Gordon Howie Reads Mother Jones!

That's the conclusion I came to after reading this from Gordon this morning:

Republican Paul Ryan and others are promoting the idea of “vouchers” and “block grants” from the Federal government to individual states, allowing them to create their own “program details” for entitlements.

That sounds like a great idea, right? So what’s the problem?

Both parties seem to be ignoring the basic problem, which is taking the money from taxpayers in the first place.

Last evening, I came upon this Kevin Drum post on the Mother Jones site. Drum quotes Ezra Klein, hardly a conservative leader:

Every Ryan budget since the passage of Obamacare has assumed the repeal of Obamacare. Kinda. Ryan's version of repeal means getting rid of all the parts that spend money to give people health insurance but keeping the tax increases and the Medicare cuts that pays for that health insurance, as without those policies, it is very, very difficult for Ryan to hit his deficit-reduction targets. [emphasis mine]

Gordon Howie is repeating liberal riffs by complaining about Republican taxation in general and golden boy Paul Ryan's plan specifically. Is Gordon becoming a RINO?

A Minor Musing About The Certainty Of A Middle Class Tax Increase

The Washington Post points out that Americans who depend on a paycheck will have a tax increase under the deal that Vice-President Joe Biden and Senator Mitch McConnell negotiated.

The deal negotiated by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) addresses a separate tax — the income tax — and would prevent tax rates from increasing for all but the wealthiest Americans. But both sides have decided to leave the payroll tax out of the agreement.

Unlike income taxes, which rise along with a worker’s income, the payroll tax is a fixed percentage of an employee’s salary. Allowing the tax cut to expire increases taxes on salaries by 2 percent for every American worker. Up to $110,100 a year in salary is subject to the tax.

First, I have to admit that I'm ambivalent about about the payroll tax holiday lapsing. I don't like the idea that my paycheck is going to be decreased 2%, but I realize that payroll taxes affect social security benefits.

The thing that really bugs me about the end of the payroll tax holiday is that Mitt Romney and others of his ilk can smile their plastic smiles and chuckle woodenly that the 47% got what was coming to them, more taxes. Meanwhile, Romney et al. will be setting up another tax shelter in the Caymans.

Quotation Of The Day: Romney Tax Plan Edition

Romney wants to wage war against the rich in order to benefit the super-rich. Maybe his comment about not caring about the poor was actually benign.

From David Frum at The Daily Beast:

When Mitt Romney talks of capping itemized deductions at $17,000 to finance a cut in the top rate of federal income tax to 28 percent, he is talking about paying for a tax cut for the Porsche customer with a tax increase on the Porsche salesman. Both may be “rich” from the point of view of the typical American worker. But they are not rich in anything like the same way. . . .

A congressional staffer friend once joked that Congress spends its days “arbitrating differences between the merely affluent and the genuinely wealthy.” That may have once been true. But in recent years the merely affluent have begun to wonder if Washington has gamed the system to make their lives more difficult while showering perks on the genuinely wealthy.

Mike L., the software engineer, says that this country has never resented the successful.

That’s true. But nowadays it sometimes seems that the very most successful resent everybody else—starting first with the people occupying the rungs of the ladder immediately below their own.

Quotation Of The Day: Mitt Romney's Taxes Edition

David Simon, creator of the The Wire which is the best dramatic television series ever, explains why Romney's claims about taxes grate:

Can we stand back and pause a short minute to take in the spectacle of a man who wants to be President of The United States, who wants us to seriously regard him as a paragon of the American civic ideal, declaiming proudly and in public that he has paid his taxes at a third of the rate normally associated with gentlemen of his economic benefit.

Stunning.

Am I supposed to congratulate this man? Thank him for his good citizenship? Compliment him for being clever enough to arm himself with enough tax lawyers so that he could legally minimize his obligations?[Emphasis mine]

The bolded sentence explains my frustration perfectly. The tax code has become a Vegas casino with people like Romney being the house, and as everyone knows, the house always wins in the end.

The Pipeline And Pawnbroker Principle

I watch Pawn Stars.  Whenever an expert comes into the shop and states an item's value, the pawnbrokers invariably pay only half the quoted amount.  Pipeline companies must operate like pawnbrokers.  Although they say they will pay an given amount in taxes, they'll end up paying only half.

From this Omaha World Herald article:

"When TransCanada officials began promoting the benefits of its first pipeline to cross Nebraska,they projected a $5.5 million taxwindfall for the state in the first year of operation.

"The actual taxbill for the original Keystone pipeline is less than half that figure.

"State and county records indicate that TransCanada this year will pay $2.2 million in personal property and real estate taxes to eight rural counties in eastern Nebraska crossed by the 30-inch, crude-oil pipeline."

Quotation And Chart Of The Day: Class Warfare Edition

From this Derek Thompson post at The Atlantic.

. . . . more than half of the folks who pay no federal income tax make less than $20,000 a year. It is also true that 7,000 millionaires paid no federal income tax last year. . . .

If you think the 47 Percent are getting away with free-riding, consider that they're mostly poor families making $20,000, which means they would have to work for 116 years at that wage just to make the average annual salary of someone in the top 1 percent. . . .

The 47 Percent are mostly working families whose tax burden was offset by the Earned Income Tax Credit (invented by Republican President Ford and expanded many times since the 1970s), the child tax credit (doubled under Bush), and other exemptions passed into law by Republican and Democratic legislatures and administrations. The 47 Percent aren't running away from the law; they're benefiting from 30 years of Congress whittling away at the tax code. Some of this whittling was smart. Some of it wasn't. The only way to fix it is to raise taxes on working class families.

I guess I'm some sort of Marxist or Socialist or anti-American anti-capitalist, or just a terrible human, but I find the 116 year to 1 year ratio unconscionable.  I accept that fact that some people produce much more than others and should earn more.  That being said, one person should not have to spend more than two working lifetimes to earn what another does in a year.

I also find it curious that Republicans love tax cuts until they benefit people earning less than $30,000 a year,  It will be interesting to see how they modify the tax code to protect the 7000 millionaires from paying taxes while making people earning  $20,000 have a tax increase.

Quotation Of The Day: Taxes Edition

From this Zachary Karabell column at The Daily Beast

Does anyone really assess their tax burden and decide that they would prefer to earn less in order to avoid paying a higher marginal rate? Yes, in a country of more than 300 million people, the statistical likelihood is that there are a few who would indeed say, “I would rather earn $378,000 a year and stay under the threshold of 35 percent taxes than earn $500,000 and pay a few thousand dollars more in taxes.” But there is also a statistical likelihood that about the same number of people believe that there is a secret NASA base on Mars. We live with outliers; we don’t construct national policy on the foundation of their delusions.

South Dakota Lottery And Corporate Taxes

I found this chart from a David Cay Johnnston Reuters column disconcerting.

 

It shows that South Dakota is one of 11 states that generates more income from lotteries that corporate taxes.  Given that lotteries take money from those who believe they are poor and are not a stable source of income, this fact seems to be terrible public policy.

Quotations of The Day: Taxes Edition

From Ezra Klein in the Washington Post,

For the record, I don’t agree with the policies the GOP is pushing under the guise of deficit reduction, but I think they’re right to see an opportunity for reform rather than a math problem that needs to be solved. A world in which we stop taxing work so heavily and begin taxing carbon is much preferable to a world in which we just jack up taxes on work. A world where we’re saving money through a strong public option is a lot better than a world in which we’re saving money by reducing health-care benefits. It’s better to save money through reforms that make the state work better than to simply make it do less and tax more. (HT Big Boy Blogger Andrew Sullivan)

From the Madville Times Governor Daugaard: Flood Schmud! Vacation in South Dakota!

Remember, out-of-state friends, Dennis’s next budget depends on your sales tax dollars. So don’t cancel that South Dakota vacation! Come camp at Lake Herman! Visit Prairie Village and Madville Times World Headquarters! And buy a lot of Bundy Burgers! 

Finally a whole post from Matt Yglesias,

Lori Montgomery’s reporting in the Washington Post makes clear, though it doesn’t explicitly come out and say, that if you oppose reductions in federal spending in the United States then today you have no more influential friend than Grover Norquist. Right now you have a debate on Capitol Hill in which the pivotal players, moderate Democratic Party legislators and the Obama White House, want to reduce spending. But the deal’s not getting done since conservative Republicans aren’t taking yes for an answer.
And it’s Norquist who’s playing the biggest part in feeding rejectionism:

On Capitol Hill, Norquist has admonished Coburn (Okla.), Crapo (Idaho) and Chambliss (Ga.) for suggesting a tax option for tackling the debt: reducing credits and deductions worth an estimated $1 trillion a year. Although most of the cash would be used to lower tax rates for everyone, a portion would be dedicated to restoring national solvency.
No good, says Norquist’s group, Americans for Tax Reform. Under the pledge, raising revenue in any way requires an equal tax cut elsewhere to avoid expanding the size of government. And, yes, that sometimes means protecting tax breaks that Republicans view as bad public policy, Norquist and his supporters say.

Follow the logic here. According to the Norquistian theology, a good small-government conservative can’t agree to close a tax loophole that’s bad public policy in order to entice Democrats into agreeing to spending cuts. You can’t achieve efficiency enhancing reforms to the tax code by using the prospect of enhanced revenue as a sweetener, and you can’t broaden the coalition for spending cuts by using enhanced revenue as a sweetener. So the tax code stays inefficient and the spending level stays high, all so the members of the True Faith can be unsullied in the purity of their complaints about the inefficiency of the tax code and the high level of spending.(emphasis in original)

 In short, stubborn people are going to prevent changes that will make tax policy more fair.