Conservative economics

[Special K 0]

I, like many liberals at the time, loved John McCain during the 2000 race. He inspired me to investigate the tenets of economic conservatism. While I still gravitate towards the liberal issues on social matters (such as gay marriage) I truly think 99% of the populace would be better served if we limited government programs and tried to curb waste.

 

The nat'l sales tax would be one thing that I actually like.

 

Problem is, I don't like Bush's social policies, and he's an economic LIBERAL. He's spent more money than maybe any prez ever.

 

Don't talk to me about the Johns accusing him of spending to little on social programs (like education) becuase I KNOW that's bull, and I don't like Kerry in the least.

 

The question is, will we ever get another economic conservative? Is it even a popular stance nowadays?

[Special K 0]

No one?

[kkktookmybabyaway 0]

Agree about Bush's spending. Simply disgusting. But the Congress is also to blame.

 

Oh, and I like the National Sales Tax idea, too...

[Stephen Joseph 0]

Well, gee I'm definitely in favor of it. And to quip a line from the democrats ...

 

ANYTHING BUT current income tax system. The problem with cutting waste is that any of these programs benefits a few *relatively* greatly at the expense of many for much less. It's difficult to get people to care when its minorly impacting them. Course sum it all up, and we're probably losing 10-15% of our income on shit we don't care to support.

 

As long as the lobbyists and special interests hold sway over DC, it'll never happen. Which is why , gasp, believe it or not... I support full public and only public funding for high elected offices. I don't like supporting it, its wasteful, but if it would break the strangehold of the lobbyists, the long-term benefits would so far outweight the short term cost

[Dr. Tyler; Captain America 0]

Which programs do you suggest cutting? Education? Social Security?

 

Currently, such commie welfare programs like Medicare are keeping my grandfather alive, since he doesn't have health care after he was laid off in 2002. I'm positive he isn't the only one, so would you just prefer to pull the plug on them all?

 

Not everyone can afford a private education, so do you suggest we cut it and just let them fend for themselves? Will the market help them find a private school that they can afford?

 

Should we cut back on defense spending?

[kkktookmybabyaway 0]

Which programs do you suggest cutting? Education? Social Security?...

Huh? Who are you talking to?...

[Dr. Tyler; Captain America 0]

Popick.

[Special K 0]

NEA

Wellfare

War on Drugs

IRS

 

Those are a few we should cut back drastically.

I, however, am in favor of national, socialist health care. But that's becuase I think it is a constitutional right,

 

Cutting back on frivolous loawsuits would help this country a lot in that arena.

[Dr. Tyler; Captain America 0]

"Welfare" is a generalistic term for programs that INCLUDE unemployment insurance, but also include Social Security, Medicare, etc.

 

NEA would save us a minimal amount of money to cut.

 

The War on Drugs is a very debatable topic, but no one can say beyond a shadow of a doubt that cutting all of the DEA's funds will help our nation in the long run.

 

Cutting the IRS would only serve us well if we instituted a national sales tax.

[Stephen Joseph 0]

Which programs do you suggest cutting? Education? Social Security?

Considering you and I agreed a few posts ago on Education, I would not cut education. That's one public good the government can provide better than the private market...imho.

 

Our defense spending is some ludicrious sum, like greater than the next 7 largest combined or something. Could we? Maybe?

 

What I'd actually rather do is kill fiscal policy. It's effects are lagged, unpredictable, and monetary policy seems so much more capable of keeping inflation/prices/and the economy in check.

 

So I'd kill fiscal policy for the time being with a rule. Budgets can grow at the following rate:

 

[GPD Growth (previous year) + GDP Growth expected (this year)]/2 - .5

 

That way, we'd have room to grow as the economy grew, but we'd eventually start creating a surplus to pay down the debt, and no programs would have to be cut.

Talk about creating an incentive for the government to pursue growth then, cause thats the only way it could grow! Double Goodness!

Edited August 12, 2004 by Stephen Joseph

[Dr. Tyler; Captain America 0]

Minus .5 what, percent?

 

If that's true, your argument sounds an awful lot like a certain screaming Democrat's idea.

[Guest Razor Roman]

One thing I like about a national sales tax is that it doesn't penalize people trying to save... when my Fiancee and I were saving up for a down payment on our house, we weren't buying anything. If there were a national sales tax, I Would have that much more to save because it wouldn't be taken out of my check, and I Wouldn't be buying stuff... so in that way I think a national sales tax would be helpful for people who need a leg up. I'm sure they wouldn't tax food, drugs, clothes and other necesseties.

 

As far as nationalized healthcare, I don't like that idea at all. I think the profit motive in the system may be what is keeping some people from getting all the care they need BUT the profit motive is also what is creating all the CURES for people. Which I think outweighs the faults in the system.

 

I think tort reform would help, but I also think that it should be made simple so that elderly/disabled relatives could be put on their family member's health plans.

 

I work for a public college and have GREAT benefits. My dad is disabled, due to going blind, and is about to lose his COBRA benefits. Because my mom makes 30,000 a year he is not eligible for the NJ perscription assistance program - but his medecine is about 16,000 a year (for diabetes and related complications on his eyes, kidneys, heart, etc) - more than my parent's mortgage.

 

I would be willing to pay extra to add him to my policy, and thanks to a new law in NJ, if him and I were sleeping together we could. But because we are not unmarried homosexual partners. Doesn't that just seem ridiculous to you?

[Prophet of Mike Zagurski 0]

Which programs do you suggest cutting? Education? Social Security?

Considering you and I agreed a few posts ago on Education, I would not cut education. That's one public good the government can provide better than the private market...imho.

So are you saying public schools are better than private? Also, most public schools get only 12% of their government allocated funding.

[Stephen Joseph 0]

Minus .5 what, percent?

 

If that's true, your argument sounds an awful lot like a certain screaming Democrat's idea.

yes percent.

 

And the idea's been around for about 20 years...it was started by a group of conservative economists around gramm-rudman-hollings time

[Dr. Tyler; Captain America 0]

Why has no one in power suggested it, then?

 

It seems rather logical to just restrain spending growth and try to pay down the debt.

[Stephen Joseph 0]

Which programs do you suggest cutting? Education? Social Security?

Considering you and I agreed a few posts ago on Education, I would not cut education. That's one public good the government can provide better than the private market...imho.

So are you saying public schools are better than private? Also, most public schools get only 12% of their government allocated funding.

I never said public schools are better than private. I said as a whole, the private market fails to allocate resources towards this public good better than if the ability of the public sector to provide for the public good.

 

 

A public good is NOT necessarily a public school,as you think i said. A public good is education. I advise that you look up the meanings of the words I used because assuming what I'm saying. I was referring to the allocation of education as a good across society.

 

I have no problem with private schools. They fill a niche that's important and help create more of the public good, education.

 

Also, I'm referring mainly to K-12, not college which I believe is where your funding numbers come from. Basic education is a public good and typically public goods are best administered by a governing body, not through individual private action.

[Stephen Joseph 0]

Why has no one in power suggested it, then?

 

It seems rather logical to just restrain spending growth and try to pay down the debt.

It's the most painless way to pay off the debt. It's like we go on a weight control plan, but we still get our burgers.

 

It's been suggested alot. However, because special interests can bring more money and influence to bear on a topic than the rest of general public that is not largely affected by the increased spending on one program thats being lobbyied for, its very difficult to constrain growth when your electablity depends on increasing funds to your funders.

 

And honestly, America's in a world of hurt if it continues to grow its government budget faster than it grows its economy. But that's 10-15 years away.

 

This is amazing, Tyler and I are agreeing...wow.

 

=)

[Guest Wildbomb 4:20]

I can agree with that. I think there should be some type of incentive program for those that choose to continue their education beyond the high school level, but basically...yeah, what SJ said.

 

--Ryan

...who likes this whole idea of, you know, paying off the debt...

[jesse_ewiak 0]

You are aware that a national sales tax would be so insanely regressive it'd be like a wet dream to the tippy top .5 percent, right? Let's say you make $50,000 last year and paid oh, $20,000 in taxes total when you throw in FICA and Social Security tax, along with state and local income tax. Now, no income tax sounds good because then you're paycheck is much larger. But, then the little things add up....

 

 

Usual motgage....$1000 let's say, under a 25% tax...boom, $1250 and an extra $3000.

College tuition....$8000 at a state college...nope...try $10,000 now.

Even little things like groceries. Let's say again, 400 a month...nope, 500. So, that's another 1200 a year down the drain.

 

Of course, since even a 25 percent sales tax would drop people in the top tax bracket (39.4) down to 25 anyway, of course it's popular. But when John and Mary at the store are wondering why groceries for the week have jumped from 100 bucks to 125 bucks, that's where the poor and middle class get screwed.

[Stephen Joseph 0]

This is an incredibly weird day. Either two libbies are agreeing with me, or im in agreement with two libbies.

 

Thanks WildBomb. I took like the idea of actually paying off the debt. Of course, if we can't I will certaintly try to pass it off on my kids.

[Stephen Joseph 0]

You are aware that a national sales tax would be so insanely regressive it'd be like a wet dream to the tippy top .5 percent, right? Let's say you make $50,000 last year and paid oh, $20,000 in taxes total when you throw in FICA and Social Security tax, along with state and local income tax. Now, no income tax sounds good because then you're paycheck is much larger. But, then the little things add up....

 

 

Usual motgage....$1000 let's say, under a 25% tax...boom, $1250 and an extra $3000.

College tuition....$8000 at a state college...nope...try $10,000 now.

Even little things like groceries. Let's say again, 400 a month...nope, 500. So, that's another 1200 a year down the drain.

 

Of course, since even a 25 percent sales tax would drop people in the top tax bracket (39.4) down to 25 anyway, of course it's popular. But when John and Mary at the store are wondering why groceries for the week have jumped from 100 bucks to 125 bucks, that's where the poor and middle class get screwed.

Earned Income Tax Credit.

 

One of the best tools we have to fight poverty. I feel that there would be some clause under a sales tax that would also do the same for the poor.

 

Half the point of a sales tax would be to get people to actually see how much money they pay in taxes...and maybe then we'd get the ball rolling on reducing that debt (12% of all tax receipts go to pay its interest i think)

 

Honestly, I prefer a flat tax, but anything's better than the shit we have now

[Jobber of the Week 0]

Problem is, I don't like Bush's social policies, and he's an economic LIBERAL. He's spent more money than maybe any prez ever.

I don't think McCain would change too much. He talks big, but so did Bush. You have to remember that at the same time the White House changed parites, Republicans got control of Congress, too. When one party is the only one that's relevant in budgeting affairs, all honorability and promises about conservatism seem to go out the window, and you have PORK PORK PORK! I don't know if McCain would be willing to mess with his ties from his party's guys in Congress to curb all the pork.

 

At the same time, it would help if Bush didn't apply his signatures to bills that he thinks are unconstitutional.

[Guest Wildbomb 4:20]

Hereby agreed to. And this is one wacko day indeed.

 

But hey, hell was bound to freeze over anyways, right?

 

--Ryan

...Time+different tax system=No National Debt...I think a two year old likes that one...

[Guest MikeSC]

You are aware that a national sales tax would be so insanely regressive it'd be like a wet dream to the tippy top .5 percent, right?

Hmm, the "tippy top .5 percent" have a nasty habit of actually buying FAR more "stuff" than anybody else. They will, like they do now, pay a ridiculously large percentage of all federal taxes.

Let's say you make $50,000 last year and paid oh, $20,000 in taxes total when you throw in FICA and Social Security tax, along with state and local income tax. Now, no income tax sounds good because then you're paycheck is much larger. But, then the little things add up....

 

 

Usual motgage....$1000 let's say, under a 25% tax...boom, $1250 and an extra $3000.

When have mortgages ever been subjected to sales tax, which is the proposal?

College tuition....$8000 at a state college...nope...try $10,000 now.

Just wait --- it'll be there REGARDLESS. It'd be best for the gov't to get out of that racket entirely. College enrollment will PLUMMET because people CAN'T pay for it (they can't do it now as is) and the never-ending black hole of money that the federal gov't is won't be there to save colleges.

 

THUS, they'll have to lower tuition DRAMATICALLY --- or shut down.

Even little things like groceries. Let's say again, 400 a month...nope, 500. So, that's another 1200 a year down the drain.

Which will still be a benefit over the current system, since your paycheck will, subsequently, be larger to pay for it.

Of course, since even a 25 percent sales tax would drop people in the top tax bracket (39.4) down to 25 anyway, of course it's popular. But when John and Mary at the store are wondering why groceries for the week have jumped from 100 bucks to 125 bucks, that's where the poor and middle class get screwed.

See, the problem is that it actually is a COMPLETELY fair system. And lots of people hate a system that doesn't actively punish the wealthy. Also, most of the proposals that have been mentioned over the years leaves food out of the national tax.

-=Mike

[Guest Razor Roman]

I guarantee that if there is a national sales tax the following items will not be taxed:

 

Food

Clothing

College Tuition

Housing

"Necesseties" (such as toilet paper, perscriptions, etc.)

 

And at first it DOES seem regressive, but think about it:

 

Lower income person, goes into Best Buy, purchases a 27" Philips TV, $250

 

Rich man goes into Best Buy, purchases $8,000 Plasma TV

 

The rich man will pay 32X as much tax as the lower income person.

 

 

Regular person buy a 25,000 Honda, Rich person buys an 80,000 Hummer... etc.

 

This would also be a way to get the Ted kennedy, Jay Rockefeller and all the other old-money, trust fund babies to pay some income tax. With the income tax, you only pay tax on money you EARN (maybe the interest on the trust, which is miniscule compared to what they can AFFORD to pay) ... with a sales tax you pay based on what you SPEND... it gets rid of tax loop holes, because you can't hide your purchases, at least not most of them :-)... i thought your liberals would be all for that!

 

There could also be all sorts of exemptions to help the disadvantaged. My father has a certificate exempting him from NJ Sales tax because he is Blind/Disabled - I'm sure the federal government could give that kind of ID to deserving people if the need arose.

[jesse_ewiak 0]

Mike,

 

Tax Revenue in 2001 (Latest Year I could find numbers) = 1.87 trillion

Final Sales of Domestic Product - That's Everything As Far as I Know - (2003, again latest numbers) = 10.899 trillion

Divide those two = 20.3%

 

OK, so I was off by some. But still, that's the bare minimum. On Everything. Including mortgages and college tuition and milk and SUV's.

 

Once you start excluding stuff, the numbers just go up higher Mike. Of course, I'm not an ECONOMIST~, so if Stephen wants to do a run-in here, go ahead.

[jesse_ewiak 0]

Just found this, from humaneventsonline.com...important parts bolded

 

Sales Tax Won't Eliminate the IRS

 

humaneventsonline.com

by Bruce Bartlett

Posted Aug 9, 2004

 

House Speaker Dennis Hastert (R-Ill.) created a flurry of excitement in Republican circles the other day when it was reported that he is proposing abolition of the Internal Revenue Service in a new book. This would be accomplished by eliminating all existing federal taxes and replacing them with a national retail sales tax.

 

There is no indication of what tax rate Speaker Hastert thinks would be necessary to replace all federal revenue. A current proposal by Rep. John Linder (R-GA) says that a 23 percent rate would be adequate. But such a low rate can only be sustained by making completely absurd assumptions about what would be taxed. Every serious economist who has ever looked at this question has concluded that a vastly higher rate would in fact be needed.

 

First, an unstated assumption is that the 23 percent rate proposed by Mr. Linder is comparable to existing state and local sales taxes, where the tax comes on top of the purchase price. Thus, a 5 percent sales tax on a $1 purchase comes to $1.05.

 

But that's not the way the Linder plan works. He deceptively calculates the rate as if the tax is part of the purchase price. He calls this the tax-inclusive rate. Calculating the rate the normal way people are accustomed to with state and local sales taxes would require a 30 percent tax rate, not 23 percent.

 

When Congress's Joint Committee on Taxation scored the Linder proposal 4 years ago, it estimated that it would actually require a tax-inclusive rate of 36 percent, not 23 percent, to equal current federal revenues. Calculating the rate in a normal, tax-exclusive manner would mean a 57 percent rate.

 

Economist Bill Gale of the Brookings Institution notes that supporters of the sales tax assume that there will be no tax evasion under their proposal and that the size of government will not grow, even though they would send a large annual check to every American in order to offset the regressivity of the tax. Making realistic assumptions, Mr. Gale estimates that the tax-inclusive rate, comparable to Linder's proposed 23 percent rate, would actually have to be about 50 percent. A rate comparable to existing sales taxes would be close to 100 percent.

 

And let us not forget that state and local sales taxes would come on top of the federal sales tax, pushing the total rate even higher.

 

Obviously, the federal government is not going to impose tax rates this high, nor would anyone pay them if it did. There would be a massive tax revolt.

 

The Linder bill (H.R. 25) is also deceptive in its basic assumption that all consumption of goods and services in the U.S. would be taxed. Implicitly, Americans would be taxed on, among other things, all medical care, purchases of new homes, and services provided by state and local governments if Linder's bill became law.

 

This means that if you are sick and have large doctor bills, you are going to pay 30 percent on top to the federal government. (Alternatively, you would pay 30 percent more for health insurance.) If you buy a new house listed for $150,000, your actual purchase price is going to be $195,000, including the sales tax. (Alternatively, there could be a tax on the imputed rent homeowners pay themselves for living in their own homes.) And if your children receive $20,000 worth of education each year from the local public schools, somehow or other you are going to have to pay an additional $6,000 to the federal government.

 

Of course, it is completely idiotic to think that the American people will ever allow this to happen. The idea of taxing all consumption sounds nice in theory until you realize just how broad the definition of "consumption" would be under Linder's plan.

 

Economist Evan Koenig of the Federal Reserve Bank of Dallas makes the point that any new sales tax is going to raise prices by that amount. If the Federal Reserve accommodates it, we are going to have 30 percent inflation the year the tax is introduced. If it is not accommodated, then producer prices are going to have to fall by 30 percent, which will cause a severe recession and greatly reduce the tax yield.

[kkktookmybabyaway 0]

Talking about this is like talking about how the shrink the size of government.

 

It'll never happen...

[EricMM 0]

Did you read the part where it said that poor people would get EIC like credit to get a rebate?

 

Did you read the part where it said that the loopholes in the current system MIGHT be closed? Is that not helpful?

[Guest TJH]

A sales tax is absurdly regressive.

 

I go into a shop and buy a shopping cart of stuff for $100. 25% tax makes that $125. I earn $50,000 per year.

 

Another guy goes in, buys $100 of stuff, pays the same $25 tax. He earns $100,000 per year. However, the $25 is twice the proportion of my income. So in effect, I pay a higher percentage of my income to the government, even though I earn less than he does.

 

One argument was that rich people buy more expensive goods, so that flattens it out. There are two counters to that:

 

1. Wealthier people are more inclined to invest their income than go out and spend it than poor people, who actively spend a higher proportion of their income.

 

2. Under no circumstances can it ever get back to a level playing field, as the poor will always spend a higher proportion of their income than the rich. The abilition of progressive income tax stresses this point further, as the wealthier person is proportionally better off.

 

Further, it is not the job of businesses to be tax collectors for the government.

 

A flat tax is better than varied sales taxes (if you have to have them at all), but it is no substitute for income tax.

 

The 'deficit calculation' as proposed by Popick takes no account of the need for increased government spending in recessions/slumps, and possibly in times of war, as you feel the need to invade other countries every couple of years.

 

Why doesn't America try and reform its inefficient agricultural and manufacturing sectors, and try and be competitive with other countries, which will help with your trade deficit and increase tax receipts?