Is this good ole GOP propaganda?

[4dsc]

Here's an email I received from my Iowa Senator Grassley.

Q&A on Taxes and Debt, Deficit Reduction

Q: Why not raise taxes on the high income to pay down the deficit and debt?
A: Professor Richard Vedder of Ohio University has studied tax increases and spending for more than two decades. His research has found that over the entire post World War II era through 2009, each dollar of new tax revenue has been associated with $1.17 in new spending. A researcher for the National Bureau of Economic Research also has studied this question and found that when it comes to fiscal adjustments, “those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over Gross Domestic Product ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions.” The evidence demonstrates that reducing government spending, not raising taxes, is the key to deficit reduction.

Q: Doesn’t raising taxes on couples earning more than $250,000 a year protect the middle class from higher taxes?
A: This year, President Obama renewed his four-year old campaign for tax increases. The President says the tax hike he wants would be on the wealthy only and that the middle class would be safeguarded. The reality is that his proposal fails to extend countless expiring tax incentives for middle class Americans, including classroom teachers and college students. It doesn't do anything to stop the AMT from hitting middle-class families. It wouldn’t stop tax increases in the 2010 health care law. It also hurts job creation by raising taxes on small businesses, where 70 percent of new jobs are created, a bad idea with 12.7 million Americans unemployed.

Q: What’s the impact on the federal budget?
A: A symbolic tax increase on individuals earning more than $200,000 a year and couples with more than $250,000 in income a year won’t even fund the government for a week. More significantly, the President's budget proposal this year increased taxes and spent more on government programs rather than dedicating any tax increase to reducing deficits and debt. According to the nonpartisan Congressional Budget Office, President Obama’s plan would have increased the national debt $10 trillion over the next ten years. More taxes and spending will not reduce federal deficits or drive down federal debt. That’s common sense. The history of tax rates teaches a lesson, too. Since World War II, revenue to the federal Treasury as a percentage of the gross domestic product has averaged right around 18 percent. This has remained true whether the top marginal rate is 93 percent, 70 percent, 50 percent, 28 percent or the current 35 percent marginal rate. What this means is that the government can’t tax its way to surpluses. Substantial adjustments must be made on the spending side of the ledger to bring it in line with revenues.

What's wrong with this picture?

[CBHagman]

1. I haven't analyzed the figures and indeed don't have the training to...

...but I'd just point out that A) the last president to leave office with a surplus was Bill Clinton, and in the first term Congress passed a tax increase with zero Republican votes and B) there were multiple tax increases under the patron saint of the current GOP, Ronald Reagan and C) people don't realize how very deep the cuts would have to be to achieve what the GOP is claiming, and those cuts will mean, at least at the beginning, more layoffs, not job growth, and a shredding of programs that benefit the 98 percent.

[liberal N proud]

2. This is one of those emails we will all receive from our right wing friends and family

It will be footnoted with the message: Be sure to pass this on.


Pure right wing bullshit!

[Historic NY]

3. Vedder is with The American Enterprise Institute for Public Policy Research

a neo-conservative think tank.

[Scootaloo]

4. It's potentially factual

If we left the tax-rate as is and "cut spending," we could close the gap. Very slowly. Only if we cut the correct places.

When people talk about "cutting spending," however, what they inevitably mean is cutting spending on things that keep people in the market and thus keep that money circulating; broadly termed "welfare." Some on the left do point to the military as a good place for a cut, granted.

No cut to our "welfare" will make a dent in the deficit. None. All of our entitlement programs are fucking miniscule. All these people bitching about welfare, ask 'em why they don't just quit their job and go on the dole, if it's so nice. The answer is easy; they know it's not, they're just fucking pissed that "those people" aren't starving or dead. Our entitlements are paltry, and with current prices, a family cannot exist on them. Period, they just fucking can't, it's a leaky aqua-wing in the middle of an ocean is all.

Similarly those cuts to our military? Would have to be enormous to make a difference. Not that that's a bad thing in my estimation, but find me a politician who's willing to stand behind declaring they want to cut non-entitlement military spending down to 3% of the budget. Find me one motherfucker willing to do that.

Another good place to cut is entitlements to the wealthy. Subsidies and tax breaks, basically rewarding the wealthy for being wealthy, needs to stop. There's no point to it, the money doesn't "trickle down," and the only jobs "created" are slave jobs in Manilla. Add to this the plain and honest fact that for many of the wealthiest people in the land, even IF they bypassed the loopholes and handouts, would still pay less in taxes than many middle-class earners? That's just a fucked-up system.

The wealthy need a heavy tax hike, and there do need to be reforms in how the money is spent. We can't really afford to spend trillions on blowing shit up, and we can't afford wealthfare, either.

[SunsetDreams]

5. +1000 Very well said

[TreasonousBastard]

7. One small problem is that...

the Pentagon is our last real jobs program. The only large military cuts that won't result in massive job losses here, and high paying ones at that, would be stopping overseas operations and many base closings. That's a lot of money in itself, but hasn't been so easy in the past. And the job loss numbers are iffy even there because of the amount of US made stuff we send to overseas bases. (our bombs aren't made in China)

[ThomThom]

6. What is wrong with this picture? The Clinton Administration

Did they just skip that balanced budget and paying down debt time. Also the pre-Raygun years where taxes on upper incomes were high and the middle class did very well.

[TreasonousBastard]

8. The first question is bullshit because...

it doesn't seem to acknowledge the acceleration of federal spending. If a million is spent on a highway project, that million will buy stuff and pay wages that will increase economic activity and generate new tax revenue. So, that 17 cents doesn't go down a debt hole, but is eventually recovered. It is also an aggregate number over half a century which includes three expensive wars and several recessions.

And, it doesn't put the blame on a Congress that just can't help buying votes by authorizing bullshit projects to get support and votes. Some ridiculous spending is to be expected in anything as large as the US budget, but a lot of the giveaways, perhops most, are political and not economic. Besides, as the Soviets proved, nobody is smart enough to sit in a capital city and properly decide how to allocate money across a nation.

The other stuff about not taxing the rich is partly true, but even with the low tax rates they have now the loopholes are incredible. Some are screwed if the income falls into the wrong box while other get away with what would be thievery if it wasn't legalized. Rewriting the tax laws is the Nirvana we'll never reach, but at least some serious attempt should be made to equalize things. Taxes should be something you should be able to anticipate with a bit of accuracy without a crystal ball.