If you want a laugh. Well maybe the humor is too dry or sardonic for most people, but it had me laughing anyway, you should watch a pro spin bad news. Todays Post has that in our distinguished pundit Robert Novak's column:http://www.townhall.com/columnists/robertnovak/rn20040818.shtml. It seems the Congressional Budget Office has just released a new report which confirms what "intellectuals" and ordinary people have already noticed; that the current recovery is benefiting the rich and empoverishing the middle.
"That study concluded that President Bush's cuts had shifted more of the tax burden from the nation's rich to the middle class, though everyone enjoyed an income tax reduction. That was the old-fashioned way of scoring consequences of tax legislation, an exercise of arithmetic rather than economics. Kerry could not have been happier. "This is the straw that will break the back of middle-class families," proclaimed a written statement by the senator."
To read the actual report, you see that indeed the economy has not been kind to either the "middle class" nor to blue collar workers:
http://www.cbo.gov/showdoc.cfm?index=5746&sequence=0
He picked right up on the salient points:
"The differential increase in effective tax rates among quintiles is reflected in a shift down the income distribution in shares of taxes paid (see the third and fourth panels of Table 2). The share of taxes paid by the top quintile falls from 65.3 percent in 2001 to 62.8 percent in 2014, even though that group's share of income does not change. Four-fifths of that decline occurs for the top 1 percent of taxpayers, whose share falls by 2 percentage points, to 20.7 percent of federal taxes in 2014. The share of taxes paid by each of the middle three quintiles climbs by about 0.7 percentage points."
Turns out I'm not the only one who felt Novak's article was unfair:
http://www.washingtonpost.com/wp-dyn/articles/A42714-2004Aug28.html
I just find all of the trumpeting regarding the "recovery" hilarious, when there are twice as many indicators showing that people are worse off and the economy is very soft. Bush needs a recovery for his reelection efforts; so what there is of one is exaggerated, blown up and hyped. The indications otherwise are ignored, or spun, as above.
Kerry needs economic problems for his campaign, so evidence in that direction is focussed on, exaggerated and spun from the other side.
Entertaining, when one has time.
Namaste, Engyo Mike Barrett
Posted by: Engyo Mike Barrett at August 24, 2004 09:26 AMThe funny (sort of) and sad (really) thing about this is that folks don't see the big picture. That picture shows a tremendous inequity in the tax structure and that the "rich" are indeed taxed too highly. Reducing the burden on the highest income earners and sharing it more equitably can (and has been proven to) help the economy overall, just as higher taxes on the wealthiest few does the opposite.
In either case, the wealthiest aren't much impacted, except in what they do with their money. More "extra" income equals more investment in terms of consumerism, benefitting the providers of that being consumed (the middle and lower classes), and in expansion and job creation.
Allow them less "extra" money and they simply don't consume and expand as much. Their lives are the same, but the providers and manufacturers and job seekers suffer.
You'll argue, I know, but it's a simple equation, proven often and never disproven. If everyone were paying the same amount of taxes, proportionally speaking, with provisions for the poor to pay little or none, then tax relief for the rich would be absurd, and possibly immoral. That is not the case, and tax "breaks" for the wealthiest makes a lot of sense.
I never got a job from a poor guy.
Cheers!
Andy
Posted by: Andy Hanlen at August 24, 2004 05:22 PMThis is a response to Andy's comments.
This is standard U.S. libertarian analysis. I think it is flawed on several points.
First, it assumes that the wealthy have come by their wealth honestly. In a libertarian context this means that they have earned their money though fair trade on the open market. This is rarely the case. A large portion of the wealthy become wealthy through the manipulation of markets via special laws and regulations; see Enron, Lincoln Savings and Loans, and numerous other such scams. Another large group of the wealthy receive special subsidies from the government which considerably adds to their wealth; see wealfare ranchers and farmers. In other words, I am suggesting that as a group, the wealthiest in the U.S. have become wealthy due to government largesse; they therefore have no good grounds for complaint when the taxman comes to get some back.
Second, the idea that removing taxes from the wealthy benefits all has, in my opinion, been thoroughly refuted by what occured during the Reagan years. A small precentage of people benefitted by the growing debt of the nation as a whole. The middle class has to pick up the tab, while the wealthy simply shore up the money the received when Reaganomics transferred all that wealth to their class.
I prefer the "trickle up" theory. I am all for cutting taxes (here I agree with Andy); but it should be taxes on the poor and middle class that are removed first. This will generate more disposable income among those who truly need it. Having more disposable income, they will purchase more. Purchasing more, the wealthy (the honest wealthy) will have more opportunity to expand their markets. Expanding their markets, the wealthy will become more wealthy.
Everyone will benefit.
Best wishes,
Dharmajim
I agree with "dharmajim" on this one. The problem with psuedo "libertarian" analysis is that it is very much skewed by the "syndicatist" attitude of it's corporate sponsors who have been working feverishly since the Roosevelt Administration (Teddy not Franklin) to avoid regulations of their behavior which would actually level the playing field or enable genuine capitalism.
Posted by: Chris Holte at August 29, 2004 12:16 AMChris, as you often do, you assume something that I neither stated nor intended. You wrote, about my statements:
"First, it assumes that the wealthy have come by their wealth honestly. In a libertarian context this means that they have earned their money though fair trade on the open market."
Nope. Not there. Even granting your assumption that much (most?) wealth comes from government largesse and/or dishonest/unethical practices and activities (which I don't grant) it doesn't matter, in the context of this discussion, where their money comes from.
And you make a further error, or maybe it's just a lack of knowledge. You wrote:
"I am all for cutting taxes (here I agree with Andy); but it should be taxes on the poor and middle class that are removed first."
Chris, this is already the case. The poor can't have their taxes cut anymore. With the Earned Income tax credit, they are actually experiencing a net gain; essentially a payment from the government (all of us). What you suggest is already in place.
Look it up. For some reason you decline to accept the real numbers, but any way you juggle it, the poor receive government largess, and the rich pay a hugely disproportionate amount of the tax burden.
No, I don't suggest making the poor pay more. I do suggest letting the rich pay less, though, thus benefitting us all.
Never mind. It's not a notion that fits into your nanny state true belief. Carry on.
Cheers!
Andy
Cheers!
Andy
Posted by: Andy Hanlen at August 29, 2004 12:17 PMAndy you just argued with Dharmajim. However, your rebuttal doesn't really make it's case. First the statistics that are used are faulty. The rich will -- of course -- argue that they pay more of a tax burden than they should. But that usually involves massaging the statistics to show their gross payments and using only part of the tax equation to show their taxes. For instance they'll usually leave out considering the very consumption taxes that they propose as an alterative. Why? Because that would destroy their case as the poor pay higher percentages in consumption taxes as it is. Even with higher tax rates than we have now, the rich come out ahead in the economic scheme of things.
The "Earned income credit" is so hard to earn that you can see that the statistics don't back you up just by looking at them. There are two kinds of poor people, and a good number of them would feel very poor even if the Government were giving them money. You try living on 10 dollars an hour, much less the 7 dollars an hour many of those people earn, or the 3 or four dollars an hour they were earning recently. Your argument is full of sophistry and inaccuracies. Richard, on the Buddhist Dialogue group already refuted it.
"For the 2003 tax year, income limits have increased. Taxpayers must earn less than $33,692 if they have two or more qualifying children, $29,666 with one qualifying child or $11,230 if there are no children. Income limits are $1,000 higher if a couple’s filing status is married filing jointly."
"The maximum refundable credit for the 2003 tax year is $4,204 for a family with two or more qualifying children, $2,547 for a family with one qualifying child and $382 if there are no qualifying children. Many taxpayers qualify for less than the maximum, depending on their income."
You try feeding a family on less than 33,000 a year. I did it. It can be done. But you don't get "middle class status" while doing it. And i was making too much for the credit.
In a healthy economy the bulk of the taxes would fall on the middle class. Why? Because they would be numerous enough and wealthy enough to pay them. As economies become less healthy more of the burden shifts to the poor and the rich, and the two start fighting over it. The rich make the case that the poor are poor because they are lazy and shiftless, or stupid and childlike.
Posted by: chris at August 29, 2004 09:19 PMHi Andy:
That was me. I don't believe in the nanny state. In fact, I'm against it. You're not talking to a liberal here.
I'm a libertarian, but I'm one who finds most U.S. libertarians unwilling to really accept the implications of their theory. My influences are in the more traditional libertarian analysis of people like Kropotkin and Malatesta. Hope that clarifies.
I can't take seriously your assertion that it doesn't matter where the rich got their money from. Of course it matters, both ethically, economically, and politically. If Enron got their now vanished billions by using regulations to manipulate the market, and thereby endangering the lives of millions of people, the name for this is theft. Just like someone looting a corner store.
Dharmajim