Conservatives For Higher Middle-Class Taxes

[babylonsister]

Posted with permission.

http://www.washingtonmonthly.com/archives/individual/2011_04/029041.php


CONSERVATIVES FOR HIGHER MIDDLE-CLASS TAXES.... Rep. Michele Bachmann (R-Minn.) talked to ABC's George Stephanopoulos this morning, and while most of the attention focused on her "birther" comments, Bill Scher flagged the far more important exchange.

The "Good Morning America" host noted the massive public support for raising taxes on those making more than $250,000 a year. Bachmann rejected the popular idea, and instead suggested the middle class should be expected to pay more.

BACHMANN: If we taxed 100 percent of what everyone made who make $250,000 or more -- everything they made -- that would get us about six months worth of revenue.

STEPHANOPOULOS: But every bit helps, doesn't it?

BACHMANN: Well, but it wouldn't be enough. I think that's what's shocking. We could take 100 percent of the profits of every Fortune 500 company and that would give us 40 days worth of revenue. We could also take 100 percent of everything that the billionaires in this country own, and that wouldn't be enough to solve the problem.

So it's really a matter of having everyone involved. Part of the problem, George, is that 47 percent of all Americans pay virtually no federal income tax, so we need to broaden the base.

For the record, I haven't the foggiest idea if Bachmann's statistics about the wealthy and Fortune 500 profits are accurate. Given her track record, I'd be cautious about accepting them at face value -- the strange Minnesota congresswoman has a habit of just making stuff up, pretending to understand things she's actually quite confused about.

The more important element to this is that Bachmann sees it as a "problem" that so many Americans don't earn enough money to pay income taxes. When the Republican lawmaker talks about "broadening the base," she means increasing the tax burden on low- and middle-income families.

Let's set the record straight. When conservatives talk about nearly 47% of the country paying no income taxes, the argument tends to overlook relevant details -- such as the fact that these same Americans still pay sales taxes, state taxes, local taxes, Social Security taxes, Medicare/Medicaid taxes, and in many instances, property taxes.

It's not as if these folks are getting away with something -- the existing tax structure leaves them out of the income tax system because they don't make enough money to qualify.

Moreover, let's appreciate the underlying point of the "problem" Bachmann wants to correct -- for all the talk on the right about cutting taxes at every available opportunity, there's also a desire to raise taxes on those who can least afford it. The GOP has a natural revulsion to any tax system, but there's an eerie comfort with a regressive agenda that showers additional wealth on the rich -- Bachmann supported the House GOP budget last week, that slashes tax rates for millionaires and billionaires -- while asking for more from lower-income workers.

In fact, the drive on the right to increase the burdens on these low- and middle-income families is getting kind of creepy. Some on the far-right have begun calling these Americans "parasites." Last year, Fox News' Steve Doocy went so far as to ask whether those who don't make enough to qualify for income taxes should even be allowed to vote.

But maybe I'm looking at this the wrong way. Perhaps the best solution is to simply have the debate. The Republican vision is to cut taxes by trillions for the very wealthy, while addressing "the problem" of getting middle-class workers to pay more. The Democratic vision is to increase taxes on the rich, at least a little, while leaving the rates the same for everyone else.

If Bachmann wants to take this case to the public, I don't imagine Dems would mind.

—Steve Benen

[palm_to_forehead]

1. Neither solution is enough.

Increasing taxes on just the rich won't get us out of the hole and increasing taxes on the poor won't either.

Why is increasing EVERYONE's tax rate off the table?

[orwell]

3. You don't increase taxes...

...in the middle of an economic recovery.

[palm_to_forehead]

5. While when to do it is a different subject, let's face it, it's never going to be a good time

If you don't do it now, you increase the deficit we'll have to deal with later.

[vroomvroom]

8. Ssshh! You are making perfect sense. nt

[orwell]

16. The deficit is meaningless...

...in a fiat money system with floating exchange rates.

People will figure this out eventually...after many more peoples lives have been ruined across the globe.

We need massive government stimulus globally as well as low tax rates to pull ourselves out of the still looming deflationary depression...

[palm_to_forehead]

17. So, your solution is to inflate our way out of it?

Don't you have a third world country to run?

[orwell]

18. That's funny...

...you're worried about inflation when the whole world has just had tens of trillions of dollars disappear.

The greatest global asset devaluation in 80 years and you are worried about inflation.

Bernanke has been throwing money out of helicopters and the only thing he can stimulate is a bunch of commodity traders who are furiously speculating up the price of anything on the screen. Have you looked at real demand, not speculative demand?

If "printing money" causes inflation explain Japan for the last 20 years.

Where is capacity utilization? Where is employment? How are unit labor costs doing?

How many more lives are you willing to sacrifice to the gods to ward off evil "inflation".

Keep fallin' for the Cons story line. It's worked so well so far.

And please spare me the post WWI Germany analogies...

[palm_to_forehead]

22. So please explain your FIAT based current manipulation solution

if it's not inflation based.

I think I've heard you before. You say that's the solution but them "lol" and go on tangents when somebody points out that it's pretty much just inflating your way out of it by printing money.

And no, you don't have to go to WWI Germany for an example. There are plenty of countries that have tried it since then.

Japan?

Have you told Zimbabwe and Venezuela that they shouldn't have inflation because Japan didn't? Are you actually encouraged by Japans 'lost decades'?

[LonePirate]

10. Isn't the end of a recovery the start of the next downturn? If not now, when?

[orwell]

15. When you've got unemployment...

...under 7% and inflation begins to rise (+3-5%) annualized.

[Avant Guardian]

27. That is the standard GOP meme

Bill Clinton raised taxes in the middle of an economic recovery. The result? 22 million new jobs.

[Bake]

11. Well, we could, just maybe, stop spending on THREE FRICKIN' WARS!!!

Then, taxing the rich would help solve the problem.

We have BOTH a spending problem and a revenue problem.

Bake

[palm_to_forehead]

13. We could eliminate the entire military and would only solve half the deficit

Not just get out of wars, eliminate the entire damn thing.

We'd also have approximately two million people just in the military that no longer have a job. That doesn't count the hundreds of thousands in supporting positions that are not active duty.

Our problems require solutions larger than one line sound bytes.

[JDPriestly]

25. Because if you raise taxes on the poor, they won't be able to afford to

work (they need gas money), feed their children, pay the rent and heat and water bills, get healthcare.

The poor pay for necessities with the small amounts of money they have.

The rich buy luxuries.

That is why you can't squeeze the poor any more, but you can require the rich to pay a greater share than they pay now.

We have a large homeless population as it is.

The Republicans should be ashamed of their agenda. On the one hand, they claim to be Christians, and on the other, they want to take from the poor and let the rich keep everything. That is the most unChristian philosophy I can imagine.

[blueclown]

2. Time for a Bachmann fact check - we know how these usually turn out.

[safeinOhio]

4. "broadening the base,"

Can we start with Exxon and GE?

[quaker bill]

6. This is BS by definition

To solve the budget problem, you need a bit north of a trillion dollars in revenue, say 1.5 trillion, but if you make some cuts in defense, the number gets a bit smaller. Gross Domestic Product (total output of the US economy) is somewhere between 13 and 15 trillion dollars a year. The top 20 percent of earners get about 80 percent of that at some point in the economic cycle. On the low side, about 10 trillion dollars pass through their hands in a year.

In short, Bachman is full of the usual stuff.

[palm_to_forehead]

7. Forget "some cuts", if you eliminate the entire military

You would only cut half the deficit.

[tledford]

9. Which is a good start. After you've saved *that* $600 billion, THEN let's talk about taxes. eom

[palm_to_forehead]

12. And how do you plan on taxing the two million people you just laid off?

Our problems require a bit more intelligence to solve than rhetorical one liners are capable of providing.

[palm_to_forehead]

14. And how about that 4.7% drop in the GDP you just created?

What's your plan to address throwing us into a depression?

[quaker bill]

20. Shouldn't they be working in the private sector?

[quaker bill]

21. So spending taxpayer dollars creates jobs...

and grows the economy. On this much we agree. Then why not spend the money on programs that grow the economy and create jobs more effectively. Instead of dumping all those dollars in foriegn economies keeping 800 overseas military bases open, why not build some bridges, roads, and schools here, using US labor and building supplies in an industry that cannot be "off shored"? You could easily get the 4.7 percent of GDP back for far less money.... and have schools and highways that work in the exchange... most likely reduce unemployment meaning less government expenditure for unemployment compensation and larger tax revenue. You might even create a bit of wage competition in the market so most people start getting raises again.... just sayin'

[palm_to_forehead]

23. Wait, we're talking about adressing the deficit.

Stopping spending it on the military only to spend it domestically doesn't address the deficit.

[quaker bill]

28. Actually in some small sense it does

Spending that is more effective in growing the economy would address some portion of the deficit. It does because the money is spent locally and thus creates more jobs and greater tax revenue. Money spent in France and Germany maintaining bases there helps the French and German economies.

Beyond that, given the macroeconomic multiplier effect, you could replace the same amount of GDP with 1/3 to 1/4 of the spending, thus replacing the 4.7 percent of GDP you think we would lose spending only 1 to 2 percent. Savings without the economic impact you express concern about would likely range in the 100's of billions of dollars.

In short, you can build and equip alot of schools for the cost of one stealth bomber, and you can fill them all with teachers that have decent salaries and pensions for 30 years for the cost of a second one. Those teachers would be taxpayers for 30 years, Do the math yourself, it is not all that hard.

The basic principles of macroeconomics is not that difficult a subject, biochemistry was a good bit harder.

[quaker bill]

19. Sort of correct

The military (DOD) gets about 700 billion on the books. The entire MIC, to include CIA, NSA, and too many other acronyms to list, is well north of a trillion. Making overdue cuts in overall defense establishment would reduce the size of the problem.

The larger point that you glossed over is that the overall economy is vastly larger than the deficit problem. In fact, with some modest cuts to defense and the elimination of "tax expenditures" (called write offs or loopholes by regular folks) the entire problem is resolved without increasing any of the marginal rates. The write offs and loopholes account for 1.2 trillion dollars of revenue we are not collecting this year. The deficit is 1.5 trillion, so if you dump the write offs, the deficit shrinks to 300 billion. Restore the Clinton Administration rates on upper incomes, and the problem goes away.

In short, we are nowhere near as "broke" as Ms. Bachman believes we are. The size of the problem is no more than 10 percent of GDP. So, the notion that "if you taxed the rich until they had no money, it would not solve the problem" is simply a lie.

[elleng]

24. WTH does this mean?

'that would get us about six months worth of revenue'

I don't think that's the issue AT ALL. We're NOT talking about 'revenue' needed to operate the fed govt, we're talking about addressing existing deficit, AND future spending to which we ALL contribute.

And I suspect her numbers, such as they are, are WAY off.

[Avant Guardian]

26. Just get rid of all the Bush tax cuts and be done with it

Budget balanced, problems solved.

[quaker bill]

29. Bachman is simply wrong

The top 2 percent are paid more than the entire federal budget, to include the deficit. Math is apparently not her strong suit.