While it’s an unqualified good that conservative naivete with respect to economics is being discussed, I think there’s a bit of a misunderstanding concerning the conservative ardor for low taxes. I think Yglesias basically gets it right.
Sebastian Mallaby wonders why conservatives don’t seem to care that cutting taxes doesn’t raise revenue. Jon Chait wonders why conservative don’t seem to care that cutting taxes doesn’t restrain spending. John McIntyre at Real Clear Politics (recommended by John Podhoretz) explains that “Mallaby can quote all the economists and studies he wants to justify his attack on the economic wisdom of lower tax rates,” his plan is to ignore that and instead “just look at what happens in the real world.” He proceeds to offer no empirical data whatsoever from the real world, just a lot of empty rhetoric much of it irrelevant to the issue at hand.
The truth, though, is that conservatives don’t care about this stuff because, obviously, the aim of conservative tax policy isn’t to cut spending or to increase revenue. It’s to increase the after-tax income of very wealthy people. And it does a bang-up job of doing that. A conservative who dedicated lots of time and energy to exploring whether or not the nominal rationales offered for GOP tax policy would not be serving his career well.
I know conservatives that would try to quibble with the statement that the rationale for cutting taxes is to “increase the after-tax income of very wealthy people.” But that’s foolishness. Their goal is to indeed to increase the after-tax income of wealthy people, whether that’s because they think those very wealthy people deserve to enjoy that income, because people deserve to enjoy what they earn, or so they say. Or else they take a utilitarian view in obeisance to pareto efficiency. But it’s indisputable that they’re goal is increase the after-tax income of wealthy people. How taxes affect either government revenues or government spending are secondary concerns.
24 Responses to “Talkin’ Taxes With Wingers”
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There are plenty of conservatives of the sort Yglesias describes, but there are lots of others whose main concern is lowering government spending, and who consider it a net loss if spending is raised while taxes are lowered. These latter types are, let’s just say, not part of the 30% who approve of Bush.
Actually, conservatives don’t want to cut all taxes.
They absolutely loathe with a passion estate taxes and capital gains taxes– the ones that could bring in millions of dollars of revenues without increasing taxes for all but a few hundred families in states like Mississippi. The ones that threaten Trust Fund Joe’s ability to make millions of dollars while lying on a beach somewhere in the Bahamas because of the millions he inherited from daddy automatically accrue interest. G-d damn if the government is going to take a 2% share of that. It’s a fucking outrage to these people.
There is one tax that they’d like to raise. One tax that they love. One tax they’re practically frothing at the mouth over: the sales tax. The sales tax just happens to be ones of the most regressive types of tax in existence. And does this really come as a surprise to anyone who studies conservative thinking? The issue isn’t taxes for them, it’s rather their particular kind of class warfare.
Funny thing- the Gini index (measure of economic disparity) was lowest during the 50’s & 60’s when taxes were pretty high. The lower the taxes- the greater the disparity.
One of the things I adored about the ancient Sim City (c.a. 1991) was the “citizen poll” feature.
No matter how high or low you set the tax rate, as the city manager, there would ALWAYS be at least 5% of the people in the city bitching about taxes as one of the city’s biggest problems.
The repugs are masters of manipulating the reflexive anti-tax crowd.
So his, Mallaby’s, reference in the artcle states: “…$316 billion below the levels that had been forecast…” with no cite for the estimate. Claimed to be just an administration estimate. Dem? Rep? OMB? CBO? But, in the same reference there are real numbers cited which show revenue increases for 2004 of 5.56% and 2005 of 14.51%. [ my calculations from the revenue collected.] There’s a lot of comparisons of apples and oranges, but these are the ONLY real world revenue numbers cited anywhere in his article and his references. We may need to rethink what Mallaby is saying.
So are you saying the CBPP is lying? If not, how can an “administration estimate” be a ‘Dem’ ‘Rep’ or ‘CBO’ estimate? Only the OMB is part of the administration. The notion that the OMB grossly underestimated the deficit before 2003 is not controversial, as a simple search will show.
What did you do, randomly click on a link from the article and them randomly pick a figure from that article? Mallaby uses plenty of figures in his article, though ironically the one you cite isn’t even one of them. Apparently for you, dividing a figure by the total population makes a statistical no longer “real world” and therefore irrelevant. I guess all statistics about personal income and unemployment is irrelevant to you, since they are generated from those fancy schmancy BLS censuses. Which means the CPI and the real GDP growth rate are also meaningless. Mallaby’s point is that claims that personal taxes pay for themselves is absurd. He’s got the theoretical and the empirical evidence to back it up. All you’ve got is a disdain for all data except the “ONLY real” data that you personally calculated, which, by the way, doesn’t even address Mallaby’s point to the slightest. You can’t rethink what he’s saying if you don’t understand it to begin with, buddy.
Their goal is to indeed to increase the after-tax income of wealthy people, whether that’s because they think those very wealthy people deserve to enjoy that income, because people deserve to enjoy what they earn, or so they say
I’m with you up to the second “because.” I think the only justification here, if it could be called that, is indifference to suffering and the desire for pleasure. Oh, and greed.
Cutting the taxes of the wealthy is essentially a kickback scheme. Payback comes in the form of political contributions by people who want you to keep it up, both from personal funds and funds from the corporations they control.
Off topic but the last time I read blog enrty that sent me to dictionary.com twice was…well never I think. Thanks for taking away my false sense of vocabulary jed :p
Nickle and diming the rich on taxes is a soggy band-aid at best. What this country really needs is a self-correction like the French, Mexican or Russian Revolution.
America’s rich bastards have lost the fear that only a roving, pitchfork-wielding horde can inspire.
Oh and Rev, I was looking back over my collection of useless brick-a-brac and I realized that I still have one of your modest mouse cd’s. You got an address or PO box I can send this to?
Building Nothing Out of Something right? Yeah, keep it. I’ve since replaced it.
What’s happening right now in my town is that we elected a Republican guy who promised to cut taxes while not reducing any services, without ever giving a clear explanation of how exactly he was going to do this, over the Democratic incumbent who didn’t bother to campaign this time around.
Now the new guy is busy wrecking all kinds of things, because it turns out he had no plan, he just assumed there was a lot of fat and waste, and so he’s cutting muscle and bone from all kinds of city programs to get funding for the other projects he promised (part of his campaign was claiming that a) there was lots and lots of crime and danger and b) he would increase the PD’s power with expensive new database technology because he wanted to poise himself as the new Mayor Giuliani - in spite of the police chief saying “wait, there’s not any more crime than before and what’s been working is better community interaction, not technology!” So teachers are getting cut and the library is losing funding and all kinds of arts and events programming isn’t getting sponsored - the things that makie people either want to live here or come here - and coincidentally spend money at local businesses. Because otherwise he won’t be able to cut property taxes AND have the garbage collected at the same time.
Now there are a bunch of whiny “compassionate conservatives” who all feel betrayed, because they believed a magic-bean salesman who promised that they could have it all and pay less, in spite of the rising costs of everything, and now they’re finding out that he lied to them (and may be about to go into debt to cover his ass - he’s claiming that there’s a secret undiscovered fund of city money he can use to ameliorate things that somehow nobody who works for the city ever knew about… That was *before* the flood, too.)
They write hurt letters to the newspapers, these “Security Moms” and their hubbies, and it’s really, really hard to feel sorry for them. It kind of makes me want to send them “You’ve won the European Lottery!” emails and see if they’d take the bait.
BeJeebus - “So are you saying the CBPP is lying?” No, not lying, just selective in their data. They compared the actual revenue versus a bunch of estimates with no cite for the reference. Which year, what purpose was the estimate used?
They did use Actual Level of Revenue 1,782 1,881 2,154 [2003, 2004, 2005]. I’m sure you can do the math to get the percentages of change.
In a later table they said revenue growth during the decades of the 80s and 90 were 1.7% 3.5% adjusted for inflation and population growth. Even adjusting the 2005 revenue it will remain a factor of more than 2 higher than the 90s, when we had a large tax INCREASE and a red hot economy.
I’m still looking for the empirical evidence Mallaby cited as you claim: “He’s got the theoretical and the empirical evidence…” My own review of his cites found ONLY the empirical numbers I have cited above. In my opinion all other cites are from theoreteical studies or studies which cites estimates and models, thus my apples and oranges comment.
Step 1: Decide what you want government to do.
Step 2: Pay enough taxes to accomplish same.
Why, you might ask, would a Republican (Nixon) invent something nice like Food Stamps?
If the working poor don’t make enough to sustain them and we don’t let people starve the cost of same is transfered from the employers to the tax payers thus creating a hidden subsidy for the rich.
So, not only are the rich get tax cuts they’re also getting a subsidy for paying slave wages.
Whether or not tax cuts pay for themselves depends on three variables, nominal GDP growth, marginal interest rate additional national debt, and what portion of goverment spending that is wasteful.
The only reason tax cuts would not pay for themselves when interst rates are so low is if the government is wasting the money.
If CoRev weren’t something of a troll, he would realize that the very numbers he cites disprove the point he’s trying to make. Since gross national product didn’t increase by 14% from 2004 to 2005, that kind of increase in government revenue implies an increase in taxes as a proportion of gnp, which means an increase in the effective tax rate. (Actually, iirc, what happened was the changing tax treatment of capital gains, which induces people to sell stuff they’d been holding onto because of possible tax consequences, and produces a one-time gain in revenue at the cost of an offsetting loss into the indefinite future.)
One important thing to remember about corporatist wingnuts is that rich people earn their money, while poor people are just paid for doing a job. So taxes that fall disproportionately on poor people are just the punishment they deserve for their lack of drive.
Why do infrequent commentors seem to get the Troll doll thrown at them? Paul, I do believe this “…that kind of increase in government revenue implies an increase in taxes as a proportion of gnp,…” statement is flat wrong. Indeed the relationship between increased tax revenue and GNP is problematic. However, if you had read the study it would have shown that the capital taxes are the most influential in raising revenue.
I also would argue against your phrasing of “…one time gain…” versus a short term gain.
Now this troll thing! I have been a lurker for many months now. Just not a frequent commentor since I don’t adhere to the totality of arguments espounsed here. Recently there have been more items of interest.
If you don’t want open discussion then ban me or tell me to go away.
Open Discussion = do not respond negatively to anything CoRev says.
Magis notes:
Step 1: Decide what you want government to do.
Step 2: Pay enough taxes to accomplish same.
Simple enough to be wise. However, many people within the “public sector” (if I can so clumsily define elected and unelected officials, those within the bureaucracy and those who receive funding streams from government) make it ass-backward. They want to collect, then decide what they want to do with it.
One of the things that I have noted amongst my colleagues on the Left in Canada (and often joined by their colleagues in the Middle) is that if they are in or funded by the public sector there is a visceral assumption that taxes are their money or government money, as if it were the government that got up at 4-fucking-a.m. to get to the shitty minimum wage job. There is never any recognition (even at a crass tactical level) that the average citizens — correctly — see taxes as their money. We on the left must first recognize a basic dual reality: that the individual citizen has a right to their income and an obligation to pay taxes to the extent necessary to preserve and enhance the society. We on the Left do a damned fine job with the latter part, and an abysmal, self-destructive job on the first part.
The Greedy Right in America (and sometimes here in Canada) has done a superb job of getting people to vote against their own economic interests. How? By being the only people who say a basic truth to the citizen: that you’re not an open and unguarded bank that thieves can steal from at any time, but rather you are entitled to the money you keep. Now, the Greedy Right says that truth, but lies in its actions, stealing like mad from the middle and lower classes (the “non-rich”).
We on the Leftfar too often fall into the error of wanting to help the non-rich indirectly, by keeping taxes high and funding positive government, as if it were the only way to approach things. We fail, and usually fail badly, at letting the non-rich know that we are their better friends. Why? Because we so rarely bother to tell them bluntly, repeatedly, honestly, that we recognize that their money is their money.
Put in a nutshell? The average citizen will pay higher taxes for government services like health and welfare and parks, and often want to do so, if that citizen is equally convinced that the government wants to keep their taxes as low as possible and will not merely see them as a bottomless source of funds for yet more and more and more and more programs.
Is this often more of a perception problem than a reality problem? Absolutely. Are we on the left often propagandized as mad spenders even when we are not? Yup. But we have to face the fact that — even taking into account those problems — the Right excels at getting people to believe in their fiscal responsibility, and we on the progressive left seriously suck at it.
CoRev,
The problem is you’re looking as this as if it were an investigation. It’s not an investigation: Mallaby has done the work, or at least he has done some work, and put together an article for us. You may critique his analysis, but in order to critique the analysis you must begin from where the analysis leaves off.
Willful ignorance unfortunately does not a discussion make. Taking off from the normative point and trying to invite others to respond to one’s own uninteresting wishful reasoning does not a discussion make either.
Right now you are not responding to Mallaby’s analysis– your comments claim in a strange fashion that you ‘can’t find’ something. However the problem here with this whole shebang lies in the fact that, as a proper response, it would essentially entail me copy & pasting the entire article for you to re-read over again. The problem is– it’s all right there. If you don’t get it that’s fine–not everyone is going to get every argument. But don’t go trying to challenge his argument if you can’t find it.
What shall I do for you? Tell you to read it again? Summarize the main points for you once more?
The Devil, being pretty damn Swish, is a fellow I like playing advocate for, at least for a line or two. For example:
I think the idea here is that the wealthy invest their money. If they have more of it to invest, they will, and that creates more jobs and helps the economy tick over - which is good for everyone.
…and in a way it’s true. As long as poor folk are too poor to invest in new businesses, it comes down to the wealthy.
So even though everyone here can surely think of approximately a billion methods of stimulating investment that are more equitable than tax cuts for the wealthy, we do need to accept that there are real, solid reasons for doing it. People who do this don’t do it to be cruel and bloody minded - that’s the effect, sure, but not the intent.
Not that I mind if you punch those responible for such asshole politics fair in the face. That goes without saying.
Bejeebus, just show me the empirical evidence in the ARTICLE. My analysis shows he cites studies baased upon estimates and models. Estimates and models are far from empirical. The definition of empirical I am using is: ” relying on experience or observation alone often without due regard for system and theory”; therefore I am discounting everything with the exception of the real world numbers in his cited study.
BTW while we are on the subject of Mallaby’s analysis here’s what CBO says about 2006 so far: http://taxprof.typepad.com/taxprof_blog/2006/05/cbo_reports_tax.html
CBO Reports Tax Revenue Gusher in 2006
The Congressional Budget Office reports “robust” growth in tax revenues for the first seven months of the 2006 fiscal year (Oct. 1 2005 - April 30, 2006):
So was Mallaby correct? Was the study correct? My bottomline is Tax Revenue. It’s up the 3 years since the cut in taxes. Is it up enough to offset the decrease?
Oh my Goodness. CoRev, you really need to be clear about things in your head. Look. I don’t know what you want. I don’t know what you are trying to say. Nor do I know what you want me to do.
You have to realize that a lot of what you’re saying doesn’t make sense. I’ll give you an example. When you say things like “is it up enough to offset the decrease,” what decrease do you mean? The decrease in revenues from taxes? That’s an endogneous question. The decrease in revenues from taxes is built into total revenues, it’s part of total revenues; so to ask whether the change in total revenues has “offset” the decrease in tax revenues is a meaningless question. I don’t know what you mean.
You say your bottom line is tax revenue. Fine. That doesn’t address the article, or the topic. It doesn’t address Jedmunds’s post.
You ask if the study was correct. What study? The CBO link you gave is a story about a report, not a study. And it has nothing to do with Jedmunds’s post or Mallaby’s article.
You ask if Mallaby was correct. That’s an interesting question, but you contribute nothing to answering it. So there’s nothing for me to write in response to.
See what I mean? It’s impossible to engage with you because your posts are convuluted and confusing. You don’t show any evidence of being clear in your own meaning. I certainly don’t see why I should re-summarize Mallaby’s article or copy & paste relevant sections of it for your own benefit when you haven’t even begun to critique his analysis in any meaningful way.