Archive for the 'Taxes' Category

Ungrateful little monkeys!

Jun 29, 2011 in Deficit, Politics, Taxes

Suzanne Mettler wrote this timely and interesting article on how little people appreciate government assistance when it comes in the form of targeted tax breaks:

Growing up during the Depression, Sam Marchesi had to drop out of school after eighth grade—soon after his father died—to work and help support his mother and his seven younger siblings. When World War II began, he enlisted in the Army and served in the Pacific. Upon his return, he took advantage of the educational and training benefits of the G.I. Bill, joining the 52 percent of fifteen million returning veterans who did so. He acquired vocational training in architectural drawing and on-the-job training as an apprentice carpenter, skills that enabled him to become a successful custom builder. When I interviewed Marchesi in the late 1990s for a study of the G.I. Bill, he reflected, “I think it was a great thing that the government did, to give us this opportunity to pick up where we left off. We had to face the world. We had to make a living. Thank God the government had the doors open for us.”

The G.I. Bill’s transformative effects on the lives of men like Marchesi have become legendary, but just as striking in hindsight is the clearly visible role that government played as the source of those opportunities. In more recent decades the federal government has expanded its efforts to provide college aid to all Americans. But instead of delivering a straight benefit, like the original G.I. Bill, most of that aid has come through roundabout means, like payments to banks to provide students with loans, or loopholes in the tax code to subsidize families to save for or pay for college. Generations of Americans have now graduated with the help of these costly-though-indirect programs. Yet over the years, in conversations with my own students, I’ve noticed that, unlike Marchesi, few of them recognize that they’ve received benefits from government. It’s hard to imagine them reflecting on their HOPE Tax Credits, or their 529 and Coverdell college savings plans and saying, “Thank God the government had the door open for us.”

And it’s not just my students. In 2008, I conducted a survey to gauge the degree to which Americans who had received various government social benefits recognized them as such. Not surprisingly, most beneficiaries of the G.I. Bill who took part in the survey acknowledged that they had been given a leg up by the government. But of the respondents who made use of tax-advantaged Coverdell or 529 education savings accounts, 64 percent said they had “not used a government social program,” as did 59.6 percent of those who used HOPE and Lifelong Learning Tax Credits.

Now if the government wanted, it could simply tax and then hand checks out, and everybody would recognize that as assistance. But much like the income tax is for most folks relatively painless or even a bonus because the money is taken out before they ever see it, tax expenditures appear in people’s wallets without them realizing it was ever gone. And it leaves you with some whiny tax-obsessive bitching about how IT’S MY MONEY THE GOVERNMENT NEVER HAD A RIGHT TO IT IN THE FIRST PLACE SO IT MEANS NOTHING even though the financial effect is no different at all than cutting checks. All that ungratefulness accumulates and then you have these people acting like they did it all themselves, thus they should pay even fewer taxes…

So the government really should quit trying to be a Secret Santa and just stick its hand out, letting people know Uncle Sam is offering to help. Name the benefits. Make people see their taxes go out, then let them see the benefits roll back in. Put it all on the table. When people get a Social Security check, they have to be a very special kind of brainwashed Republican to forget who it came from.

In the meantime, Congress can close a lot of revenue gaps not by increasing taxes heavily (not that returning to Clinton-era levels is a heavy increase), but by eliminating a lot of tax expenditures that go to the upper middle class and the wealthy. It’s at least a bit more politically palatable for Republicans who know spending cuts alone won’t get the job done.

-hw

Taxes are low.

Jun 02, 2011 in Taxes

You’d think after ten years of the Bush tax cuts we wouldn’t have to argue with people claiming taxes are still high, but we are. You’d also think after the past ten years that we wouldn’t have to argue with people claiming tax cuts are a magic cure-all for the economy, but, yes, we’re doing that too. Sensible conservative (i.e. liberal) Bruce Bartlett is a stickler for reality. There are plenty of numbers in the piece, but this analysis of Republican dishonesty sticks out:

If taxes are low historically and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are.

For example, Stephen Moore of The Wall Street Journal recently asserted that Democrats were trying to raise the top income tax rate to 62 percent from 35 percent. But most of the difference between these two rates is the payroll tax and state taxes that are already in existence. The rest consists largely of assuming tax increases that no one has formally proposed and that would be politically impossible to enact at the present time.

Ryan Chittum, in Columbia Journalism Review, responded with a commentary that called the Moore analysis “deeply disingenuous.”

In my experience, just about all Stephen Moore analysis is deeply disingenuous. If you’ve ever seen him on Bill Maher, he’s always giggling at his own words, like even he doesn’t believe what he’s saying, ala William Kristol anywhere outside the Fox bubble. Most of the recent debt ceiling conundrum is a product of cynical elites and the people they gladly deceive in order to make sure the rich people they service have a few extra million to brag about at the country club. And by service I mean dick-sucking, obviously.

Yes, our taxes were slashed by GWB, and in the meantime health care costs for families doubled, infrastructure crumbled, college tuition hyperinflated, and, oh yeah, our debt exploded. So no middle class or poor person has had a net gain because of any tax cuts. And now the jackasses responsible are unrepentant and demanding more. As always, they’re willing to say anything, unrestricted by shame or even basic math, to get more money in the hands of bankers and other financial swindlers while ordinary Americans are told to pull themselves up by their bootstraps. No new taxes can ever be discussed, yet Americans are expected to see Medicare dismantled and retirement ages raised.

If you can’t tell you’re being conned by this point, you’re in on the con.

-hw

Math was always my lowest score.

May 21, 2011 in Politics, Taxes

Enjoy these pics. Somebody feel free to note any discrepancies or changes. The first one is older:

Of course, it’s important to note that by “Bush tax cuts” one includes the tax cuts for all Americans, which constitute 75% of the damage. Yes, America, it’s the fact that you’re not paying those horrible Clinton-era tax rates that is contributing so heavily to our deficit problems. Obama and most Democrats have, unfortunately, consistently harped on raising tax cuts for the rich only and letting the other 75% of the tax cuts stay in place, since that sounds, on the surface, like the best message in an election.

What we need is actual leadership to tell the country a hard truth that isn’t really that hard. Most Americans would give anything to return to the prosperity of the nineties, and that sense of hope we felt when we started to see hope for paying down our deficit and shoring up Social Security and Medicare. Now these things seem like impossible dreams, and the Republicans have solidified themselves behind simply ending Medicare and Social Security as we know it and privatizing them. It doesn’t have to be this way.

Besides, there’s another more important principle at work here. Our future obligations are one thing, but there’s a tab we already ran up, and every American is on the hook for that bill. Our democratically elected leaders spent a lot of money already, and it’s time to pony up. George W. Bush committed a grave act of fiscal irresponsibility slashing our taxes the second our fortunes started to pick up. There were outstanding bills at the time, and he went on a rampage of slashing taxes and increasing spending dramatically.

Talk to me about low taxes after we’ve paid down our debts and fortified the social obligations that maintain massive popular support. That’s what responsibility is about.

-hw