Our good, but underappreciated friend Brian has an article up on taxes:
Friday, May 15, 2009By now, you’ve heard that the Democrats are thinking about taxing drinks with sugar in them, with the explanation that these things are bad for you and contribute to the decline of the average American’s health. The money raised will supposedly go towards nationalized health care.
They’re also thinking about increasing taxes even higher on cigarettes, alcohol, and other so-called “bad habit” products. There’s even the possibility that they’ll start taxing your employer-provided health benefits.
What does all of this mean? It means that conservatives were right about the Democrats, that they know only two things when it comes to government: high taxes and even higher spending.
If you saved all of your receipts, pay stubs, bills, etc., over any given year and took a look at what you paid in taxes — whether it’s sales tax, excise tax, whatever — you’d probably have a stroke. These people are nickel-and-diming us to death. And they wonder why people have a problem with it. It’s not that the government doesn’t have enough money to spend, it’s that they spend too much to begin with.
We’re not asking for much, just that government — whether federal, state, or local — live within its own means and stop fleecing us the way it does. We work hard, we deserve to keep as much of our money as possible and use it as we see fit, whether it’s to pay down our own debt, save for our retirement, or put our kids through college. Is that so much to ask? To a liberal, yes, it is, because they think this is all something government should do for you, which means higher taxes and even higher spending, economy be damned.
We’re just a few months into a Democrat-controlled Washington, and look at all the power- and money-grabbing that has gone on. And we’re expected to just sit here and take it for the next four to eight years? Hardly. The left can laugh and mock conservatives and conservatism all it wants, but come 2010, I think they’re going to be in for a nasty little surprise. We are by no means beaten, defeated, or demoralized as they would have you believe, and I firmly believe that if the Democrats continue down this road, they’re headed for electoral disaster. Conservatism WILL be back. Count on it.
I think that this is important. I had said, many times, before the election that there was no way President Obama could keep his tax cut promises: he had promised way, way, way too much on the spending side, and that was before the late 2008 Troubled Asset Relief Program (TARP) financial systems bailout and Mr Obama’s own $787 billion Porkulus Plan. But, at least so far, the President has been true to his word concerning taxes, at least as far as income taxes are concerned.
But as this oft-used graph demonstrates, the federal government is going to be buying red ink by the barrel if something isn’t done.
And the stories Brian has noted give us a hint as to what will be done: income taxes (probably) won’t be increased, but the feds will increase taxes on everything else.
As much as I’d like to blame only Democrats for this, it seems as though politicians of all stripes know that it’s easier to raise taxes indirectly — on the evil tobacco companies, on wicked ol’ corporations, on various “sin” items — than it is on people directly, because far too few people understand that all taxes are paid by individuals: corporations simply collect taxes from the end user of a good or service.
I’ve used this description before, but it bears repeating: If I go to the Jim Thorpe Market and buy a gallon of milk, I’m paying not only for the milk, but:
- The corporate income taxes on the dairy farm which produced the milk;
- The corporate income taxes on the trucking company which transported the milk from farm to the dairy;
- The diesel fuel taxes on the fuel which powered the truck which transported the milk from farm to the dairy;
- The corporate income taxes on Jim Thorpe Market;
- The corporate income taxes on the trucking company which transported the milk from the dairy to the market; and
- The diesel fuel taxes on the fuel which powered the truck which transported the milk from the dairy to the market.
And that list is nowhere near exhaustive. All of the other taxes which constitute a cost of doing business — Social Security and Medicare employer matching taxes, business licenses, gross receipts taxes, hundreds of other things — are included in the price of the milk. The price of the milk has taxes added to it at every stage until it reaches the person who converts the milk into an unsalable material, and even then, unless you have a private septic tank system, you are taxed for the disposal of the unsalable material.
Somehow the Yorkshire-added category of Defecate Spending seems most appropriate here!
Now, I certainly don’t mind the fact that Bill Gates pays the same tax on a gallon of milk that I do, but it’s long past time that our politicians, Republican and Democratic alike, stopped lying about taxes. It can’t be stressed enough: all taxes are paid by the individual!
President Obama might just wind up keeping his word when it comes to income taxes. The problem is that no one pressed him to be specific about other tax measures. People smart enough to have voted for John McCain knew that this would be a problem; we were, unfortunately enough, in the minority.
I’ve often wondered if people voted with their Social Security numbers instead of their names and then were held to share equally in the taxes imposed by the ones they voted for, how many Democrats would be left in the country. For that matter, how many Republicans?
Course we could never do that. Illegl aliens couldn’t vote then nor could ACORN sign up Mickey Mouse.
Nice Site, check mine out and if you are interested in exchanging links let me know:
Baroccoli Obamination
Where were you folks during the last eight years when we had tax cuts for the wealthy, spending increases that doubled the national debt, an unjustified war, and a laissez faire attitude toward Wall Street?
(How are your 401K’s now?)
These are the policies that dug us into the hole that Obama inherited and is trying to fix.
This piece does not suggest anything new or creative, except to rail against tax increases and big spending.
And Dana, you republish the exact same data on which I gave you factual perspective that you have totally ignored. (Post #2 at: http://commonsensepoliticalthought.com/?p=5832 )
On top of everything else, you offer no suggestions on how we get out of this mess created mostly by so-called conservative Republicans who were in power in Congress under Bush.
What good is this for our ailing nation, I ask pointedly?
And then you mention McCain. Holy cow! The man had not a clue about the economy, and actually admitted it. In fact his economic cluelessness may have been a major factor in his loss.
Yours is a partisan rant, nothing else, nothing new, in my view.
Of course none of us likes taxes, but at a time like this, what do we do?
In my view, the focus on recovery should be job maintenance and creation. The Obama people so far have not made this the main focus, instead focusing on Wall Street. Jobs create income which creates demand which creates production which creates a spiraling up for the economy.
We need the approach that FDR used in the 1934-1937 time-frame, which was working until he chickened out under pressure from the right concerned about the deficit and debt.
Now look here: It is estimated that a GM and Chrysler bankruptcy would cost a job loss of over 300,000 jobs. Moreover, if this is not bad enough, what does the revenue loss do to the auto states in the mid-west?
Obama’s push for alternate energy, reducing healthcare, and investing in education are all laudatory. However, on job creation, he leaves me flat — too much money going to Wall Street, not nearly enough going to Main Street.
I remain very, very worried, as I see the right and the left faltering on solutions to our economic problems, distracted by insignificant issues like Pelosi and Cheney!
We need some critical thinking here, on job creation, not on taxes. So far, I’m not seeing it.
Perry asked:
I fully supported the 2001 and 2003 tax cuts; I was very much opposed to the huge spending increases that occurred. The FY2008 cost for the wars in both Iraq and Afghanistan was $193 billion, but the FY2008 budget deficit was $455 billion; if the wars in Iraq and Afghainistan had never happened, we’d still have been running a deficit. The prescription drug benefit added to Medicare was ridiculous.
The American economy was bailed out of the Depression by Hideki Tojo and Adolf Hitler, not Franklin Roosevelt. Those two gentlemen created a huge demand for industrial production, a continuing demand as the goods produced kept getting expended and had to be replaced. Following the war, the United States enjoyed unquestioned industrial and productive supremacy, in part because our industrial plant was untouched, while those of our industrial competitors were heavily damaged.
That’s because you are looking for a government solution. Other than government jobs themselves, government does not create jobs; individuals and private corporations create jobs. Poor regulatory schemes and badly-thought-out taxes can have a depressing effect on the calculations prospective entrepreneurs take as to hoped-for profits, and government buying can create demand directly, but, for the most part, that’s the only real impact of government on job creation.
And how many GM and Chrysler jobs have been lost over the past thirty years without bankruptcy? General Motors used to be the largest corporation in the world, but they kept producing crappy cars, and their market share continued to decline, not because of the government, but because individual people chose to buy automobiles from other manufacturers. If GM and Chrysler go bankrupt — and they already have — it’s because individual Americans have decided not to buy their products. Why should the government step in and subsidize companies that the public have, in the aggregate, decided don’t produce vehicles they want?
You ought to post this over at Pandagon, and watch heads explode al over the place!
If you saved all of your receipts, pay stubs, bills, etc., over any given year and took a look at what you paid in taxes — whether it’s sales tax, excise tax, whatever — you’d probably have a stroke. These people are nickel-and-diming us to death.
See here.
Denmark taxes 50% of its GDP, Sweden 49.7%. They are surviving nicely.
France taxes 46.1%, Germany 40.6%, the UK 39.0%. They’re doing okay.
Japan taxes 27.4% of its GDP. It isn’t doing that great.
The US taxes 28.2% of its GDP. And yet, somehow, we are expected to believe this is killing you?
Somehow the Yorkshire-added category of Defecate Spending seems most appropriate here!
Didn’t appreciate the effectiveness of that catagory, but seems more appropriate than ever. We must create a family oriented catagory for Pure B.S. Maybe “Pure Bovine Feces”
Didn’t appreciate the effectiveness of that catagory, but seems more appropriate than ever. We must create a family oriented catagory for Pure B.S. Maybe “Pure Bovine Feces”
Done!
Dana:
“The American economy was bailed out of the Depression by Hideki Tojo and Adolf Hitler, not Franklin Roosevelt.”
That’s true, but my point about FDR in the ’34-’37 timeframe is also valid. By putting people to work on infrastructure projects, FDR halved unemployment down from 25%. I wish Obama were using the same model. In place of the WWII spending, Obama is using the recovery spending broken down into bank bailouts, loans to certain industries, infrastructure projects, and investments in green energy and education, but he is way too weak on the infrastructure part. As I pointed out to you in an earlier post, even with all this spending, the national debt now is 78% of GDP, compared to 120% in 1946, from which we recovered.
“I fully supported the 2001 and 2003 tax cuts”
I didn’t, because they favored the wealthy, supply side, the approach that Reagan used that did not work, instead built up unweildy deficits and debt, which he had to increase taxes twice in his second term, then Bush-41, then Clinton, all because of Reagan fiscal policy.
One of our serious problems right now is that our wealth is tilted heavily toward the upper 5%, whereas the middle income folks’ wages have been stagnant for over two decades. What kind of a compensation system is this that we now have? It’s unsustainable, and just a matter of time, in my view, before we have violence in the streets and a crime increase as a response to this and the failed economy, all due to failed economic policies, mostly due to Republicans. And you want to continue with the Reagan approach. How wise is that, I ask you?
“That’s because you are looking for a government solution.”
I am looking for a temporary government solution, because the Wall Street solution has failed us, and because the problem now is so deep and serious, that only the government has the resources to address them. Those who do not see this handwriting on the wall are in denial of the facts, instead letting their ideology interfere with clear/logical thinking based on the facts.
Re GM and Chrysler failures, of course you are correct, but their failures pale compared to the failures on Wall Street, so far amounting to upwards of $1 trillion to attempt to fix, maybe more. Can you imagine what we could do to help GM and Chrysler recover if we invested much larger quantities than a few billion dollars to rescue them? And then there are the jobs to rescue to, something you seem very willing to brush under the rug.
What about the jobs, Dana??? You don’t seem the least bit concerned!
I would rather have moderate, temporary tax increases on individuals and businesses, rather than job losses to get us through this crisis. At least then we would be spreading the pain, instead of having the unemployed suffer most of the pain.
Are you including all the local, state, and federal taxes, combined, that you pay per year? I’m sure it goes a lot higher than 28.2% of GDP.
And, last I checked, those countries you mentioned have a little bit of a socialist streak to them. If you want to live like them and at their taxation levels, I’ll buy you a ticket to go join them.
Are you including all the local, state, and federal taxes, combined, that you pay per year? I’m sure it goes a lot higher than 28.2% of GDP.
It came from the Heritage Foundation – “In the most recent year, overall tax revenue as a percentage of GDP was 28.2 percent.”
I’m sure it goes a lot higher than 28.2% of GDP.
Or, you know, it’s possible the same people who told you to wet yourself over terrorists are fear-mongering over taxes…
And, last I checked, those countries you mentioned have a little bit of a socialist streak to them.
Ooooh – SOCIALISM. I’m so scared now.
The psychologists were right.
Taxes on businesses are part of the fabric of the politics of envy. Businesses pass on taxes to their customers in the form of higher prices.
Those losers who call themselves socialists will never get this point. They mindlessly state that profits are bad.
Yet what happens to business profits? The parts that escape the tax collector are used for capital improvements. This creates new jobs for suppliers. There are investments in R&D that are undertaken on the basis of common sense and not the result of some arbitrary bureaucratic mandate. Some is distributed as dividends, usually to a great number of investors. There are bondholders who get something for clipping those coupons.
There is executive compensation. But that is taxed, along with the dividends and interest payment.
Perry wrote:
Yet most econommists would say that tax increases, regardless of how moderate or temporary, during a recession will lengthen the recession, not shorten it. I’m not certain that I agree with the conventional wisdom on that.
Perry wrote:
I’d say that this is a self-defining statement, one which indicates that you are operating from a position of share-the-wealth and share-the-pain, that the needs of society outweigh the rights of the individual. It says to me that you would be willing to take from those who have more, to give to those who have less. Is this an accurate assessment?
Brian: The Phoenician kind of does already; he lives in New Zealand!
Those losers who call themselves socialists will never get this point. They mindlessly state that profits are bad.
Art, would you care to cite anyone here stating “profits are bad”?
It must be real hard beating up that strawman you’ve set up…
what drinks with sugar in ‘em? I have to buy Mexican sodas to get sugar in my drinks – Federal subsidies to corn growers made the prospect of replacing sugar with high fructose corn syrup irresistible to PepsiCo & Coke, which is why most soft drinks taste like the bottom of a garbage can now.
Dana: “It says to me that you would be willing to take from those who have more, to give to those who have less. Is this an accurate assessment?”
No, Dana, it is not an accurate assessment. If you will reread my statement, I used the word “temporary”. We have an extraordinary economic downturn that requires a large government financial intervention to get us back on track. I don’t think it is asking too much for the wealthier of us to temporarily give a little more.
That said, I will note that the distribution of compensation in this nation is out of whack, which has led to an lopsided distribution of wealth which is unsustainable. How long can we continue where executive compensation has risen annually in the double digits, while middle incomes have been stagnant for over two decades. That is fact! When you put that together with Bush tax cuts that favor the wealthy, and the tax loopholes that they use, you have an unsustainable situation which will lead to serious societal disruptions, in my view.
What, that you’re a nut?
Pho, I have to question your US tax number of 28.2% of GDP. I think that is way too high. There seems to be a mistake.
Look, if you do the math, GDP is about $14.5 trillion, and our population is about 300 million, that calculates to a per capita tax of $13,630.
Thus, an average family of four is paying $54,520 in taxes alone.
Can this be correct? It seems that the 28.2% figure is too high, meaning that the US taxpayer pays even less taxes, making your point stronger about the US tax rates being lower than other countries, thus further invalidating the high tax arguments put forth by the tax cut hungry Republicans.
You don’t think that paying over a quarter of your annual income is excessive (I know, we’re not talking annual income, we’re talking GDP…but the same principle applies.)? We’re not talking about taxes only rich people pay, here, we’re talking about all the little, puny taxes that everyone pays. They add up to quite a chunk of your annual income. I have no problem paying taxes, provided that it goes to things that the government is supposed to do. Transferring wealth to those who refuse to earn their own way isn’t one of those things.
And, I might add, your source (here) also points out that spending “in the most recent year equaled 36.7 percent of GDP. Stimulus measures passed in the second half of 2008 promised to push government spending significantly higher.” You don’t see a problem with that? That means the government is spending about 15% (give or take a few points) more GDP than it is taking in. The problem isn’t that the government doesn’t have enough money, it’s that it spends too much. I had a BIG problem with Bush’s spending, but Obama and his cohorts up in Washington make Bush look like a piker.
Thomas, you are right in that most sodas these days are made with corn syrup. But not all drinks are sugar-free. There are plenty of them out there, and they’re made here in America (Pepsi just started making “Throwback” versions of Pepsi and Mt. Dew, for example). And if they can tax sugar-laden drinks like certain sodas, energy drinks, whatever, what’s to stop them from taxing candy bars, gum, the coffee or tea that you might add sugar to, or anything else? What’s to stop them from imposing a corn syrup tax? Nothing.
Perry, you say “temporarily ask the wealthier to give more.” Nothing is temporary when it comes to libs and tax policy. Besides, they’re already paying through the nose (thank link, BTW, also destroys your ‘wealthy-only tax cuts’ meme). And then you guys wonder why they have the nerve to demand any kind of a tax cut.
Look, I’m not rich by any stretch of the imagination, I’m merely trying to become rich (through hard-work and investment). But the person who pays my check is (or trying to be). You tax the crap out of these people, the people who start the businesses and create the jobs, you’re destroying the economy and killing jobs. You might think that “oh, they’re rich, they can afford it”, but believe me, they’re not just going to give their money away. They worked for it, they earned it, it’s theirs, not yours and certainly not the government’s to do with as you please.
Should say “that link” instead of “thank link”…sigh. Need more corn-syrup drinks to get me started, lol.
Haven’t seen the throwback sugar drinks, thanks for the heads up
I pay over 30% tax but you don’t hear me complaining, somebody’s gotta keep throwing all that money down the Iraqi War For Freedom hole
[...] Political Thought: Here Come the Taxes! As much as I’d like to blame only Democrats for this, it seems as though politicians of all [...]
The psychologists were right.
What, that you’re a nut?
You do fall into these things, don’t you?
Just who are the ‘authoritarians’ of today?
We do have some people who would literally apply Leviticus to all forms of human activity. They are a tiny minority on the political scene.
The dangerous authoritarians are on the Left. They would impose rigid rules on our lives that are allegedly for our own good. They are rather selective. Some are mere faddists who would demand that others follow their rules. One example is provided by the vegetarians who rail against meat.
There are the selective civil libertarians who oppose censorship of pornography but support the more oppressive censorship of political correctness. They would impose a NewSpeak as foretold by Orwell.
My own political philosophy has (asymptotic) libertarian and even neo-populist elements. I am a believer in the merit of the Invisible Hand but do know that certain people in commerce do go over the edge in exploiting people.
Yet the socialist utopians seem to ignore human nature and believe that one size does fit all. Perhaps they are the failures in life who have degenerated to the politics of envy. They may rush to the ample bosom of Big Nanny to satisfy their wants and needs.
Big Nanny may well be Big Brother in drag.