Tuesday, December 7, 2010

Conservative Victory in Tax Cut Debate? I Don't Think So

Right after the election, the media framed the victory in terms of what would compromise look like, effectively setting the trap for the Republicans.  As part of the tide that swept the Dems out of office, the last thing I was hoping for was compromise.  As has been said, how do you compromise between food and poison.  How do you compromise between fiscal responsibility and irresponsibility.  You don't.  Compromising on either means that you were just a little bit irresponsible, but irresponsible never the less.  So when I hear that the Republicans scored a great victory in the tax cut debate, I do not celebrate, but mourn the fact that they have allowed the country to ingest poison.  That poison comes in the form of a 13 month extension to unemployment.  As if that isn't enough to kill growth, they also allowed the estate tax to go up from 0% to 35%.  Now, if you rely on the media for your news, they will have framed it to say that the estate tax went from 55% to 35%, so at least the Republicans got something.  This is crazy talk.
The Republicans stood their ground on the principle that incomes over $250,000 are not actually rich, but also small businesses and that their taxes should not go up.  Why did they not apply this same principle to the estate tax, where the people most affected are farmers and small businesses, where the cost of leaving the farm or businesses to a relative ends up being so high due to taxes, that it closes down.  This is just one layer of why the Estate tax is morally wrong.  The other is that you are literally taxing money that has been taxed over an entire life time.  The government has not right to a person's estate upon passing. 
By yielding on this point, the Republicans will have effectively gone along with a massive tax increase on estates, and increasing the debt through unemployment welfare extension.  I think we have our answer on what kind of Republicans we have.

12 comments:

Kansas Bob said...

Just a quick question and I am serious about this. Are you an advocate of trickle down economics where tax benefits for the ultra rich trickle down to the poorest among us? If so, can you give me a few examples of how it has worked?

jrchaard said...

I am against trickle up poverty. For my example to work, we must uncouple the deficits of the 80's and 00's from actual tax receipts and economic growth. When those taxes were cut, economic growth increased and and so did tax receipts. #1, it is not my business to tell people what to do with their money, nor do I feel that myself or the government are entitled to our money. This nation is not founded on the principle that everything we have is the government's and we only get to keep what they let us, but the other way around. So, that being said, empowering the consumer to choose how to stimulate the economy through market forces is better than the government picking winners and losers and stimulating the winners through confiscation of prosperity. If a billionaire wants to buy a yacht, keep his money in a bank or mutual funds, or under his bed, is his business. My spending stimulates the economy. Rich people spending stimulates it more. Plus, who is doing the hiring around here. Ultimately, I don't believe in class warfare. It is unconstitutional.

Kansas Bob said...

So you do not believe in trickle down economics. I agree.

I also agree that more jobs create more tax receipts. But I do not see anything that anyone can do in the short term to turn the unemployment trend around. The jobs that were once here are here no longer and there is little that anyone (including the govt) can do about it.

I do think that the federali's would do well to heed the debt commission proposals.

jrchaard said...

The debt is a red herring for raising taxes. Raising taxes equals more power for the fed. Cut, cut, cut , cut

Kansas Bob said...

So you are opposed to cutting spending too?

jrchaard said...

Nope. I mean, the same principles that got me out of my financial bind should work for the fed. Cut spending, create a balanced budget, pay off debt.

Kansas Bob said...

Sounds simple doesn't it?

jrchaard said...

simple, like somebody saying "how do you get to the top of a mountain? Easy, you climb it." I know it is simple, but very tough. I had to live like no one else for a couple years so we could later live like no one else. I think the fed needs to do it too.

Kansas Bob said...

Thank about what your family budget/debt reduction would look if you and Tonya did not agree on the basics. That might be a pretty accurate depiction of the mess in DC? Wonder if there is a way to Dave Ramsey DC?

jrchaard said...

It's an odd concept. Everyone outside of DC knows what it takes to get it done, but none of them want it to affect them, so the politicians walk a tight rope. They have to appease the people that want to cut as well as those that don't want it to affect them. They day it will work is when the people that are getting, don't mind having it taken away.

Kansas Bob said...

I submit that a large percentage of Americans live lifestyles that resemble the policies in DC. Perhaps the values in DC simply resemble those on Main Street?

jrchaard said...

I certainly agree with you. We find that how we live is often the exception, so while it makes sense to me, it isn't the same for others. If there is one good thing to come of all of this, it is that many people are being turned off to debt