Month: August 2007

 

   

 

 

 

Here’s some fascinating viewing from Iowa.  So, if Rudy weren’t running, he’d be backing McCain?  Well, as a 2000 McCain supporter who currently favors Rudy, I get where he’s coming from.

I wonder, however, whether this is a not-very-concealed ploy to ensure that everyone in Iowa knows that when McCain drops out (that might be an "if," but for now, I’ll treat it as a "when"), Rudy’s the natural person for McCainiacs to throw their support to?  Clearly, they won’t be throwing support to Romney (no matter how much he may be trying for that), but I think Fred Thompson may appeal to some of them who are pro-life or who are the "clean government" types who actually really like McCain-Feingold (which Fred of course voted for).

www.lizmair.com

Last word on taxes/spending for today, I promise.

One reason for the perception of regressive taxation is the fact that a lot of people pay more in payroll taxes than they do in income taxes. I’ve worked jobs towards the bottom end of the ladder, and all you have to do to is read your pay stub and look at the deductions. You know you can get a refund on the federal income taxes, but the payroll stuff is all gone.

So when politicians talk about cutting income taxes, this really means nothing to you, at least not directly. And when you see that the tax cuts are aimed at people making more money, without any real immediate benefit for people in the low-end jobs, you can’t escape the feeling that the whole tax system works this way, as opposed to just the distribution of the latest round of cuts. Changing the tax system to make it less progressive leads to the misperception that it’s not progressive at all.

So what’s the solution to this P.R. problem? I’m not sure there really is one.

Technically this is more a great band moment than a guitar moment, but in this case I’m focusing on the brilliant lead guitar work of Steve Hackett. I think he really pushed the other members of the classic Genesis lineup to their absolute limits.

(Note to Eric: click on the link before posting.)

That’s what I get for working two jobs today and rushing. I apologize and stand corrected.

Having said that, I’m sticking to my overall points on progressive taxation and why I prefer it to flat systems.

The data I cited include all federal taxes including the payroll tax. (Note to Eric: click on the link before posting.) They do not, however, include state and local taxes. These are often assumed to be regressive, but I don’t see it. The property tax is essentially progressive because one has to be relatively well off to own a house, and almost every state has a progressive income tax. So my guess is that while states vary in the degree of their progressivity, overall they probably mirror the federal tax distribution.

I appreciate Liz’s post because every once in a while I get sympathetic to the idea that passive surveillance might be a reasonable price to pay for increased security. But obviously if it doesn’t work, then there is clearly no justification for it.

On a related point, I sometimes think there may be some value in a domestic intelligence service to pursue terrorists. The problem with relying solely on the FBI to do this job is its law enforcement focus–it is necessarily concerned with gathering evidence in such a way that it can be presented in court. But I can see times when all we want is the information–say about a looming attack–even if it means collecting it in a way that would be inadmissible in court.

Britain has an agency that does exactly this: MI5. It is separate and supplementary to Britain’s version of the FBI, Scotland Yard. Both agencies have had long and deep experience with terrorism in that country owing to the Irish problem. Therefore, one would think that they would be far more effective than the FBI in preventing terrorist incidents. Yet London has not been spared Islamic terrorist incidents, while we have had none since 9/11.

My point is that if there were clear and demonstrable evidence that sacrificing our liberties to pervasive video surveillance and a domestic spy agency were effective then it would be reasonable to consider those options. But if they have no record of effectiveness in a country with considerable experience using them, then the case for moving in that direction becomes nonexistent.

Regarding tax progressiveness, Bruce, does that include all levels and forms of taxation, from income tax to federal payroll taxes, plus sales taxes, state income taxes, etc? Sure, the income tax is progressive, but FICA taxes are most certainly not, just to pick an example, and that certainly changes the overall distribution of the tax burden.

As for me, I’m for progressive taxation not so much because I see it as fairer — although I certainly do see it as fairer. The real reason I’m for progressive taxation is simply because we can. Sure, I’ve never heard of a poor man creating jobs, as the right likes to say. But I’ve also never heard of a poor man paying $250,000 in taxes for one year, either, and the money to pay for all that we demand of the government has to come from somewhere.

And on the question of fairness/social justice, a rich man is simply better able than a poor man to part with a quarter of his income — which in turn connects to the “because we can” answer.

I fully acknowledge that this introduces economic distortions and can have some bad effects if we take it further than necessary, but at the end of the day it remains necessary. If we truly want lower and flatter taxes, then to be honest we should first start demanding less of the government. You’ve of course noted that starving the beast is a sham, and only creates additional problems. So first make the case to genuinely shrink the government, then come back with the tax cuts later.

A reader:

In this article, you wrote…

“You’d end up with a whole mass of people on the low end ceasing to be productive workers and instead just living off the dole. … Ideally, welfare should exist to be a security net … But one thing it should not be is a permanent way of life for people who could be working otherwise.”

Perhaps the (overly) simple solution, that keeps a VAT / “negative income tax” viable, would be a system to track anyone who received, say, 60% or more of their income from this for a year. Those people would continue to receive that minimum check but be drafted / conscripted into some sort of civil service and/or the military for a year.

Lots of public works projects and pocket wars could be accomplished thataway. A certain segment of the population would be rather motivated to find sufficient work, and count their pennies, to make damn-sure they hit that magic 41%. Another certain segment of the population would see this as not objectionable at all, and work the civil service / semi-volunteer army system to skate as much as possible also. And while there’d be a bit of bureaucracy around tracking, finding and employing folks in this system, it likely wouldn’t be nearly as byzantine as the I.R.S. and may attract the sorts of people who are less inclined to play numbers games and more inclined to be the kind of self-starters you see on say, Dog The Bounty Hunter.

I leave it as an exercise for the reader as to whether I’m proposing this in the spirit of “A Modest Proposal”. Mostly because I honestly don’t know if I am or not.

Queens, New York, 9.30 am.

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