Well, Republicans have been screaming for days about how Obama's tax increase on those earning over $250,000 will kill small business.
It turns out that only 3% of the small businesses in this country would be affected. (Thank you Peter Orszag for this rather important fact that none of our useless media ever bothered to ferret out.)
When faced with that fact, a Republican changed tactics. Yes, that's true. But that 3% employs 50+% of all small business employees. So?
And, remember, we're talking about turning back the top marginal tax rate to where it was in 2000. Less than a 4% increase.
But we are supposed to believe that a 4% tax increase on 3% of the small businesses in this country will cause these business people to ... what? Shut down their businesses? No, I don't think so. Refuse to expand or hire new employees? That's kind of hard to see, too. Don't most businesses expand when there is increased demand for their products? So unless a tax increase is confiscatory - costs the company more than it can earn through expansion - I find it truly difficult to imagine this outcome either. (Any of you small business people earning more than $250,000, please let me know if I am wrong.)
This reminds me of an argument that I haven't heard in a couple of decades:that the progressive income tax on individuals will cause them not to seek promotions. Because promotions come with salary increases, usually, and some salary increases come with increased taxes. Now, I have never known anybody to turn down a promotion because of an associated tax increase. Again, if the increase totally wipes out the salary increase, I suppose a person might refuse the promotion - but being primates, I suspect most of us would still go for the promotion.
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Monday, March 9, 2009
Wednesday, March 4, 2009
Bernanke, Geithner, and Orszag Face Congressional Committees Mar. 3, 2009
Well, I've now seen Geithner and Bernanke testify before several Congressional committees and yesterday I saw Orszag's first budget presentation.
Here's my assessment of the three as performers.
Geithner
Without question, he is the worst of the three. He is simply not a good salesman - in large part because of a number of quirks. First, he has a tendency to hunch over the mike and look up at the committee from under his eyebrows. Second, he has a habit of starting answers with phrases such as "that's an excellent question". Third, he has an Obama-like tendency to repeat the same phrases over and over and over. Fourth, and worst of all, he is defensive. He may be very, very smart. And his plans may, indeed, pull us out of this mess. But he does not give that impression and right now we need somebody who can be seen to be confident, optimistic and in charge. (It also doesn't help that he continues to talk in generalities.)
Bernanke
Calm and respectful. Sometimes, I think, too respectful. Like Geithner, he is smart. And he has acted decisively. But in front of Congressional committees, he comes off as a bit of a mouse. Perhaps he feels constrained because of the position he holds, but he seems to bend over background not to get into any kind of argument with any of his questioners - which limits his ability to sell, to Congress and to citizens, the actions he has taken.
Orszag
Triple A+. His performance yesterday was masterful. His command of budget details was awesome. His answers to the questions posed were concrete and short. No endless justifications of the general strategy, goals, etc. Moreover, he was not intimidated by the Republicans and he was indulgent toward those Democrats whose questions were designed solely to prove how good this budget is in contrast to the Bush budgets. Not only was he never defensive, he seemed to enjoy the give-and-take. Orszag came across as a man who understood the budget, who supported the budget, who was not ashamed of the choices made in creating the budget. Cheers.
Here's my assessment of the three as performers.
Geithner
Without question, he is the worst of the three. He is simply not a good salesman - in large part because of a number of quirks. First, he has a tendency to hunch over the mike and look up at the committee from under his eyebrows. Second, he has a habit of starting answers with phrases such as "that's an excellent question". Third, he has an Obama-like tendency to repeat the same phrases over and over and over. Fourth, and worst of all, he is defensive. He may be very, very smart. And his plans may, indeed, pull us out of this mess. But he does not give that impression and right now we need somebody who can be seen to be confident, optimistic and in charge. (It also doesn't help that he continues to talk in generalities.)
Bernanke
Calm and respectful. Sometimes, I think, too respectful. Like Geithner, he is smart. And he has acted decisively. But in front of Congressional committees, he comes off as a bit of a mouse. Perhaps he feels constrained because of the position he holds, but he seems to bend over background not to get into any kind of argument with any of his questioners - which limits his ability to sell, to Congress and to citizens, the actions he has taken.
Orszag
Triple A+. His performance yesterday was masterful. His command of budget details was awesome. His answers to the questions posed were concrete and short. No endless justifications of the general strategy, goals, etc. Moreover, he was not intimidated by the Republicans and he was indulgent toward those Democrats whose questions were designed solely to prove how good this budget is in contrast to the Bush budgets. Not only was he never defensive, he seemed to enjoy the give-and-take. Orszag came across as a man who understood the budget, who supported the budget, who was not ashamed of the choices made in creating the budget. Cheers.
Coburn & Education - A Lot of Neurons Short of a Full Deck
In arguring against Harkin's earmark for repairing schools in Iowa,Mr. Coburn asserted that, of course, our schools only declined in quality after the federal government got involved (out in here in California, it's pretty obvious that schools began to decline after the passage of Prop. 13 rolling back & limiting property tax increases), and that students could learn just as well in a quonset hut as in a high-tech building.
Now, I suppose one could build a quonset hut that would hold labs for biology, chemistry, physics, computer science, etc. And that would have running water and indoor toilets - but after one has done all that, how many students could be accommodated? So, unless he thinks that one-room schoolhouses with chairs and a blackboard provide the same quality education as a high-tech school building (a very dubious claim in 2009), Mr. Coburn must be given credit for one of the dumbest arguments ever made against an earmark.
Further, he argued that to spend money repairing schools in Iowa in today's difficult financial situation would mean placing - yes, you guessed it - a burden on our children and grandchildren.
Although one can argue about the value of earmarks, or the value of this earmark in particular, it seems to me that arguing that improving the educational environment of students who will be creating those future generations could be bad for those future generations is absurd. Educated parents generally raise educated children.
One wonders if Coburn would be where he is today if he had been educated in a quonset hut.
Now, I suppose one could build a quonset hut that would hold labs for biology, chemistry, physics, computer science, etc. And that would have running water and indoor toilets - but after one has done all that, how many students could be accommodated? So, unless he thinks that one-room schoolhouses with chairs and a blackboard provide the same quality education as a high-tech school building (a very dubious claim in 2009), Mr. Coburn must be given credit for one of the dumbest arguments ever made against an earmark.
Further, he argued that to spend money repairing schools in Iowa in today's difficult financial situation would mean placing - yes, you guessed it - a burden on our children and grandchildren.
Although one can argue about the value of earmarks, or the value of this earmark in particular, it seems to me that arguing that improving the educational environment of students who will be creating those future generations could be bad for those future generations is absurd. Educated parents generally raise educated children.
One wonders if Coburn would be where he is today if he had been educated in a quonset hut.
Thursday, February 26, 2009
Republicans and Tax Cuts (Obama's first budget)
Well, Obama's 2010 budget has been announced and, as usual, Republicans are apoplectic about the tax increase on the rich which will cause small businesses to fail all over the country, kill entrepreneurship, etc.. And how big is this tax increase? 3.9%. The top marginal tax rate for people earning over $250,000/year will increase from 36% to 39.6% - which won't kick in until 2011. Now, I know that COLs vary a lot around the country and I believe that, once we're out of the recession, we should all pay more for the government services we want. But this knee-jerk Republican hissy fit should be shown up for what it is. And if the reduced tax rates on dividends and capital gains remain in effect, this increase will, practically speaking, probably have even less impact.
Once upon a time, the top marginal tax rate in this country was 94%!* Now, the Republicans think 39.6% is too much. Indeed, during the battle over the stimulus package they wanted a 5% across-the-board cut. Tax cuts are the Republican answer to good times and bad times. It is, indeed, the only government action they approve of (except for defense and legislating morality, of course).
Republicans won't even raise taxes to pay for the one government function, defense, of which they approve - which is why Obama inherited a trillion-dollar deficit. The truth is that Republicans don't believe in government. They want to kill social security, medicare, medicaid, welfare, the NEA & NEH, the CDC, the NIH, the NSF, the FDA, etc. Indeed, if they could, they would kill every non-defense agency. And they figure the way to do this is to starve the government of money. But they know that if they tell the American public this is their objective, they couldn't get elected dog-catcher. They know Americans don't like to pay taxes (who does) but,while Americans differ on which government programs they approve of, all Americans use or want some government services. So Republicans talk about "waste, fraud, abuse" (of which there is nowhere near enough to end the deficit and at least one of which exists in every household in the U.S.). They talk about earmarks (which don't add money to the budget but direct it to pet projects). They talk about individual responsibility. They don't talk about the government programs they want to kill. And our ineffective media let them.
I have a challenge for you tax-cutting Republicans. Give me a tax rate, any tax rate (flat or progressive), which will satisfy you. 20%? 15%? 5%? 0%? And then tell me what government agencies you will shut down to balance the budget.
*Here are three web sites with historical tax rate information:
1.Top tax rates 1913-2003
2.Highest marginal tax rates 1913-2009.
3. Historical bottom and top tax brackets 1913-2000.
Once upon a time, the top marginal tax rate in this country was 94%!* Now, the Republicans think 39.6% is too much. Indeed, during the battle over the stimulus package they wanted a 5% across-the-board cut. Tax cuts are the Republican answer to good times and bad times. It is, indeed, the only government action they approve of (except for defense and legislating morality, of course).
Republicans won't even raise taxes to pay for the one government function, defense, of which they approve - which is why Obama inherited a trillion-dollar deficit. The truth is that Republicans don't believe in government. They want to kill social security, medicare, medicaid, welfare, the NEA & NEH, the CDC, the NIH, the NSF, the FDA, etc. Indeed, if they could, they would kill every non-defense agency. And they figure the way to do this is to starve the government of money. But they know that if they tell the American public this is their objective, they couldn't get elected dog-catcher. They know Americans don't like to pay taxes (who does) but,while Americans differ on which government programs they approve of, all Americans use or want some government services. So Republicans talk about "waste, fraud, abuse" (of which there is nowhere near enough to end the deficit and at least one of which exists in every household in the U.S.). They talk about earmarks (which don't add money to the budget but direct it to pet projects). They talk about individual responsibility. They don't talk about the government programs they want to kill. And our ineffective media let them.
I have a challenge for you tax-cutting Republicans. Give me a tax rate, any tax rate (flat or progressive), which will satisfy you. 20%? 15%? 5%? 0%? And then tell me what government agencies you will shut down to balance the budget.
*Here are three web sites with historical tax rate information:
1.Top tax rates 1913-2003
2.Highest marginal tax rates 1913-2009.
3. Historical bottom and top tax brackets 1913-2000.
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