Sunday, September 18, 2011

Goldilocks and Class Warfare

Goldilocks said the porridge was “just right.”

President Obama is talking about fair shares of taxation and the Republicans are shouting that he’s engaging in class warfare.

He probably is - I’m sure more of his potential voters next year are not millionaires than are.

And, it strikes me as odd that the Republicans are accusing him of class warfare other than the fact that many of us engage in class envy and class aspiration despite reality that says neither will pan out for most of us.

That said, the GOP is absolutely clear that it will tolerate NO TAX INCREASES!  Having drawn that line, the GOP presupposes that the taxes in this country are “just right.”  Democrats say that taxes have to be raised – Obama trumpeting more taxes on oil companies, jet owners and millionaires and that will be “just right.”

Says who?  Please explain.

But the GOP doesn’t do that beyond repeating the mantra that increasing a tax of any kind will ruin the already near-death economy.  Obama proposes band-aid tax increases and building nicer schools and then all will be well.

On Thursday John Boehner said that “[j]ob creators in America are essentially on strike.”  And from the evidence, I think he’s right.  Corporations have hundreds of billions of dollars sitting on the sidelines and are raking in billions more in profits as I type.

Will Google, Microsoft, all the banks, hedge funds and other industries shut down if their executives get a tax bill that’s a couple of percent higher than it’s been for the last ten years?

Alternatively, maybe we should reduce the marginal tax rate for the richest of us, will that spur the companies they control to hire people?

The answer to each question is no.

That being so, the question isn’t taxes on the rich.  The question is indeed class warfare and a refusal on the part of the people on both sides of the aisle to deal with reality.

Left wing Democrats appeal to have-nots.  Right wing Republicans appeal to haves and those that think the haves having will help them.

Neither side is willing to even consider addressing the structural problems of our economy for fear of losing the votes of their core voters resulting in classic class warfare.

Obama’s proposal to increase the taxes that millionaires pay will not solve one problem that we have.  Boehner’s insistence that millionaires not pay one penny more in tax is equally unavailing.

Money for investment will continue to be on strike until … well isn’t that the question that I see neither Democrats nor Republicans trying to answer.  I guess we need a Goldilocks to tell us what is just right and then do it.


Anonymous said...

"Neither side is willing to even consider addressing the structural problems of our economy for fear of losing the votes of their core voters resulting in classic class warfare."

What is your perspective on the structural problems of our economy?

Barbara Burch Allen

Dave said...

Anymore, I don't really know. I do know we are ignoring most of it - infrastructure, roads, bridges, etc. need billions and billions of dollars. Corporate America is running amok aided and abetted by environmental, economic and labor deregulation and unlimited "Citizens United" political contributions and thus influence. Communications are quickly going the way of the rest of "business" - content providers become conduit owners and as such throttle competition and speech. Our educational system sucks. Enough?

Dave said...

Some ideas about fixing things:

Means test social security and medicare (if that's the one that is age based).

Stop taxing corporations, it masks what people pay for government.

End corporate political giving, it skews the results and corporations aren't "people."

Stop taxing income and tax based on spending - some version of the FairTax. It would end the influence of tax consequences on economic planning.

Enact rational regulations for communications companies, banks, Wall Street and insurance companies - what that rational regulation is, I don't know - I do know what we have now doesn't work.

Anonymous said...

I think we're pretty much on the same page about most things. For sure we mostly agree on the problems.

But we probably disagree about the Fair Tax, which I don't support. I've heard Boortz preach and I've read, indeed I even own, the book. We already have taxes based on spending and its too regressive, which is why the federal and state taxing authorities have built relief from them into the tax code. The poor would pay a far greater percentage of their income in taxes, it truly wouldn't be fair.

Income may be the greatest assest most of us have, but for investor classes which hold at least 80% of this country's wealth, it would be far more effective to tax them on their assets. Now THAT would truly be fair!

But I think we are going to be stuck with income taxes for at least the rest of my life. I have no hope that we will ever be able to convince the ignorant masses that money and speech, although both forms of influence, are certainly NOT equal. All that does is disenfranchise the folks who rely on speech instead of money (the poor and their advocates). And of course, it empowers the folks with more money than votes.

The newest batch of Koolaide large sectors of the public has swallowed is that corporations are people. We have become a nation of idiots.

Of course there is class warfare, there has been since the beginning of the Industrial Revolution since business have continually preferred to invest in capital equipment rather than labor. Which is part of what gave rise to the labor unions. But now it is the investor class that screams class warfare because more and more of us have caught on to the changing economic reality that human labor is becoming an obsolete factor of production.

Not that automation will be the end of the world, it is just that it has been more than a hundred years since the market and government sectors have had a greatly reduced role in the lives of the populace. Nowadays, we are completely unprepared for the realities that face societies that had previously been organized around labor, but must now find a new organizing force.

Ok, that's enough gloom and doom for now.

Barbara Burch Allen

Dave said...

"We already have taxes based on spending and its too regressive, which is why the federal and state taxing authorities have built relief from them into the tax code. The poor would pay a far greater percentage of their income in taxes, it truly wouldn't be fair."

It would seem that some system for rebates like in the FairTax plan or some other mechanism can take care of regression. If so, it, or some similar tax make so much more sense than what we do now.

And while we are on taxes - education shouldn't be funded by property taxes and if it is, the "revenue" should be pooled and spread through the entire taxing state - gets rid of disparate spending.

Anonymous said...

I love the idea of a pool for educational funding across the state!

If it isn't funded by property taxes, what do you think is the proper funding mechanism?

Barbara Burch Allen

Dave said...

General Funds I suppose, though source isn't as important if all schools get pro-rata support.

The Curmudgeon said...

Excerpt: "The top 10% of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office."

There were, the article continues, 1,470 households in 2009 with income above $1 million that paid no income tax -- but that's less than 1% of "the nearly 237,000 returns with incomes above $1 million."

Proving that some rich folks have better accountants than most.

We need economic growth more than anything else (this automatically increases tax revenue). The problem is that government can't make growth, though it can influence it, usually negatively, with taxes or interest rates.

My own suggestions: Stop pretending that social security is a pension plan. Eliminate the limit on social security taxes (that taxes the rich... and anyone else making more than about $110,000). Increase the retirement (and Medicare) age to 70. Link it to life expectancy: start collecting benefits 5 years -- or 2 -- pick one -- before average life expectancy. I won't be happy -- but, then, I wasn't going to be able to retire anyway.

Eliminate all pensions except military. (Honor current benefits, but new workers are not included.)

Make Medicare liens something that can be ascertained without the consultation of sheep entrails -- make the G's lien like every other -- you know the number right away. Create a private right of action for ferreting out Medicare fraud. Award attorney fees to successful plaintiffs; discretionary fees to defendants upon a showing of bad faith.

Serious patent reform: Eliminate protection for 'processes.' You got a machine that actually works? Patentable. Otherwise, forget it.

Plow money into real alternative energy research. Imagine if that money that was stolen, er, lost by Solyndra was put into real Manhattan Project style research into commercially viable alternative energy.

How much of a surplus do you want?

Dave said...

C, I think you have notes for a post here, I do need fleshing out. Thank you in advance.