,370 Wal-Mart: AV: 6.923M Cost: 76.71 Revenue: 531,063,330 Total Revenue: $4,587,364,800 Taxes (5%): $229,368,240 per day Annual Tax Revenue: $57,342,060,000 So more than 1.3% of the federal budget (again assuming $4.3T) just on six blue chips stock sales. Assume volume dips 10% because of the 5% tax rate and it’s still more than $1 in each hundred of federal spending. Extend that across all 86,000 equities and a godawful amound of mutual funds and we might have something there. ---
**Author:** ![yellowjacketcoder](https://avatars.discourse-cdn.com/v4/letter/y/4bbf92/32.png) [@yellowjacketcoder](https://boards.straightdope.com/u/yellowjacketcoder)\ **Post date:** [March 27, 2014, 3:18pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/32 "2014-03-27T15:18:39Z")
> [@Jonathan\_Chance](#): > > So more than 1.3% of the federal budget (again assuming $4.3T) just on six blue chips stock sales. Assume volume dips 10% because of the 5% tax rate and it’s still more than $1 in each hundred of federal spending. Extend that across all 86,000 equities and a godawful amound of mutual funds and we might have something there. I think the prediction of a 10% drop in trading is fantastically low. High Frequency Trading accounts for a large amount of trades happening now, and occurs at such low margins that the 5% tax rate will destroy that market (not that I think this a bad thing, mind you, it would make the market much more stable and less prone to rapid fluctuations). Also, I think the trade volume for the non-Fortune 500 companies is going to be miniscule. Not that this means I oppose the idea, I like it quite a bit, but I think it will generate much less revenue than you seem to predict. EDIT: apparently HFT is down from a market high 60% of all trades in 2010, but I think my point stands even if weaker. [Bloomberg Businessweek - Bloomberg](http://www.businessweek.com/articles/2013-06-06/how-the-robots-lost-high-frequency-tradings-rise-and-fall#p1) ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [March 27, 2014, 3:47pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/33 "2014-03-27T15:47:16Z")
Eh, I chose 10% because it was twice the 5% tax, not for any quantifiable reason. But I agree that such a thing would make rapid trading a smaller part of the market. It would also encourage buy and hold strategies. Since both of those are - to my mind - a good thing I won’t cry. Still, it demonstrates what a true national sales tax could accomplish. Let’s look at homes… According to the National Assn of Realtors in 2013 there were: New home sales: 431,000 Existing home sales: 5,073,000 Total: 5,504,000 If the average cost of homes is $150,000 that means: Total sales activity: 825,600,000,000 Sale tax generated: 41,280,000,000 Still not bad. And then you factor in rentals, leases and such. In short, to repeat my thesis, a National Sales Tax is not a bad idea if it applies to ALL economic transactions, not just a subset. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 27, 2014, 4:22pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/34 "2014-03-27T16:22:38Z")
> [@Shagnasty](#): > > I want some sort of federal balanced budget amendment although it doesn’t have to be on a strict fiscal year basis. One of the most common criticisms of such amendments is that it would prevent the U.S. government from reacting to emergency circumstances and that is a valid complaint in some ways. However, every day is an emergency to some people and that needs to be reigned in. Would a recession count as an “emergency,” allowing for Keynesian stimulus-spending at a deficit? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 27, 2014, 4:24pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/35 "2014-03-27T16:24:09Z")
> [@Shagnasty](#): > > Some states have balanced budget amendments and do quite well with them. The main reason the federal government does not have one is that it fully intends to spend itself into the ground over time and doesn’t want anyone or anything interfering with that unspoken plan. Why would the government intend to spend itself into the ground? And, considering how many people are involved in government, how could such a plan go “unspoken”? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 27, 2014, 4:29pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/36 "2014-03-27T16:29:10Z")
> [@Jonathan\_Chance](#): > > 1. No longer allocate the budget by dollars. Instead, do it by percentages and those line items get that percentage of annual or quarterly revenue. If receipts go down, cash for each program goes down unless specifically acted upon by congress. What would be the point of that? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 27, 2014, 4:31pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/37 "2014-03-27T16:31:29Z")
> [@Little\_Nemo](#): > > I’d like to see the deficit reduced. Preferably down to nothing. I’m serious enough about this that I’d favor a mix of raising taxes and cutting spending to do it. Ross Perot ran for president on that notion – didn’t get far, did he? Anyway, [you’re struggling with a non-problem](http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/Economics). > [@](#): > > **6. America the bankrupt:** National debts don’t work like your personal debt. For example, people don’t buy your debt to prop up your currency. Yet for some reason a lot of writers tend to think of the national debt in the same terms as a bank loan, with angry creditors and everything. When this trope is invoked expect to see a consortium of angry foreign dignitaries banging on a conference table that they want their money back. In reality, if countries actually acted like this, the global financial system would probably collapse pretty spectacularly and everyone would be screwed. This trope is not specific to America, but for some reason Americans are exceptionally paranoid about the National Debt, particularly when the Chinese are buying it up, and now not buying it anymore. Oddly enough, America’s National Debt isn’t even that bad by international standards. Also, the US national debt is in terms of dollars, and the government can create as many dollars as they need to pay off the debt. Everyone would be paid the amount owed, but the new dollars would lead to inflation. The key here is that governments usually owe substantial portions of their debt to ‘themselves,’ i.e. either the government owes money to different branches, or those branches hold their assets as bonds and treasury bills instead of money; by owing money to yourself, you usually don’t charge yourself interest (beyond inflation) and you theoretically can’t default on money you owe yourself. This is how Japan can have gross debt worth over 100% of their yearly economic output and have little economic effects: 70-80% of its debt is owned by the Japanese Central Bank. In the United States, around 35-40% of the government debt is owed to itself, mainly to the Social Security Administration. Also, debt owned to foreign entities makes up MUCH less of the debt than people seem to think: as an example, China owns only 6% of the total US debt. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 27, 2014, 4:33pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/38 "2014-03-27T16:33:24Z")
I don’t know if I qualify as an “economic conservative” so don’t know if I should participate in the thread. I certainly condemn the reckless deficit spending of Reagan and Bush Junior. To help me know if I fit in, I’ll ask “economic conservatives” to answer some questions: (1) Among Presidents of the past 35 years, who had the best fiscal record? The worst? (2) Are we all aware that non-military discretionary federal spending as a percent of GDP is now the lowest it’s been in a long while? (3) Can those advocating the “privatisation of Social Security” point to a scholarly article that we tell me why this would be a good idea? Or is it just a feel-good soundbite? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [March 27, 2014, 4:39pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/39 "2014-03-27T16:39:32Z")
> [@Jonathan\_Chance](#): > > Now, look, I find most of this silly and unrealistic. It’s the sort of thing we see screamed about on cable news for people riling up the base and not really trying to accomplish anything. > > However… > > The bolded item - emphasis mine - is one that has long intrigued me. First, I’m opposed to consumer culture and this would put a break on consumption. Fine. > > But also, I think this would be doable if it were extended to all purchased. Make it a national sales tax on all transactions. Most people see that as similar to the current sales tax. Buy a case of beer, pay 5% or whatever. > > But a national sales tax (or consumption tax, if you prefer) could apply to everything. > > Buy beer? Tax. > Buy a car? Tax. > Buy a house? Tax. > Buy 1000 shares of Apple? Tax. > > National sales tax. No exemptions. That might just work. Example, yesterday (3/26) there were 950K shares of AAPL traded. At ~$535/share that’s $508,250,000 sold. At 5% that means AAPL sales yesterday would have generated $25,000,000 in federal sales tax yesterday. If that’s the average then over the 250 trading days $6.25B in tax. So one equity would generate 0.15% of the federal budget (assuming a budget of $4.3 trillion). > > I do note, however, that most national sales tax advocates balk when I bring this up. They all seem to want sales taxes to apply to OTHER people’s purchases and not theirs. > > Human nature, I suppose. What about services? They’re exempt from state sales tax here in Florida, and a lot of lawyers and doctors and other well-organized professionals are determined to keep it that way. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [March 27, 2014, 4:49pm UTC](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623/40 "2014-03-27T16:49:26Z")
Well, of course they are. It’s part of the hypocrisy I’ve pointed out earlier. Just like in my professional they want a NST so long as it doesn’t apply to the markets. Everyone wants a balanced budget until they have to give something up. Again, it’s the fundamental nature of the American budget issue: people, in aggregate, want $1.25 worth of services for $1.00 in taxes. That and they’ll still bitch long and hard about the $1.00! So, yes, tax my industry, tax professional services. If money changes hands, have government have its collective hand out. But the minute you start saying ‘except for THIS’ you’ve just thrown us back into the unworkable space that we currently inhabit. Plus, hey, no more income tax at the federal level. I bet some of those professionals wouldn’t mind having that happen. Might be rough on the accountants, though. And seriously, BrainGlutton. Citing TVTropes in an economic discussion? While I don’t necessarily disagree with the thesis, for heaven’s sake, look for a better cite. [Previous page](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623.md?page=1) [Next page](https://boards.straightdope.com/t/economic-conservatives-what-changes-do-you-want-to-make/684623.md?page=3)