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Ali-Radicali β Grading Tax plans
Published: 2012-10-18 01:25:46 +0000 UTC; Views: 1311; Favourites: 19; Downloads: 9
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The Romney Ryan tema loves to talk about job creation and tax cuts. What they don't talk about is how they're going to pay for that stuff. The only specific cuts in government spending they've mentioned is the punding for CPB, $444 million, a laughably small portion of the total federal expenditure (0.0012%).It's simple maths, if you want to keep social security, medicare and defense spending, AND bring down the US debt, that either means annihilating every other source of expenditure (subsidies, investing in science, pell grants, veteran's pay, etc.), or LYING.
Something's gonna give, there just isn't a way to pay for all the giveaways Romney-Ryan promises.
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Comments: 52
Well he's not that rich....
Still, guys like mitt could easily pay for the sequester and other such employment-hurting cuts. Where's their patriotism?
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Up their asses, to be honest.
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Hiding in the cayman islands and other assorted tax havens around the world would be my guess.
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That definitely makes sense.
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NObamney 2012! We've been overdue for a third party candidate for decades!
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The US is overdue a massive overhaul of the political system, but until then, Obama >>> Romney.
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Well, I can't really argue against this considering how Mittens wants to cut funding to PBS but has promised not to cut the military, which we spend more on than any other country in the world.
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Worse, he wants to increase defense spending, when your defense budget is 47% of the entire world's defense costs (and that's not even counting war expenditures in afghanistan/pakistan!).
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And Repubblicans wonder why I won't vote for him. Obviously because he's NOT a fiscal conservative.
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Neocons live in opposite-world. To them spending money you don't have = fiscal conservatism.
Unless it's obama doing it, then it's EEEEEEVIL SOCIALISM.
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Sad but true. Eisenhower once spoke out against the military-industrial complex. Now Republicans are in bed with it. Dwight must be turning 360s in his grave.
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Eisenhower would be thrown off the stage by the GOP as a communist pinko libby lib. He was for unions, against the military industrial complex and he collected taxes to pay for stuff. Unnacceptable.
Hell, I don't think even Ronald Reagan would stand a chance as the GOP frontrunner. After all, he raised taxes to keep social security solvent, he raised taxes on gas, he granted amnesty to illegals, he left lebanon after getting his ass kicked (cut and run, anyone?), he supported numerous big government spending programs, he was initially pro-choice and worst of all, he started out as a democrat.
Sadly, as the right gets more extreme, they detach themselves increasingly from reality, viewing the Gipper through the distorted pink glasses of nostalgia.
Reagan would have a tough time running as a democrat these days.
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Well he was considered a "conscious, dedicated agent of the Communist Conspiracyβ by the Birch Society, so thatβs not exactly far from reality.
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Well it is a little more than simple math that is required to understand why the plan will work, it takes some understanding of economics and finance.
The plan and its specifics are on his web site. [link]
The majority of how the 5 Point Plan will pay for the spending cuts and pay down the national debt is by growing the base. Growing the base means (a) attracting foreigh capital/investment/business to move their businesses to America which will then pay taxes here, (b) getting people jobs and lifting them out of poverty and up through the income classes so they will become tax payers, (c) allowing private businesses to start-up or expand, to hire more people and to earn more profit which means more tax revenue, even if there are lower rates.
Some other key details are:
(1) Energy Independence: By opening up drilling offshore and on federal lands, allowing the construction of new nuclear power plants, allow more pipelines, fracking, etc... America will generate alot more GDP, and will gain a lot of jobs, which directly leads to higher tax revenues even if rates are lower.
(2) Limiting Federal Spending to 20% or Less of GDP. This prevents the spending and deficits from growing faster than the tax revenues from the growth of the economy.
(3) Cutting tax rates leads to higher tax revenues due to Growing the Base by attracting foriegn capital and ecouraagin private sector buisness rentention, expansion, and repatriation of capital/investment here in the USA which will produce profits that will provide tax revenue here that would otherwise be paid to more competivie foreign nations.
(4) Improving education through competition, by allowing parents choose where to send their children along with the federal funds that are allocated to that child. This will force schools to be innovative and provide higher quality teaching/services inorder to attract attendance, and give schools incentive to figure out ways to reduce costs/waste/ineffeciencies etc.... Better educated children can get higher paying jobs and/or make more/better innovations in business and technology later on.
(5) Romney will eliminate taxes on dividends, interest, and capital gains for taxpayers who make less than 200k, which encourages and rewards low and middle class to save and invest, which helps them move up through the economic classes to become wealthy, and helps make college/retirment more affordable. Not only does this help the savers/investors, but also the businesses whoes stock they invest in which allows that business to expand and hire more people which all grow the base and produce more tax revenues.
(6) It appears from the debate, that there would be bipartisan support for a $25,000 standard deduction for people making up to $200k (then phases out) which should allow for Mortgage Int/College Tutition Credits/etc... and all other deductions/loopholes would be closed except for ordinary necessary businesses expesnses for businesses.
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It's completely, absurdly unrealistic.
1) oil, gas and coal are heaviy subsidised, would probably get more subsidies from Romney. The USA is already ooverreliant on fossil fuels and energy in general, investing in energy efficent technology and alternative energy sources would be a vastly more efficient way to reduce the USA's (foreign) energy dependence, certainly when you look at the longer run. Fossil fuels are a finite resource, after all.
2) And how does he intend to reign in government spending? If you take his word for it, he wont touch social security, defense or medicare/medicaid for the currently covered. That means any budget cuts are going to fall in the 19% or so discretionary spending.
Current budget is ~3.8 trillion dollars, GDP is about 15.5 T. That means the budget is 24.5% of GDP. If you completely cut discretionary spending, you BAAARELY make it below 20%.
3) completely contrary to all empirical data. Romney refuses to give specifics about which loopholes he wants to close, and even cloing them all (and that includes home mortgage deductions, child and education and charitable giving deductions, you still fall massively short of the 5 Trillion dollars required to pay for these tax cuts. 5 trillion dollars doesn't just come showering out of the sky. It's more than the annual budget. The only way to pay for this crap ist to raise taxes anyway or to let the debt baloon up. The US is already losing a trillion dollars each year, why on gods green earth would you increase that to SIX trillion?
4)I'm sure he has wonderful ideas about education, but with no money left to pay for it, I guess his only option is privatisation. Which would be a horrible idea.
5) again, tax cuts which he can't pay for. It's nice that he want to help the middle class out, but you need money to pay for tax cuts, he's going to have to get tax revenue from somewhere to make up for his lavish tax cuts.
6)If you close all the loopholes and then create a giant new loophole, guess what, net gain = zero. Or possibly even negative, if he actually want to have the middle class keep more money. If Mitt Rmoney is going to tax rich people more to actually pay for his crap, he doesn't have to do it in such a roundabout way. He can simply let the bush tax cuts expire on the wealthiest 1%.
The whole plan hinges on the utterly fantastical notion that somehow taxcuts are going to have the economy grow exponentially (with no cost to federal revenue!). And that flies in the face of history and common sense.
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Actually it dosn't fly in the face of history nor common sense. The whole point to the plan is "growing the base". Its not magical, it has been done before (Reagan, Kemp, Clinton[on capital gain rates from 28 to 20%]) and currently some european countries also are lowering their marginal rates and increasing their tax revenues, because lower rates stimulate business growth, reinvestment, and attraction of new investment from foreign sources, all of which grow the economy faster because more profits are made and more wages are earned, all of which are subject to tax.
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Reagan doubled the national debt during his term, clinton raised taxes in '93, and progressively lowered the annual deficit every year by 40-80 billion thanks to budget cuts, economic growth and higher tax rates. Clinton cut capital gains tax in '97, and absolutely nothing changed with regards to the rate of economic growth.
Supply-side economics has been widely debunked, the idea that low taxes stimulate investment and employment just doesn't square with the data:
[link]
Also interesting to note:
[link]
All the denmarks and swedens and other "socialist hellholes" which, according to your logic, stifle opportunity and profitability by overtaxing.... well the do BETTER on almost every soco-economic indicator than the US... and yes that includes economic growth and GDP per capita.
Wages are a pretax expense, so the higher taxes are, the lower the relative cost of labour. If taxes are 20%, paying employees costs you 80 cents on the dollar, because you'd have to pay 20% of that in tax if you kept it yourself.... the higher the tax rates, the less lucrative it is to profiteer, the more attractive it is to invest in human capital (and actually pay your workers).
If you actually want to boost employment via financial stimuli, why not give tax cuts specifically to companies that decide to hire more people? Why give these tax cuts across the board? There's no point in relying on financial incentives if you give that incentive indiscriminately to everyone, regardless of policy.
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I doub't the accuracy/bias of the authority you have cited to support your claim that "supply side" has been debunked.
I think the best economic indicator is the feet vote. Wherever people move to or refuse to leave is best place for them to be economically, assuming they are informed of options. If that the socialist models were truly the best, then they would be the global engine of the world.
FYI [link] (I know you probably will discount it, but its good reading).
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The feet vote only proves that the people who can afford to move (I.E. not the poor) move to places where they don't have to pay (as much) taxes. And in the US, red states proportionally get way more government funds than they bring in in taxes, so the playing field is skewed in their favour. It's not even a case of less taxes less government, it's less taxes, same/more government.
And your link is horrible and biased. For instance:
"In fact, the balanced budgets of the Clinton years didn't occur until after a Republican Congress passed and the president reluctantly signed a 1997 tax bill that lowered the capital gains rate from 28% to 20%, added a child tax credit, and established higher limits on tax exclusion for IRAs and estates. "
Instead of looking at the way the annual deficit was reduced at a progressive rate from the start of the administration, they only look at the first point when revenue overtook spending ('98) and tie it to these tax cuts.
The deficit was going down EVERY YEAR by 40-80 billion. If you attribute the surplus of '98 to tax cuts, how the heck do you explain all the previous years deficit reductions?
But by all means feel free to ignore the data while you talk in broad terms about misconstrued correlations by right-wing fantasts.
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That's a nice story but theres some problems. Taxes on the upper income brackets are significantly lower now than they've been for the last fifty years and have been trending steadily downwards. At the same time, the average workers wages have also been falling. Even before 2008 financial crisis and resulting recession, both job growth and more important, wages, were pretty stagnant. And that's the key to the problem: economic growth is not driven by rich people deigning to 'invest' their wealth among us plebes, instead economic growth is driven by the average worker spending money to enrich their lives. If people dont have much disposable income, the economy will simply not grow. The Republicans and to a very slightly lesser extent, the Democrats have facilitated a corporate-dominated economy where workers are paid as little as possible for as short a time as possible; jobs are insecure and have fewer and fewer benefits. This is driving up corporate profits (which are back to pre-2008 highs in many industries) but the rest of the economy stagnates. Tax cuts for the rich will continue to drive 'job creation' in China and other low-wage labor markets just as its done for the last couple decades.
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You are correct in part that economic growth is driven by people spending their money to enrich their lives.
How did they get that money though? Most of them performed valuable labor or created a product for which they were paid the money. That is all good. However the question then becomes, how do those people make more money and how do their employers/clients afford to pay them more?
It is not a matter of the employer/clients taking less profit and just paying the employees more for the same services, that won't drive the economy.
In order to drive the economy, one of more of these things have to happen:
(a) the employees have to work more to produce more, to earn more, to spend more.
(b) the employees have to innovate by working smarter to produce the same or more using less of thier time/labor which makes their products cheaper and more profitable.
(c) some of the employees eanings could be saved and invested to generate a return which does not cost them thier labor time which is limited.
(d) the employers have innovate to make their goods cheaper or more valuable to consumers who then are willing to purchase more of the product, and are willing and encouraged to continue to either work and produce more themselves, or the consumers are mortivated to innovate their own ways to generate income so they can get more (or better) of the employers products.
Driving the economy boils down to innovation of ways to making more of something, and/or making things better and/or cheaper, and as a result, the consumers who more of the product (or better product) will themselves be forced to work harder, smarter, innovate, etc...
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It's amazing how republicans can grasp a concept such as supply-side economics and claim it to be the ultimate truth, yet when you give them something really obvious and historically proven, like keynesian demand-side economics, they just dont seem to get it?
It seems so obvious. One millionaire might buy more cars, jeans and fancy food than a single poor guy, but for every ludicrously rich guy, there are a thousand poor people who would love to buy cars and clothes if they could afford to. Rich people are not the engine of a healthy economy, consuming middle-income families are.
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Lol. I dissagree. The real engine of the economy is "capital", or "real goods and services" produced like minerals, wheat, food, computers, oil, and all labor that adds value to such goods etc..., and even "innovation" which make such real goods cheaper/effective.
That said, the more real goods/services that are produced, the better off everyone is.
If you just stimulate demand by government spending, without increasing production of any real goods, you just have more dollars chasing the same amount of goods, or more dollars chasing after imported goods.
At least when you stimulate supply, even if demad stays the same, costs come down.
Also, that Millionaire is more likely able to and capaable of using his extra tax savings to capitalize/fund another business venture that will bring more tax revenues, that the same amout of tax savings distributed among more less business savvy individuals who more likely make personal expeditures, than invest the tax savings to generate a return.
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And the facts disagree with you. I'm sorry if you find reality offensive to your idealistic portrayal of reality, but tax cuts negatively affect the employment rate. As income inequality increases, employment dwindles along with demand, because you'd be a damn fool of a capitalist to overproduce (which drives up the cost and drives down the prices). So you lay off people to compensate for losses in demand.
Supply follows demand, not the other way around. If there is a demand for something, the free market steps in and supplies that demand. The way to stimulate growth is to get people buying goods and services again, which increases jobs/production. You won't achieve anything by showering wealthy people with money and hoping they spend it charitably. They won't spend it, and that's the crux of the problem.
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In your business, if you work as much as you can stand too work to produce 10 units of your product/service "X", and then the government doubles the money supply and starts spending it and handing it out to others to spend which increases the demand for your product, are you going to keep you prices for product X the same?
Or, are you going to work harder to meet the new artificial demand, knowing that there is no real goods/services produced to account for the extra money supply?
Or, are you going to raise your prices to keep pace with the inflation?
In general you are right, that supply typically does follow demand, HOWEVER that is for dsitribution of resources according to fair market values (any artificial government influences cause bubbles/corrections/etc...)
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If the government doubles the demand, you might raise the prices initially, but you'd be a damn fool not to invest in increasing your supply, because there's good money to be made there and if you don't step up production, someone else will. That's how free market economy works, remember?
And it's not really a matter of artificial government inflation, no more so than the increase in wealth for the top 0.1% over the last decades was and "artificial deflation". It'd simply be a matter of redistribution of tax burden, which would de facto leave the poor and middle class with more money to spend, thus more demand for goods and services.
10000 middle class families may represent a similar amount of money as 5 very rich dudes, but 10000 middle class families create a lot more jobs for doctors, car mechanics, window cleaners, dog walkers, babysitters, nurses, tutors, sports coaches and ballet instructors.
The idea that a teensy protion of the population could possibly consume as much or create as much jobs as a nation full of employed middle class families, is preposterous.
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No that is not how a free market works, but rather how it will respond to government action that artificially creates and re-allocates demand when there is no extra real goods/services to account for that artificial demand.
That is not "good money" to be made, rather that is government residistrubued market share that businesses will have to compete for, again.
The increase in wealth for the top 1% is usually do innovations that make production of real goods/service cheaper or more effective/efficient/valuable, and allow more profits that way. Another large part of the increase in wealth for the top 1% is because they usually keep their "money" invested in inflation protected mediums that own assets that appreciate along with inflation. As such, much of the inflation created by the government actually causes there to be an appearence in the increase in wealth of the top 1% when rather a large part of that increase is just reflective of the underlying inflation pushing the numbers up.
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ANY action by the government, even inaction, is a form of government intervention. What you don't seem to realise is that the government provides the context of trade in a given country. It sets forth trading laws, tax rates, it controls the currency, it regulates financial institutions (or should, hint hint), etc.
The idea, that ge government is somehow committing a gross and unnatural act by taxing here, spending there, when that's what governments DO and have always done, is just preposterous. If giving poor people tax cuts creates "artificial demand" and this "artificial demand" is somehow inferior to "real demand" (??) then why aren't we calling lowered tax rates "artificial supply"?? Oh that's right because you agree with that kind of government intervention.
This is all a bunch of rhetorical hogwash, all you've done is introduce a new term, "artificial demand", and assert that it's very very bad, "because it comes from the government".
There is no motive to invest in the current economy. With low tax on capital gains and low corporate tax rates, speculating, hedgfunding and pinching wages/layoffs are FAR more lucrative than investing in human capital and hiring people.
Wages, investments in R&D are pre-tax costs, the higher the tax rate, the lower the relative cost of employing workers or doing research. The less you have to pay in taxes, the mosr profit there is to be made by employing as few people as possible.
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You are correct, the government will always be part of economic life and its actions and inactions will affect the economy. However the question is, how much control does a society want a government to have on the effects of the economy? Ideally, at least I would hope to think that America would want the best/brigtest individuals innovating in the market place, rather than seeking to enter politics/government because "controling/ruiling" others becomes more lucrative and alluring.
Demand v. Artificial Demand: I don't think I am creating any new ideas here. It makes sense that there is demand which exists because of peoples needs/wants and thier ability to execute that demand by they themselves producing real goods/services. Then it also makes sense, that if "something" alters that demand without that person producing more real goods/services, then the demand able to be exercised by the people is being artificially inflated. If there was no government involvement you would have real demand and real supply, but since that cannot purlely exist, there is always an element of real demand/supply and artificial semand/supply. That said, any change in government status quo (tax rate reductions for example) would infact alter the ultimate suppy (on the suppliers side) and the ultimate demand (on the consumer's side). However, going back to true supply and demand in a world without goverment, in effect lowered tax rates allow people to keep more of what they produce to that would be reflected in true supply and true demand since the goverment is lessening its actions.
Because we are not talking about "tax cuts" or letting people keep more of what they earned, as much as we are talking about
Motive to Invest: In the current economy, the lack of motive to invest is due to paralyzing uncertainty. Businesses do not want to expand beyond 50 employees because of all the new costs/taxes/regulations of Obamacare, which may or may not be repealed. Banks do not want to lend money b/c of uncertainty about repyament due to the shakey economy, combined with artificially low interest rates, bank take overs, bad PR for making loans, etc... Individuals do not want to invest in banks/savings b/c of low interest rates, nor invest in stocks b/c everyone is waiting to see whether the next 4 years will be more of the same, or whether fiscal responsibility will begin to return to government policy, along with lower compliance costs with regulations and lower taxes. Afterall it may be cheaper to invest overseas in a jurisdiction which has lower taxes and compliance costs.
High Taxes benefits Employment (your claim): I think you are mistaken. Just because wages are a pre-tax cost, and there is more incentive to spend that money on something productive rather than paying that money in taxes, dosn't mean there is justification for increasing taxes, because:
(a) the incentive to create more profits with untaxed money exists independent of taxes,and
(b) the less taxes taken, the more money that can be used generate profits, and
(c) the larger the share of profits the earner gets to keep, the more pyschological incentive there is to keep generating profits considering it takes up time/stress to continue to make smart investments/business decisions, so there will be some point at which the burden of time/stress to the profiteer outweights the diminishing returns on their profits only to benefit the government politicians who use the taxes to uslally buy populist votes.
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Whether the government decides to tilt the playing field one way or the other, it's exerting control. Economies, if left to their own devices end up with a very few wealthy people holding all the money and power. History: more than just a tv channel with aliens.
The whole concept of taxation, of pooling money to spend it for the betterment of the nation, is built upon the principle that trade left to its own devices ends up killing itself. It's a positive feedback cycle, not an equilibrium. You need some agency to channel money back down to the lowest incomes to keep the economy running. So while you can argue that theoretically, a government that doesn't intervene and doesn't tax has less "control" over te people, but it simply means that that government leaves the natural "money makes money" dynamic unopposed, leading to income inequality and all the related societal ills.
Your whole rant about artificial demand is a naturalistic fallacy. Congratulations, you've managed to reach the conclusion that this demand couldn't hae existed without government interference.. You have yet to demonstrate how it's a bad thing.
The "motive to invest" argument is an extremely lame one, but one that all the rich investors and bankers use to justify their low tax rates: "don't raise our taxes or we'll stop trying to make money, which'll hurt EVERYBODY!" Sounds kinda laughable when you actually think about the implications of the threat, right?
FYI, after the recession, the amount of businesses with 100.000 employees or less shrunk. Those with over 100000 employees grew substantially. So much for the theory that no one wants to expand.
a)the incentive to create more profits with untaxed money exists independent of taxes
contradictio in terminis. How can anything related to "untaxed money" exist "independent of taxes"?
b)Profits =/= job growth, or even tax revenue if you're the kind of company/billionaire who can afford the right kind of tax loopholes.
c)Low taxes is a big motivation to go for PROFIT. High taxes means a big motivation to INVEST in your business, in human capital. Back in the day tax rates were as high as 90% for the very rich, yet that didn't stop them from (succesfully) trying to amass more wealth.
It doesn't take a genius to turn a billion dollars into more money, I really don't see any justification, be it practical or moral, to justify making it even easier.
And no, your tax dollars aren't being used to enrich politicians; that's incredibly naive and simplistic.
Companies and rich private investors buy the politician by donating to his election campaign. The politician, in turn, accepts policy advice and proposals from paid lobbying groups and think taks sponsored/endorsed by the people funding the politician.
The utter fail on the part of you government-hating folks is the idea that government in isolation is some sort of malicious, money/powerhungry entity. That's hardly ever the case. What happens is that corporations corrupt the government, and once the stakes are sufficiently, high, then it becomes lucrative to consider politics, but even then thanks to corrption by non-government agencies.
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We obviously do not agree on many things, so we can agree to leave it that I suspose, but feel free to take the last word.
That said, it appears we have totally different idealogies about government and its proper role for a society, which is fine considering diversity of opinion is always a good thing. One last thing though, what you government-loving folks utterly fail to realize is that the natural order of things is for governments to grow and seek power, and for individual freedoms to yield. This concept was understood by America's forefathers and you can see it happening since America's inception. It is only a matter of time before the government will control virtually everything and eventually there will be yet another revolution/civil-war, to reset the balance of freedom and security. Additonally, it should be noted that governments (even before the existence of corporations) have always had issues with being malicious, power hungry, and over-bearing on thier own populace, which is often the reason for revolution or people voting with thier feet and going some place more attractive in terms of personal/financial freedoms (lower taxes and less regulations).
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I may not be able to convince you, but I really hope to make you at least reconsider.
Governments do not seek power over their populace for power's sake. Individuals within the government might try to do that, based on some kooky justification or another, but the purpose of government is to serve the people, not to lord over them. To say that all governments seek to control their populace is an extremely lazy oversimplification/distortion.
Before corporations, you had other institutions exploiting people: nobility/feudalism, religions, slavery, etc. Instead of elected governments, you had people who ruled by accident of birth or by virtue of succesful ecclesiastical politics. To even compare these to democratically elected officials misses the point completely IMO.
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"Part two of the plan is trade that works for America. Mitt believes that trade can offer enormous opportunities for American businesses and workers, but only if they are given a level playing field on which they can compete and win. That is why he will work to open new markets for American goods and services, while also confronting nations like China that cheat on trade and steal American jobs."
Outsourcing isn't stealing.
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Also, if you read carefully between the lines, it means Romney's giving up on the US market and instead trying to open up markets in foreign countries to export goods to.... because he realises that if current trends continue, USA is going to be the china of tomorrow, the country that thrives on exploitation and exports.
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I have yet to see this 5 point plan he speaks of. But I'm well assured he has one right? And it magically adds up!
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From Mitt Romney's website (commentary in bold):
- Reduce federal spending as a share of GDP to 20 percent β its pre-crisis average β by 2016. How?
- In so doing, reduce policy uncertainty over the need for future tax increases.
- Reduce individual marginal income tax rates across-the-board by 20 percent, while keeping current low tax rates on dividends and capital gains. Reduce the corporate income tax rate β the highest in the world β to 25 percent.
- Broaden the tax base to ensure that tax reform is revenue-neutral. How?
- Gradually reduce growth in Social Security and Medicare benefits for more affluent seniors. Whom? How much? Give more choice in Medicare to improve value in health care spending.
- Block grant the Medicaid program to states, enabling experimentation to better fit local situations.
- Remove regulatory impediments to energy production and innovation that raise costs to consumers and limit job creation. Which ones?
- Repeal and replace the Dodd-Frank Act and the Patient Protection and Affordable Care Act. The Romney alternatives will emphasize better financial regulation and market-oriented, patient-centered health care reform. How exactly?
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The Romney tax reform plan will increase GDP growth by between 0.5 percent and 1 percent per year over the next decade. How? .... documented in the Appendix Fair enough.
Kevin Hassett and Alan Auerbach surveyed the literature and found that tax reform couldincrease output by between 5 and 10 percent. Which reforms are these?
David Altig, Alan Auerbach, Laurence Kotlikoff, Kent Smetters and Jan Wallsier found that reform proposalswould increase GDP by between 5 and 9 percent over the long run, using a dynamic economicsimulation model. Which model?
Young Lee and Roger Gordon found that a cut in the corporate tax rate by 10 percentage points would increase economic growth by 1.1 to 1.8 percent annually. Ok so one point, finally. Cutting corporate tax by 10 percent.
More recently a study by John Diamond of Rice University estimated that the Romney tax reforms will raise real GDP by about 0.6 percent per year over a decade and increaseemployment in the long run (above the level possible in a more robust cyclical recovery) by 7 million jobs. Again, which reforms?
A long-term reform would also create a more stable tax code, which adds further gains in output by increasing policy predictability. Which ones? How so?
... Cutting to the chase. There's a lot of how so's and which one's and how much's
Recent research by Ellen McGratten and Nobel laureate Edward Prescott concludes that higher regulatory costs reduced both R&D and fixed investment during the financial crisis and its aftermath; and regulations continue to increase. Between 2009 and 2010,the number of pages devoted to final rules in the Federal Register rose from 20,782 to a 24,914 β a 20 percent increase. Stopping this growth and applying cost benefit analysis will remove impediments to investment and increase long-term growth. Ok cutting regulations. Which ones? Who knows. But that's at least something more concrete than previous things I've been seeing.
By reducing domestic discretionary spending, setting out a three-year program to reduce tax rates, and alleviating the regulatory burden .... Governor Romney would reduce the size and cost of the federal government. He champions a reduction in marginal tax rates in the context of a general tax reform. Particularly powerful are his proposals to reduce marginal tax rates on business income earned by corporate and unincorporated businesses alike.Good rhetoric but still no details.
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I still fail to see this plan except in generalities. The best I could get was reducing corporate taxes and reforming things in ways the general public is not privy to know about.
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Well I see things differently. Given that Obama has no plans set out for the future other than letting the bush tax cuts expire (which will not put any meaningful dent into the debt of annual deficits and will even slow growth and cost jobs, I think Romeny's plan is a lot better laid out and detailed which alone inspires more confidence in his leadership.
Without getting longwinded, the main point of Romney's plan is to "Grow the Base", by making the US attractive for Foreign Capital, Reptariated Capital, and for expanding business in America, which means more investment, more jobs, more production, more local capital, which translate into economic growth which means higher tax revenues, even if rates are lowered. The cuts to deductions/loopholes are mainly designed to ensure that the rich pay the same %, rather than serving as paying for the tax rate reductions. In sum, reduced rates and compliance costs of regulations means more businesses and capital comes to America (either foreign or would otherwise be outsourced) to be taxed here rather than being taxed in other countries.
Reforms to Soc Sec and Medicaid will stay the same for people 55 and up, but people younger will likely see more means testing (reduction of benefits as income rises, older eligibility requirements, etc..) FYI when Sec SEC was originally implemented, the retirment portion was only expected to be payable over 3 years before the avergage life expectancy was met. Nowdays Soc. Sec. amounts to government subsidized retirement for 20 years. If people truly can't work because of their age, that is one thing, but rarely does turning age 65 these days mean that such person should be encouraged to leave the workforce. Same with government pensions traditionally being automatically awarded after 20 years, concievably encourageing retirment as early as early 40s. That dosn't make any sense. Sure if people can afford to retire early, and choose to do so, that up to them, but Government policy should not be to embrace the notion that people are expected to work only to age 65 and then they get to retire regardless of thier ability to continue working.
Limiting spending could be achieved by refusing to allow the rate of growth of spending to keep increasing as fast as it is now, and/or even place freezes on the automatic increases so that every other year each department/program has to make due with the same amount of money as the current year. Of course, less spending cuts are needed as growth increases.
In sum, I understand you want exact details and preferably the syntax of the proposed legislation, however that is not feasible or productive, especially considering most congressmen don't even read bills before they vote onthem anyway. Romney's plan is more of a strategy with goals, and a few tacticle teasers, rather than exact orders offered for exacting scrutiny, which no doubt opponents would seize upon minor points and distort the effects of the bill.
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So basically counting chickens before they hatch. Romney expects a quick recovery and turn around of the economy (ie a temporary deficit in the form of an "investment" so to speak) gambling on the idea that if the base can grow, then taxes will follow. Am I wrong in this assessment?
Well, talking about social security and expected ages of significant morbidity and/or death is a fairly longwinded discussion. Two cents version: there's considerable variability in expected age of death across the population, even if the average is 76ish now. Better medical care has certainly fascilitated this, but emphasis on primary care and preventative medicine to narrow that variability and raise the average further would be a good long term investment. There's very good reason why healthcare is an important topic. Cost of care is something that needs serious addressing and I've yet to see either side really talk in-depth about their plans to curb the health system. We can assume that Obama will keep his plan. I'm hoping Mitt will at least talk about it. Meantime, asking Americans to retire later won't win popularity points, even if it's a good idea. It would almost involve appealing to a sense of patriotism to invest in the SS fund if you are still able-bodied.
If the government had market incentives to decrease overhead and reduce waste, this would be no discussion. But we're talking a gov't agency. Freezing funding will not necessarily make them more efficient.
Regardless of feasibility for congressmen, Romney sure looks foolish onstage when the people of the country and his opponent challenge the math and he can't produce it. He can at least get some pimping from his financial specialists on some tangible things to talk about. It seems to me that either A) he hasn't got the details planned yet because he's radically changed it since the Republican primaries B) he doesn't want to name numbers and then get challenged about them come re-election or C) He knows fully well that moderates and liberals will dislike the actual planned "reforms" and "cuts". There's already backlash on proposed PBS cuts; why incur more wrath? Option A is dishonest to his party: saying one thing to get nominated, something different to get elected. Option B shows his lack of confidence in his ability to get his plan to work. Promises not kept are very good weapons, and I'm sure he realizes that what goes around does indeed come around. Option C is just pussy-footing.
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There are a number of ways to bring down the cost of healthcare, which don't fit the agenda of many politicians who like to control the population (get votes) claiming they and there programs are the only way you can get affordable medical care.
(1) Tort Reform. Limiting the amount of money that can be awarded in medical malpractice cases to just medical treatment costs, and some reasonable form of economic damages should be all. No punitive damages should be allowed. If there are incompetent doctors who regulary harm people, then they needto be dealt with through the criminal or licensing system instead of through litigation. These limitations will lower insurance costs and defensive medicine costs.
(2) End Defensive Medicine. Because of fear of law suits, and increasing costs of insurance, many doctors wwould rather order every test possible (regardless of the remoteness of the probability of the issue they are trying to rule out) just to be able to say if they were ever sued that they went above and beyond the normal standard of care for the benfit of the patient. Of course since they get paid for all these extra tests it is a self rewarding behavior as well. Additionally, every doctor/specialists like to order duplicate tests so they don't have to rely on other doctors test results, which means a lot of test are being wasted and costing society a lot of money. This type of activity can be reduced by Tort Reform, and finding someway to standardize and certify tests that taken once so they may be relied upon and made easily availbe for other doctors to use rather than ordering new tests.
(3) Find someway to Influence people to engage in healthy behavior that costs less than the negative associated consequences later. Whether with carrots or sticks, the benefits made available frm social programs need to be ajusted to reflect indivivdual behavior. For example, smokers and/or drinkers need to have medical benefits reduced, or eligibility periods deffered, or should be taxed higher to reflect their personal behaviors that cost the system. Same for illicit drug users. Same for people who are obese, and same for high risk professions and hobbyists (excluding Police/Firemen/Emergency/Military Personel), but people who make themselves prone to injury (like skiers, boxers, etc...) should have to account for thier personal decisions if they are collecting from a social safety net.
(4) Increase Supply of Doctors/medical professionals: There is currently a shortgage of Doctors/Medical Personel, which drives price up because Demand is greater than supply. May be it would be worthwhile to prioritize preferential student loan rates, scholarships, grants etc... only for Medical and Science based degrees, rather than allowing any major to be subsidiezed (like english, law, history, language, teaching, etc...).
(5) Why not give doctors a tax credit for treating the poor, and limit the credits to their income. For example, for every dollar of treatment of the poor, the doctors would get a tax credit of 3 dollars. This would provide much incentive for treating the poor because doctors would then be able to reduce thier taxes by doing so, and by setting the multplier higher doctors would actually make more money treating the poor then the unpoor. Of course limiting the credits to their income would prevent them from abusing the tax credit system.
Well, that is the current state of politics. It is easier to win being less detailed and appealing to peoples emotions rather than logic and education. Noone but us geeks wants to get into the details, as most of society could care less as long they are content (food, shelter, job, and cabel TV mostly). Providing any amount of details, just opens it up for your opponent to seize on one part of the plan to demonize it and distort the good of the whole plan. Thats why it wont happen, until the legislation is introduced to congress and then people can start arguing over the details and making amendments.
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Briefly, since I wasn't exactly asking for a debate on healthcare:
1) Agreed.
2) "Of course since they get paid for all these extra tests it is a self rewarding behavior as well." Not usually true. Unless the doctor ordering the test is performing it himself. Also standardising the electronic medical record and having ways to access common databases would help eliminate repetitive testing. Otherwise agreed.
3) I find punitive measures and finger-wagging sadly ineffective in my experience. Balancing punitive with rewards/incentives might work also.
4) That's a complicated mess, to be honest. In a nutshell, the demand is not being offset by competitive wages. Hospitals will often hire less doctors and nurses (thus more hours, more patients per medical professional, less efficient patient care) and cut corners on things like medical supplies so they can turn a profit. Demand is going up, yes. Incentive is not catching up with it.
5) Tax credit for helping the poor isn't a bad idea. Placing caps might be.
Welcome to the human race. No one cares about logic and good debate form except that geek minority anyway.
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Well it is called a "plan" to it is a set of intended goals and actions to take place durring the future, which might have unforseen events. That said, I would think it would be fair to equate it counting chickens before they hatch, since "every" plan (Romney's or Obama's) would be counting chickens before they hatch.
Like many things is life, short term fixes rarely have positive long term consequences and vice versa. Raising taxes will slow the rate of economic growth because you are pulling otherwise productive cash out of the market, to run it through the inefficiencies of government, to then spend what is left of it, and only that remaining value then makes it back into the market stimulate growth. Compare that to not raising taxes, or lessening taxes, which allows stimulation if spent producing one more round income tax revenues on the seller, and even better is if that money is invested in business operations (jobs/equipment/services) which will likely generate a profit first (taxed), and the wages paid or equipment/services purchased (also subject to income tax on the provider side), and finally whenever that invested money is ultimately returned to the investor it will either be reinvested or used for personal consumption (generating more taxes on the sellers side).
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So in essence we're voting on which set of eggs looks better eh?
Still, a concrete plan with data and models is much better than a flimsy idea.
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Obama was spot on when he said that Romney's five step plan had only one step: cut taxes.
To be fair, you could extend that to three phases: "cut taxes", "???????", and "profit".
Either way, the plan isn't much of a plan and for a numbers guy and budget prodigy, Ryan is extremely reluctant to specify.
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Because they know fully well they're running on gusto and charisma and don't want their plan picked apart by pundits pre-election. Just shows the amount of confidence they have in the American people to agree to something reasonable if it's explained to them.
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Well yeah, and it also goes to show what a sad state US media are in when they just wont call these guys out. There was a brief moment after the RNC when the media actually started calling Ryan a liar, but that quickly ended for no good reason, and now we're back to this panzy-ass "he said-she said" nonsense where the media doesn't fact check or call winners and losers, n it just sticks spokespeople for both sides on screen and tells the audience to decide what is true, as if truth were subjective....
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They call it "politics" for a reason. The media has no reason to call out too heavily anyone who might be the future president. The new president might turn around and threaten cuts right? Though I've been happy with NPR recently in at least attempting to do some homework. Then again, they have motive: cuts have already been threatened at them. They must feel they have not-much to lose.
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