Finally a politician gets it right!
Published Mon, Oct 27 2008 9:08 AM
Technorati Tags: News and Politics, Elections, Republicans, Democrats
“Tax cuts for the rich!” That's always the complaint whenever a Republican proposes reducing the heavy tax burden that we must share in order to fill the government's coffers long enough to pretend that there's a non-negative net balance. “Government can't afford a tax cut!” That's another refrain. “If you cut taxes the deficit will grow!” is another. All three of these statements, typically uttered by Democratic politicians are of course correct, but for the wrong reasons.
First, regarding “tax cuts for the rich”, it's only natural that whenever a Republican proposes a tax cut that it will be a tax cut for the rich. This is because, poor people don't pay taxes, and a large segment of the “middle class” don't either. Yes, there's the regressive “payroll tax”, but you'll never hear a call even from a Democrat to cut that tax. In fact Representatives Jim McDermott and George Miller (both Democrats) want to do away with the tax breaks (actually, tax deferrals) on 401(k) plans and instead make everyone pay a mandatory five percent into an expanded social security program, one that will only pay three percent per year on the money. That's actually going to hurt the “middle class” because without the tax incentive, employers aren't going to be inclined to “match” employee contributions, resulting in less net investment into retirement programs.
Second, regarding the notion that “government can't afford a tax cut”, of course it can't. Our federal budget is so large that we have to have massive taxation to cover it. But I think that Democrats have looked at this the wrong way for decades. Every time tax cuts have been implemented, the federal government has ended up raking in more tax revenue than before the tax cut. Of course at some point the law of diminishing returns will have to kick in. After all, if you reduce taxes to zero, you're not going to take in any revenue, but as it stands now taxes are still too high.
Finally, regarding the notion that “if you cut taxes the deficit will grow,” that's most definitely true. But I offer the counter argument that “if you raise taxes the deficit will grow.” There's a simple reason for this, and that's that the federal budget continues to grow at a rate that outpaces revenue growth. The notion of a real spending cut is foreign to our government. When we hear about a proposed spending cut in any part of the budget other than the military (one of the few things in the budget that the Constitution actually permits and treats as a federal duty), it always seems to carry the adjective “draconian.” Most of the time, these so-called spending cuts are nothing more than a reduction in the rate of increase of spending anyway. Think about it, if you are increasing the budget for a program by 10% per year, and you decide to change the rate of increase from 10% to 8% our politicians call that a spending cut. But really, what it is is simply a smaller than anticipated spending increase. After all, you're still increasing the budget by 8%.
Well, finally, a politician has got it close to right. In the Seattle Post Intelligencer (hmm… is that anything like “post racial”? Have they moved away from intelligence?) today, I found this article. Here's a highlight.
CLEVELAND -- Republican John McCain promised Monday to break with President Bush's policies on the economy and put a tight lid on government spending.
Flanked by some of his economic advisers, the Republican presidential candidate bashed Democratic rival Barack Obama, but also made clear he would steer a different course than the current GOP administration.
"We both disagree with President Bush on economic policies," McCain said. "My approach is to get spending under control. The difference between us is he thinks taxes have been too low, and I think that spending has been too high."
What do you know. Someone finally got it right. Cut government spending — really cut spending — and we might get our economy back on track. We'll certainly reduce the deficit although it will take years (decades actually) to eliminate the federal debt. It would be a shame after all to have the people that hold that debt to foreclose on it, just like foreclosing on a bad mortgage.
Cut spending. Maybe that way our children and grandchildren won't be left holding the bag for our foolishness today.
Trackback URI for this post: http://perrinelson.com/track.aspx?postid=1267
Permalink URI for this post: http://perrinelson.com/2008/10/27/1267.aspx
Subscribe to this entry's
comment feed. (Atom)
Angel responded with:
 | cut spending?..seeing is believing..I can hardly wait!:) |
Marshall Art responded with:
 | Therein lies the ony real problem with the Bush presidency. I agree with his war on terror methods. I agree with his tax cuts. I agree with two out of three SCOTUS nominations. His most egregious shortcoming was his unwillingness to wield the veto pen on all those bills laden with pork and earmarks (earmarks ARE pork, aren't they?). Tax cuts alone were never good enough, though I still felt quite glad for them, without spending cuts to go along with them.
During research to support the proposition that tax cuts result in more revenues to the treasury, I found that Reagan's cuts were to limit money that Congress was spending like women at the mall (sorry, ladies). Cutting taxes meant less revenue in the year or two immediately following the cuts, thus giving Congress less to work with. Once it was determined that Congress would not limit themselves, this was the course Reagan took. But later on, as the market thrived with the reduced tax burden, the economy expanded providing more revenues anyway. Thus, a double benefit.
Should Johnny Mac win next week, and I pray fervently that he does, I'm not so sure he'll be able to succeed in making good on that promise to cut spending. However, I have little doubt that he'll do all he can to try. We, as the people of this country, need to be on the horn to our reps in both houses, as well as to whatever non-McCain candidate wins the White House, demanding that they do away with non-essential spending as dictated by the Constitution. Always, always, always, ride their sorry asses until they represent us as we want them to represent us. |
Layla responded with:
 | I do not believe anything the right or left, dems or reps have to say anymore. They all lie and say whatever to get elected. They cannot do even a fraction of what they promise anyhow.
However, I will say Obama's proposals are pure Marxism and we will be in huge trouble should he become POTUS. |
David responded with:
 | Cutting spending is a fundamentally great step. Heck, if the fedgov were to actually limit itself to legitimate constitutional expenditures, at least half the fedgov budget would be eliminated. But that's an utopian dream. |
Perri Nelson responded with: Utopia
 | Isn't it strange that conservatives recognize utopia as an unachievable dream, while liberals and socialists do their best to implement it through any means they deem necessary -- other than democratic means?
Of course, conservatives and liberals have two completely opposing views of what utopia is as well. |
Layla responded with:
| I agree Perri, but at the end of the day, like nirvana - can utopia really be attained? |
Tariq Nelson responded with:
 | Pure Marxism? I wasn't aware that Obama proposed a nationalization of all companies and land. Were Clinton's policies Marxist? |
Perri Nelson responded with:
 | Tariq, In response, I have to direct you to my post here. In that post, I outline for you in some detail how the trend toward Marxism has been implemented in this country. The left's policies in this nation since 1913 have been essentially Marxist in character. Democratic politicians have proposed nationalizing many companies. Maxine Waters has threatened to nationalize the oil companies. Other politicians have suggested nationalizing the automobile industry. Even so-called conservatives have taken steps to nationalize many banking institutions through government purchase of ownership shares. Local jurisdictions use the theory of eminent domain and “blight” to subvert property rights and take land, whether for public use or to give it to other private interests. It's amazing to me that people don't see these things happening. |
Comments to this entry are closed.