Your friend Jim George thinks you'd be a great addition to Ricochet, so we'd like to offer you a special deal: You can become a member for no initial charge for one month!
Ricochet is a community of like-minded people who enjoy writing about and discussing politics (usually of the center-right nature), culture, sports, history, and just about every other topic under the sun in a fully moderated environment. We’re so sure you’ll like Ricochet, we’ll let you join and get your first month for free. Kick the tires: read the always eclectic member feed, write some posts, join discussions, participate in a live chat or two, and listen to a few of our over 50 (free) podcasts on every conceivable topic, hosted by some of the biggest names on the right, for 30 days on us. We’re confident you’re gonna love it.
Trump adviser Steve Bannon is supposedly pushing for higher taxes on the rich to pay for middle/working-class tax cuts. As Axios reporter Jonathan Swan
Good lord. The tax code’s objective is to raise revenues with the least distortions possible. Confiscatory rates do not raise revenue because they cause distortions. Their purpose is demagogic. Closing revenue gaps in our deficit is far less important than doing minimum damage. The deficit will be closed with borrowing or by taking resources away from the private sector. Borrowing is market conforming, unlike taxes that just confiscate from anyone who hasn’t figured out their favorite distortion. Where borrowing threatens is when we borrow abroad. We borrow abroad when we have low savings. High marginal and corporate rates reduce savings and spur external debt. Now lets summarize this. What matters is spending.
So, there are no plans to actually raise the tax rate then? This whole post rests on what Steve Bannon might have said at some time in the past under who-knows-what context?
Leave the rates, take the deduction for state and local taxes.
Or the cannoli, your choice.
Of course, but when it sticks its ugly head out of the hole you must whack it.
Steve Bannon may not believe in supply side economics,, but the performance of our last President Buraq Hussein should have, if one knew the score, put that issue to bed and settled it for good.
You see, Buraq had arguably installed the highest effective rates in my lifetime, but his collection of revenue per dollar of GDP was significantly lower than any President since Truman.
To repeat simply, Buraq had the highest tax rates, but raised the least amount of revenue in the last 60 years, proving perhaps beyond a reasonable doubt the Laffer Curve.
If only Buraq could have raised revenue like that guy who allegedly gave away millions to the rich with significantly lower tax rates – Ronald Reagan -but who raised about 15% more revenue per dollar of GDP with GDP growth more than double of Buraq’s.
The net result of a Reagan like revenue raising Presidency would be at the this point about a Trillion dollars more in Federal Revenue a year. Yes! a Trillion Dollars a year more!
But no, the tax raising, economy killing nitwits of the world like Steve Bannon want their pound of flesh from the Wealthy no matter what the consequences.
What makes matter worse – in fact much worse – is that the economy shows real signs of faltering if the disastrous performance of retail stocks and retail sales, and the closing of stores is any indication – and yes way beyond the impact of Amazon. Since 2014 and the end of QE, retail sales have taken a nose dive back down to 2008 levels. QE probably exceeded all of the GDP growth of the Obama years and without it, one should expect a wobbly if not depressed economy. Raising taxes in this economy is just suicide, and would be the end of a Trump Presidency.
The GOP probably will have to make the tax code more progressive at some point, and yes it will be a disaster. The people who pay the taxes always have outsized political influence. Take progressive taxation too far, and you’ll end up with an oligarchy as the government starts pandering to the economic and cultural interests of the wealthy so as to maximize tax revenue.
The personal income tax marginal rates have already been lowered to a point well below where the level might increase total revenue- the common supply side claim doesn’t work well under 50%; this is not a pragmatic question. Even Laffer would not try to claim that revenues increase now the way the cap gains revenues temporarily spiked in the late 1990’s when the stock market bubble and lowered rates encouraged lots of income reporting.
The question about taxes is a moral one about whose money it is. There is little question that revenues must increase because the public demands certain costly things. In actuality, some sort of border adjustment tax (essentially a targeted VAT) is probably inevitable, despite all the fights today, because it would hit the mid-upper mid classes who demand and get a lot of benefits from government.
I’ve been thinking about this lately. What if populist conservatives started demanding that, for every stupid benefit the upper middle class gets from the government, the poor must get it too? Subsidized solar panels and electric vehicles, loan guarantees for vocational schools that might actually benefit the poor, instead of something as snobbishly high-brow as college, making the mortgage interest deduction into some sort of refundable credit, etc.
Somehow I don’t see the upper middle class maintaining its enthusiasm for, say, solar panels if they start appearing on the homes of poor people, or electric/hybrid cars if poor people start driving them. And of course, we all know how much affluent people love it when poor families move into their neighborhoods.
“The personal income tax marginal rates have already been lowered to a point well below where the level might increase total revenue- the common supply side claim doesn’t work well under 50%”
Evidence please.
At this point , since I live in California, I know of many people who whose combined Federal/State marginal tax rate is way north of 50% and they are pissed.
So you want to raise taxes because you think you can raise more money. Think Again. Growth in tax revenue with high progressive, tax brackets such as the US has correlates strongly with economic growth; not marginal tax rates. That is because when people in higher brackets are making more money they pay more taxes. Buraq decimated small business. Many are failing. The owner of a failing business pays little in tax, when the one owning business making lots of money will likely pay lots of taxes.
The present highly progressive Federal Tax Scheme is addicted to entrepreneurs making lots of money; when entrepreneurs fail to make lots of money tax receipts will fall. It is really that simple.
Take a look again at the percentage of GDP Buraq Hussein hauled in. It was dismally small. He killed thousands of businesses with his high taxes and his high amounts of destructive regulation ( which in a way is a tax). Raising taxes again with even higher rates will only kill more businesses and make the Federal tax take smaller, not larger.
Taxes should be flatter and broader. I favor a 5% personal gross receipts tax. For everyone…no exceptions.