The Fiscal Cliff talks

[TPS]

 

 

What did the wise old man once say about statistics and lies?

 

Yes, let's talk about facts. If your theory were true, then not only would payroll taxes rise more than income taxes over the periods, but the proportion of payroll tax vs income tax relative to total revenues would also rise. Yet, that isn't the case.

 

Interesting that you bring in 1980 as the starting year, because it obviously plays into your statistics. Why didn't you use 1960 as the baseline, when payroll taxes were a much smaller component of the revenue take? They have grown substantially since Great Society's implementation, but that's the point. If you want to provide a social safety net, you want to have as many people on the hook paying into the system.

 

But to your point that Reagan/Moynihan's grand bargain sacrificed the working class for tax cuts to the rich, nothing can be further from the truth. Individual income tax contributions stayed at a consistent mid 40% level of total federal revenue, while payroll tax contribution rose from low 30% to mid 30%. I'll admit that's a big jump, but most of the difference came from lower corporate tax remittances. But, wait, there's more. Over 1/2 of payroll taxes are paid by employers and the self employed. So, the majority of that rise in payroll taxes wasn't on the back of the working class, but came out of the employer's wallet, who are probably in the high income tax brackets.

 

So this recession reinforces the stupid direction that the country and its tax policies are headed in. By making the tax code even more progressive, you stifle growth avenues, while your revenues are based on a diminishing number of people who have the ability to defer income and lower their tax bills.

 

Yeay, progress.

You start out by saying it's not the case that payroll taxes are a bigger share relative to income, then you provide data they are. While of course employers pay an equal share of the tax, the point is there was an increase in the tax at the same time that Reagan cut taxes on the top. Also, as I said, the growing surpluses were generated by a combination of increase in the tax, a freeze in the cola, and an increase in the age. The point is to create a surplus on those off-budget accounts to offset the primary deficits. I agree completely that the employer portion is probably one of the worst possible forms of taxation, as it creates a penalty for hiring workers!

 

Once again, I think the focus of the deficit conversation should be on establishing the size of government, then determine the best way to finance. E.g., G=20% of gdp with 3% dedicated to defense; 3% non-def discretion; and 14% to SS and Healthcare. Then decide how to best generate an = 20% of revenues. There is obviously a need to change the %s over time as the demographics change. All the BS would have to be set aside, I hope...

[KD in CA]

I will add this. My father suffered from multiple forms of dementia, multiple myeloma and numerous other things. Towards the end, when we declined treatments, which would be worse than the illness, we were besieged by friends and family that went off on us- they said we were doing the wrong thing. Sometimes letting the end cme, is the best treatment possible.

 

I don't expect everyone to nderstand that, but after watching the end come, I don't ever want anyone to go through that because of me. Personally, I don't want to hang around past having a quality life, anyways

I think people who don't or won't understand that are despicable and selfish. And worse, that behavior is encouraged by the medical community. We had idiot doctors still blathering about the next round of radiation 96 hours before my father died from cancer.

[Adam]

 

I think people who don't or won't understand that are despicable and selfish. And worse, that behavior is encouraged by the medical community. We had idiot doctors still blathering about the next round of radiation 96 hours before my father died from cancer.

We were told that a brain biopsy was necessary for my dad. After it was over, we were told that it is one in a million that the procedure would turn anything up.

[GG]

You start out by saying it's not the case that payroll taxes are a bigger share relative to income, then you provide data they are. While of course employers pay an equal share of the tax, the point is there was an increase in the tax at the same time that Reagan cut taxes on the top.

 

I never said that "it's not the case that payroll taxes are a bigger share relative to income" (which they are not BTW)

 

I disputed your claim that the increase in payroll taxes funded the income tax rate cuts, which I also backed up with data. If your theories had been correct, income tax revenues would have dropped like a stone, but they didn't. What the 30 year history of taxcode changes showed however, is that more of the income tax burden falls on the upper income demographic, which is a stupendously idiotic fiscal policy. Awesome political policy though.

 

Yeay, progress.

 

Also, as I said, the growing surpluses were generated by a combination of increase in the tax, a freeze in the cola, and an increase in the age. The point is to create a surplus on those off-budget accounts to offset the primary deficits. I agree completely that the employer portion is probably one of the worst possible forms of taxation, as it creates a penalty for hiring workers!

 

Once again, I think the focus of the deficit conversation should be on establishing the size of government, then determine the best way to finance. E.g., G=20% of gdp with 3% dedicated to defense; 3% non-def discretion; and 14% to SS and Healthcare. Then decide how to best generate an = 20% of revenues. There is obviously a need to change the %s over time as the demographics change. All the BS would have to be set aside, I hope...

 

I hate it when you talk of the deficit as if it's a cause rather than an outcome. Please stick to one side of the equation - in this case the revenue side. The point that I made was that there would have been no Clinton surplus if his tenure didn't benefit from an extraordinary increase in capital gains receipts in '97-'99. Obviously, full employment and controling costs got to a near budget equilibrium, but it was the cap gains that put it over the top.

 

And then you have the pariahs like Bartlett, who's no longer welcome on the Beltway cocktail circuit inventing correlations to endear himself to NYT readers. That was a whopper article to read with all its contortions.

Edited January 9, 2013 by GG