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Archive for Friday, October 12, 2012

Economist calls for flat tax, less spending

October 12, 2012

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Economist Arthur Laffer, known as the “father of supply-side economics,” speaks Thursday at KU’s Woodruff Auditorium.

Economist Arthur Laffer, known as the “father of supply-side economics,” speaks Thursday at KU’s Woodruff Auditorium.

Arthur Laffer laid out his prescription for an economic turnaround during a talk at Kansas University on Thursday, using his doctrine of supply-side economics: less government spending and a flat tax.

The former economic adviser to Ronald Reagan criticized the federal stimulus spending that has taken place over the past five years, saying it served only to hold the economy back.

“The reason we have a great recession is not in spite of stimulus spending,” Laffer said. “It is because of stimulus spending.”

Laffer told an audience of business students and other people at the Kansas Union, numbering roughly 200, that he believed stimulus spending did indeed spark economic activity among the people who receive money, but the money must come from somewhere, and that spending will result in corresponding economic decline.

He recommended a flat federal tax of 11.8 percent on all personal income and value added by businesses, saying it would match current revenues while doing more to encourage economic growth.

He said he had compassion for the poor and deplored the income disparity in the United States, but he said redistribution of income served only to give fewer people an incentive to work.

“Economics is all about incentives,” Laffer said. “If you move the cheese, you move the mice. If you move the mice, they go back to the cheese.”

Laffer advised Gov. Sam Brownback on tax policy during the last legislative session, which included the passage of massive tax cuts.

Though he criticized President Barack Obama on health care and economic policy, he made it clear his allegiances did not necessarily follow party lines.

He praised Bill Clinton for his support of free-trade legislation and welfare reform, saying he voted for him in 1992 and 1996. And he said George W. Bush was in a tie for his least favorite president of all time — with Obama.

“I can’t tell the difference between the two of them, to be honest with you,” Laffer said.

He also praised Al Gore for his proposal to tax carbon emissions while reducing other taxes to make up for the additional revenue, saying it could provide insurance against possible climate change while not harming the economy. He added, though, that he did not have a position on whether global warming is real.

Laffer’s speech was sponsored by the KU School of Business, 1st Global and the Fred and Mary Koch Foundation. But KU Business Dean Neeli Bendapudi, speaking at the beginning of the program, said the person who led the effort to bring Laffer to Lawrence was KU business school alumnus Tony Batman, the CEO of 1st Global, a financial company based in Dallas.

In an introduction, Batman called Laffer the “father of supply-side economics,” a philosophy that he credited for a period of economic prosperity between 1982 and 2007.

After the talk, Batman said he sought to bring Laffer in as a speaker because he thought his ideas were beneficial for people to hear. He also said he wanted to give back to the business school.

“This school changed my life,” Batman said.

During a question-and-answer session following the speech, one attendee accused Laffer of favoring the rich and neglecting the poor with the policies he favored. But Laffer said his proposed flat tax would close tax loopholes that rich people are especially able to exploit.

The tax cuts approved by Brownback following Laffer’s advice have been criticized by some who say they give wealthier Kansans a tax break while depriving important government services of funding. Legislative researchers say the cuts will create revenue shortfalls approaching $2.5 billion. Brownback has said the cuts will spark growth in the economy.

As he walked out of the event, KU sophomore Tanner Treiber said he agreed with Laffer’s economic philosophy, though he was skeptical that it would ever be fully implemented by the federal government.

“We need a guy like this in the White House to take charge,” Treiber said.

Following the speech, Laffer attended a reception with business students and others in attendance.

Comments

question4u 2 years, 2 months ago

"He said he had compassion for the poor and deplored the income disparity in the United States..."

Well then, it must be true, because words speak louder than actions in Brownbackistan backwards land.

Liberty275 2 years, 2 months ago

So you support theft because it's fair?

chootspa 2 years, 2 months ago

So you think taxes are illegal? Because otherwise they would not qualify for the hyperbolic label of "theft."

Liberty275 2 years, 2 months ago

If you take from me against my will to give to another it is theft.

M4 or pawn shop saturday night special. When it's pointed at you, you hand over your wallet.

rtwngr 2 years, 2 months ago

Bozo, you come across not as compassionate but as someone that wants to take from someone else simply because they have more than you. Fair shot and fair "share" are not the same things. The American dream is not about equal outcome. It is about equal opportunity and for those where that opportunity is not as apparent, a hand up not a hand out.

Crazy_Larry 2 years, 2 months ago

There is no such thing as 'equal opportunity' when money is free speech. The poor cannot buy legislation to tilt the game in their favor as the rich corporations have done over the several decades. Thievery by the corporate class--'legal" only because the Corporatist Bourgeoisie wrote the legislation that way then bought off the legislators to get it passed into law.

chootspa 2 years, 2 months ago

Bozo is asking for precisely that. Not that everyone earn the same amount of money, but that everyone have a chance at success. A fair shot. A hand up.

repaste 2 years, 2 months ago

Oh Poo, I know it is hard, but you will be O.K.

John Hamm 2 years, 2 months ago

Because the Flat Tax would apply to whatever they "earned" with no deductions. That's it's advantage.

scaramouchepart2 2 years, 2 months ago

So how young should children go to work and what do you want to do with the old worker who retired, and these days forcibly?

anotherview 2 years, 2 months ago

Are you saying that our soldiers and veterans are not contributing to our society?

Crazy_Larry 2 years, 2 months ago

All military income earned by an enlisted member in a combat zone is tax exempt.

George Lippencott 2 years, 2 months ago

What a comparison Larry. The exemption for combat that lasts o ly while you are in combat. The rest of the time they pay taxes.

Crazy_Larry 2 years, 2 months ago

Sorry, I wasn't comparing anything...just a factoid for everyone to enjoy.

http://www.courthousenews.com/2012/10/12/51225.htm

"After garnishing exempt disability payments from a 100% disabled Army veteran's wife, a debt collector told the vet he was "living off social security while the rest of us honest Americans work our a-- off. Too bad; you should have died," the veteran claims in court."

Liberty275 2 years, 2 months ago

It has to be doesn't it? If money is earned overseas (where the combat zone is), why should the US government get a cut? I don't think we tax overseas earnings at the federal level do we?

Crazy_Larry 2 years, 2 months ago

I paid federal taxes while serving in the Army and stationed two years in Germany. Combat wages are exempt though.

Crazy_Larry 2 years, 2 months ago

All military income earned by an enlisted member in a combat zone is tax exempt.

verity 2 years, 2 months ago

"The federal income tax only is one type of tax though, and most Americans pay a substantial share of their income in taxes. When factoring in all federal, state, and local taxes, the poorest fifth of Americans paid an effective tax rate of 17 percent last year, while the top one percent paid an effective tax rate of 29 percent, according to Citizens for Tax Justice."

Bonnie Kavossi, Huffington Post

George Lippencott 2 years, 2 months ago

And the upper half of the middle paid an effective tax (counting SS and Medicare) of close to 35 - 45%.

Now most of that 17% is payroll taxes. The top 1% pay no payroll taxes on most of their income. If we extended the progressivity of the tax system using the above someone making 1M would have a marginal rate of close to 100%

jhawkinsf 2 years, 2 months ago

I like the idea of a flat tax. I have no desire to hit my head against a wall, and then do it again. And again. That's what trying to amend our current tax system is while trying to make it "fair". With our current tax system, yes, it's time to throw the baby out with the bath water.

just_another_bozo_on_this_bus 2 years, 2 months ago

A flat tax would be extremely regressive. Just because it's "simple" does not change that fact.

jhawkinsf 2 years, 2 months ago

How's that current tax system working out for you? Or the poor? Have we reached that point of "fairness" yet. God knows, we've been trying now for decades. Surely we must be close, yes? We keep amending it, closing loopholes. Surely it's as close to perfection as can be had, right? Your solution is to keep fighting the good fight. The point is Bozo, if you want to bang your head against that same wall, again and again, have at it. I choose not.

As to it being regressive, sure. But that can be balanced. We could provide additional services equal to or more than what would be lost to higher taxes. Or we could choose not to. We could choose to fund schools or the military industrial complex. Or not. But start laying some taxes on everyone, and I mean everyone, then you'll see those people coming out and voting in numbers like you've never seen before. Then, instead of you advocating for the poor, they will advocate for themselves. Instead of you advocating for the disenfranchised, they will advocate for themselves. Instead of you advocating for the the downtrodden, they will advocate for themselves. Those people who vote in historically low numbers can vote for services, schools, military, roads, rec. centers, etc. Whatever. Or not.

just_another_bozo_on_this_bus 2 years, 2 months ago

Just because the current tax structure is flawed doesn't mean that a flat tax would be an improvement. It's nothing but a simplistic solution to a very complex problem.

Besides, creating a truly fair system of progressive taxation without all the loopholes would be just as easily implemented a flat tax-- which is not to say that doing either would be easy, politically. There are too many vested interests who like the status quo well enough not to risk changing it in favor of a system whose effects would be difficult to predict.

jhawkinsf 2 years, 2 months ago

The current system isn't just flawed, it's flawed beyond repair.

"creating a truly fair system of progressive taxation ... " There you go again, defining "fair" as progressive. We can't agree what is fair. I've said it before. And I don't mean you and I. I mean us, all of us. So as soon as you do that, you're opening the floodgates of that class warfare you accuse others of choosing. And it's a fight people with your attitude have fought and lost many times. You really want to fight that fight again? Fine with me. But you'll lose again.

just_another_bozo_on_this_bus 2 years, 2 months ago

The flaws of the current system do not magically render a "flat tax" as either easy to implement or fair.

For you, fair means a tax system that favors the wealthy, while I favor a tax system that recognizes that our version of capitalism doesn't distribute income and wealth fairly, so the tax system needs to be progressive to be fair.

"And it's a fight people with your attitude have fought and lost many times."

Do you ever tire of patting yourself on the back?

appleaday 2 years, 2 months ago

I want to know who does Laffer's hair.

jhawkinsf 2 years, 2 months ago

Only if done in a vacuum. Our current tax system doesn't operate in a vacuum and there's no reason to believe a flat tax system would operate in a vacuum.

just_another_bozo_on_this_bus 2 years, 2 months ago

The devil is in the details, and the only way to make a flat tax actually fair is to distort it so much that it actually becomes a progressive tax.

jafs 2 years, 2 months ago

Those who support flat taxes also generally don't support helping poorer folks.

So, even though it's possible that those two can be combined in theory, in practice it's virtually impossible.

jhawkinsf 2 years, 2 months ago

Jafs, I'll tell you a story that happened to me many years ago. It was very early in my career working in social services, while still in college. I was working at a senior center that provided, among other services, transportation for seniors. There came a time when we outgrew our ability to provide for everyone, we were stretched as far as we could go. So we needed to prioritize that service. We decided that doctors appts., trips to the grocery store, etc., would get priority and we stopped taking seniors to bingo, bridge, etc. Well, that created a firestorm. The seniors gave us an earful. "How dare we decide that for them". They vetoed us and told us not to presume for them.

It was a valuable life lesson. I learned that whatever it is that someone else wants, it's better for them saying what that is. I should not presume for them. I don't mind helping poor people, but I'm very reluctant to presume to know in what form that help should come. I'd rather they say, than for me to presume. I'd rather have them vote, than for me to presume food stamps, or presume subsidized housing, or presume state heath care.

While you're painting with a wide brush, (those who support flat tax don't want to help the poor), I'll paint with an equally wide brush. Those who pretend to want to help the poor are arrogant and condescending in presuming to speak for them. Let them, the poor, speak for themselves. Encourage them to speak for themselves. Don't tell me what they want. Listen to them when they say what they want. I've said before I think a flat tax would have a side effect of higher voting from traditionally low voter turnout groups. Let them tell us what they want and need through their own voice at the ballot box.

jafs 2 years, 2 months ago

Nice story, but rather besides the point, I'd say.

I also support people advocating for themselves, and voting.

But, I also can make my own judgements - in your senior citizens example, I have no problem saying that trips to the doctor are more important to provide than trips to bingo, if resources are limited and choices like that have to be made.

If we're providing aid, we have a legitimate interest in what kind that is - you've mentioned that repeatedly - are you now simply giving up on that idea?

The point I'm trying to make is this - if a flat tax is imposed, that means that those in power favor that. Since those folks generally oppose social programs (you're a notable exception), the result will be flat taxes and fewer social programs.

If everybody now votes, everybody (at least those on the lower end) will vote for the guy who promises lower taxes and social programs, and then we'll go right back to where we were before.

I think it wouldn't achieve the effect you seek.

The fundamental problem, as I see it, is that too many people vote on the basis of narrow self-interest, without an eye on the bigger picture, and that politicians say whatever they need to say to get elected.

jhawkinsf 2 years, 2 months ago

I think you're missing the bigger picture when it comes to the idea of people voting in greater numbers. I don't recall seeing the numbers for the last local election, but I do recall the numbers for the one prior. Sixteen percent was the turnout. I hear calls for a vote for the proposed rec. center. Wouldn't you feel more comfortable with the results if 80% voted?

Suppose we had an election and nobody voted, would we still have a democracy? I think I've asked that question before. At what point does democracy actually die? Is it 1%, 2%? If it's 16%. And if the poor in that election voted in smaller numbers than the wealthy, then their numbers might be reaching whatever number we choose for the death of democracy.

Too many people vote on the basis of their narrow self interest, I agree with you. And that is exacerbated when very few actually vote. If 80% voted, by definition, that narrow self interest would be overwhelmed by a broader general interest.

Back to my example, if aid is provided in the form of transportation to doctors appts or grocery stores, yes, that's what should happen. If aid is provided in the form of transportation for seniors, then allowing seniors to decide how that should be structured is the way to go. To say to seniors that we know what's best for you and then impose that on them involves no small measure of arrogance. But again, the greater the numbers of seniors who have input, the more likely a general interest will be achieved, rather than narrow self interests.

But here's another point I think you, Bozo and several others keep missing. For a long time, we've been trying to get from point A to point B, using the shortest possible path. Every time, we hit some invisible wall that thrusts us back to where we started. Then we do it again. I'm not necessarily opposed to going from point A to point B. I want to get there, using a different route. I think if we had elections with turnout reaching 80% - 100%, you'd see a substantial reduction in the military industrial complex. I think wars of choice would become a thing of the past. With that, there would be greater emphasis on the infrastructure here at home and putting people to work on that. The savings would be enormous, in my opinion. While taxes would go up substantially in the short term, especially if were to choose to pay off our accumulated debt, in the long run, taxes would actually go down for many, specifically because we would be making different choices. Just as I think Lawrence would be making different choices if 80% voted as opposed to 16%, the same would likely be true on a national level. I think it's quite probable that if we vote on the new rec. center and 16% vote, the vote might go one way and if 80% turn out, the vote could well go the other way. If the Gore-Bush election had a 100% turnout, then Iraq never happens. Imagine what we could have done with all that savings. In my opinion.

jafs 2 years, 2 months ago

There is the interesting issue of informed voters as well, as we've discussed. I do want greater participation, but also more informed voters. If we have a huge turnout, and ignorant voters, is that great?

I don't see how a lot of people voting in their own self-interest arrives at a more general good for the nation, actually. What it really seems to translate to is politicians promising everything to everybody in order to get elected, and then not delivering on it once elected (it's probably impossible to do).

Sure, and we could just give poor folks a bunch of money and let them do whatever they want with it. But, we don't do that - we prefer to offer concrete help, and choices are made. As you've said, reach into my pocketbook,... I have little to no problem offering concrete help for important things, but I do have a little problem offering luxuries. So I'd be glad to pay to help seniors get to the doctor, but not necessarily to bingo.

I think your idea of what would happen is unrealistic, that's all - I like your goals.

jhawkinsf 2 years, 2 months ago

Actually, I think my ideas are unrealistic in that I don't think it will ever be implemented. That said, this process of constant revision of the current system trying to create that ever elusive notion of fair is doomed to failure if for other reason than it promotes an atmosphere of class warfare. There has to be winners and losers. It's like building a football field and then being surprised that a football game broke out. If you don't want class warfare, then pick a number we'll all pay.

chootspa 2 years, 2 months ago

We'd only have the same amount we all pay if we had the same income we all earned. I'm not sure you'd want to go that direction, Komrade.

booyalab 2 years, 2 months ago

btw, have you ever gone into a higher tax bracket in a year and the increase in taxes you owed caused a net loss in income? I have. It's not fun and it's not fair. The flat tax is the only way to avoid that.

skinny 2 years, 2 months ago

I like the flat tax idea too. Everyone should have to pay taxes equally. You should not be penalized for going out and working harder to bring in more money so the guy next door can sit on his @@$ and do nothing.

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."

headdoctor 2 years, 2 months ago

The wealthy have no problem legislating freedom and money away from the poor.

skinny 2 years, 2 months ago

Notihng is free in this world my friend!

CountyResident 2 years, 2 months ago

skinny: What Brownback did is the opposite of what you said. He cut the income taxes of doctors, lawyers, accountants, farmers and anyone else who is self-employed to ZERO. Now he wants to increase sales tax so everyone else can give their money to these groups. He even took away the sales tax exemption on food for low income people.

anotherview 2 years, 2 months ago

In some cases a flat tax would be better than what we have now. Romney paid a tax rate of 14% on $20M of income while a person making between $50,000 and $100,000 pays around 20%.

chootspa 2 years, 2 months ago

Paying more in taxes when you earn more is not a punishment. It's a user fee. I don't begrudge paying more to get a 16 oz coffee than I do for an 8 oz. I still get more coffee. I don't begrudge going up a tax bracket. I still get more money.

jafs 2 years, 2 months ago

Not really a user fee.

Those who pay more taxes don't get to use government services at any greater level than those paying fewer taxes, generally speaking. We all get to use the roads, etc. In fact, as income levels rise, people tend to take their kids out of public schools, while lower income folks have them in the public system.

So, higher income folks are paying for a service they don't use, in that regard.

chootspa 2 years, 2 months ago

They have more stuff that requires police protection. They're more likely to need to ship goods and services on roads with semis. They need employees who have been educated in the public school system, including those private school teachers. (And it isn't a given that the rich are going to be in a private school. Many attend public schools in neighborhoods where the schools get more funding.) They also extract or use resources from the environment like coal and oil that cannot be replaced at a greater rate than someone without larger financial means.

So while the direct use of things like food stamps goes down, the indirect use of the services goes up.

jafs 2 years, 2 months ago

I can't see how on earth they need to ship goods more than anybody else.

Everybody buys food, and it's shipped a lot.

And employees need employers.

It's just not a "user fee", however you analyze the effects. A user fee is when somebody pays directly for a service they're using. Taxes don't operate that way at all - they're paid into a pool, and then spent on a wide variety of things.

If you support user fees, then you'd oppose taxes, generally speaking.

That's not what you believe, from many posts on here, as far as I can tell - that's a rather right-wing concept - let everybody pay for what they use, and cut taxes and programs for the common use/good.

chootspa 2 years, 2 months ago

A business owner has a greater need to ship goods than the workers employed there, and they need the protection of law and order all along the route. Any way you slice it, the rich disproportionately benefit from the economic system in this country.

I do pay user fees to enter theme parks, and they don't just put the money toward the rides I enjoy. They pool the money into a general fund. At this point you're just arguing semantics.

jafs 2 years, 2 months ago

Not at all.

The difference between "user fee" and "tax" is a fundamental one.

When you pay a user fee to enter a theme park, you're doing so because you want to use and enjoy it - people who don't want to do that don't have to pay for it. That's the fundamental difference between user fees and taxes. With taxes, we all pay into that system, whether we use what it's spent on or not.

For example, I pay about 1/2 of our property taxes towards public schools - we have no kids in public schools and will almost certainly never have any there. If the schools were paid for by user fees, then families that used them would pay for them, and the rest of us wouldn't.

Employees of that business benefit from the business' shipping, etc. without which the business would fail, and the employees lose their jobs.

I agree that our current system favors those at the top, of course.

But your claim that higher taxes are user fees seems quite inaccurate to me.

chootspa 2 years, 2 months ago

Semantics. The initial comment was that taxes were punishment, to which I responded that they were not, and I called them a user fee to highlight the fact that everyone, including the very rich, gets a benefit from having a government. Now you're just getting hung up on a detail of the analogy that doesn't fit. You are correct that we have structured our tax system as taxes, which is why we call them taxes and not user fees, but that isn't an important detail. It's a silly distraction. Let's move on.

Labor is not exchanged at its true value. The difference between wages and the value of the product is profit, and it's what makes commerce work. Employees agree to work for less than the true value of their wages because they don't own the business and likely never will. The employer disproportionately benefits from this system, and disproportionately benefits from the collective value of all the necessary items that go into the system, from the lack of rioting in the streets to the workforce that isn't dying of cholera.

I'm not arguing that we all set up a commune. I'm fine with capitalism, and I'm not suggesting everyone needs to be taxed to the point that we all have the same money. That's silly. But I am going to argue that the rich get more benefit out of our government than the poor do, and not in a flat proportion to their earnings.

jhawkinsf 2 years, 2 months ago

While discussing what the employee brings to the business and what the owner brings, you conveniently leave out many details. Things like initial investment. Things like risk. Things like a multitude of taxes and fees that businesses pay and employees don't. Might this account for the disparate benefits derived from the business? Besides, when you say labor is not exchanged at it's true value, I'm trying to think of a formula for compensation that is more fair than when both sides agree, in advance, what that compensation will be.

chootspa 2 years, 2 months ago

Like I said, I'm not advocating that we all turn into communists. There will never be anything that equalizes all factors. It is simply the way things work in a society. The dominant class will dominate, and the dominated will consent to the domination so long as they feel they've gotten some value from the exchange.

But the more income you have, the less real risk you face, the less hardship an initial investment takes, etc. The taxes and fees are already part of the equation. Otherwise, there would be no profit. Someone risks far more by taking out a loan for college than Trump does -ever. His companies have filed for bankruptcy at least 4 times, yet he still gets a 2 million dollar a year paycheck, and he gets to keep all of his money even if all his businesses fail. That doesn't seem like risk to me. Does it to you?

If we wanted to fix things, I'd decouple health insurance and retirement from wage labor and go back to making higher education more affordable. That would free up employees to leave whenever they wanted for a new job or to start their own business. Companies would be forced to raise wages or come up with creative benefits packages if they wanted to keep their most talented employees. No more sticking with a job you hate because it's got health bennies.

jhawkinsf 2 years, 2 months ago

Whoa Nellie. It sounds to me like you're putting the horse before the cart. The high income that you say offsets the risk, that only happens AFTER the period of investment and AFTER the period of risk. Only then can a high income be drawn from the business. Maybe things are different in the Trump stratosphere, but open a business here in Lawrence, after growing up here being of modest means, and you're definitely taking substantial risk PRIOR to reaping much reward.

Your whole way of describing the dominate class and the dominated makes me feel uncomfortable. Maybe I just don't look at things that way. As an employer, I've never felt like I'm any better or worse than others. I do work more, I'm certain of that. I'm protecting a far greater investment, protecting a much higher risk. But I've always felt that while I can hire or fire as needed, they too can work or walk according to their own needs and desires.

I agree with about education. I've frequently advocated for a greater commitment to education. As to your other suggestions, much of what you want is in place. Social Security for retirees is already here. Should companies wish to supplement that to retain their better workers, they are free to do so. If they choose not to do that, they risk losing those workers to companies who do provide that. Of course, the workers can decide for themselves whether to stay with a company that offers a more generous package or stay with the company that doesn't. One thing I think you neglect when you say the dominated class will stay if the are "somewhat" rewarded is that they always have the choice to stay or go. They are no more or no less held hostage by the marketplace than the business owner is. To illustrate this, let's suppose a worker values his labor at $20/hr., but is only earning $10/hr. He may feel exploited, but it's just the marketplace determining his value. But suppose the business owner values his business at $1,000,000. He bases that on his investment, earnings, years spent building up the business, etc. But when he goes to sell it, he may only be offered half that amount. Is the marketplace exploiting him? I would say the worker and the business owner are both, or neither, being exploited to the same degree.

As to the issue of bankruptcy, I feel it's a system too often abused. Allowing someone or some business to walk away from debt has become too easy. I would favor a restructuring of the whole system to make such a solution much more difficult. If we're going to allow great reward, we must allow for great risk. I'm not at all a fan of bankruptcy at all. I know in my heart of hearts, it a path I would never choose.

chootspa 2 years, 2 months ago

I'm having a hard time reading the type when it gets this indented, so I'll be brief. Small business owners aren't usually part of the top income bracket. If you are, congratulations. You're doing far better than most. And it's actually one of the reasons I say the system is rigged. You're absolutely correct that the little guy is risking more than Donald Trump, and he's not going to make it easy for anyone to follow in his footsteps.

jafs 2 years, 2 months ago

It's not just semantics.

There are two fundamentally different philosophies underlying user fees and taxes.

One is that people should pay for what they use themselves, and not have to pay for things they don't use. The other is that we live in communities, and certain things should be publicly available to all citizens.

Your shift into employer/employee things is interesting, but misleading.

Income taxes aren't user fees - when we had less money, and thus paid less income tax, we used more of the public facilities, like the library, community building rec center, etc. As we've gotten more money, we've stopped using them, and now go to bookstores, and use private rec facilities. So, our use of public facilities has decreased as our income has increased - an inverse relationship between tax revenue and use of public facilities.

I imagine this isn't that uncommon, and that many people experience such a shift.

User fees work the opposite way - if we used the public facilities more, we'd pay more for them, and when we didn't use them we wouldn't have to pay for them at all.

Using your first analogy, I'm not getting more coffee, I'm getting less coffee (actually no coffee at all), but paying more for it.

And, I'm sure that jhf will be talking about the value of the employer's contribution to the equation, so I don't have to do that.

The rich get more benefit, but only because we've allowed them to use money to influence the government, which is very problematic. What we should do is to stop that, not just charge higher taxes, in my view.

And, it's only true after you get to a certain level of money, I think - our increase hasn't resulted in any more influence or benefit, as far as I can tell, since even now we don't have a lot of money by American standards.

just_another_bozo_on_this_bus 2 years, 2 months ago

"Some Americans just ain't going to make it in a socially fair environment. They have to have the upper hand."

And that's why they've hired Laffer and others like him to do their bidding.

scaramouchepart2 2 years, 2 months ago

Oh you mean those who hid the money in off shore accounts, don't want to pay their taxes legally Iike corporations? Those who sell out the American workers like corporations by taking their jobs to China? Corporations who developed fraud via derivatives and then demanded bailouts? You those guys right?

Liberty275 2 years, 2 months ago

"Some Americans just ain't going to make it in a socially fair environment"

Make what?

and

What is social fairness?

booyalab 2 years, 2 months ago

...all in the name of "wealth distribution"

headdoctor 2 years, 2 months ago

The stimulus held the economy back is laughable. The banks setting on the money not making loans after they were bailed out did more to hold back the economy than anything else. There was about a year and a half where you couldn't get a loan even if you were platinum plated.

This ignorant, spoiled brat attitude of me, me, I want, I want but I don't want to pay for it or I want but I want the lower income people to pay for it makes me sick.

George Lippencott 2 years, 2 months ago

The middle class alreadt pays substantially. How much more do you want?? It is the rich donors to both parties that get the cheese while telling us Laffer moved it.

headdoctor 2 years, 2 months ago

I would like to see Arthur Laffer try to raise a family on 30k a year and pay 11.8% of their income on top of the local and State sales tax, fuel tax, sin tax, etc.

scaramouchepart2 2 years, 2 months ago

Don't forget no health insurance in that list. I agree with you.

independent_rebel 2 years, 2 months ago

The truth is that our society is so full of entitlements that it's better to work part-time and qualify for free and reduced fees for everything from food, shelter, lawyers, school fees, school lunches, transportation, health insurance etc., than it is to make 30K and just fall over the line that would allow you to qualify to these entitlements. The way it works now is that lazyness is rewarded. It's not like the customers seen on shows such as Hardcore Pawn could actually hold jobs that would pay for a lifestyle any better than what they get for free from Uncle Sam, so there is no incentive for them to even try.

chootspa 2 years, 2 months ago

So which part time job do you work at while you mooch off of the fabulous services the government provides? Do tell? Also, which model of Cadillac do you drive?

JackMcKee 2 years, 2 months ago

Jack McKee calls for Art Laffer to return the $75k he took from the suckers in Topeka.

headdoctor 2 years, 2 months ago

Last time I bothered to look there are upwards of a half million filers or more that are part of the 47% and those are people who could afford to pay taxes. It also included 6 of the most wealthy.

scaramouchepart2 2 years, 2 months ago

Atiopatioo Really you are using a number that includes children and retirees, who by the way lost their hard saved retirement. Talk about spewing framed verbage. If you don't understand who the 47% represents then don't use it. It could include you someday.

Liberty275 2 years, 2 months ago

" pay more for membership in America"

I don't need a membership. I was born a citizen. It's all in the constitution.

" Social fairness is a must."

You want social justice? Crawl out of bed and go to work like the rest of us.

Liberty275 2 years, 2 months ago

The IRS lets 47% of Americans get away without paying "dues". Why should I have to pay to be an American when other's don't.

Anyway, I'm not a member, I'm a citizen. I don't pay dues, taxes are taken from me.

verity 2 years, 2 months ago

You keep pushing the 47% thing and you know it's a lie, antipoo.

Repeating it over and over and over will not make it anymore true. It just makes you look stupid.

jhawkinsf 2 years, 2 months ago

I was listening to NPR a couple of weeks ago and there was a really good analysis of who that 47% actually was. Once you take out seniors, those in the military, etc., and really focus on those we generally concede are deadbeats, then the actual number is 18%. Whether you think that number is still too high or you think that's an acceptable number, let that argument begin. But the real number is neither 47% nor is it zero.

jafs 2 years, 2 months ago

Uh oh - get ready for the attack on NPR as a flamingly liberal news source.

verity 2 years, 2 months ago

"The federal income tax only is one type of tax though, and most Americans pay a substantial share of their income in taxes. When factoring in all federal, state, and local taxes, the poorest fifth of Americans paid an effective tax rate of 17 percent last year, while the top one percent paid an effective tax rate of 29 percent, according to Citizens for Tax Justice."

Bonnie Kavossi, Huffington Post

Most of them are contributing---you know it, I know it, we all know it. I realize I'm just feeding your desire to stir things up and get attention, but sometimes I just have to call the lie a lie.

gphawk89 2 years, 2 months ago

I agree that this type of flat tax is not fair. How about a TRUE flat tax? By that I mean equal taxes for all adults regardless of their income. You want our armed forces to defend your freedom? Pay your fair and equal share. You want government-sponsored medical research to find a cure for your disease? Help to pay for that research the same as everyone else. Why should you get away with paying less (or nothing) for something that directly benefits you if you have a lower-paying job?

scaramouchepart2 2 years, 2 months ago

We do. What we can't afford is to buy candidates who want to make us slaves and force us to owe our souls to the company store. Why has the cost of living grown far faster than wages? It is your types who create the lower-paying jobs, that once were decent paying jobs.

headdoctor 2 years, 2 months ago

The Department of Energy is one of the biggest black holes of tax money. They use it to conceal a very large amount of the defense budget and a few other large departments. A prime example is the ownership, expense and R&D for the nuclear triggers and such are owned by the DOE. The just let the military test pop them ever once in a while. The DOE can be in a meeting and requisition millions for programs just by changing the file paperwork.

lawslady 2 years, 2 months ago

Background: I have worked since I was 14, having as many as 3 jobs to put myself thru college (without loans of any kind). I am a big believer in the "pull yourself up by your bootstraps" philosophy.

However.... (a) A flat tax is a regressive tax. It will always hit the poorest the hardest. 5% of a $35,000 annual salary takes out a far bigger chunk than 5% of a $100,000 annual salary, in terms of buying power after that tax is paid. That fact is why we have the current progressive tax code which in theory was meant to take a higher % from those who earned more; (b) Many of the governmental "hand-outs" in the USA were begun in response to the dust bowl/depression, and without them many in this country would have died back then; (c) There has never been a pure "market" economy, unless you are counting the fuedal times when everything anyone made/had actually belonged to the king; and (d) the main problems we are facing in our economy were decades in the making and will probably be decades in the fix (imho, Americans spent and borrowed too much and saved too little).

We need a balance. In all things. Including how we approach economic issues. Too much government or too little government can both end up causing a complete melt down. Those who are so afraid of (Fill in the Blank) might want to study history a little more and realize that there are no black and white easy answers to tough situations and any time you suggest a solution that seems easy or obviously right, it's probably wrong.

lawslady 2 years, 2 months ago

Oh, and for those who advocate that no oneshould get anything they do not pay for, may I suggest that you go back to birth and walk through that scenario if you were born poor and raised by ill or in seriously dysfunctional conditions. Oh, but without any help from anyone ever (including use of roads or schools, which are paid for by jointly going in on them). I for one do not mind paying a little extra $ so that Granny Smith or the future next Winston Churchill (born to a prostitute) can achieve or have a minimum standard of life. Those who want to pay as they go are asking for a government based upon worth. And who gets to judge that worth? Them? Welcome to class war fare. http://en.wikipedia.org/wiki/Meritocracy

Liberty275 2 years, 2 months ago

"5% of a $35,000 annual salary takes out a far bigger chunk than 5% of a $100,000 annual salary"

It's 5% either way. How is 5% of 35 bigger than 5% of 100?

George_Braziller 2 years, 2 months ago

Costs essentially the same for everyone to live. Doesn't matter if you make $10,000 or $10 million. The 5% on a $35K salary DOES represent a larger chunk than 5% on on a $100K salary.

Liberty275 2 years, 2 months ago

"Costs essentially the same for everyone to live."

No it doesn't.

"The 5% on a $35K salary DOES represent a larger chunk than 5% on on a $100K salary."

5% of 35 is 1.75; 5% of 100 is 5. I don't know what universe you are in, but in this one 5 is larger than 1.75. Either way, it is 5%.

just_another_bozo_on_this_bus 2 years, 2 months ago

The important difference isn't in the amount of taxes collected, but with the amount of money left after those taxes are collected. That's what is regressive about a flat tax-- a struggling poor person is even poorer and struggling even harder, while a wealthy person is still.... wealthy.

jafs 2 years, 2 months ago

It doesn't mathematically, of course.

But, those making less money tend to spend more of it, and need to do so, just to live, whereas those making more money have more disposable income, so flat taxes affect those at the bottom more negatively.

Liberty275 2 years, 2 months ago

Thank you Jafs.

At least you are complaining about wealth disparity instead being wrong about middle school math.

jafs 2 years, 2 months ago

My pleasure.

This is the standard argument against flat taxes, so I can't take much credit for it, though :-)

Thomas Bryce 2 years, 2 months ago

Great Picture! Caption should read "Laffer Laughs All The Way To The Bank"!

Trumbull 2 years, 2 months ago

“The reason we have a great recession is not in spite of stimulus spending,” Laffer said. “It is because of stimulus spending.”

Well, I was not there, but was it explained exactly how the stimulus created the recession? In my mind, it put a floor on the recession helping to prevent a possible collapse or depression. Social safety nets like stimulus and unemployment compensation prevent demand from slipping below a certain point.

Austerity measures like what is going on in Europe are not working folks. Spain for instance. Are we learning anything from what is going on there? It seems also like we are forgetting all about succesful preventative measure we implemented and learned from as a result of the great depression. I guess it takes a couple of generations to forget. Same with war. We don't learn from history.

George Lippencott 2 years, 2 months ago

Wrong - maybe. Which budget? If we talk discretionary spending and unfunded entitlements DOD is about 25-30%. If we talk all spending (SS and Medicare) it is closer to 6 to 10% (depending on what you count). Lumping in Homeland security appears a bit inappropriate. While VA sending is related to wars are you going to cut the WWII vets, maybe the Vietnam Vets?

“The war were wrong” therefore those drafted to serve in them must be punished. Of course we can talk about the all volunteer force and renege on what was part of the business contract.

Uninformed people who write stuff like this are not part of our best and brightest. Do your homework. It is laudatory to want to use resources to help people but we do have bills to pay. ?

verity 2 years, 2 months ago

Oh, they're a father all right, they just don't take responsibility for their children.

Greg Cooper 2 years, 2 months ago

What, really, is wrong with a flat tax that charges all persons (remember, corporations are people, too) 2.5% of their true income. Eliminate all deductions, eliminate all dodges, and US tax income would be far more than enough to fund all essential government services, with billions left over which can support selected "quality of life" options, like, maybe, Big Bird.

Progressive taxes are not happily embraced by all, and that makes sense to me. If I had an idea that became a product of service that helped me become part of the 1%, I'd be truly happy. If i were a worker who worked for that person, I'd be happy to be paying on a par with my employer/company.

I'm not Laffer, and my idea may be laughable, but I don't see why. Maybe someone can enlighten me as to why this would not work.

just_another_bozo_on_this_bus 2 years, 2 months ago

It's pretty simple, really. Say you want to go to lunch, and that lunch costs $10, but there is a 10% tax on that, and you only have $10.50 in your pocket. You don't eat because you're 50 cents short of having enough.

But if you have a $100 in your pocket, you get to eat, even though the price and the tax are exactly the same for both people.

This illustrates the regressive nature of sales taxes. A flat tax on income would be similarly and equally regressive.

Greg Cooper 2 years, 2 months ago

I understand what you are saying, but doesn't reality really say that you will choose a less expensive lunch? I mean, yes, we all want the best for ourselves, but if our income is such that we have to choose the best, but within our budgets, then the options are that we choose what we can afford or we do what we must to earn more income to be able to afford what we really want.

I understand what you mean, and I truly sympathize with your position, but would not the tax I mention be better in the long run by making taxation fairer for all? It seems to me that the deleting of deductions for all would be the "fair" for which you and others ask.

just_another_bozo_on_this_bus 2 years, 2 months ago

My example was a simple one, so, yes, there's a possibility that a person with $10 might find a cheaper lunch, but even with that simple example, it's hard to find a lunch for much less that $10 these days.

But when it comes to overall expenditures on total income, a flat tax is not fair. Not even close.

Perhaps it's better to look at it this way. Say there is a 10% flat tax. If you have an income of $25,000, after that tax is levied, you have $22,500. Neither amount is easy to live on these days, especially if you have a family to support. But the latter is significantly more difficult to live on than the former.

Now take someone who makes $250,000-- an amount that anyone ought to be able to live on very comfortably. Apply the 10% tax, and the income is $225,000. That's still a pretty comfy income to live on.

So the result of the flat tax on a poor person is to make life significantly more difficult, while the effect of the tax on the wealthier person is nearly non-existent-- at worst they might only get to trade cars every other year instead of every year.

If you believe that to be fair, I'm not sure there's much I can tell you.

Greg Cooper 2 years, 2 months ago

I hear what you're saying, but consider this: If one earned $25000 and paid $2500 in tax, he would still have the incentive to better himself into a higher-paying position. It's never going to be easy on the lower-income people, but, for heaven's sake, why should someone who happens to be fortunate enough or hard-working enough or bright enough to put himself into the hiher income bracket have to pay more to get the same level of government service?

just_another_bozo_on_this_bus 2 years, 2 months ago

You're arguing for the unsupported and wholly ideological assertion that a progressive tax system makes hard-working people into lazy slackers. That doesn't magically transform a flat tax into a fair tax.

Liberty275 2 years, 2 months ago

You need to get over that envy crap. Poor people are poor. Rich people are rich. That's how it is. The current system is a bureaucratic nightmare of credits, deductions, line 1 minus line 8a (dividing by zero!) - written by men that get paid to do taxes or defend people from tax law at the behest of men rich enough to win elections.

The current system is corrupt and you are supporting it without a thought. Stop doing that.

Liberty275 2 years, 2 months ago

Lunch costs me $3.50 + tax at Walmart.. Sometimes lunch is 4 pieces of bread, 2 pieces of bologna, some mustard and tap water from an old Gatorade bottle.

Must be nice to afford 10 bucks a day for lunch.

just_another_bozo_on_this_bus 2 years, 2 months ago

So apply the same math to $3.50, then. It doesn't change the underlying fact that a flat tax is a regressive tax.

jhawkinsf 2 years, 2 months ago

Let me give you an example of two different taxes that are regressive, yet reaction to them frequently is quite mixed. Taxes on food is probably the most regressive I can think of. And I would be in favor of eliminating that tax, especially for foods that are not pre-prepared. But how about taxes on cigarettes. That is also a regressive tax in that more poor and more minorities smoke and therefore, the very high taxes on cigarettes impacts those groups disproportionately. (Not to mention the impact on their health). Yet that's a regressive tax I'd be in favor of and even expanding. So just saying a tax is regressive or progressive doesn't really say much.

just_another_bozo_on_this_bus 2 years, 2 months ago

Yes, sales taxes are almost always regressive, especially on essential goods such as food.

Cigarettes are hardly in that category, even though the sales taxes on them are much more detrimental to low- and middle-income users than on wealthy users.

Personally, I don' think that sales taxes on cigarettes should be any higher than on other items just to pump up general revenue. I would be in favor of levying a special tax on them to help fund a single-payer healthcare system, with the amount determined by the costs that smoking adds to overall healthcare expenditures-- same thing with alcohol and other consumables with detrimental health effects.

Liberty275 2 years, 2 months ago

It isn't regressive, it is neutral. If anything, what we have now is a regressive tax full of holes that only rich men can afford. Keep fighting that thing you think is the good fight.

Either way, I can eat lunch 3 times for $10.50. I suppose I could eat 9 times in 10 days and give the remainder to help you fund $10.50 lunches for other people.

scaramouchepart2 2 years, 2 months ago

WWIII has started. Class warfare. Why do those who have more to steal want those who have little pay for their protection. If we allow those who could provide more not be allowed a decent education as Lawslady pointed out, we would lose future leaders. I went to college without financial help, but after disabled in a work related injury I now need the student financial help so I can continue to be a functioning person as I pay back my loans. I don't get an out it if I sell before the start date or if I fail like developers do. I don't get a bailout if I abuse the system and get caught like the banking industry did. I don't get to send my debt overseas to get out of paying it like Romney. As the average person hurt not only physically, but financially by corporate greed, I must pay my fair share. It is time corporations quit spewing the economic growth lie and own up to the only economic growth they produce is their own.

voevoda 2 years, 2 months ago

We could have a flat tax that is also fair if we start by exempting income up to a living wage from tax. Then, above that level, a flat percentage. Below a living wage, just a token, such as a dollar per thousand of income, because if all residents pay something according to their ability, then none can be accused of mooching off others. At the same time, we wouldn't be creating still more hardship from the poorest of our fellow-citizens. I'd like to hear from Laffer and his admirers--why not advance this version of a flat tax plan, if the goal genuinely fairness and not simply making the rich richer at the expense of the poor?

just_another_bozo_on_this_bus 2 years, 2 months ago

What you propose is already part-way towards a progressive tax.

And if it were to actually raise enough money to fund government at more or less the current level of expenditures, it'd still be quite regressive for middle-income earners.

But I think your idea would have more merit if it had at least a two more brackets-- one starting somewhere around $250,000, and another at $1 million. But, that again gets us back to a progressive income tax, not a flat tax.

Bradley Kemp 2 years, 2 months ago

If we got rid of loopholes and deductions, we'd have a flat rate. We'd all pay 10 percent on our first $8,700 in income. We'd all pay 15 percent on our next $26,649 in income. We'd all pay 25 percent on our next $50,299 in income. We'd all pay 28 percent on our next $92,999 in income. We'd all pay 33 percent on our next $209,699 in income. We'd all pay 35 percent on any income over that.

That's using expected 2012 rates.

Budgets_Smudgets 2 years, 2 months ago

Sure, why should the rich get a mega-millions dollar exemption while homeowners only get a measly home doduction.

George_Braziller 2 years, 2 months ago

What home deduction? Don't get any for mine.

George Lippencott 2 years, 2 months ago

And the rich skate. Use the effective rate and see just how progressive it really is. It turns out to be almost flat above about $400K.

Richard Heckler 2 years, 2 months ago

They could not fully implement the grand theft scheme by way of D.C. so now the plan is state by state.

Kansas may be the first on the map for supreme WRECKANOMICS which represents the 1% through and through.

It is a fraud on the middle class in a very very big way!

Neither WOMEN nor Republicans nor Democrats nor the Upper Middle Class/Middle class can afford the Republican/RINO Party!

Do women need more republican big government in there lives? It is on the way! http://www.kansascity.com/2012/10/05/3849961/joel-brinkley-gop-would-impose.html

Public Education is a strong player in new Economic Growth yet republicans starve the system of funding which starves our teachers of resources. Which starves the desired level of education = stealing from our children’s future.

Trying to kill an educational institution such as Sesame Street and PBS is reckless and Irresponsible. Republicans are out of touch going on 32 years.

Is the market value of your home worth less than your mortgage? How much market value have home owners lost since 2007? Trillions of $$$$.

Richard Heckler 2 years, 2 months ago

Bear in mind so many many of the perpetrators of this scheme are either on government payrolls and/or have access to super duper loopholes which allows them to pay no taxes.

These leeches will never leave government because they need to be in office to protect this grand scheme aka grand theft.

This will cause a sizeable increase in local taxes. Water/Sewer/Trash rates,swimming fees,public school fees etc etc etc etc which are all taxes will increase.

So the leeches which pay the least amount of taxes will pay even less overall. The tax dollar moochers will continue to hide their true incomes by way of Cayman Island accounts.

The upper middle class and middle class will still be picking up the cost of everything..... only more.

How many of the new republican names on the ballots are actually from Kansas? Can we say wreckanomic imports? which may be against the law?

Richard Heckler 2 years, 2 months ago

Why did the nation see two major recessions in the past 32 years?

Let's talk about republican entitlements that have literally destroyed jobs,economies and retirement plans. And made owning a home a risky investment - now that is remarkable.

DC republicans have been successful at wrecking our economy big time twice in the past thirty years. Because of the pattern I am convinced it is their economic policy established under the direction of Reagan/Bush.

Bush/Cheney accomplished a remarkable achievement by destroying the world economy which of course makes it difficult for the USA to bounce back quickly. The question becomes how in the world did they sucker financial institutions worldwide into buying bundles upon bundles upon bundles of bad USA home loans worth trillions of dollars in bad debt?

What an incredible and criminally insane economic policy? I don't believe the entire world can afford the economically reckless republican party that was born in 1980.

Let's talk about republican entitlements that literally destroyed jobs,economies,retirement plans. And made owning a home a risky investment - now that is remarkable.

--- This ENTITLEMENT - Bailing out The Reagan/Bush Savings and Loan Heist aka home loan scandal sent the economy out the window costing taxpayers many many $$ trillions (Cost taxpayers $1.4 trillion), Plus millions of jobs, loss of retirement plans and loss of medical insurance. http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

--- This ENTITLEMENT Bailing out the Bush/Cheney Home Loan Wall Street Bank Fraud cost consumers $ trillions, millions of jobs, loss of retirement plans and loss of medical insurance. Exactly like the Reagan/Bush home loan scam. Déjà vu can we say. Yep seems to be a pattern. http://www.dollarsandsense.org/archives/2009/0709macewan.html

--- This ENTITLEMENT - Bush/Cheney implied many financial institutions were at risk instead of only 3? One of the biggest lies perpetrated to American citizens. Where did this money go? Why were some banks forced to take bail out money? http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

Is the market value of your home worth less than your mortgage? How much market value have home owners lost since 2007? Trillions of dollars!!!

The fewer republicans the more our properties will become worth and the more likely USA jobs will be reinvigorated.

Richard Heckler 2 years, 2 months ago

Republicans keep saying that people should be allowed to make more quicker investing in Wall Street which implies playing Wall Street is a sure bet which of course it is not.....absolutely not.

If an investment-firm broker made this claim to his clients, he would be arrested and charged with stock fraud. Michael Milken went to jail for several years for making just this type of promise about financial investments. http://www.dollarsandsense.org/archives/2010/0111orr.html

With corporations routinely defaulting on their pension promises, more and more workers must rely on their individual wealth to make up the difference. The stock market collapse at the turn of the millennium wiped out much of the financial wealth of middle class Americans, and the collapse of the housing bubble has wiped out much of their remaining wealth.

Making any cuts to Social Security now, either by raising the retirement age or cutting benefits, would have a huge impact on their remaining retirement income and are not necessary to “save the system.

Social Security does not contribute one dime to the deficit. In fact privatizing Social Security Insurance will add trillions to the debt and put the economy at further risk. http://www.dollarsandsense.org/archives/2010/0111orr.html

Have elected officials which oppose Social Security Insurance lied to the public about Social Security Insurance? Absolutely! http://www.dollarsandsense.org/archives/2010/0111orr.html

verity 2 years, 2 months ago

What does Merrill say in the above post that isn't correct?

When you can't dispute the facts, then attack the messenger.

Liberty275 2 years, 2 months ago

He''s caught in a loop. Somebody turn him off and back on.

Carol Bowen 2 years, 2 months ago

There were two economic stimulus efforts and taxes were increased six times under president Reagan.

jafs 2 years, 2 months ago

And he tripled the national debt anyway.

A bizarre hero for the fiscally conservative, isn't he?

George Lippencott 2 years, 2 months ago

JAFS

Do you have data to support that claim or must I go dredge it up and post it??

jafs 2 years, 2 months ago

Look it up.

According to the CBO, our debt increased by a factor of 3 during Reagan's terms in office.

George Lippencott 2 years, 2 months ago

OK, but before I do - what do we mean by debt? To me that is the national debt at the satrt of his term and the national debt at the end. Is that your definition??

George Lippencott 2 years, 2 months ago

You are absolutely right. He trippled the debt. The slope of the increase in det has been relatively constant (increaseing) under Republican Presidents since Nixon and relatively flat under Democrats until Mr. Obama when it took off at a increased slope greater than Mr. Reagan's.

The simple answer is that the Republican's cut taxes but could not cut expenditures while the Democrats increased taxes to cover those expenditures. The issue remains the same - raise taxes to meet expenditures or cut expenditures to meet revenues.

Nothing changes that it remains the same.

jafs 2 years, 2 months ago

Thanks.

I don't think Obama's increase is greater than Reagan's though.

National debt was about $10 trillion when he took office, and it's about $15 trillion now, after 4 years.

That's a 50% increase - if he continues at the same rate in a second term, it would mean that he doubled the debt, which is less than tripling it, right?

And, there's a distinct difference between raising taxes to cover expenditures and simply borrowing more to do so - one increases the debt and the other doesn't.

George Lippencott 2 years, 2 months ago

Not sure percentages are the best way to compare. Going from 1 to 3 (+2) is tripled while going from 10 to 15 (+5) is only 1.5.

I tend to look at history. Historically we have borrowed to pay for wars on the presumption (not always valid) that future generations also benefit. Both Bush's borrowed to fight wars (as did Kennedy Johnson). Have to do more research to sort how much of Mr. Obama's is war.

Not sure how to work stimulus as the last time we did that significantly was with Mr. Roosevelt (and a war also).

WE also have several trillion in recent increased domestic spending (stimulus to some/not to others) to sort out. The last time we did that was Mr. Johnson (guns and butter) and look what happened after that.

jafs 2 years, 2 months ago

That's true.

Percentages give a different result than absolute numbers - if we use those, of course Obama's added more to the debt than Reagan.

My point is that it's not the same thing, raising taxes to pay for spending or borrowing that money - one adds to our national debt, and one doesn't - so from the standpoint of fiscal responsibility, it's clearly better to raise taxes rather than borrowing the money.

George Lippencott 2 years, 2 months ago

But you leave out the option to reduce spending to meet revenue.

There are a lot of people that are not volunteering to pay any significant increase in taxes (those that pay them)

jafs 2 years, 2 months ago

If we tried to cut spending without raising revenue, we'd have to gut a lot of the federal government.

I've said numerous times that the only sensible way to fix our financial issues is to both raise revenue and cut spending.

But, you must agree that "tax and spend" is a more fiscally sound approach than "borrow and spend", right?

If those are our choices, then I vote for the former - at least that way we don't continually increase our national debt.

George Lippencott 2 years, 2 months ago

I know you do while I vote for deep cuts. That is why we are on different sides of many things.

It may come down to the simple fact that my wife and I have been asked by you and others to make more sacrifices and pay a lot more tax. We see no responsible argument for that. (Pay for the trillion annual deficit)

While we support the historic notion of the common good we reject the newer version where helping somebody is defined by others as being in my interest. We come from the philosophy that if you want something you pay for it or convince your neighbor to help (not force to help)

In my world one does not go around asking a minority of the population who are by no means rich, to contribute ever more to what others want. Particularly when so little is asked of the really rich.

jafs 2 years, 2 months ago

Except of course in our defense spending, which is a major part of our budget.

I haven't asked you or your wife to make any sacrifices.

Your paragraph about common good is rather confusing to me - first you say you believe in it, but then reject the idea that helping others is part of that. How does that work exactly?

You benefit personally from much of government spending, so I'm absolutely sure you don't pay for everything you use - none of us do that directly. Lack of awareness of that fact seems to be prevalent for many people.

Do you want government "small enough to drown in the bathtub"? How deep are your cuts, and where are they, since they leave out defense, which is one of the main components of the budget? If you believe yourself to be "moderate", how do you reconcile this idea, which is widely advocated by those on the more extreme right?

My approach would include starting with obvious waste that we should all (or the vast majority) agree isn't necessary. Then I'd move towards making government more efficient as well. If we're to cut spending, I certainly wouldn't leave out defense, since it's a big expense.

There are a number of things that we can pay for as a society one way or the other - on that score, I prefer to pay for education and job training, rather than jails and the criminal justice system.

And, I have to notice that you fail to respond to my question - given that D seem to be "tax and spend", and R "borrow and spend", which is more fiscally responsible? I think it's clear that taxing and spending is better in that regard.

If you don't like either, will you vote Libertarian or some other third party?

George Lippencott 2 years, 2 months ago

Lot of good questions. Not much space. If you want to continue where do we do it. This thread is very old and I suspect the LJW would like to retire it.

jafs 2 years, 2 months ago

Just go to the bottom of this thread if you like.

George Lippencott 2 years, 2 months ago

I started a new blog and anwered your quastion. I will post more answers if you like. Go there. I am done here

Richard Heckler 2 years, 2 months ago

--- The flat tax fraud - http://www.nationofchange.org/flat-tax-fraud-and-necessity-truly-progressive-tax-1319289260

--- Conservatives are pushing the flat tax as a smokescreen. They’d rather not have anyone talk about the unfairness and fiscal absurdity of the current system.

--- Why Flat Tax is a Fraud – Business Inside - http://articles.businessinsider.com/2011-10-22/politics/30306786_1_flat-tax-sales-taxes-income-taxes

--- Flat Tax a Flat Out Fraud - http://www.sfgate.com/opinion/reich/article/Flat-tax-a-flat-out-fraud-2325085.php

Budgets_Smudgets 2 years, 2 months ago

Let's apply the Lafler curve to the following 1) school of business total expenditures, 2) school of business average salaries and 3) Whether there are any faculty or students who actually occupy the largely empty school of business on Fridays.

James Minor 2 years, 2 months ago

The bottom line is there is no easy fix to the recession and unemployment problems we are experiencing today. A flat tax looks good on paper to those above the poverty level. It is when you are below the level the problem arises, starvation, health problems, economic disparity, etc. Laffer's idea of a one size fits all does not answer how a flat tax will stimulate economic growth. In the Reagan years, supply side economics or the trickle down philosophy, did not prevent American businesess from sitting on their wealth. In the Bush administrations, reducing federal regulations, resulted in the bank and auto meltdown. A flat tax will only work if there is no poor, the rich aren't greedy, Romney is not elected president, and Laffer is recognized as a joke!!!

George Lippencott 2 years, 2 months ago

Everybody is still sitting on their wealth - blog to come

tbaker 2 years, 2 months ago

Huge and growing structural deficits and the rising national debt-to-GDP ratio are the two things that cause sovereign debt (in our case the 30 year bond) to be downgraded in value to junk status, which pushes the yield on the bond so high governments can no longer raise enough real money to finance anymore debt. History is rife with examples and whats going on in Europe right now is just another one. Printing money to try and inflate their way out of the debt (and screw all of us) is another very predictable response to the crisis, and it's outcome is always the same. There is no example of these techniques ever working - all they do is delay the ultimate result. The political time they are buying always results in the same grim outcome for the people. Freshman Econ 101.

The US hasn't actually cut any spending in years. Congress can't even agree on cuts in the rate of growth in spending, let alone doing the hard work of closing entire cabinet-level agencies and ending thousands of government programs. If history is any guide, nothing will change until things get real bad for the majority of the population. Only united in suffering do people overcome their ideological differences to the extent they can come together on an issue and cause real change.

Richard Heckler 2 years, 2 months ago

Republicans and Congress Commit Tax Dollar Fraud Against the 99% everyday = DUPED!

Tax cuts cost everybody money except those receiving the tax cuts.

Why support government officials who only want to allow tax cuts for the 1% when in fact it increases taxes on the other 99%?

Why support government officials who only want to allow cuts for the 1% under the guise it will create jobs and new revenue for the USA? If that is in fact true why not hand out equal tax cuts and loopholes for all taxpayers?

Who's getting duped?

Flap Doodle 2 years, 2 months ago

Any post that's been repeated over 100 times on this award-winning website is spam.

jayhawklawrence 2 years, 2 months ago

Every generation sees it's share of "rain makers" and witch doctors" promising anything and everything and taking advantage of our gullibility. It is often the case that these people target college towns.

"Youth are easy to deceive because they are quick to hope." - Aristotle

Kansans will probably be inundated with people like Laffer during the Brownback administration because a major part of his con job requires that he keep people distracted from the real agenda which is to increase the bank accounts of his handlers which he does very well.

I seriously doubt whether Kansans will figure this out for quite some time if ever.

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