A flaw in Mr. Hartmann's thinking about tax cuts

27 posts / 0 new

I watched the youtube posted in another thread where Mr. Hartmann criticized Jude Wanniski. He said something to the effect that Democrats give away welfare and Republicans give away tax cuts. Putting aside that Republicans have increased taxes numerous times either directly or by running deficits that must be payed for by future tax increases or inflation. (Inflation is a hidden tax that transfers wealth from the poor and middle class to the politically connected wealthy. Yet progressives don't seem to have a problem with that awful creation from the Progressive Era, the Federal Reserve System). Anyway, getting back to my point. How is cutting taxes a gift? How is keeping your own money a giveaway? How is it equivalent to welfare? There is only one way in which tax cuts can be viewed this way. That is if you believe that the government "owns" 100% of what you earn and letting you keep some is some kind of cost to government.

Where did this myth that Republicans want to starve the beast come from? Cutting tax rates while increasing spending is not starving the beast. Saying you want to starve the beast is not the same thing as actually starving the beast. Or do progressives now take conservatives and Republicans at their word every time! Anyone who claims to be a conservative and for limited government, yet speaks highly of that New Deal Democrat (with an R next to his name) Ronald Reagan isn't being honest with you. Reagan (and the Democrats and Republicans in Congress) increased government spending 60% nomimally in the 80's. They quadrupled the national debt. They increase taxes. I know it's hard to believe but when conservatives say Reagan cut the government and liberals say Reagan cut the government, THEY ARE LYING TO YOU.

TheFirstLeftist's picture
TheFirstLeftist
Joined:
Mar. 23, 2012 2:33 pm

Comments

Taxes are a forced re-investment in the infrastructure that everyone needs and benefits from. Tax cuts in good times is not such a bad thing but tax cuts in a bad economy can be devestating. The infrastructure is bleeding profusely and in need of attention. Right now is the worst possible time to give even more tax cuts as it hurts all Americans. It hurts the poor and middle class right away and over the long haul it actually hurts those it's aimed at helping, the rich and corporations. Overtaxing in bad and undertaxing is bad. The difficult part is finding the right balance that works for the economy which in turn works for national security.

You are right about Reagan and that holds true for every Administration I can think of. Government grows whether we like it or not. The population grows, the economy grows, the world grows and so must the government. A small government can't protect it's citizens from international governments or international corporations, both of whom would like to have unlimited power.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am
Quote Bush_Wacker:

Taxes are a forced re-investment in the infrastructure that everyone needs and benefits from. Tax cuts in good times is not such a bad thing but tax cuts in a bad economy can be devestating. The infrastructure is bleeding profusely and in need of attention. Right now is the worst possible time to give even more tax cuts as it hurts all Americans. It hurts the poor and middle class right away and over the long haul it actually hurts those it's aimed at helping, the rich and corporations. Overtaxing in bad and undertaxing is bad. The difficult part is finding the right balance that works for the economy which in turn works for national security.

You are right about Reagan and that holds true for every Administration I can think of. Government grows whether we like it or not. The population grows, the economy grows, the world grows and so must the government. A small government can't protect it's citizens from international governments or international corporations, both of whom would like to have unlimited power.

Bushwacker,

Must the government grow in proportion to the population? Implicit in saying that tax cuts in bad times is devastating is the idea that the government can spend or invest your money better than you can. How exactly is someone keeping their own money bad for the economy? Who decides just what the right level of taxation is?

If everyone needs and benefits from the infrastructure, then why are taxes needed? Would an entrepeneur jump into the fray to provide? While I realize that governments have near monopolies on infrastructure, would you be opposed to a businessman building a road or a bridge? How is it decided where a road or bridge is going to be built? Politically, not economically. Just like certain military contracts are put in certain districts. If the government is going to build intrastructure, should it be funded and built locally? Why should a Floridian pay for a road in Alaska?

What power do corporations have over me? Where did they get it? If the government forces me to subsidize a corporation or refuses to prosecute a corporation for wrongdoing, the fault is with the gov't. Absent the government, no corporation can make me buy any of its products. With government, you have no choice?

TheFirstLeftist's picture
TheFirstLeftist
Joined:
Mar. 23, 2012 2:33 pm

Do you really want a private profiteer having control of your roads or bridges? You and I could probably afford to pay a toll but what about the poor person who can't afford to eat? As soon as you start charging for the use of the commons it's no longer the commons. I've hated the fact that some 20 years ago the State started charging fees to use the lakes around here. Not only do my tax dollars pay for it already but they've virtually made it impossible for many of the poor people around here to be able to enjoy it. With private companies in control it would get substantially worse.

Alaska and Florida are both part of the UNITED States of America. Don't Alaska and Florida both benefit from the protection of soldiers all over the U.S.? What you seem to be calling for is that every State no longer be part of a union but to be it's own country. I believe that the power of the many is much better than the power of the few. Alone we can succeed but together we can dominate.

Corporations don't have too much power over you right now because of the government. Remove the government and you will soon have to succumb to certain corporations. Eventually there will be no choices left for you. You will have to buy your food from the grocery chain that eliminates all the others. You will have to buy your internet from the company that eliminates all the others. When those things happen the power of the free market no longer exists. You'll have no choice in what you pay for things. Government intervention is supposed to now allow monopolies for that reason.

With unregulated business you eventually end up with "no choice".

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am

Actually, Bush_Wacker, I think that corporations (ie. those that manipulate them) are much smarter than that. Why get rid of government when you can have government do their bidding--and, then, blame government for the results? And, paying off legislators to do it with.....you know, capitalizing on the legislators' greed without once having to confront their own....something that wouldn't be as easy to cover up for if their actions were 'out in the light' without them being able to manipulate it 'in government's shadow'.....

Kerry's picture
Kerry
Joined:
Jul. 31, 2007 4:01 pm
Where did this myth that Republicans want to starve the beast come from?
The notion probably comes from observers like the person who wrote this Wikipedia Article. Apparently, the phrase first appeared in a Wall Street Journal editorial quoting a Ronald Reagan staffer in 1985.

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm

Why is it your giving me something when you take less of my money but its taking something when i cut benefits you didnt earn?

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm
Why is it your giving me something when you take less of my money but its taking something when i cut benefits you didnt earn?
That's probably because the expected norm in a civilized society is that people will pay taxes and some of "their" money will become somebody else's income and that those people with the additional income will be given something that some other people don't feel they deserve beyond the expected norm in a civilize society. To reduce the amount taxed would be a gift compared to the expected norm in a civilized society, and the reduced benefits would be a "taking" compared to the expected norm in a civilized society. That's what I think Thom may be saying.

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm

you mean that half the country isnt living up to societal norms?

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm
you mean that half the country isnt living up to societal norms?
Could you flesh that out a little bit? I don't know what your reasoning is? What half of the country do you think isn't doing what that I referred to?

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm
Quote CollegeConservative:

Why is it your giving me something when you take less of my money but its taking something when i cut benefits you didnt earn?

It's not. That's how you percieve it. When cutting taxes on the rich you help no one and hurt many who do need help. When raising taxes on the rich you are helping many and hurting no one. One of these two scenarios actually helps the economy greatly as well.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am

if income tax is a societal norm and half the country dosent pay income tax then half the country is not living up to societal norms.

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm
if income tax is a societal norm and half the country dosent pay income tax then half the country is not living up to societal norms.
That's just not true. Those half who do not pay taxes to the Federal Government on their lifestlye money easily make up for it with all the other money they pay to Government. Once again, do you only consider taxes paid to the Federal Government to be actual taxes? All the other taxes don't count? Is that just play money?

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm
Quote TheFirstLeftist: ...How is cutting taxes a gift?

If you cut taxes and not spending, then you get a free gift. That is generally what the Republicans actually do..

The starving the beast theory is a bit different - it says cut taxes then you are forced to cut welfare. That is just a way to reduce government spending on the poor and maintain it for other groups - such as defense contractors.

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 4:01 pm

I use the income tax because it is the source for half of federal revenues and in my state texas we have property tax for the majority of our revenue so those that dont pay income usually dont pay state either.

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm
I use the income tax because it is the source for half of federal revenues and in my state texas we have property tax for the majority of our revenue so those that dont pay income usually dont pay state either.
Are Federal revenues the only taxes that count as Government revenues? Property taxes don't count as taxes in Texas? All those other taxes don't count? Don't the poor people in Texas pay all those other taxes, too? Do we just dismiss these as funny money"

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm

What other revenues is the government getting from individuals other than taxes? Property taxes count but as a general rule if your income is low enough not to pay income tax u dont own property.

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm

There are federal and state taxes on your phone bill. The same goes for your cell phone bill. Gas taxes, tobacco taxes, liquor taxes, sales taxes, use taxes, payroll taxes, social security taxes. Those are just the ones who use the word tax. Start looking at "fees" applied to many things.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am

ok yeah but what percent of revenue does that make up it cant be much.

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm

Are you talking just about Federal revenue? It's nothing compared to income taxes as far as Federal revenue goes but it's quite substantial for local government revenue. I actually figured out a couple of years ago how much was going where for me personally. After deductions and credits and whatever else, my Income tax was about 5 thousand dollars. After figuring purchases and local taxes I figured I had paid in about 6 thousand dollars in local taxes of all sorts and additional Federal taxes. That didn't include my payroll taxes or my social security which would have made it much more of course.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am

I wouldnt consider the ss a tax because you are going to get that back

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm
Quote CollegeConservative:

I wouldnt consider the ss a tax because you are going to get that back

Still, low income people have to pay it while trying to feed their families.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am
Property taxes count but as a general rule if your income is low enough not to pay income tax u dont own property.
Everybody pays property taxes. The landlords of poor people do not pay the property tax on their capital property. Their tenants pay it. Then the landlords get a nice tax deduction for it. Doln't forget all those excise taxes, like on the gas that poor people use, either by filling their gas tanks or paying for the fuel used by mass transit.

It really doesn't matter what posters on a message board consider to be taxes. The Federal Governmnet has its own opinion as to what are taxes. FICA taxes take away from poor people's lifestyles to an inordinate degree. In this way, they are the most regressive tax we have. Poor people can't get it back until they're 59 and a half.

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm

Im talking of a pure monetary value stance those dont amount to much overall comparatively.

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 2:22 pm

On the Dylan Ratigan show on Monday (I am guessing Monday), Mr Goodfriend computed all the taxes and it turned out that all those other taxes and fees equaled the federal income tax.

chuckle8's picture
chuckle8
Joined:
Jul. 31, 2007 4:01 pm

Abraham Lincoln created the first income tax. The only people who paid that tax were the top 1%.

chuckle8's picture
chuckle8
Joined:
Jul. 31, 2007 4:01 pm

For those who are interested in more information about this, there are some pretty good sources. For example , The Center for Tax Justice put together a good little chart.

The Center on Budget and Policy Priorities has a good little article entitled Misconceptions and Realities about Who Pays Taxes. Figure 2 is especially stunning. Figure 3 is also pretty impressive.

The Tax Policy Center does a lot of work in this area.

What I get from our dilogues with our College friend is that he doesn't think that payroll taxes are real taxes. Or that sales, excise taxes and property taxes amount to a hill of beans.

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm

Currently Chatting

Powered by Pressflow, an open source content management system